Customer Relationship Management in Luxury Hair Salon - Essay Example

RELATIONSHIP MANAGEMENT LITERATURE REVIEW CHAPTER 2: LITERATURE REVIEW The present chapter discusses the researches and studies already conducted on the same or relevant topics, which will be highly beneficial in respect of elaborating the vast topic in a more proper, vivid and refined way. “Customer Relationship Management” Ward submits, “refers to the methodologies and tools that help businesses manage customer relationships in an organised way.” (Quoted in sbinfocanada.about.com) CRM and marketing relationship are often applied as synonymous to each other. “Some of these two themes”, Nevin states, “offer a narrow functional marketing perspective, while others offer a perspective that is somewhat broad and paradigmatic in approach and orientation.” (1995: p 329) Thus, Nevin submits marketing a bit broader than the CRM, though he does not negate the significance of customer relationship management. Customer relationship management has been the matter of special attention for the organisations, marketers, investors and retailers. Feingberg et al. have conducted their research with special concentration on CRM in electronic retails under the title “The State of Electronic Customer Relationship Management in Retailing” and concluded that it is customers which serve as the pivotal point around which all the activities and schemes of the business environment revolve. “A business and marketing strategy”, they submit, “aim to integrate its technology, productivity and all business activities around the customers of the organisation.” (2002: p 473) Hence, they viewed customers and their satisfaction as the asset of the companies, without the help of which no strategic policies could be adopted or implemented. Parvartiyar & Sheth have strived to find out the relationship of marketing with the customer relation management. “CRM”, according to them, “represents an enterprise approach to developing full knowledge about customer behaviour and preferences and to developing programmes and strategies that encourage the customers to continuously enhance their business relationship with the company.” (2001: p 2-3) The writers are of the view that customer relationship management is highly supportive in completely understanding the growing needs and requirements of the customers, which is the most important issue for the growth and development of the organisation. Hill, in his article, vehemently emphasises upon the capturing of profitable customers for the enhancement of marketing and sales. “The most important thing in sales and marketing”, he views, “is to attract and retain your most profitable business customers. In order to accomplish this feat, you must devise and implement a customer strategy that builds, fosters, nurtures and extends relationships with your customers. Your company profits only when the earnings from retained customers exceed the costs to acquire and to service customers over time.” (Retrieved from Helium.com) The contemporary era is the age of personal relationship. Since almost all the big companies and brands are offering their services in one and the same rate, companies hire the services of the personnel that contain long list of relationship in the market. Jackson views intimate relationships with the customers as the only source of the survival in the business market. “Marketing oriented”, he writes, “toward strong, lasting relationships with individuals accounts pave the way towards the business expansion.” (1985: p 3) Developing long term business relationships with the customers and clients is the only strategy for business enhancement in the contemporary era. The scholars maintain it as the key to success for the companies. “The best companies”, Lamb et al. state, “view new customer attraction as the launching point for developing and enhancing a long term relationship, which will be productive in respect of setting new goals and strategies.” (2005: p 11) The customer relationship managers have to examine the whole manufacturing and sales processes keeping in view all the instructions of winning the approval of the customers. Moreover, pricing, placement and production procedures must also be taken seriously, so that the customers can afford their favourite products and services. Negligence from any of such liabilities not only harms the clientele and the corporate environment, but also it may severely damage the reputation of the organisation. The strategic managers are responsible to the state and public while articulating a strategic plan. "Private sector organizations are responsible to stakeholders and shareholders, while the private sector organizations are responsible to politicians, public and parliamentarians." (Johnson & Scholes, 1993: p 197) Globalisation has brought incredible changes in the business atmosphere all over the world. It has not only determined new dimensions in the competitive environment, but has also offered new dimensions in the field of customer care and marketing. “Globalization is most typically characterized as involving increasing borderless and the increasing compression of social life, which is dependent of social contacts and wide range of customers.” (Chase-Dunn, Kawano, & Brewer 1999). Globalisation has introduced an open market environment, where there are more opportunities of economic activities and marketing. There is an urgent need of exploring various markets and make researches on them. Countless companies have penetrated in the international market, and the requirements of the consumers from different schools of thought and belonging to different socioeconomic classes can be sorted out with the help of research methodology, so that both consumers and companies can obtain the best share in the global market of maximum choice and freedom. But every company does not capture the attention of the customers. “People trust those who put them in the proper context and distrust those who resist the images they seek to establish.” (Culbert, & McDonough, 1985: p 171) Velocity of commercial activities in the contemporary business environment has decreased the divergence between the marketing and research marketing on the one hand, and management and relationship management on the other. In this changing scenario, there is an urgent need of joint adventure by marketing personnel and public relation managers so that the maximum information regarding commercial activities could be found in this age of competition and globalisation. It is therefore, the age-old principles of marketing have taken a drastic change with the passage of time. “The need to better understand customer behaviour,” Winer submits, “and focus on those customers who can deliver long term profits has changed how marketers view the world. They have given up attending the customers in a traditional way.” (2001: p 2) The researchers have maintained desks along with the marketing