Business Project:Customer Relationship Management Essay

Question:

Discuss about the Business Project for Customer Relationship Management.

Answer:

Introduction

CRM refers to Customer Relationship Management, a term that was coined in 1990s by some eminent management gurus, namely,John Kotler, Philip Kolter, Robert S. Kaplan and John C. Maxwell. Referring to the strategies, practices and technologies the companies and a firm utilizes to manage customer interaction and to analyze data during the period of customer lifecycle in order to improve the business relationship with customers so that it leads to customer retention and drives sales growth. Through CRM informer can be compiled about the customers from different channels like telephone, live chat, website, direct mail, social media and marketing materials.CRM also can provide the details of the staff who is dealing with the customer so that the purchase history, buying preferences and personal information of the customers can be obtained (Zakaria et al. 2014).

The paper discusses a literature review about CRM for front line staff. The main idea is to explore the importance of customer service staff and see how it has an impact on the developing and maintaining the relationship with the customers. The front-line staffs are the people who deals constantly with the queries of the customer and are the first one to interact when the customer seek any guidance or help. They do play an important role in building the impression on the customer and retaining the customer. So it is worth studying the CRM for front-line staff them (Taylor and Barber 2016).

The paper starts from the basic concepts of the relevant terms like CRM, front-line staff, loyalty and others to understand the relation between CRM and the related terms. It discusses CRM as a business tool that helps to gain higher profit from the customer and where front-line staff plays the major role as they helps in gain the loyalty of the customer. Further the paper makes a detail study of the literature available in the area and tries to find the potential gap in the literature that can lead to framing of a research question.

Definition

The paper starts with defining the term Customer Relationship Management (CRM). In the literature of marketing, it has been noticed that the terms relationship marketing and CRM are interchangeably used. One of the oldest definitions of CRM refers to maintaining strong lasting marketing oriented relationship with individual account. The concept of individual account was applied in the industrial market in defining CRM. Nevin (1995) points out that the CRM term is used to show different perspectives and themes. Some themes are discusses functional marketing from narrow perspectives while other considers broad approach. The former is basically a database marketing that emphasizes on the promotional activities of marketing while the latter emphasizes on customer retention strategies and believes in using different marketing tactics that lead to develop bonding with the customer and make possible to stay in touch with the customer ever after the sale. The more popular approach to CRM in the era of information technology is to concentrate relationship with individual customers so that the database can be integrated with long term growth strategy and customer retention policies .( Stock and Bednarek 2014)

The definition of CRM can be summarised as it refers to the different practices that is followed by the organization to develop and retain healthy and effective relationship with the customers with the adoption of modern technologies.

Customer loyalty is one of the major objectives to obtain in CRM. Developing a base of loyal customer is beneficial for the firm and majority of the companies endeavour to obtain customer loyalty and due to huge competition in most of the sectors, the challenge to gain customer loyalty increase further. It has always been considered as a major element of retaining the customer but in today’s tough competitive world, even if the customer seems to be satisfied, there is no guarantee that he or she will retain with the company (Hsiao and Chiou 2014). Thus it demands more rigorous study to identify the factors that retain the satisfied customers and gain their loyalty as these customers will always generate profit for the firm in long run. The customer do not always change the company due to dissatisfaction, sometimes the customers are indifferent among the choice of companies due to their lack of detailed knowledge about the market and company (Stein et al.2013).

In marketing, customer satisfaction is the most important and every organization tries to enhance its ability to satisfy the customer. A dissatisfied customer may seek redress cell and demands attention. If the company fails to address the dissatisfied customer properly than it can lead to adverse affect in the company’s image and profit. On the other hand, the possible chances of a satisfied customer to come back to the company are very high. Also a satisfied customer will always spread well about the company and through word of mouth, the company may bet new customers as well. Hence every organization tries to attain customer satisfaction through different strategies (Wang and Feng 2012).

Customer retention become important for the companies and can be attained by gaining customer loyalty. However, it depends on several other factors besides customer satisfaction. The factors are better price, product choice, greater convenience and increased income. Sometime customer satisfaction is also considered as an indicator for the company’s future market competitiveness and profit. If the customer is satisfied then there are higher chances of gaining customer loyalty and hence it has become an important goal for majority of the corporate (Shapiro et al.2014).

There has been a strong relationship between customer satisfaction and customer loyalty. However, there have been various studies to learn the type of relationship. It may not be linear always and depends on several attributes of consumer. One of the famous slogans in marketing that highlights the objectives of the company of giving importance to customer satisfactions is “Customer is a king” (Rayport et al. 2005).

Customer loyalty has been one of the strategic objectives of the corporate. It is expensive to acquire customers but once the company gain their loyalty, it become easy for the firm to obtain premium price from the company. The most effective methods of generating customer loyalty are to delight the customers and to deliver excellent service and quality products to establish superior customer value. However sometimes switching cost become an important determinant for the customer to stick to the company and firm must ensure that switching cost for the customer should not be less than the services and satisfaction level of the customer. Thus customer loyalty has been a popular concept and refers to winning the customers’ confidence. It can be regarded as one of the important concern for CRM (Rababah et al. 2011)

CRM as a Business Tool

CRM can be viewed in different ways. It can be regarded as a response to the emerging environment of customer oriented marketing strategy and importance of building brand loyalty. It can help the organization to become customer-centric and enhance information technology in business. Further, it can be regarded as the most important way increase customer value and profitability of the organization. In other words, CRM can be the most effective business tool that increase profit and creates value for the customer (Quinton 2013).

