Customer Relationship Managment

INTRODUCTION

·        Customer Relationship Management

 Customer Relationship Management is a bit ironic as its seemingly not difficult to define, however, there is no universally accepted single definition. In fact, there are nearly as many definitions of Customer Relationship Management (CRM) as there are CRM software vendors and system integrators who specialize in the industry. Nonetheless, when you recognize that CRM is a strategy focused on evolving customer relationships, a vendor neutral and industry standard definition of CRM can be easily accepted.

“CRM is a business strategy directed to understand, anticipate and respond to the needs of an enterprise's current and potential customers in order to grow the relationship value.”

A common misconception is believing that CRM consists of software or that procuring CRM software will in and of itself achieve CRM objectives. This is not the case and it must be recognised that CRM is not equated to just application software but rather a comprehensive and holistic customer focus which evolves with every customer touch point and activity. While CRM is not software or technology, CRM software is a necessary enabler to achieve most CRM strategies and objectives. From an information technology perspective, CRM business systems deliver customer information combined with operational, analytical and support tools which empower knowledge workers and provide customers a consistently superior customer experience.

CRM is not Sales Force Automation (SFA) software, although SFA software is a component of CRM. By most business analyst standards, the minimum suite of software components to achieve a credible and enterprise wide CRM business system includes SFA, Marketing Management and Customer Service.

CRM is also not an implementation or an event; it is a process sponsored from the highest levels of an organization, embedded into the corporate culture and pervasive throughout the organisation. CRM is not a destination, it is a journey of continuous learning, process improvement and customer relationship evolution.

CRM is not confined to business processes within an information technology system. In fact, CRM can consist of virtually any front office or customer facing process designed to improve the company's relationship with customers. As an example of a CRM business process that doesn't require any technology, think of the old adage 'service with a smile' or 'the customer is always right'. These are examples of CRM processes made popular long before the introduction of CRM software technology.

·       DEFINITION:

CRM is an acronym that stands for Customer Relationship Management. It describes the strategy that a company uses to handle customer interactions. One example of a common CRM strategy is the rewards card program offered by many supermarkets. The store gives its customers a free card that gives them access to special deals and discounts when they swipe the card during checkout. But that card also tracks everything the customer buys and allows the store to create an extremely detailed customer profile based on his or her purchasing habits. Armed with that information, the store can then offer its customers targeted coupons and other programs that will motivate its customers to buy more products from that store.

CRM software can help by storing all this information in an easy-access format. With a typical CRM program, new leads are entered into the program's database and salespeople add notes throughout the sales cycle. It's then easy for a company to compile reports from this data that help it to design a CRM strategy that's tailored to its customers. The CRM software can also automatically send out emails to individual customers as designated by the salesperson. For example, a salesperson might program his CRM to send out a thank-you message whenever a customer reaches his or her one-year anniversary of purchase, or to send an e-card on the customer's birthday.

·        There are four important characteristics of CRM

1. First it will track and report every interaction with a customer, describing the customer's purchase, interest or demand. It will report also the changing needs of the customer and the way your business reacts effectively to them. 
2. Furthermore, the CRM will be a universal instrument for collecting data about the service requests, order entry, satisfaction and billing. 
3. Third, the CRM will be able to measure the performance of the business on the basisof internalbenchmarks.
4. Last the CRM will facilitate the working processes by emphasizing on the positive and exclude the negative practices in your customer relations center.

·       The Evolution of CRM

CRM strategies and CRM software solutions have already migrated from managing and streamlining customer-facing transactional processes to harnessing customer information in order to better interact and collaborative with customers.

CRM 2.0 was born of Web 2.0 and the social media phenomenon characterized by user-generated content manifested through social networking sites, blogs, wikis, community forums and RSS syndication. CRM thought leaders are experimenting with new methods to communicate in the way the customer wants, to elevate the communication to bi-directional exchange, and to engage the customer in a way that delivers useful knowledge and content to both parties. .

·        CRM at IT Knowledge Exchange

According to one industry view, CRM consists of:

·         Helping an enterprise to enable its marketing departments to identify and target their best customers, manage marketing campaigns and generate quality leads for the sales team.

