Customer Relationship Management Issues - Research Paper Example

CRM Executive summary The primary purpose of this study has been the evaluation of the how important CRM has been in term of business operations and how the core business operations of a company can be affected by an inefficient CRM system. The study evaluates a company’s strategy using various theoretical models and frameworks of CRM and also provides a theoretical perspective on how a company can implement CRM to create a sustainable and competitive advantage. The study also highlights the key features and proponents of CRM and how effectively can they be implemented. In the end, the study outlines a conclusive summary and few recommendations for further development of the company’s business strategy by taking into consideration of the crucial role of CRM and for business management. Introduction CRM, that is, customer relationship management involves all characteristics of interface between the company and its customers, no matter, if it is related to a sale of a product or any service. As per Mendoza (2007) the term customer relationship management is frequently employed to depict the relationship between the company and the customers, but at the same time CRM systems are also used in an identical mode to administer business acquaintances, customers, etc. Necessity of the CRM process Many companies in the modern era, although are not very popular and experienced in the implementation of CRM, but have different experiences related to it. The core focus of the CRM model is to focus on customer retention, information analysis, processes management and they in turn help to increase productivity, quality, improved communication and frequency of commitment by continuous company evaluation. (Hall & Tomkins, 2001) Although a huge number of successful organizations have found the implementation of CRM very effective but some companies are not able to comprehend in an effective manner because they have been highly successful without implementing this model (Burgess, 2008). To such extent they have achieved the concept of diversity along with performance objectives. So the assurance of enhancement of operational activities with implementation CRM may not be guaranteed. Internal and external drivers of CRM implementation Internal drivers The internal driving forces of CRM include all crucial which have a direct or indirect influence on growth and popularity of a specific service or product. It may include suppliers, consumers and most importantly the target market/segment. (Walter, Müller, Helfert, & Ritter, 2003) From a management point of view, it may include other important business factors such as financial management, procurement, sales, research and development. According to Levi & Slem (1995), companies in the business sector have implemented various strategies to consider some very important plans and have been able to certain very important and effective strategies which may be implemented when devising such important plans in a highly lucrative sector. External drivers The important external factors of CRM which can be emphasized may consider the business environment of a company on a macro level. They may include all social, technological, economical and environmental factors which may have a direct influence on competitive and marketing strategy. (Zbaracki, 1998) The CRM model has been able to propel customers to such a extent that it can directly fulfill their needs. From a business perspective, companies must distribute and market their products in a manner which influences individual people who may have different spending patterns and motives as well have a variance in their disposable income but all the business factors are interlinked in such a manner that they are able to influence them directly. (Sebestyenova, 2007) Key features of CRM According to Payne & Frow (2005), uncomplicated and simple to employ with the other software’s: it is imperative for a CRM to be uncomplicated and simple in such a way that it can be employed with the other software as well, that is, it should not have the compatibility issue, as it won’t be effective for the company if the company won’t be able get the employees to operate it and subsequently the employees will be demoralized to operate it which would eventually urge them to resist against the operation of such a CRM. Distant access: it is also vital for a CRM that it should have a distant access feature too as well and that would be when it can be accessed not only form company’s office but also from other places as well (Peppard, 2000). For example, in case of data entry, it can also be done then from the client’s location or from an associate’s site. Flexible access: besides a CRM to have a distant access feature in it, it should also have in it a flexible access feature as well. It would be useful for a company in case of; for example, a ground sales worker often needs to make contact with the company and for that, he needs the contact data and other basic information as well so that he can complete the task on timely basis which is assigned to him (Ryals & Knox, 2001). Well-built multichannel assistance: a CRM should be such that it has a well-built multichannel assistance not only to assist the flexible access feature of the CRM but also to assist other motives as well of the company. (Brown & Coopers, 1999) Support should be such that it is not only well built but also obtainable from an additional channel as well. For example, besides an online assistance, a service contact number is also indispensable for the company Assistance in decision making: Accumulating facts is of no use, if the meaning of it is not understood, In order to apply it. CRM results must facilitate the companies with the access to decision making