Managing database is one of the major tasks of organization to have effective communication with the customers. CRM has provided it successfully by bringing IT based solution

CRM has become one of the important tool in today’s emerging market of strong competition and particularly for mid-size enterprise; the CRM practices can average the difference between failure and success and in today’s era majority of the company is seeking to understand the concept and mechanism of CRM. CRM basically brings IT based solution to any problem in the corporate by using different tools and applications and creating customer service surface. However, few finds the criticality of the database and its management and development complicated. In a broader concept, CRM is a IT face of business processing whose objective is to establish beneficial relationship with the customer in order to obtain customer retention, higher profit and customer value (Nguyen and Mutum 2012).

Identification of the customers is vital for any organization. The firm first need to identify them and then try to acquire them by providing their requirements and lastly has to nurture them to gain their loyalty and sustain the relationship with the customer

CRM helps in augmenting the marketing efforts of a firm and bring mutual benefit to the company. It builds relationship with the customer through the use of effective technology and assist in building long lasting relationship with the customer. Further, CRM also helps in building cooperative relationship with the marketing organization to increase the volume of the business and profitability of the enterprise. Therefore CRM can be considered as a tool, strategy for marketing organization and process that deals with first identifying the customers, then acquiring them and nurturing them to retain the customer for long run interaction which lead to a development of beneficial association between marketing organization and customers (Neslin et al.2013).

Technology definitely plays a vital role in bringing efficiency in work and effective communication with the customers with transparency.CRM has helped in using the technology efficiently and effectively.

CRM plays a vital role in developing business and enhancing profit. It is managed effectively by using technology based solution and improves business activity. It paves the way for ERP, MRP, Customer Relationship management and Supply Chain Management as IT based solution for any organization. It has become possible due to several advancement in IT programming, and architecture developing ability. One of the most famous and useful architecture is client-server architecture which has proved to have endless solutions and opportunities. CRM has made it possible to optimise supply chain management and connect the supplier through the customer (Neslin 2014) by using technology that organize, automate and synchronize salesm provide technical support and customer service.

Segmentation refers to dividing the market into groups and subsets of consumers so that the organization can understand their customers better and can target the groups for meeting their needs and requirement. CRM as a tools has assisted in targeting the groups and understand the customer in a better way.

The manager of the company can use CRM as an effective tool for business by connecting the company with the customers and learn the need of the customers. It helps the company to understand which products are required by the customers and accordingly it frames the product in the business. Further, CRM helps to gain knowledge of the customer with respect to segmentation, potentiality to contribute to the profit and profiling. CRM also help to reach the customer and link him or her to the product. It does not require any physical aspects to be present in the market (Malthouse et al. 2013).

Different companies follow different strategies in the market but everyone desires to be a part of CRM and it has been deployed to revolve around the customer in form of customer identification, selection, conversion and retention. CRM driving force is customer value management where process technology and people work together to achieve the goal of customer value management. The questions which a company must highlights while implementing CRM is

What should be the process in place to manage the customer 24 X 7 X 365?

What need to be the skill, mind set and empowerment issues?

Which technology to select keep in mind the company or industry nuances? (Kishor and Nagamani 2015)

Process, People and Platforms are the three Ps of generating lead in the business. They are connected to each other and have to be carried out efficiently so that the lead can be converted into business return

To put a comprehensive CRM plan in place the company has to map the interface between Processes, People and Platforms. From a technology perspective, different models of CRM can be provided that shows the firm’s requirement in terms of design, development and implementation of CRM. The main purpose of the model is to make sure that the processes are put in their place and CRM becomes functional (Khodakarami and Chan 2014).

Frontline employees in marketing refers to the people who are directly in contact with the customers and is involved in the process of meeting he need of the customer and selling the product to him. They definitely play an important role in business

There are several researches on CRM and its practices. According to Ruth (2014), a demand resource model was developed where the customer resources and customer demands affects the satisfaction of the customer through the front-line employees’ customer oriented behaviour and customer oriented attitude. The study has identified that an important source of customer satisfaction is customer behaviours. Customer satisfaction is enhanced by the frontline employees by being customer oriented attitude (Hollensen 2015).

Front-line revolution has been originated to manage the coordinated interface system Several studies have been done on this regard. It has been suggested by some that company should do internal audit of their interface and optimize it in three phases, i.e.,call separate, relate and integrate phase. Such an interface system forms the base for efficient CRM and shows the competitive advantage for many firms. A pre-implementation plan has been suggested for CRM which aims to communicate a culture of customer –oriented within the organization. It increases the understanding of CRM among the employees and spreads the knowledge to everybody within the organization (Gebert et al. 2013).