·         Assisting the organization to improve telesales, account, and sales management by optimizing information shared by multiple employees, and streamlining existing processes (for example, taking orders using mobile devices)

·         Allowing the formation of individualized relationships with customers, with the aim of improving customer satisfaction and maximizing profits; identifying the most profitable customers and providing them the highest level of service.

·         Providing employees with the information and processes necessary to know their customers, understand and identify customer needs and effectively build relationships between the company, its customer base, and distribution partners.

Many organizations turn to CRM software to help them manage their customer relationships. CRM technology is offered on-premise, on-demand or through Software as a Service

·               What is a Customer?

In general terms, a customer is a person or organization that a marketer believes will benefit from the goods and services offered by the marketer’s organization. As this definition suggests, a customer is not necessarily someone who is currently purchasing from the marketer.

v customers may fall into one of three customer groups:

·         Existing Customers – Consists of customers who have purchased or otherwise used an organization’s goods or services, typically within a designated period of time. For some organizations the time frame may be short, for instance, a coffee shop may only consider someone to be an Existing Customer if they have purchased within the last three months. Other organizations may view someone as an Existing Customer even though they have not purchased in the last few years (e.g., television manufacturer). Existing Customers are by far the most important of the three customer groups since they have a current relationship with a company and, consequently, they give a company a reason to remain in contact with them. Additionally, Existing Customers also represent the best market for future sales, especially if they are satisfied with the relationship they presently have with the marketer. Getting these Existing Customers to purchase more is significantly less expensive and time consuming than finding new customers mainly because they know and hopefully trust the marketer and, if managed correctly, are easy to reach with promotional appeals (i.e., emailing a special discount for new product).

·         Former Customers – This group consists of those who have formerly had relations with the marketing organization typically through a previous purchase. However, the marketer no longer feels the customer is an Existing Customer either because they have not purchased from the marketer within a certain time frame or through other indications (e.g., a Former Customer just purchased a similar product from the marketer’s competitor). The value of this group to a marketer will depend on whether the customer’s previous relationship was considered satisfactory to the customer or the marketer. For instance, a Former Customer who felt they were not treated well by the marketer will be more difficult to persuade to buy again compared to a Former Customer who liked the marketer but decided to buy from someone else who had a similar product that was priced lower

·         Potential Customers – The third category of customers includes those who have yet to purchase but possess what the marketer believes are the requirements to eventually become Existing Customers. As we will see in the Targeting Markets Tutorial, the requirements to become a customer include such issues as having a need for a product, possessing the financial means to buy, and having the authority to make a buying decision. Locating Potential Customers is an ongoing process for two reasons. First, Existing Customers may become Former Customers (e.g., decide to buy from a competitor) and, thus, must be replaced by new customers.

·               Customers and the Organization

For most organizations understanding customers is the key to success while not understanding them is a recipe for failure. It is so important that the constant drive to satisfy customers is not only a concern for those responsible for carrying out marketing tasks; satisfying customers is a concern of everyone in the entire organization.

Whether someone’s job involves direct contact with customers (e.g., salespeople, delivery drivers, telephone customer service representatives) or indirect contact (e.g., production, accounting), all members of an organization must appreciate the role customers play in helping the organization meets its goals. To ensure everyone understands the customer’s role, many organizations continually preach a “customer is most important” message in department meetings, organizational communication . These examples include:

·         Source of Information and Ideas - Satisfying the needs of customers requires organizations maintain close contact with them. Marketers can get close to customers by conducting marketing research (e.g., surveys) and other feedback methods (e.g., website comments forms) that encourage customers to share their thoughts and feelings. With this information marketers are able to learn what people think of their present marketing efforts and receive suggestions for making improvements. .

·         Affects Activities Throughout Organization - For most organizations customers not only affect decisions made by the marketing team but they are the key driver for decisions made throughout the organization. For example, customer’s reaction to the design of a product may affect the type of raw materials used in the product manufacturing process. .

·         Needed to Sustain the Organization - Finally, customers are the reason an organization is in business. Without customers or the potential to attract customers, a company is not viable. .

