E-loyalty and Customer Relationship Management - Coursework Example

E-loyalty and Relationship Management Table of Contents I. Introduction ……………………………………………………… 3 II. Importance Relationship Management (CRM) ……. 4 III. Importance of E-Loyalty ………………………………………… 4 IV. Customer Relationship Management (CRM) and E-Loyalty Challenges Brands Online ……………………………………….. 5 V. Conclusion ……………………………………………………….. References …………………………………………………………….….. Introduction Businesses exist because of its customers. This is the main reason for the need to develop a good relationship between the customer and the business organization. For many years, a lot of businesses have started to invest in customer relationship management (CRM). It has been defined as loyalty programs for businesses and is considered to be an important tool in keeping the loyalty of the customers towards a specific company. Small business could take over the market share and the profitability of large companies by using e-loyalty programs. Many times, small businesses acts like consumers. Some sole proprietors use online programs in targeting nationwide and global customers by using accurate information regarding the business and the use consumer programs such as credit card reward programs as a strategy in keeping their loyal customers satisfied. It is common that these reward systems are tailored according to the needs and expectations of the customers. Business-to-business (B2B) or e-biz is an effective tool in the exchange of products, services, and information between business and consumers. Over the years, B2B has proven to be very effective in closing business transactions between the business owner and the customers. According to a study that was published back in early 2000, the profitability of using B2B has exceeded the ‘e-tailing’ by 10 to 1% and is expected to have an annual growth of 41% over the next few years. (Jones, 2001) The reason for the success of using B2B is the application of the CRM and e-loyalty within the system. This study will determine the differences between the importance of CRM and e-loyalty as well as its challenges on online brands. Importance of Customer Relationship Management (CRM) Customer Relationship Management (CRM) is a ‘software’ that helps a business organization in managing its customers better. (Walsh, 2007) CRM software enables the sales people and service representatives to have a quick access over the information related to the customers. This allows the sales force of the company to immediately provide the customers with a more customized service according to the customers’ needs regarding the products and services the business is offering. (Williams, 2006) According to Kumar and Reinartz (2006), CRM is defined as a strategic process of selecting the customers a firm can most profitably serve. It is also capable of shaping the interactions between a company and these customers with the goal of optimising the current and future value of the customers for the company. (Kumar and Reinartz 2006, 6) Based on the definition, CRM is a process of enterprise-wide that has the potential to affect decisions related to marketing communications, pricing, customisation of products and services, resource allocation across different customers or customer groups, and customer support services. The capability of CRM for a web access gives it more value in the whole process. Because of the effectiveness of CRM strategy, it is commonly used today in maximizing the customer value across the global customer portfolio of the company. (Ramaseshan et al., 2006) Importance of E-Loyalty E-loyalty used in online marketing is a long-term strategy used by businesses based on a value proposition in order to enhance the relationship building between the company and its customers. (Reid Smith and Associates, 2001) Basically, e-loyalty is about engendering trust and value towards the valuable customers by humanizing digital loyalty. Therefore, it helps create a strong relationships with the website’s prospective customers and customers online. Implementing E-loyalty programs in B2B can be more effective than the traditional B2B marketing because the Website offers a virtual sales and training room that is accessible 24 hours a day. One thing nice about the e-loyalty program is the fact that it provides a real-time feedback via Web logs, tracking software and customer feedback prompts. This feedback can allow the administrator to identify the problems and provide a feedback faster. Therefore, it is more convenient on the part of the customer. (Anderson and Srinivasan, 2003) The fact that the Web is interactive, it can more closely mimic a human relationship through the use of ‘two-way dialogs.’ (Smith, 2007) Each customer has the capability to search for different websites rather than to spend a long time waiting for the product representative to return their call when a customer is engaged in a traditional business process. The use of creative product demos online gives the client a more personalized ‘real life’ experience that is critical in building the first impression towards the quality of professionalism of the company. Customer Relationship Management (CRM) and E-Loyalty Challenges Brands Online It is important that we realize that branding is about building awareness and that loyalty is much deeper than branding since it provides an emotional bond between the customer and the product or services that the company offers. Loyalty should be strong enough to stand the challenges related to the test of time, price, and tight global competition. Branding can easily be accomplished through numerous web advertisements. Making a huge number of