Evaluating the Success of Customer Relationship Management Systems - Case Study Example

? IMPLEMENTATION RELATIONS MANAGEMENT SYSTEM BY ROYAL MINT of EXECUTIVE SUMMARY Customer Relationship Management system is the process through which a company is able to interact effectively with its customers and thus enhance relationships. The application of CRM systems in the management of the marketing functions of a company includes the application of various elements of the CRM system such as information technology, people and the organization and management processing procedures in the facilitating the marketing of a company’s products. The Royal Mint Company requires a CRM system to facilitate the management of marketing information. The company will effectively acquire customer information and process it within the CRM system’s database to make marketing decisions and plans in addition to the evaluation of the impact of the company’s marketing endeavours. In implementing a Customer Relations Management system, Royal Mint stands to gain several benefits including better quality services and increased efficiency. CRM also helps to ensure reduced operational costs, increased profitability, and decision making support. The system leads to customer intimacy and thereby ensures the retention of existing customers. However, in the use of data stored in CRM, Royal Mint has to ensure the security of such data. This is because the use of such data could lead to ethical and legal issues. Access of such data has to be restricted as well as the transfer controlled. Introduction Romano and Fjermestad (2003, p. 233) define Customer Relationship Management (CRM) as the process of managing the interactive relationship of a business organization or a company with its customers. CRM is usually automated and applies technology to foster communication between a company and its clients. CRM therefore uses information systems which include computer application software which facilitate communication and interaction between a company and customers who are the major stakeholders of business functions and thus determine the success of the business. The composition of a CRM system is basically made of the hardware and software elements, the people who are involves, processes, procedures and policies which govern the application of the system to realize the goals of the business (Schierholz, Kolbe and Brenner 2007, p. 830). The benefits of CRM include increased profitability, better customer relations and higher quality products. The paper discusses the elements of a CRM system, its benefits and the ethical issues involved in the use of the CRM system with a special relation on the Royal Mint Marketing strategy. Elements of CRM System According to Mandic (2011, p. 347), information technology is the major element of a CRM system because it is through these computer systems that companies are enabled to effectively communicate with their customer. The Royal Mint which is England’s legal entity which is authorized to mint or manufacture coins and medals has invested in information technology as the most appropriate way of facilitating interaction with its customers as described by Boulton (2011, p. 48). The marketing strategies of the company apply information systems to manage its customer base and enhance communication between the company and these clients. However the company has not utilized CRM system in making marketing decisions. Information technology in making marketing decisions is used to facilitate the management of customer information for marketing reasons. In a CRM system analytical tools and computer systems are used to gather client information and use it to make marketing decisions. Therefore the Royal Mint should apply information technology to maintain a database of its customers and also facilitate the interaction with its market. The use of CRM in marketing includes displaying the company’s products on the internet which can be accessed by the clients through creation of user accounts through the company’s sites. The information that the company gathers from the market is managed through the CRM system and decisions reached by top executives through the help of related information systems such as the decision support systems. Khodakarami and Chan (2011, p. 253) explain that the information technology element in CRM system includes sophisticated computer software in addition to hardware components which facilitate the management of marketing information within an organization or company. People and the organization is an element within a Customer Relationship Management system. The Royal Mint is an organization which uses information systems in the management of various functions. The organizations include various subsystems or departments such as the sales and marketing, finance and human resource. The need for the CRM system by the Royal Mint is necessary within its marketing function as a way of facilitating the management of marketing information and making decision related to the marketing of the company’s product to the market. The people in a CRM system include the company staff and the customers of the company’s coins and medals. According to Gilkes (2009, p. 92), the Royal Mint produces coins for various states in addition to medals for both sports and social functions such as weddings. Therefore there is need for the marketing of these products to the market. To facilitate the marketing function, the company will thus implement a CRM system through its marketing department employees who comprise of the people within the elements of the CRM system. The