·               The Importance of Good Customers

For marketers simply finding customers who are willing to purchase their goods or services is not enough to build a successful marketing strategy. Instead, as we note in our definition of marketing in the What is Marketing? tutorial, marketers should look to manage customers in a way that will “identify, create and maintain satisfying relationships with customers.” By using marketing efforts that are designed to “maintain satisfying relationships” rather than simply pursuing a quick sale, the likelihood increases that customers will be more trusting of the marketer and exhibit a higher level of satisfaction with the organization. In turn satisfied customers are more likely to become “good” customers.

For our purposes we define a “good” customer as one who holds the potential to undertake activities that offer long-term value to an organization. The activities performed by customers not only include purchasing products, these also include such things as:

·         offering feedback on company performance

·         making prompt payment

·         offering suggestions for new products

·         voluntarily promoting the company’s products to other.

·               Challenge of Managing Customers

While on the surface the process for managing customers may seem to be intuitive and straightforward, in reality organizations struggle to accomplish this. One reason for the struggle is that no two customers are the same. What is appealing to one customer may not necessarily work for another.

For instance, a marketer may change how it issues coupons to customers by reducing the frequency of issuing coupons by regular mail and instead directing customers to electronic coupons found on its website. The marketer makes this move to encourage customers to visit the website more often with the hope it will lead to cost savings (e.g., sending out traditional coupons by mail requires postage expense), allow the marketer to acquire more customer information (e.g., monitor their activities when they visit the website), and give the marketer the opportunity to sell more product to the customer (e.g., special promotional messages on the website).

·               Customer Service and Marketing

When it comes to managing customers, an important non-product benefit that affects customers’ feelings about a company is customer service, which is defined as activities used by the marketer to support the purchaser’s experience with a product. Customer service includes several activities including:

·         Training - services needed to assist the customer in learning how to use a product

·         Repair – services needed to handle damaged or malfunctioning products

·         Financial Assistance – services needed to help customers with the financial commitment in purchases or using the product

·         Complaint Resolution - services needed to address other problems that have arisen with customers’ use of a product

In many industries customers’ experience with a company’s customer service can significantly affect their overall opinion of the product. Companies producing superior products may negatively impact their products if they back these up with shoddy service. On the other hand, many companies compete not because their products are superior to their competitors’ but because they offer a higher level of customer service. In fact, many believe that customer service will eventually become the most significant benefit offered by a company because global competition (i.e., increase in similar products) makes it more difficult for a company’s product to offer unique advantage.

·        Benefits of customer relationship management

A customer relationship management system may be chosen because it is thought to provide the following advantages:

Ø Quality  and efficiency

Ø Decrease in overall costs

Ø Increase profitability

·        Objectives of the CRM

Studying and learning the Strategic CRM system implementation.
Here the research will include the academic literature, enterprise publication different organizational data and information for CRM system implementation which has been published by the organization or specialists), CRM system implementation case studies and resources which will explore and explain the significance of strategic system implementation.
To investigate how CRM applications are developed in UK firms. A lots of facts and issues are in the system implementation and among them the major impact is higher rate of project failure and its impact the growth of the organization. The investigation will highlight the different organizational management issues like top level management co-operation in the system implementation and their knowledge and skill, their time schedule for system implementation and affect and accepting on their and employees work and organizational change environment etc.
To study the problem customers faces in implementing the CRM applications. It is mainly the customer’s satisfaction that are they accepting  new system, is it too complicated to use and the organizational change is acceptable, are the new system is improve their satisfaction.
Critically analyzing and investigating the task, responsibilities and role of Information and Technological resources and people resources in system implementation project because these resources are critical for  system implementation planning and success. To establish the way organization structure affect the usage of CRM systems and applications. Experimenting, testing and evaluating the hypothesis. Propose and designing the hypothesis based on the analyzed information and testing it for the expected result and calculating the risk. 
To investigate how CRM systems are compatible with employees knowledge and skills. To suggest and recommend ways of mitigating and solving the problems posed by the systems and applications. 

