Ecommerce and Best Practices in CRM - Essay Example

Ecommerce and Best Practices in CRM Table of Contents Introduction 3 E-commerce and its implementation 3 CRM in Ecommerce 6 CRM Strategy for Ecommerce 8 Online Payment and Convergence 10 Change Management for Ecommerce 11 Why we need Best Practices in CRM for Ecommerce 11 Best Practices of CRM at Ecommerce 12 New CRM technology for best practice 12 Implementing CRM 13 Conclusion 13 Works Cited 14 Introduction The basic reasons behind the development of e-commerce (electronic commerce) are the widespread existence and easily availability of the internet for the exchange of transactions between sellers and buyers. The way of selling and purchasing goods, products, and services electronically with computerized business transactions via Internet, networks, and other digital technologies is acknowledged as e--commerce” (Laudon and Laudon 25) and (Stair and Reynolds 19). However, it does not include only selling and buying activities but it also comprises activities at the back of those market transactions, such as customer relationship management, marketing, payment and customer support delivery. In addition, by changing paper-based or manual business processes with electronic methods, and by utilizing information flows in contemporary and active manners, e-commerce can improve order processing, delivery, and payment for services, products, and goods as well as minimize corporations’ inventory and operating expenses (Laudon and Laudon 25). This paper presents a detailed analysis of the e-commerce activities specially customer relationship management (CRM). The basic aim of this research is to analyze best practices in customer relationship management. E-commerce and its implementation The internet has become a common medium (or source) for electronic commerce (e-commerce), since it is creating up to date methods for organizations to collaborate with their stakeholders and customers. In simple words, e-commerce means carrying out business activities/operations on internet (Norton, 2001, p. 371) and (Worthington, 2003). Amazon.com is one of the most well-known examples of e-commerce. It uses e-commerce to run its business. When someone gives or submits an order at Amazon.com or even just views the web site, Amazon.com is able to scratch various online and e-mail advertisements to user’s interest. Another benefit of e-commerce that Amazon.com uses is the capability to communicate and collaborate with stakeholders and partners (Ray, 2004). Below are some examples of corporations that are making use of the e-commerce techniques to increase their sales: (Stair and Reynolds 17-18) Name of Corporation Objective of adoption Description of e-commerce practice Godiva Chocolatier Increase sales as well as profits This business has created a very useful web site that helps customers buy and ship chocolates. Kim Land, who is director of Godiva Direct says, “in the beginning this system was launched to make money.” And in two years, online sales have reached to more than 70 percent. Environmental Defense Alert the public to environmental concerns This corporation successfully implemented the internet to alert the public to the exercise of catching sharks, taking away their fins for soup, and returning them to the ocean to die. In addition, the implementation of web site also helped people fax more than 10,000 letters to members of Congress regarding the activity. Fred Krupp, who is the executive director of the Environmental Fund says, “The internet is the very important term of ‘think global, act local.’” Buck man Laboratories Offering better employee training This corporation successfully implemented a web site to train its employees to sell mostly chemicals to paper companies, instead of bringing them to Memphis for training. According to its manager, “their retention rate is much better, and they have minimized a week in Memphis, which meant big savings.” In addition, the implementation of web based training has reduced the hourly cost of training an employee from $1,000 to only $40. Siemens Reduce expenditures This organization constructs and services power plants. By implementing a web site it is able to diminish the cost of entering orders/date and improved customer relationship management. The web site development expenditures were about $60,000 compared with a traditional solution that would have cost $600,000. Goldman Industrial Group Save time This company makes machine tools. By implementing a web site it able to reduce the time it takes to complete an order from three or four months to a week. Since web sites helps it systematize components and development with its suppliers and at its plants. Partnership America Make better decisions This company has created a web site for wholesalers of computer equipment and supplies. Now, the wholesalers and suppliers utilize its web site to make suitable decisions regarding expenses and attributes of different components of computer equipment. In addition, the system helps wholesalers link to Partnership America’s web site using cell phones. Altra Energy Technologies Get energy to companies that need it This company has created a web site which helps other companies purchase oil, gas, and wholesale power over the Internet. CRM in Ecommerce At present, organizations compete based on relationships, not just on the basic services and products customers expect. Additionally, the organizations must exactly identify which customer populations most openly make or generate their value and what facilities and benefits will keep these customers please and faithful over time. In view of the fact that customers drive business success and the leaders in this