Customer Relation Management System - Case Study Example

Customer Relation Management System Name: University: Date: Customer Relation Management System Introduction Customer relationship management (CRM) as defined by Chen and Popovich (2003) is a combination of technology, processes and people seeking to understand the customers. CRM is an integrated approach for relationships management by concentrating on customer relationship and retention development. CRM has developed from advances in organizational changes as well as information technology into customer-centric processes. Chen and Popovich (2003) posit that companies that successfully implement CRM can benefit from long run profitability as well as customer loyalty. Still, successful use of CRM is subtle to numerous companies; mainly for the reason that they do not know that CRM needs customer-focused, cross-functional, company-wide business process re-engineering. Currently, CRM according to Soliman (2011) is the most crucial targets in almost 60 per cent of the projects across the globe. Great technological advancement assisted in the division of market territories, improving customers’ communications, offering a platform rich with information in order contribute in the improvement of the efficient strategies for managing customers. Using Tesco and Sainsbury’s as the case study and real world example, the paper provides an analysis of Customer Relation Management (CRM) system. Literature Review CRM according to Lyu, Chao, Chen, and Huang (2012) was formerly from contact management, where it specialised in gathering information concerning the contact between the customer and the company. CRM main concept is to offer the customer expectations’ value, so as to realise customer satisfaction as well as generate customer loyalty. In view of this, Lyu, Chao, Chen, and Huang (2012) observed that effective CRM model, with suitable technology for supporting communication between customers and enterprises can result in a good relationship between customers and enterprises. Consequently, this will lead to customers’ retention as well as successfully improve customer loyalty. Besides that, CRM implementation as mentioned by Lyu, Chao, Chen, and Huang (2012) can facilitate in differentiating the target customers, listening to the voices as well as comprehend the key customers’ needs, and in establishing the business position and focus. For this reason, the value of the company must be customer-oriented so as to offer suitable prices, services and products at the right time to the required customers for maximisation of the customer relationship value. For an organisation to be competitive, Alipour and Mohammadi (2011) argues that it must be able to adjust itself to the needs of the customer swiftly. Competitions are increasingly making the organizations have relationships and more contacts with the customers in the markets’ world. Therefore, CRM is described by Alipour and Mohammadi (2011) as the commercial process in the Business-to-business (B2B) environment that gets the organizational structure ready to survive and improve in trading. Therefore, CRM is a strategic support process that offers value for the sellers as well as buyers and brings about outstanding benefits. Undeniably, the modern world is the world of competition as well as quality and the current world position, concerning service and production is in a manner that all countries can produce, serve, as well as meet technological needs in various contexts. Still, their dissimilarity is in the production quality as well as the delivery idealization of the service to customers. CRM implementation according to Fabac and Mance (2011) needs a systematic approach and epitomises an issue of organizational design. Basically, CRM needs a multifaceted, cross-functional integration of operations, processes, people as well as marketing capabilities facilitated by means of applications and technology. The economic growth of the service sector has resulted in the fact that service companies with demanding customer contacts need certain some changes in the organizational design. High consumer uncertainty results in a need for the organizations to find creative responses as well as process new information. In this regard, Fabac and Mance (2011) points out that design is crucial and structures of the organization with less formalization and more decentralization can process the new information. Soliman (2011) asserts since late nineties CRM has created much attention, particularly amongst the practitioners as well as academics. More attention has been directed by CRM towards different important aspects, which includes direct relationship necessity between marketers as well as customers, the significance of retaining the present customers, as well as the certainty of developing lasting relationships with customers rather than the method of customer-oriented transaction so as to increase institutions’ profitability, particularly in the current economy that is increasingly competitive. For this reason, contemporary firms shifted their attention to the