employees of the company in addition to the marketing management should be able to apply the CRM system in management of the interaction between the company and it clients. In addition, the staff and company management should be effectively trained in the management of marketing information and customer database via the use of CRM system software. The applications of the CRM should also be user friendly to ensure that the users who are the company’s customers to be able to use them in providing the company with useful marketing information and interacting with the company on matters of making orders, purchases and payments. According to (REF, the management of marketing processes through laid down procedures and policies is another element of the Customer Relationship Management system. The processing of the marketing information should follow appropriate procedure if the system is to be efficient. Planning and analysis of marketing information will be facilitated and thus benefit the Royal Mint in its marketing endeavours. Marketing planning by the Royal Mint will use the information within the CRM system database to make managerial plans on the marketing issues such as the need for market research and the investment in the marketing and promotion of the company’s products through various media such as the internet. Lassar, Lassar and Rauseo (2008, p. 68) say that the marketing processes are facilitated by CRM systems because they facilitate planning which is based on analysis of the information gathered and stored within the system. In the processing of marketing information propositions on market segments for the Royal Mint’s products will be made which will guide managerial decision such as branding and pricing of the company’s products. Pedron and Saccol (2009, p. 34) assert that the application of the elements of the CRM system in the marketing function of a company includes the management of management of the activities of the customers within the market. The Royal Mint Company will thus use the CRM system elements to welcome its customers to its information system which will target the acquisition of more customers from the potential market. Gurau Ranchhod and Hackney (2003, p. 199) explain that it is through the CRM system that a company is able to efficiently achieve access to its customers and thus include their details in the customer database. Additionally, the implementation of CRM system in the management of a company’s marketing strategies includes the use of the system to know and understand the needs of the customers. Pacey (2009, p. 4) emphasizes that the interactivity of the CRM system enables a company to interact effectively with the market and as a result understand the customers well which facilitates the making of accurate marketing decisions. Ku (2010) adds that a CRM system is used to manage the problems of the clients by answering the questions they pose to the system and providing them with readily accessible information through the system. This includes managing the inquiries of the customers and thus wins their loyalty to the company’s products. The Royal Mint Company will apply the CRM system as the most effective way of developing its clients and evaluating the effects of its marketing endeavours within the market. Most importantly, the CRM system will enable the Royal Mint Company to remain as the most competitive coin and medal producer within England and beyond. Benefits of CRM CRM is implemented by companies as a strategy to help it manage its interactions with customers. With its implementation, Royal Mint stands to gain several benefits. Stone (2005, p. 34) explains that implementation of a CRM system helps the business to understand, forecast and respond to the needs of the customer comprehensively and consistently. Soliman (2011, p. 166) affirms that this and notes that this leads to better service to the customer therefore leading to customer satisfaction. Soliman (2011, p. 166) holds that CRM may be used to help improve many aspects of the business processes and operations. CRM system can be used to collect important information about the customer order history. This can help Royal Mint in budgeting for any new order and to evaluate the credit worthiness of a customer. CRM system as observed by Soliman (2011, p. 166) helps to improve communication channels with the customer. This is critical since Royal Mint would be able to get timely feedback from the customer and thus help to improve the quality of their services. Stone (2005, p. 34) asserts that CRM’s prime benefit is that it helps to improve relations with existing customers. With implementation of customer relations management system, Royal Mint stands to benefit from higher retention of its existing customers (Urbanskiene, Zostautiene, and Chreptaviciene 2008, p. 59). The two authors further explain that retention of customers help assure prospective customers that the firm’s products are of excellent quality. Starck (2011 p. 4) further points that implementation of CRM helps to identify new potential markets for the business. Royal Mint’s profitability may be improved with implementation of a CRM system. This is because better relations with customers leads to effective marketing of the products. This comes from concentrating on a better and a more personalized communication with customers. With real time response from customers the firm may also enhance the quality of its products. Zineldin (2006, p. 437) observes that CRM helps companies to cut operational costs by bringing down the cost to service and support existing customers. Operation