ground will be those corporations that most efficiently and certainly handle relationships with their customers. In spite of the worldwide financial hold up, organizations, mainly government agencies carry on to initiate CRM (customer relationship management) plans as a way of minimizing the expenses of conducting business operations along with encouraging superior levels of customer pleasure. Moreover, in order to effectively compete in current worldwide financial environment, organizations need to keep in mind that customers are the basic driver of business success, Furthermore, the broad variety of low-end choices may lead organizations to base accomplishment on cost, however the main concern is to find out if the CRM system being measured fulfills the organization’s needs. Customer relationship management (CRM) is a process of creating a broad picture of customer expectations, needs and behaviors as well as managing those attributes to improve business performance (Shaw; Hoots). According to (Gordon, CRM is a strategy, not a tactic), customer relationship management is the continuing process of discovering and generating new value with individual customers/clients, and maintaining the beneficial relationships over a lifetime association. In addition, it engages the understanding and managing of continuing association between suppliers and particular customers for shared revenue generation and sharing (Gordon, CRM is a strategy, not a tactic). Customer relationship management (CRM) plays a vital role in the e-commerce. In this scenario CRM analysis contains the entire information technologies that analyze data regarding corporate customers and then present it efficiently, facilitating business decisions to be made quickly and powerfully. Additionally, assessing hard facts regarding customers’ activities is much more advantageous than analyzing customer thoughts or forecasting customer dealings without solid data to support these postulations. In addition, a number of corporation at the present time collect terabytes of information regarding customers, such as buying cycles, demographics, product interest and reaction to marketing efforts (Gondwe; Gordon, Best Practices: Customer Relationship Management; Fernekees; Fathy). According to Fathy (2009), the customer relationship management is all about identifying the customers requirements and using this knowledge to augment online business sales as well as improve service. Additionally, customer relationship management builds the boundaries among service and sales (Fathy). According to Fernekees (2008) a best practice in CRM is the customer satisfaction that brings more ROI (return on investment) and customers to a company. However, this innovative focus is the direct outcome of the new web based electronic business world. Additionally, the WWW (World Wide Web) is the ideal place to find and develop the client on a one-to-one basis. In addition, it presents a matchless prospect to personalize services, numerous alternatives for consumer support, delivers loyalty plans, and measures customer satisfaction. Moreover, the application of the CRM goes further than automating business tasks. It involves a basic transformation in the operations and culture of a business. It as well deals with tackling the business communications needs intended for its implementation on the web (Fernekees; Fathy). CRM Strategy for Ecommerce Figure 1- CRM Strategy Source [ (Gordon, Best Practices: Customer Relationship Management)] According to Walia (2008), each interaction that a corporation has with its customers, suppliers or partners starts a new track of data that over a short period of time is able to build a surge effect. One main factor that has contributed to this data explosion is the continuous worldwide flow of online transactions. IT integrators have started uniting main systems like that ERPs and CRMs through customary e-commerce solutions (Walia). In case of implementing a successful CRM strategy to an ecommerce business requires considering the following aspects (Fathy) & (Walia): Database Consolidation: This engages the consolidation of client data and information in a single database as well as re-engineering of company procedures around the client. The objective is to have the entire interactions with a customer recorded in one place to carry out marketing, production, customer and sales related activities. Knowledge Management: In case of CRM implementation at any corporation it is the attainment of business information regarding a customer, its investigation, sharing and tracking. In addition, it is important to make use of knowledge to gain business competitive advantage and for employees to recognize what measures to take as a consequence of this information. Integration of Systems and Channels: The essence of online service is to react to customers in a reliable and high-quality way throughout their channel of choice, such as phone, e-mail or online chat. Additionally, this really states the integration of communication channels with the customer database. It as well states the combination of CRM with other parts of a companys systems and business handling applications. Technology and Infrastructure: At the present better business handling tools exist to computerize and improve online customer management service. Additionally, the self-help model normally attained with a set of tools (for example knowledge bases through an agent technology, instinctive search capability, automated online business email) is able to be complemented through real-time interactions offered via live chats as well as IP telephony. As the tools are easily available, the basis of the matter is to make