consumer relations management system and abundant investment to the infrastructure, with attention to the great Information Technology advancement. Soliman (2011) argues that performance improvement can be realised through focussing on CRM. In a number of organizations, Chen and Popovich (2003) posit that CRM is merely a technology solution extending automation tools for sales force and separate databases so as to bridge marketing as well as sales functions to enhance targeting efforts. Besides that, a number of organizations view consumer relations management system as a tool designed precisely for one-to-one communications with the customers, the only responsibility of marketing, call centres or sales/service departments. Chen and Popovich (2003) hold the view that CRM is not only a technological application for service, sales and marketing, but instead, when successfully as well as fully implemented, it becomes a technology-integrated, customer-driven, cross-functional strategy of business process management that capitalises on relationships and involves the whole organization. In essence, the business strategy of CRM leverages finance, human resources, operations, marketing, customer service, R&D and sales, in addition to the Internet and the information technology for maximisation of customer interactions’ profit. CRM provide consumers with convenience, simplicity and customization of finalising transactions irrespective of the channel utilised for interaction. Furthermore, initiatives related to CRM have led to augmented competitiveness for the majority of enterprises as evidenced by lower operational costs as well as higher revenues. Efficient and effective management of customer relationships increases customer retention rates and satisfaction. Therefore, applications of CRM assist organizations examine profitability as well as customer loyalty on measures like longevity, dollars spent and repeat purchases. Case Study and Real World Example In the United Kingdom, the major retailers have continually espoused policies as well as strategies of CRM. A number of studies have pointed out that; successful implementation of CRM can have a positive impact leading to business profitability as well as growth. Sainsbury’s and Tesco’s Loyalty Card holders rarely shop at the other retailers; therefore, responsiveness as mentioned by Hassan and Parves (2013), is a crucial factor for successful CRM, and newsletters delivered to the customers offers a reliable means of sharing information. Tesco is a UK-based retail chain stores started in 1919 and introduced the Tesco Club card scheme in 1995 for offering the customers’ service benefits outstandingly. In 2000, the company introduced the www.tesco.com so as to encourage the e-commerce trade after introducing the ‘First Class Service’ between 1993 and1994. Besides that, Tesco had launched the ‘One on Front’ service with the intention of reducing the time consumers wait at the check-out. The company achieved effectiveness by means of the Club cards information on areas such as market research, media effectiveness, customer services, pricing, merchandising, customer acquisitions, promotions, and customer communications. On the other hand, Sainsbury’s was started in 1869 with the company experiencing tremendous growth during the Victorian period (1837–1901) (Hassan & Parves, 2013). The company efficaciously launched the Nectar Card Scheme, which consequently raised enormous response amongst was extended until 2020. Basically, the Nectar card scheme is has a connection with many partners and draws more customers’ attention from different countries. Imperatively, the Nectar card has enabled Sainsbury’s to created partnerships with numerous organizations and retailers and facilitates consumers’ information collection with regard to different issues. Analysis and discussion Both Sainsbury’s and Tesco have continued applying CRM strategies into practice so as to improve profitability and bring about a successful relationship between the company and the customers. Tesco considers CRM as a powerful tool that has helped the company to distribute magazines regularly to more than 150,000 customers showing exclusive as well as latest offers. Such magazines have the latest news, articles and advertisements on the services and products offered by Tesco. Besides that, Tesco introduced a loyalty scheme known as a Club card for retaining as well as gaining customers’ loyalty. Effective CRM practices at Tesco have as well been expanded across the globe, and the company contacts over 8 million customers by means of the CRM adopted tools. So as to remain in touch with potential as well as the existing customers, the company introduced ‘www.tesco.com’. All such efforts have positively impacted the process of customers’ decision making. Sainsbury’s, on the other hand, has been progressively encouraged its customers to shop physically in its stores and virtually in its online stores. Akin to Tesco, Sainsbury’s also offer its customers magazines and has subsequently introduced the Nectar Card. The company has been prioritised