regarding both that is not only for sales but also for marketing as well. Strategy As stated by Bull (2003), with an increased level of competition in the business world, it is highly important for companies to plan strategically but this may require consideration of many important factors, which include market condition, customer requirements, organizational environment, etc. Such factors are determined by business and operational excellence and these important issues must be integrated with business goals for development of a strategic plan. But the implementation of CRM strategy must be distinguished from corporate strategy. Kumar (2010) has strongly emphasized that CRM deals with business strategy and also competes for a various set of customers and increasing their loyalty and commitment while corporate strategy determines the rivals to compete with. 1 Customer focus One of the most important elements of an effective CRM strategy is customer retention. Customer demands are increasing in a huge manner and organizations are bound to deal with customers, their demands and expectations and can thus gain a huge advantage in this manner. CRM, in this regard aims to develop better customer management and communication. Information related to customers is evaluated and efforts are made for customer satisfaction and commitment. (Yu, 2008) Though key elements of CRM may not be directly indentified but each and every objective is interrelated to each other in such a manner that they tend to be almost the same. To acquire quality in either products or services, it is vital to comprehend client’s demands and to communicate with them effectively (Brown & Coopers, 1999). It is very important for companies to assess requirement for how product reliability as well as service speed. Although organizations do have internal as well as external customers but their output can be shared with each other in a different manner. A company must have an open and transparent relationship with its customers and it must be developed and maintained in a manner which is able to obtain regular input for product design, customer loyalty and commitment. According to Winer (2001), strong and effective communication among customers and companies enables delivery of high quality products and services and helps to build a highly successful relationship among them. Such improvement is possible by obtaining regular feedback and compliments of the customers regarding product and service design as well as quality of products and services. 2 Product/Service design Product and service design is highly important from organizational perspective. (Amit & Schoemaker, 2006) Performance of an organization will be improved by building an effective and highly productive product and service design which can be done through the following process: According to Chakravorti (2004), when designing any product or service, a product or service which can be designed with close cooperation and coordination will have less modification specifically when it reaches the production execution and thus it increases efficiency and productivity of a company and reduces inefficiency. Through evaluation of customer demands and requirements, organizations can build a product or service design which is able to evaluate and analyze acceptability of future process and service designs. To meet customer demands and requirements, organizations have to develop new ideas and concepts which have high productivity and profitability motives. 3 Information analysis According to Bose, (2002), CRM heavily emphasizes on making important decisions after analysis of data which focuses on customer requirements, operations activities and also attempts to lead businesses to success. CRM does provide huge variety of techniques for companies to process their data and information with efficiency which may include cost-benefit analysis, control charts, etc. Regular collection of business data and its regular analysis is highly beneficial for business improvement and also gives a company a psychological and competitive advantage but the process of data collection and analysis can also hinder in company performance. Organizational performance in companies may not be very effective and may also affect companies which are internally unstable. (Mendoza, 2007) It’s a fact that information analysis is highly beneficial but some researchers have found it to be highly irrelevant action in few cases. These situations are likely to appear in cases where the process of CRM may progresses form process manufacturing to other important business applications such as marketing and service activities. 4 Process Management According to Abraham & Knight (2001), success level of any organization can be directly related to methods and frameworks for designing their products and services and how such process and methods can be integrated to production, delivery requirements and management of company. Due to the fact that all processes from product design to product delivery are directly interlinked, each process has its own importance. Products may be unsuccessful not only if it lacks quality but also if it is not delivered on time and is able to fulfill customer demands. Also, behavior of suppliers will directly affect the acceptability of a particular product in the market. According to Cook (1998), process management may not be a direct component of management theories but it is certainly considered to be a direct extension of business re-engineering and service quality. Several organizations are observed to have huge improvement in considering product design and engineering. Process management not only allows projects and services to be delivered on time but ensures time for problem detection and can be modified on time (Burgess, 2008). 