global consumers aware of ‘brand name’ contributes a lot when it comes to convincing the prospective customers in patronizing the company’s products and services. Brands could be enhanced through constant interactions between the customer and the company. Over time, the brand can become irrelevant in the market. (Kania and Slywotzky, 2000) For this reason, the company has to constantly innovate ways that could promote the viability of a brand. However, there are also unforeseeable risks in brand innovation. (Kania and Slywotzky, 2000) In order to keep the customer despite the tight competition in the global markets, it is a challenge for the company to design a long lasting strategy that could make the customer experience harmony with the existing brand. (Feakins and Zea, 2000) This will eventually result to customer loyalty. On the other hand, customer loyalty derived from e-loyalty is about creating a two-way relationship between the customer and the company that requires constant interaction, trust, and mutual respect. In the absence of loyalty programs, some of these businesses could be incapable of building a strong bond that is necessary in defending a brand against a strong competitor. The tight competition web markets contributes to a lot of challenges in the Customer Relationship Management (CRM) and E-loyalty when it comes to maintaining Brands online. The most important challenge that online companies have is to build a solid customer loyalty rather than expanding the online channels of the company. According to Jones and Sasser (1995), a high level of customer’s satisfaction could eventually lead to a high customer loyalty. (Jones and Sasser, 1995) The authors noted that: “customer-satisfaction information can be used as a critical barometer on how well the company is serving its customers.” (Jones and Sasser, 1995, p. 95) When a customer keeps on returning to the website to purchase some goods or services, it is most likely that the customer is very much satisfied with the service he/she is getting from the company. For this reason, there is a higher chance that the company has won the loyalty of the customer. Immediate responses towards the customer’s concerns is another challenge that the website administrator has to give importance. (Gommans, Krishnan, and Scheffold, 2001) It could mean that the company has to be online 24 hours a day in order to keep up with the demands of the global markets. To address this issue, the company needs to have a wide connection globally in order to set up a group of administrator across the country in order to keep the company’s operational expenses low as well as be able to keep the business running all the time. The use of e-loyalty enables the company to identify the ‘root cause’ of the most dissatisfied calls. (e-Loyalty Corporation, 2004) The administrator or the marketing staff could immediately take the necessary actions to satisfy the needs and wants of the dissatisfied customer. This strategy could eventually build a better loyalty between the company and its customers. The market share of the company can be very much affected when a customer fails to receive a prompt service from the company. Because of the constantly growing number of online businesses, it is easier for the customer to search for another website that offers the same service that he needs regardless of the costs. Not all customers are after low prices. For this reason, the company needs to strive hard in order to retain its loyal and prospective customers. A great number of these customers weigh the ‘after-delivery satisfaction’ more than the price they have to pay. (Jiang, 2004) In order to achieve a good ‘after-delivery satisfaction’, it is a challenge for the company to maintain its reliability at all times. ‘Reliability’ is often linked with aspects such as delivery time – whether the product was delivered as promised, and the consistency of customer service including the order tracking, on-time delivery, customer support and quality of product and services that meets the customer’s expectation. (Smith et al., 2000) Up to the present, there is still a huge portion of the market segment that could be considered as a prospective customers for online trading. Building ‘trust’ with the customer is the most difficult challenge of all. It is equally important for the company to spend extra time and effort in winning the trust of its customers because it could affect the long-term business transactions between the company and the customer. The customers’ concern regarding the security, privacy, and protection against business scams are still very high. (Anderson and Srinivasan, 2003) A lot of people have qualms in providing credit card information to an online business that has no physical location because it increases the perception of risk towards some of the customers. Others do not trust the online businesses with regards to keeping their purchase data confidential. In line with the issue of trust, it is a challenge for e-loyalty technology to continuously upgrade and develop new technology that could totally prevent the risk of security related problems over the use of the online business transactions. Because of the tight competition in the global market, it is a challenge for the company to maximize the use and benefit of CSR and e-loyalty in order to be competitive with the demands of today’s markets. With regards to this issue, some companies offer a multiple promotions that runs throughout a multiple product divisions; customer support centres; and sales teams at any given time. The use of e-loyalty program could centralize all customer communications into ‘one voice’ that remembers