cost is brought down significantly since website based customers service are cheaper than the costs of telephone customer service. Stone (2005, p. 34) demonstrates that since a company is able to comprehend a customer’s needs, CRM leads to simpler sale and marketing process thereby ensuring overall efficiency of the business is improved. The other benefit of CRM implementation is that it leads to better decision making since a firm is always armed with information about the customer. Ethical and Legal issues in the use of data stored by Royal Mint in CRM It is an ethical and legal obligation of Royal Mint to ensure that the collect sensitive customer information in a secure environment. Sensitive customer information such credit card numbers must be encrypted when being stored or transmitted over the internet. When using the customer data (ref) insists that customer data ought to be consulted only when necessary to fulfill a customer’s relations management task. He further explains that access to such data must only be given to employees who deal with such data to complete the task. Zineldin (2006, p. 432) explains that when sub-suppliers have to use data from CRM, it is the legal obligation of Royal Mint to ensure they first commit themselves to restrictions similar to what CRM company has put in place. There may be legal restrictions as to the transferability of CRM data. West (2000 p. 66) explains that since privacy issues may be dealt differently in different countries, CRM may only be moved to countries with similar guidelines on privacy. Wilson, Daniel and McDonald (2002 p. 198) further note that European Community Commission has harmonized guidelines for its member countries and this allows for Royal Mint to move CRM data to countries within the EU but under customers consent. Privacy in the use of CRM data is both a legal and an ethical issue (Zineldin 2006, p. 432). In the use and dissemination of personal information, CRM must uphold the five principles as a guideline used in the EU countries, America and Canada as observed by Wilson, Daniel and McDonald (2002 p. 198). The principle includes notice; where the customer has to know when their information is to be used. Consent is another principle which demands that the customer needs to be informed how their information is to be used. The customer must also be allowed access to their data where they can change such information. Royal Mint has an ethical responsibility of ensuring the security of customer’s data from loss, fraudulent use, unauthorized access and destruction. There is also an issue of enforcement by the state where in case a customer is aggrieved in the way his information is used, they can take the company to court. The other issue in the use of CRM data is that of online contracts. Wilson, Daniel and McDonald (2002 p. 198) explain that online contracts are different since a customer accepts to the terms of the contract by a click of a button. In this method, known as click-wrap contracting, it is advisable that the company seeks the advice of a lawyer when coming up with a CRM system to avoid contractual problems as explained by West (2000 p. 66). Recommendations The Royal Mint Company should adopt and implement the use of CRM system in the management of its marketing functions. This recommendation is motivated by the advantages of CRM system application in the facilitation of the success in the marketing goals of the company. The CRM system will help the company to interact with its customers, obtain marketing information and effectively manage it in making marketing decision and plans in addition the implementation of the CRM system is recommended because it will allow the company to evaluate the success of its marketing strategies. In implementing the system I would recommend that Royal Mint only authorizes specific number of people to access customer information. I also recommend that they go through all the regulations that control the use and transfer of CRM data to avoid legal cases being brought against them. Conclusion The elements of a CRM system include information technology, people and the organization, procedures and policies for the processing information within various functional areas of a company. The application of CRM in marketing involves the use of the system to obtain information from the customers which is used in making marketing decisions and plans. The interaction of a company with its customers is facilitated by the use of a CRM system in addition to the evaluation of the success of marketing through the information contained in the system. Despite the numerous benefits of CRM, Royal Mint must be diligent in ensuring that there is privacy of in the use of customer information. The company must also control the movement of such data to ensure that it can only be moved to a country with similar guidelines as those in UK. References Boulton, M 2011, 'Collectable 50p Olympic coins: in Mint condition', Forecourt Trader, p. 48 Gurau, C., Ranchhod, A. & Hackney, R. 2003, "Customer-Centric Strategic Planning: Integrating CRM in Online Business Systems", Information Technology and Management, vol. 4, no. 2-3, pp. 199-214. Gilkes, P 2009, 'Royal Mint fails to provide necessary small denominations: Industrial Revolution triggers public to meet money needs of commerce', Coin World, 50, 2562, pp. 92-94.. Khodakarami, F, & Chan, Y 2011, 'Evaluating the Success of Customer Relationship Management (CRM) Systems', Proceedings of the European Conference on Information Management & Evaluation, pp. 253-262. 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