managers and both the departments are in work with the support of each other in order to examine and investigate the characteristics of modern commercial developments. It is the fact beyond suspicion that the foundation of an organisation rests upon the philosophy, values, vision and goals of its management. It is the management that plays decisive role in respect of growth and development of the organisation. Bovee et al. have noted that development of close relationships with customers reflect the command of the personnel and managers over all aspects of management. “An organisation’s performance”, according to them, “could be measured by the quality and productivity they offer to their customers, leading to their trust and satisfaction on the one hand, and achievement of long term relationship on the other.” (1993: p 688) If management is more stable carrying long-term momentum of strategy, the paradigm of achievements will be more smooth and homogenous. “Managerial decision-making” Johnson & Scholes observe, “differentiates an organisation with other industries existing under the similar business environment.” (1993: p 47). Customer relationship management is extremely necessary in order to cope with the changing global business scenario. The latest technological advancements have made very easy for the companies to maintain complete record of the old and new customers. “Data missing,” Gates writes, “is a part of customer relationship management (CRM), in which information technology helps companies manage customer relationships on one-to-one basis, instead of on the mass-marketing model, and keeps the information updated.” (1999: p 230) Customer relationship is not limited to one single area of the products; rather, services play more important role in this regards. Satisfaction of the clients and customers is the major motive behind the corporate firms and organisations offering their products or services. “Since the profitable customer relationship”, Egan argues, “is the eventual motive of the Customer Relationship Management (CRM), which can only be achieved by obtaining customer satisfaction.” (2000: p 281) Bovee et al. also declare customer satisfaction as the vital issue for the companies, and displeasure of whom may put their business on stake. “When the customers are”, they state, “dissatisfied and when they receive unsatisfactory responses to their complaints, they defect to competitors.” (1993: p 689) It is in the benefit of an organisation that it must contain and establish clear sets of beliefs that might be altered according to the changes taken place in the commercial environment keeping in view what customers demand from them. It is therefore, most of the financial institutions have assigned their senior executives specific responsibilities to win customer satisfaction. “Commercial banks,” Newman & Logan argue, “often have different vice presidents for types of customers—railroads, manufacturing concerns, stock brokers, consumer loans, and the like—all these departments stand for providing the customers with best of the services and subsequent satisfaction.” (1976: p 364) Since customers are the most valuable stratum for an organisation, paying them proper care and attention is the most significant activity for the managers and employees. “The organisations,” Wailgum writes, “must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centres, mobile sales force staff and marketing and advertising efforts.” (Retrieved from www.cio.com) McNamara takes strategic planning as the outcome of the changing needs of the wide range of customers, which determines the articulation and revision of the strategic plans in an organisation. “Simply put”, McNamara notes, “strategic planning determines where an organisation is going over the next year or more, how is it planning to satisfy it clientele.” (2006) Kevork (2007) views CRM as a multifarious methodology in order to retain their attention and loyalty for long period of time. “CRM”, he states, “involves marketing activities given to customers through channels in a digital way sharing the same concepts such as: customer centric relationship, long-term lasting relations, customer management.” (2007: p 22) In the same way, McKenna looks for the conducting of a comprehensive market research for acquiring complete knowledge of all the customers call for from a particular brand. It is therefore, the customer first strategy should be adopted to meet the new market challenges. “The policy of putting the customers first”, he professes, “and shifting the role of marketing from manipulating the customers regarding their needs leads the way towards sharing the ideas and communicating of schemes within the business environment. It not only shows the producers right path of manufacturing a thing quite innovative and novel, but also keeps the customer in strong bondage of trust and confidence.” (1991: p 49) The organisations take into consideration the expertise of the individuals to deal with the customers while recruiting the staff. They may undergo some difficulties after recruiting the wrong sales staff, which costs their financial resources and wastes their time and energy on not complying with the demands of the customers. “There are two kinds of sales personnel: those who maintain already existing clientele, and those who bring new clients. The companies want salespeople who can generate new business and can make cold calls, build new relationships, and close a deal with a new client (or bring a deal to the owner, so they can close it)”. (Neitlich, 2004) The companies face the following difficulties on recruiting the wrong salespeople. Paulsen compares business relationship building to dating and marriage. “The customer and distributor will enter into a committed relationship and there will be issues that will test the relationship. A successful business partnership and a successful marriage depend on relationship-building or the dating process. Partners must understand each others strengths and weaknesses before they commit to the partnership.” (Paulsen, 2003) A firm’s international development has been viewed as an evolutionary process in which relationships with customers at international level are sought. “We could not deny the fact that relationships have always been an important part of business processes, but also it helps the performance of corporate firms in enhancing their volume and create competitive advantages over others.” (Ford, 1998: p 12) REFERENCES: Bovee, Courtland L., Thill, John V., Wood, Marian B. & Dovel, George P. (1993) Management McGraw-Hill, Inc. pp 688-691 Chase-Dunn, Christopher (1999) Globalization: A World-Systems Perspective Journal of World-Systems Research, 5, 176-198, from http://csf.colorado.edu/wsystems/jwsr.html Culbert, Samuel A. & McDonough, John J. (1985) Radiant Management. Power Politics and the Pursuit of Trust. 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