E-Customer Relationship Management - Essay Example

E-Customer Relationship Management The Internet has evolved greatly since its inception and is no longer just a portal for electronic mail or an electronic source of information that had not existed in the public forum. It has become a tool that organizations are using to reach out to a larger target market that goes beyond the borders set out by masses of water. This has created a greater potential of increase in profits, and organizations are reaching out to cap it for their individual firms, therefore, creating an environment with healthy completion (Lee-Kelley, Gilbert, and Mannincom, 2003). The use of the Internet as a tool has led to a social phenomenon of e commerce where transactions are made online. E-commerce has faced lots of alterations given the technological advancements in electronic devices and programs. Although the advancements have created opportunities that had not existed before, many firms are constantly faced with the challenge of an upgrade so as to create a lead as more organizations take a digital leap in the way they handle their transactions. This has brought about business issues that need to be addressed so as to fill in the gaps created by these advancements. One of the business problems that this essay shall look into is the e customer relationship management as a continuous challenge facing businesses. According to Romano and Fjermestad (2002), e customer relation management involves attracting and maintaining a strong relationship to economically valuable customer while eliminating the customers with a lower margin of profit to the organization. This makes the management of customer relations electronically a delicate issue since it entails personalizing the attention given to the economically valuable customers to the highest level that can be attained in the situation that lacks a personal interaction with the customers. In studies carried in Boston, customers cited convenience as the leading reason why they choose to engage in online transactions. However, despite the convenience offered by the online shops, the customers were willing to forego that for better customer relations at offline services. The studies show that about 65% of the customers who made an online transaction at a certain website did not go back for a subsequent transaction (Scullin, Allora, Llyod, et al, 2004). Following research undertaken to understand the potential markets and increased profit presented by the Internet, e customer relationship management has come forth as an area that has not yet been fully looked into. Studies continue to show that online based organizations do not offer competitive customer service to counter their offline competition whose customer relations management supersedes that of the online based firms. According to the research report by Lee-Kelley, Gilbert, and Mannincom (2003), many firms in the U.K that went online were blinded by the perception that the Internet provides a near perfect market. This belief led most of the firms to decrease the attention on other strategies of pleasing the client and instead focused on setting the price. This led to aspects such as feature, quality and customer relations being compromised and this meant the organizations did not enjoy the full potential of opportunities created by the Internet. One of the rationales for the concentration of setting the prices is the fact that with online transactions, the consumer is able to compare different firms offering the same item and this creates price wars. This makes firms engage in an act that eventually benefits the consumers more. Although e customer relations management is a fairly new area of study for businesses and related stake holders, there has been research taken up to show the possible solutions to the business problem as presented above. These solutions have been projected to help the organizations increase and maintain their customers through the provision of quality customer relations. The first solution that shall be looked into is developing customer focused business strategies. This involves considering the consumer throughout the process of developing a business strategy (Shanmugasundaram, 2008). This means the organization has to understand the needs of the consumers as well as the demands and through this they can be able to project what demands the consumers might make in the future. The most effective way of getting to the level where an organization can make projections into the future about the demands of their clients, is by providing channels of communications that enable the client to give their views on the products provide4d as well as communication what the consumer would like the organization to improve or include in the line of their production (Romano and Fjermestad, 2006). By so doing the client gets to choose which channel of communication best suits them and thereafter the organization can use that to communicate on a personal level to the consumer telling them of new products and of upcoming sales. This creates a personal feel to the relationship even though there is no physical interaction between the consumer and the organization. Customer relationship management has created a craze for firms and business as analysts find that the management of these relationships are critical in how the consumers interact with the products the organizations are providing. Studies have found that customer relationships that are healthy tend to increase the sale and interactions of the organizations with the consumers and this increases the profit margin for the firms. Many firms have therefore gotten aboard the bandwagon of better e customer relationship management without a clear strategy of how best to ensure that they attract and retain valuable consumers. According to Uwagwuna (2011), this brings about the need for organizations to come up with workable strategies that ensure that online transactions are consumer centered and that there needs are addressed as they appear. Firms invest a lot of money into the customer relationship management programe so that they can address the customer needs on the online market. This investment includes buying hardware, software and training the personnel on how to use the new systems to ensure efficient service to the consumers. The integration of the customer relationship management systems for online transactions require an intense analysis into the business processes that should be reviewed well before