sure the capability of the organization as well as the scalability of the technology arrangement to deal with augmented volumes. Online Payment and Convergence The best practice of CRM in ecommerce involves various activities like that online payment. Walia (2008) stated that online payment processing with combination of two technologies like that ERP and CRM facilitates businesses to collect important information on items like that sales reports, web traffic, promotions, available inventory and shipping and customer requirements fulfillment in real time as well as all the way through external and internal channels (Walia). Change Management for Ecommerce Fathy (2009) stated CRM is more than an ecommerce business technology. It entails a change in business objectives as well as attitudes. The new mantra is to perform what it obtains to please the customer. As a result, a procedure intended for managing change has to be established to facilitate a corporation’s change from a product centric arrangement to a customer centric approach (Fathy). Why we need Best Practices in CRM for Ecommerce According to Das, Parmar, & Sadanand (2009) each business process is unique, with dissimilar business marketplace strategies, dissimilar business procedures, diverse customer strategies and different opportunities. However, the main challenge for any business or any web based company is to utilize different customer strategies and take quick and effective (info based decision) actions all through their channels and to deal with these challenges successfully they can utilize CRM software (Das, Parmar and Sadanand). Best Practices of CRM at Ecommerce In an ecommerce business there is a marketing setup that deals with the evaluation of the transactions and business knowledge. Here organizations can attain best practice by not putting together dissimilar product line associations to have single analysis of a customer’s association. Additionally, they also need to establish some real time update in their web based CRM set up. In addition, to implement a best practice through CRM technology they need to have sophisticated database technology that is capable to separately manage the online business customers and suppliers. Moreover, the CRM technology should be capable to measure customer requirements as well as the product’s performance. And these aspects need to involve the financial metrics in the business. Furthermore, CRM technology needs to establish a simple operational rule (although it need lots of effort and expertise) to attain and serve the exact customer with the correct communication at the precise time. In this scenario the business cost reduction and innovation are fundamental business features that can offer most excellent CRM practice (CRMTrends) & (Gondwe) & (Das, Parmar and Sadanand). New CRM technology for best practice According to Gordon (2002) modern web based CRM tools are dedicated to offer guidelines and links to ecommerce business CRM best practices. Additionally, these web based CRM technology systems are intended for marketing and sales professionals who consider the customer a king and move in the direction of customer centric objectives. In addition, now businesses have recognized that customer’s role is very important in their business consequently they are accepting CRM methods. Moreover, organizations need the CRM web based technology systems that fulfill their requirements and are easy to use and safe (Gondwe). Implementing CRM Organizations need to establish realistic objectives and periodically determine their development. Additionally, once the corporations have the CRM technology structure that can be used to train the business people after that they will start with a few quick wins. In case of CRM technology establishment they need to periodically check to find out that if they are meeting their pre-defined business objectives. However, they need to recognize one thing regarding the CRM system that is it woks effectively only in case of availability of effective business information (CRMTrends). Conclusion The organizations are spending a lot to enhance customer services; however they are still struggling to attain satisfactory outcomes on their effort. Additionally, CRM technology has solved this problem, CRM software approaches after using most excellent practices to tackle five main and critical business issues: process management, governance, user friendly, data management and latest technology. As a result, CRM technology provides a lot of web based business advantages like that lower costs, increased revenues, elevated ROIs, and better competitive advantage. This paper has presented a detailed analysis of the e-commerce. The basic intention of this paper was to discuss best practices in CRM. In this scenario this research has outlined and highlighted some important aspects and areas of this new emerging business trends and technology. Works Cited Band, William. "CRM Best Practices Adoption." 2008. 25 05 2010 . CRMTrends. "CRM Customer Relationship Management -." 2010. CRMTrends..com. 25 May 2010 . Das, Kallol, Jitesh Parmar and Vijay Kumar Sadanand. "Customer Relationship Management (CRM) Best Practices and Customer Loyalty A Study of Indian Retail Banking Sector." European Journal of Social Sciences Volume 11, Issue 1 (2009): 62-85. Fathy, Nazan. "E-commerce: All about Customer Relationship Management." 01 April 1999. suite101.com. 25 05 2010 . Fernekees, Bob. 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Walia, Sandeep. "CRM and E-Commerce: The Integration Payoff." 08 November 2008. CRM Buyer. 25 May 2010 . Worthington, Paul. Introduction to Information Systems. Singapore: Thomson, 2003. Read More