·        Company overview

Vodafone is a mobile network operated in Britain and its headquarters are situated in Newbury, Berkshire in UK. Vodafone is the largest mobile operator and communication network in world with a market value of more that $75 billion. The company operates in more than 25 countries in the world and has also partnered with other networks in more than 42 countries. The company derived its name Vodafone from the Voice Data fone to reflect the major work of the company which is to deliver data and voice services of the mobile phones. 
Vodafone is the second largest mobile telecom group in the world behind the China mobile with approximate of 303 million customers across the globe. The China mobile has more customers than the Vodafone but has less turnover and market capitalization than the Vodafone.  Vodafone owns 45% of Verizon Wireless, the largest mobile operator in the United States based on the number of customers the company has.
    Vodafone CRM overview

Despite of customers dealing with different company’s employees and different entities, they perceive the business as a single entity. In Vodafone, the CRM is a combination of different policies, strategies and processes that are used by the company to track the customers’ information and unify the customers’ interaction with the company. This is a new means and technology that is used to attract more customers that are more profitable to the business and on the other hand, it forms tighter bonds with the current customers. 
There are different aspects in the CRM that relate to each other. These aspects include:
The front office operation (FOO) - These includes the meeting with customers face to face, on phone conversations, through emails and other online services.
Back office operation- the deals with activities that are linked to the front office. Primary activities that take place in back office operation that affects the customer most are the marketing, settling down payments and product development and production. 

Business relationship- this category helps both the front and back offices in carrying out their duties smoothly with the outside environments. They deal with issues of company partner, distributors and other company network.  

·        Problems of CRM

A number of reasons are commonly expended concerning the use of CRM systems, software and applications. In UK, most of the firms express adopting CRM systems and their related support tools (software and applications) for three main reasons which entail the customer service improvement, marketing and sales. Depending on the three areas, the companies aim at reducing the increasing high cost which is incurred through use of physical direct sales method. The development of CRM systems in the UK has over the past few years been much rapid due to firms’ realization of the increasing costs on the employment of the direct sales techniques. Apart from this, the UK firms believe that CRM systems are means through which they can increase their global competition as most of the companies have gone to the global markets. This means that CRM applications and systems are in high demand for those companies which are operating in the foreign markets as means that may better monitors and keep the companies updated on the global markets developments. Information and data very paramount for the success of businesses and this is mostly articulated with CRM systems acting as storage of database (Ebner et al., 2002). Information on sales, marketing activities and services that are offered to the customers are relevant information that is needed by the firms. This acts as reference systems that help the firms to develop marketing plans that are feasible by integrating the appropriate marketing mix. 
Although there are several anticipated benefit that the firms believe and realize through implementation of CRM system, equally there are enormous disadvantages which are associated to the systems use.  Large number of the UK firms lacks the marketing planning (Goff et al., 1998, p. 19). Marketing plan establishes the weak points of the company’s customer needs and needs right from the product development to the distributions that make the company to close links with clients. Consequently, the blurred planning systems form barriers to establishment of priorities of the organizations. 
In most cases, UK companies have automated their system as a way simplifying complex processes. However, as mentioned earlier, companies in the UK are much varied and therefore each individual organization has different needs. Due to the uniqueness of the different businesses, development of universal application that can be used effectively and satisfied customers’ needs has yet not been developed. This means that most of the organizations have not been to acquires suitable software that support wide range of customer relation needs. 
As result, most businesses are still grappling with development of robust technique that can be used in deciding critical customer related issues. Retail firms and medium companies are much affected by the low financial availability. Sale force automation software is among the most challenging and most the CRM systems are viewed as being unfriendly to the organizations (Andersen 2001, p. 110). As versions of applications and supporting software changes, this calls for the organizations to update their original. Generally, introduction of new software and applications requires both in-depth technical knowledge and skills that are necessary for the upgrading of the systems. Lack of adequate knowledge and skills thus form a great obstacle for most organizations. 

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·        Research methodology

The research method is the way the data was collected, the purpose of this data and the strategy that was used.

:-The research process

According to Malhotra (1996 p 96) the research design is a structure by which the research is carried. It gives a road map to collect data and analyze the research study. The research design also gives the specifications of the data to be collected, where the data will be got from and the procedure that will be used to collect it. There are different ways to collect data depending on the field being researched on though they are all interrelated in one way or another. At the end of each research, there must be a problem to be addressed giving a way to find a collect solution. 