any purchase is done (Romano and Fjermestad, 2002).. This is necessary in making a purchase of the most effective software for the type of business processes that an organization is running. By the acquisition of the best Customer Relationship Management software, the business problem for online based consumers will be addressed as the interaction between the consumers and the organization improves The research into the customer relationship management has left some grey areas which require a lot more investigation to be able to settle emerging controversial issues. Some of these issues have made relationship managers in firms more cautious of how they seek to establish relationships with the potential clients. One of the grey areas behind customer relationship management is the issue of persona privacy that should be accorded to the consumer visiting the website. According to Pride and Ferrell (2008), many firms breach this right to their consumers as the personal details of the consumer get into wrong hands. This infringement of rights cause the consumers’ privacy to be further stepped upon by spam mail and phishing by companies that the consumers had not enlisted on. Although this is not entirely caused by the particular organizations, it provides an opening for the consumer to wonder about the information they may be sharing with these organizations. In light of these threats that may keep away targeted consumers, organizations are taking action by ensuring they provide the best service and security to ensure the information submitted by their clients is not leaked by hackers or persons intending to use the information for their own reasons that go against the values of the organizations. The issue of personal privacy creates a grey are that is known but one which more strict measures need to be taken to ensure that the right to privacy is achieved to the maximum level that can be achieved as the Internet continues undergoing changes. The other grey area that is striking is how the organizations blanket the needs of their consumers while sending out information. The opportunities created by the Internet include a lager clientele base for the organization and unlike off line service where every consumer is treated as they arrive, most online interactions require a consumer for most part to be served by prompts and dialogue boxes for a complete transaction. This means that through this interaction, the organization cannot read subtle signs projected by the body or tonal of voice or even simply the posture of the individual. This provides a challenge that is yet to be countered because of the level of impersonal relations that take place ( Anderson and Kerr, 2002). As a cause and effect event, the organization fails to capture the individual’s personal preference and the details and instead cluster the consumers either according to the product that was bought or according to the links that the consumer followed during the time spent at the organizations website. The irrelevant information passed on makes the consumer feel bogged down by excess information that they had not asked for and this becomes a reason to switch from the organization. This grey area provides a challenge that can best be dealt with when the organizations departments take part collectively in maintaining and expanding healthy customer relationships. This creates more work in determining what a consumer would like and projecting the consumers’ most probable demands for the future. Which theories are being used? E customer relationship management relies heavily on the theories employed in the offline customer relations of an organization. One of the theories is the attraction theory that state that one is attracted to another because of four basic aspects; attractiveness proximity reinforcement and similarity (Rai, 2008). This theory was conceptualized by social psychologists who study the relationships of humans from a sociological aspect and a psychological aspect. This theory provides a premise that demands the sales person of an organization to sell his or herself to the consumer and in so doing attract the consumer to try the products that the organization is selling. In e customer relationship management this is a critical factor in establishing a relationship with the consumer and through the theory of attraction can maintain the contact made. The other theory plays a role in maintaining a relationship with the customer is the social exchange theory. In this theory the fundamental principle lies in creating a situation where the relationship yields the most profit (Kleinaltenkamp and Ehret, 2006). In e customer relationship management this can be done by ensuring that the customer gets more profit where through the competitive prices as well as the after-sale services that the organization provides. It is therefore important for an organization to create a relationship that benefits the economically valuable customers to ensure that the relationship continues over time. This ultimately creates customer loyalty and this goes along way in increasing the sales of the organization through the word of mouth reference from the customer. An organization can achieve optimum e customer relationship management by taking note of the minute details of serving online customers. This is the area most firms overlook and therefore fail to get maximum results from the Internet market. References Anderson, K., and Kerr, C. 2002. Customer Relationship Management, McGraw-Hill Professional, London. Romano, N. C., and Fjermestad, J. 2002. “Electronic Customer Relationship Management: An Assessment of Research,” International Journal of Electronic Commerce, 6, 2, 61-113. Romano, N.C., and Fjermestad, J., 2006. Electronic customer relationship management Volume 3 of Advances in management information systems, M.E. Sharpe, New York. Shanmugasundaram, S., 2008. Customer Relationship Management: Modern Trends and Perspectives Authors (ed.), PHI Learning Pvt. Ltd, New Delhi. Uwagwuna, C., 2011. The IBM Model of Electronic Customer Relationship Management: Industry Report, GRIN Verlag, Amsterdam. Pride, W., and Ferrell, O. 2008. Foundations of Marketing Authors (Ed. 3), Cengage Learning, London. Rai, A. (2008). Customer Relationship Management: Concepts and Cases Author Publisher PHI Learning Pvt. Ltd. Kleinaltenkamp, M. and Ehret , M. (2006). Relationship theory and business markets Vol. 2(2) of Journal of business & industrial marketing London: Emerald Group Publishing, Read More