5 Training and Support According to Verhoef (2003), CRM software proposes an extensive variety of gears for customers to study and implement. Numerous consumers would then need various types of certifications and trainings so as to achieve the fundamental ability which is essential to be successful with the latest CRM. On one hand, there are some CRM systems that offer certifications, visual and other various sorts of trainings. And on the other hand, there are then other types of CRM systems that propose solo or continuing personal set and person coaching. Following things are to be considered throughout training, and they are as follows: Spot each training choice prematurely. Provide the prospective CRM system customers a decent beginning by introducing to them a general idea as to how they can study CRM to implement the latest CRM gears. Recognize what is for without any charge and what is not. Appraise trainings for value and also to get ready the customers for prospective training (Reinartz, Krafft, & Hoyer, 2004). Do some preparations regarding as to how the gaps in the training could be filled up. Often it happens that the on hand training resources couldn’t cover up all of the CRM attributes, which the organization strategizes to utilize. The existing gaps if any must be readily identified, as well as, in black and white materials, visual, or the other various sorts of training. And then subsequently, do some preparations as to how such gaps may be filled up, whether with the assistance of in-house experts or via external experts (Ryals, 2005). Study as per the actual or existing circumstance or situation accordingly. It must be ensured that CRM expertise is applied in such a way that the genuine facts are exercised, which the trainees can study and implement. Prepare the prospective trainers for the prospective training. All the procedures, techniques and the methodology applied throughout the training should be put into a written form, to assist the prospective training of further personnel. CRM implementation process Implementation of a CRM process within a business can prove to be a highly successful business tool within a workplace (Winer, 2001). A flexible and highly business system allows companies to produce better and productive results. With intense competition in business, it is very crucial for companies to have an integrated and technically sound business process allows them to achieve the desired results within the stipulated time period. (Stone, Woodcock, & Wilson 1996) The implementation of CRM in this regard can be elaborated as follows: As stated by Chen & Popovich (2003), greatest benefit on implementing the CRM process is implementation of an integrated information system. The CRM model links all business activities by consolidating a segregated business into an integrated process. The implementation CRM allows companies to consolidate their crucial business operations (e.g. supply chain, finance, procurement etc) into a single business model. The implementation of CRM allows businesses to increase their shareholder confidence and enhance a company’s worth. Such systems allow companies to improve their revenue generation and profitability.  They help a company to possess a deep understanding of the business market and assess and evaluate behaviour and attitude of various customers and their decision-making process (Wernerfelt, 2006). CRM allows company managers to consistently compare past performance of their business by creating an analytical system and utilizing core objectives and goals of business (Campbell, 2003). Management and senior company officials can easily evaluate and compare past business trends of the company and make a forecast for future performance. Businesses which implement an effective CRM strategy not only benefit in the short term but can enjoy several long term benefits. The core reason being that CRM is directly related to long term as well as short term business goals and gives high importance to each and every move of the company. Such processes can create better understanding among different associates of a particular company. (Gefen and Ridings, 2002) The CRM process allows management of an organization to generate highly accurate and in-depth business reports which allows a company to have a better understanding of performance analysis of its business and helps in making decision which are beneficial for the company (Dyche, 2002). It allows a totally new dimension to the business and helps management of a company to improve its business sectors. Conclusion According to Ryals & Knox (2001), in order for a CRM to be actually effectual, a company has to persuade its personnel that such a change, to bring CRM, would not impair their interest in the company and it is only for their betterment, to assist them in their work. After that, the company then must evaluate its business tactics to decide as to what changes would be required to be made in order to adapt itself with the technology of the CRM software, but, in such a way that it would not force the company to alter its overall objects, which would eventually be prejudice not only the companies position in the market, but also its personnel and stakeholder’s interests as well. And then the company must decide what sort of facts regarding the customers would be pertinent for the company, to use it accordingly and appropriately. Lastly, a squad of cautiously chosen managerial staff must be formed who would be assigned a task, to select the appropriate technology to mechanize which requires to be mechanized. And this procedure would depend on the dimension of the company and also on the size of the facts too and this may require at least a couple of weeks to a year or more than a year may be. . 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