:-The purpose of the research 

The research can be used three purposes that include, explanatory, exploratory and descriptive. 
The descriptive research occurs when there is a plenty of information within a given research area and the only needed thing is to study the current events that are occurring and describe them. The aim of this is to give a detailed literature of the problem and mostly seeks to answer as to why, when, what or where and how the event or a phenomenon occurred. It actually seeks to give more descriptive information concerning a person of an event in a certain situation. The accuracy is a necessity and very much recommended in this research as it would give a detailed information after exploration of the research problem.The exploratory study seeks to find what is happening. The exploration seeks to give a better understanding as to what is happening or the research problem. The main advantage of this is that it accepts changes and can be changed at any time though it must have a direction. The exploratory research seeks to establish the relationship between the valuables. The aim of this is to study the research problem and establish the relationship with other valuables. According to Zikmund(2000), the research must relate with the research problem. 

:-Research Philosophy
The research philosophy which can also be interpreted as what one thinks on developing of his knowledge affects the overall methodology including the approach and the method of data collection.  Understanding of research philosophy is helpful in clarifying the appropriate research design to be used and how it can be adjusted to fit the research that is being carried out. The Research begins with an understanding of theories and models which fundamental to the researched problem. The access to relevant information helps the researcher in acquiring specific knowledge that is significant to the research. In the epistemological considerations, there are three philosophical approaches to research that include positivism, interpretivism and realism. On the other hand ontological assumptions constitute philosophical approaches objectivism and constructionism. 
In epistemological assumption events are independent of anyone. This means that the truth about the events can be obtained through a scientific method or hypothetic-deductive method. On the other hand, Positivists argue that data can be collected by someone not included in the research or an observer. An interpretivist on the other hand emphasizes on understanding the human behavior and is regarded as complementary epistemology to positivists.  Positivists identify some valuables which have either direct or indirect relationship with the research for the research purpose. Constructivist’s approach is more suited in mass surveillance since they are inherently complex. This complexity is mostly witnessed in surveillance environment, where managing people and processes are complicated by the nature of research. In addition the relationship between the surveyor and the surveyed is mostly strained owing to the mentioned reasons. This means that a constructivist approach, in instances where the research cannot be detached fromits original settings is better suited.Constructivists’ ontology and epistemology differs from positivists, in the sense that the former emphases on the socially agreed understanding. 

:-Research Ethics

Research ethics is an important part of research. Respect for other people, sincerity and academic veracity, makes a responsible research work. To consider the ethical responsibility of the research concerns only avoiding plagiarism and a bias free writing would only be a superficial one.Researcher is more sympathetic to the participants’ feelings in a qualitative research which means ethical issues are clearly addressed. An ethically responsible research must ensure that the respondents do not have to face any difficulties as a result of their participation in research. This is a crucial consideration in this research because of the sensitive nature of the research. Avoiding questions such as name of the respondent, their designation etc has assured the respondents that they would not be identified on the basis of the research. When researching a controversial or sensitive topic, anonymity is essential. 

:-The research strategy
Research strategy is a general orientation of the research. This refers to the procedure that is followed in collecting data and analyzing the data. This procedure is also called research technique. There are three basic techniques that include the semi structured like conversations, individual interviews and focus groups. Fully structured techniques include structured interviews and structured questionnaires. Additional techniques include field experiment and observation.

        Qualitative research is soft and subjective which means it tries to take into account individual’s understandings and feelings. Qualitative research is flexible, and based on the case study method. Qualitative research assumes a grounded theory, and involves investigative orientation. The deductive approach to research advocates an emphasis on scientific principles.
A deductive research starts with a hypothesis, which draws its basics from the researcher’s prior knowledge and understanding of the topic of study. The inductive approach emphasizes on understanding the socially constructed meanings with little need for generalization. Based on the research findings, the researcher tries to find the theory on which findings are based. 
Qualitative research lacks reliability, but it provides an opportunity to get into contact with people involved in the study. This helps the researcher to have a better understanding of the findings. Reliability of a research is an important attribute of the research as it raises confidence in the study. This means that a research approach that combines the two approaches would provide an in depth and reliable study.  
Qualitative method is used for data collection in case study research method, though qualitative method will predominate. .