Role of Front Line Staff in Increasing Loyalty

The role of front-line staff is undoubtedly important as they are directly in contact with the customers and can develop positive relation with them so that it increases customer loyalty with the company. Its importance became more noticeable when a crisis in CRM was identified. Several studies have indicated the gap between single channel and multichannel customer spending both offline and online. It has been noted in a study that customer spend more ofline than online. For every dollar spend online, customer spends six dollar offline. Further, tri-channel customer spends six times more than single-channel customer. It shows the proportion of multichannel customer has increased more than the single-channel customer. Due to this the demand of customer service has increased and CRM has started facing crisis in terms of achieving efficiency in customer value management. The multichannel customer have become deployed and discontented due to lack of good relationship with the company. It resulted in losing the multichannel customer as they end up choosing different brands when offline purchases are done. The customer disloyalty has started growing and companies were not able to meet the requirement of cross channel services. In one of the research, it was revealed that only 27% of the companies have met the 80% criteria for having efficient and required cross channel interaction with the customers (Fournier 2013).

The number of shoppers was growing at an increasing rate and companies were finding difficulties in servicing them and obtaining customer satisfaction. It is told that higher customer satisfaction lead to business growth but vice-versa may not be true, i.e. business growth may not lead to satisfied customers. The companies are lacking proper management of increasing demand of customers and this result in slower services, crowding and longer lines. The trend of declining customer satisfaction has led to the interaction and relationship management crisis of business today. The companies are facing huge cost and falling in labour quality while the customers are getting more demanding and sophisticated. Hence the challenge to the companies today is how to maximise the performance of the less qualified labour force by using advanced technology so that the customer satisfaction is obtained in multichannel shopping (Finnie and Randall 2002).

The crisis in CRM has led to the revolution of front-office operation which happens at the point of interaction between companies and customers and can affect the total work force. The front-line machine labours are in the form of websites, automated voice-responses, kiosks, touch screens and vending machines which has replaced the domain of human and now the smart devices are able to interact with customer more effectively. It has made possible to serve the people from remote places where human resource cannot be provided. In other words, the companies have adopted the displacement and substitution policy to meet the increasing requirement of serving customer and creation of labour shortages (Fagerstr?m et al.2015).

The role of Frontline staff has helped the organization to come out of the crises by making it possible to link to multichannel customer simultaneously by using technology effectively. The process of frontline staff operation is discussed in the next paragraph.

Front-office implementation had changed the shape of customer relationship management function and interaction between the company and the customer. It has allowed the company to achieve effective interaction with the customer at lower cost of serving them. Its success has made a large number of companies adopting the front-office automation operation which has been characterized with three main features (Coelho 2013)

Substitution: Positioning machine in place of people by putting kiosk in place of counter person or e-ticketing

Complementarily: collaborating machine with people or people with machines. For example, when an employee uses Wifi- enabled handheld device to provide the service to the customer

Displacement: it refers to outsourcing the work to machines. For example, a food chain taking order through call centres.

The innovation of front-line operation has increases the efficiency of the companies in meeting multichannel customers demand and so has made the companies gain the loyalty of the customer as now the customers are satisfied from the company’s service. Hence front-line operations have helped the companies to earn customer loyalty again which they were losing due to multichannel operations (Brennan et al. 2014).

Gap in the Literature

Despite of the increased technology and innovated operations of CRM along with front-line services, the multinational and the domestic firms are facing grievances from the customer in terms of unsatisfied services or reckless behaviour or technological snag. The companies are still losing customer and facing disloyalty from customer despite of all the efforts to satisfy the customer. What may be the reason for it? Where the company do fails in meeting customer requirements? How to feel the gaps between the service provided by the company and the service expected by the customers? These are some of the questions which arise in today’s business operations (Blumberg 2016).

Through the understanding of the study, it can be sated that some research is required in get the answers for the above mentioned questions. Taking clue from the raised question, the paper tries to raise an area of research in understanding the root cause of increasing customer grievances. In this regard, a research can be conducted by selecting few companies and studying their operations along with the customer’s feedback. The companies taken should be a mix of high technology oriented company and low technology oriented company. The feedback and grievances proportion should be compared between the companies to understand whether technology plays a role in increasing the customer grievances or not. Later, identifying the factors leading to customer grievances and then finding a solution for it (Bitran et al. 2008).

Conclusion

To conclude, the paper has discussed the literature review on CRM for front-line staff. It has stated in details the reason behind the origination of CRM and then the objectives and functions of CRM in building a good relationship between customer and organization. The role of CRM has been discussed and analyzed in increasing the profit of the organization. Further, how the changing market conditions have changed the customer’s behaviour and demand has been examined. In this regard, the front-line operation has been stated and examined. The role of frontline operation in gaining customers’ loyalty has been discussed in details and how it has helped in removing the crisis of CRM.

The paper then finds out the gap in research in terms of less study towards customers grievances and the link in the business operations. Despite of the increasing use of updated technology to satisfy customer, there is less fall in customer grievances. The paper has identified this area of research which needs some attention.

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