information collection on the experiences of the customers, and in consequence, this has become a crucial element for formulating most effective and beneficial marketing strategies. The case study of Sainsbury’s and Tesco exhibit that customers can remain loyal when their needs and demands met. To maintain a solid CRM base, both Sainsbury’s and Tesco have introduced the Loyalty card schemes, which allow the customers to benefit from the policies of CRM used by these retailers. Still, customer loyalty may not be granted as non-flexible and static since some customers go to other retailers to either compare the prices or the accessibility of services and products. At Sainsbury’s and Tesco, the holders of the Loyalty card have not limited their shopping to these retailers, and therefore, loyalty cannot be perceived blindness since there are many alternatives that consumers can access. The companies have merged the previous CRM policies with the conventional and electronic means of communication. This is for the reason that; unlike the small retail stores, comprehending the customer shopping patterns in large retailers such as Sainsbury’s and Tesco is hard due to a large number of customers. This has consequently, incited large retailers such as Sainsbury’s and Tesco to adopt the ever-changing features of the consumer relationship management system. Personal and Reflective Thinking In view of the case study and the literature review, I have realised that CRM has been covered persistently the broader framework of developing and maintaining customer relationship value. In consequence, this has broadened in terms of products or services marketing together with the indirect or direct sales pattern. I have noted that the CRM approaches are by and large reliant on both the suppliers and the customers of products or services. I agree with a number of authors such as Fabac and Mance (2011) that the contents core has been altered considerably with advancement in technology and for this reason, a number of companies have recently adopted innovations that are more oriented to technology. I have realised that CRM has turned out to be more than an aphorism, as the strategic approaches intended for enhancing shareholders value through the creation of a suitable relationship with key customer bases or customer segments. The CRM policy in my view should focus on the development of products and services through espousing expanded strategies, rather than just remaining restricted to maintaining the customers’ relationships. The CRM centres of attention as well as core contents have significantly transformed with advancements in technology and therefore, these innovations that are technologically oriented have compromised the retailers more frequently than in the past. Conclusions and Recommendations In conclusion, the paper used Tesco and Sainsbury’s as the case study and real world example to offer an analysis of Customer Relation management (CRM) system. As evidenced in the paper, the affectivity and implementation of CRM are extensively reliant on the suitable utilisation of information communication technologies together with the relationship marketing strategies crucial for delivering longer term profitable goals. Basically, consumer separation and perception is effective for realising competitive advantage; therefore, companies must focus more on promoting quality products. Competitive advantage can be realised by investigating complaints of the customers; therefore, it is recommended that organisations introduce electronic systems for complaints’ investigation, for recognising complainant customers and make them satisfied. CRM is crucial for attracting and maintaining customers, and companies must promote cooperative plans as evidenced by Sainsbury’s and Tesco who offer their customers with efficient systems for interaction. References Alipour, M., & Mohammadi, M. H. (2011). The Effect Of Customer Relationship Management (CRM) On Achieving Competitive Advantage Of Manufacturing Tractor. Global Journal of Management and Business Research, 11(5), 1-10. Chen, I. J., & Popovich, K. (2003). Understanding customer relationship management (CRM) People, process and technology. Business Process Management Journal, 9(5), 672-688. Fabac, R., & Mance, I. (2011). Customer Relationship Management System in Occupational Safety & Health Companies: Research on Practice and Preliminary Design Solution. Interdisciplinary Description of Complex Systems, 9(2), 101-118. Hassan, A., & Parves, M. (2013). A Comparative Case Study Investigating the Adoption of Customer Relationship Management (CRM) The Case of Tesco and Sainsbury’s. International Journal of Managing Value and Supply Chains, 4(1), 1-10. Lyu, P. J.-J., Chao, D. H.-L., Chen, D. C.-W., & Huang, L.-Y. (2012). Developing a Customer Relationship Management Model for Better Health Examination Service. Nang Yan Business Journal, 1(1), 38-46. Soliman, D. H. (2011). Customer Relationship Management and Its Relationship to the Marketing Performance. International Journal of Business and Social Science, 2(10), 166-182. Read More