and recognizes the needs of its customers. It means that only promotions that directly meet the customers specific needs and satisfactions are advisable to use. The use of other multiple promotions such as benefits or rewards could also contribute to establishing the challenges in establishing online brands. Specifically, the application of benchmarking on the CSR and e-loyalty programs of the company should be used in measuring the performance of the company against other similar companies that also uses CSR and e-loyalty programs. Benchmarking will serve as a guide on whether the company is way below the industry level when it comes to the application of CSR and e-loyalty programs. (SSPA news, 2004) It is a challenge for the company to be able to determine their over all marketing performance as compared with the other companies in the same industry to ensure that the business is competitive enough to grab enough market share to keep the business successful and profitable. Conclusion Establishing online branding is a critical factor of making web businesses successful. In order to win the trust and loyalty of the global consumers and customers, the company needs to establish a good rapport and strong professional relationship with its customers. The use of customer relationship management (CRM) and e-loyalty programs enable the company to build a good long-term relationship with its customers. A lot of online businesses are becoming more customer-oriented with the use of customer relationship management (CRM) and E-loyalty programs. Specifically the CRM provides an excellent customer service by shortening the time requirement in every customer inquiry and other concerns. This is one major factor that contributes to the satisfaction of each customer. On the other hand, the use of e-loyalty programs enhances the relationship between the customer and the company by making its customers feels special. For this reasons, CRM and e-loyalty programs are two important keys to the success of online consumer marketing. CRM and e-loyalty programs face a lot of challenges in developing online branding. This challenges includes: build a solid customer loyalty, providing immediate responses towards the customer’s concerns, ensure the customers’ after-delivery satisfaction by maintaining the company’s reliability, and continuously upgrade and develop new technology that could totally prevent the risk of security related problems over the use of the online business transactions. Benchmarking of CRM and e-loyalty of similar companies within the industry could be very useful in keeping up the present standard of the company’s CRM and e-loyalty programs. *** End *** References: 1 Anderson, R.E. and Srinivasan, S.S. (2003) ‘E-satisfaction and E-loyalty: A Contingency Framework’ Journal of Psychology and Marketing; 20(2), pp. 123 – 128. Retrieved: May 6, 2007 < http://delivery.acm.org/ > 2 e-Loyalty Corporation (2004) ‘e-Loyalty Highlights Key Focus Areas for Growth in 2004’ Retrieved: May 6, 2007 < http://www.eloyalty.net/ > path: News & Events 3 Feakins, K. and Zea, M. (2000) ‘How Conoco Broke the Convenience Store Mold: Building Brand Equity through many “Moments of Truth”’ The New Brand Strategy: Are You Experiencing? Mercer Management Journal. 2000, Number 12. pp. 49 – 51. Retrieved: May 6, 2007 < http://www.mercermc.com/ > 4 Gommans, Krishnan, and Scheffold, (2001) ‘Figure 1: The E-Loyalty Framework’ in ‘From Brand Loyalty to E-Loyalty: A Conceptual Framework’ Journal of Economics and Social Research 3 (1) 2001, pp. 43 – 58. Retrieved: May 6, 2007 < http://jesr.journal.fatih.edu.tr/ > 5 Jenamani, M.; Mohapatra, P.K.J.; and Ghose, S. (2002) ‘Benchmarking for Design Evaluation of Corporate Web sites a Study’ Quarterly Journal of Electronic Commerce, 3 (4), 391 – 315. 6 Jiang, P. (2004) ‘Customer Intention to Return Online: Price Perception, Attribute-level Performance, and Satisfaction Unfolding Over Time’ European Journal of Marketing. Vol. 39, No. ½, 2005 pp. 150 – 174. Emerald Group Publishing Limited. Retrieved: May 6, 2007 < http://faculty.lebow.drexel.edu/ > 7 Jones, T. and Sasser, E. (1995) ‘Why Satisfied Customers Defect’ Harvard Business Review, November – December, pp. 89 – 99. Retrieved: May 6, 2007 < http://searchcio.techtarget.com/ > 8 Kania, J. and Slywotzky, A. (2000) ‘What Ever Happened to Burma-Shave?: Pattern Thinkers can Outsmart Brand Rivals in a Changing Marketplace’ The New Brand Strategy: Are You Experiencing? Mercer Management Journal. 2000, Number 12. pp. 35 – 46 Retrieved: May 6, 2007 < http://www.mercermc.com/ > 9 Kumar, V. and Reinartz, W. (2006) ‘Customer Relationship Management: A Database Approach’ New York: John Wiley. 10 Ramaseshan et al. (2006) ‘Issues and Perspectives in Global Customer Relationship Management’ Journal of Service Research 2006; 9; 195. November 2, 2006 Retrieved: May 6, 2007 < http://jsr.sagepub.com/ > 11 Reid Smith and Associates (2001) ‘What is E-loyalty?’ Retrieved: May 6, 2007 < http://www.e-loyaltyresource.com/ > 12 Smith, E.R. (2007) ‘Building B-to-B E-Loyalty’ CRM Today Retrieved: May 6, 2007 < http://www.crm2day.com/ > 13 Smith et al. (2000) ‘Understanding Digital Markets: Review and Assessment’ Brynjolfsson, E. and Kahin, B. ‘Understanding the Digital Economy, MIT Press, Cambridge, MA. 14 SSPA news (2004) ‘What Other Service Areas Should You Benchmark?’ July 13, 2004 Retrieved: May 6, 2007 < http://www.thesspa.com/ > 15 Walsh, K. (2007) ‘Customer Relationship Management’ Retrieved: May 6, 2007 < http://projects.bus.lsu.edu/ > 16 Williams, E. (2006) ‘What is CRM (Customer Relationship Management)?’ Retrieved: May 6, 2007 < http://searchcrm.techtarget.com/ > Read More