International Conference on Management Science (ICMS 2010), Zhengzhou, China
The Impact of Electronic Customer Relationship Management (E-CRM) on achievement of Customer Satisfaction in Different Companies Rashad Yazdanifard 1
Khoo Cheng Long2
Faculty of Management, Multimedia University, Cyberjaya, Malaysia
[email protected]
Faculty of Information & Communication Technology, Limkokwing University of Creative Technology, Cyberjaya, Malaysia
[email protected]
Abstract – The focus of this paper is to discuss about the positive and negative impact of electronic customer relationship management (E-CRM) towards different scale of companies in order to achieve customer satisfaction. Customer relationship management (CRM), as a marketing strategy, and emerging of electroni c commerce brought a drastically changes towards business market. E-CRM, by facilitating company customer relationship management with new information system include the Internet, telemarketing and database storage capabilities, overall pe rformance of the company may dramatically change over a long period. However, not many companies were able to implement this software system into their business model especially small-medium enterprises or traditional business around vulnerable neighborhoods. Negative impa cts due to failure of implementation may bring down the whole business. In addition, customer perspective about the company’s business model may influence the result of a succeeding process of E-CRM. O ther factors that influence the result of E-CRM implementation are available there for other experts to recognize in future. Keywords – Customer Relationship Management, Electronic-Customer Relationship Management, customer satisfaction
I. INTRODUCTION Many studies and practices related to traditionalcustomer relationship management (CRM) have been conducted over the past decade in the academic marketing literature [4], [23]. CRM has proved its existence, importance and influence to almost all the industry nowadays since the born of business itself. However, the implementation of CRM in companies or organizations to retain long-term and profitable relationships with their customers is tougher comparing with other business related management system. Advancement of technological development and rapid growth of the power of customers had nurtured a more competitive, dynamic, and complex environment for most enterprises [15]. Electronic-commerce or e-commerce has evolved and became popular among most consumers. Mixture of ecommerce with CRM may bring a new phenomenon for most enterprises understand the effects of implementation of electronic-CRM or E-CRM to their business revenue and its status in the market. Customer satisfaction, however, is a method of measuring how a products or services offered by a company will fulfill or outshine most customer expectations. In a competitive business
era, customer satisfaction has emerged as a key success and boundaries between big and small companies [12]. II. CRM As definition described by Galbreath and Rogers [10], CRM refer as: “… activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost. CRM integrates sales, marketing, service, enterprise-resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contact. CRM facilitates relationship among enterprises, their customers, business partners, suppliers, and employees.” Similarity of definition by other experts, CRM, as a marketing strategy, mainly focused on enhancing the market competitiveness, by building right relationship between businesses and customers include provide right products for customers with different demands, at the right time, with appropriate ways and determine the cost of providing the win-win situation products or services [18]. Lim and Vincent [5] defined that CRM is a management field that handles with whatever a company needs to manage and maintain its customer relationship. Examples of activities involved in CRM include the capture and analysis of customer information, and the execution of business analytics to leverage the output towards better sales performance [11]. III. E-CRM E-CRM, however, with the combination of hardware, software, process, applications and management commitment to improve customer service, retain customer, and provide analytical capabilities, mainly focuses on internet-based interaction between customer and service provider [3], [6]. In Multimedia Victoria Research and Development [9], they defined that E-CRM is an integrated online sales, marketing and service strategy that is used to identify, attract and retain an organization‟s customers. They also specified that ECRM describes improved and increased communication between an organization and its clients by creating and enhancing customer interaction through innovative technology [9].
Kennedy [16] says that E-CRM is strategic technology-centric relationship marketing business framework. Benefit of E-CRM is to retain the existing customers, improve customer service, and to assist in analytical capabilities [8]. Dyche [8] also mentioned that E-CRM is an infrastructure which provides support to valuable customers to remain loyal, E-CRM comprises of hardware, software, processes and applications to manage all company issues. It is very important that measuring the performance of E-CRM in an organization in order to assist the companies to increase the revenue and enhance customer loyalty [20]. As mentioned above, E-CRM requires implementation of conventional CRM using Internet and web technology; hence, there will be different influence to different type of companies or organizations. IV. Customer Satisfaction Method of measure and evaluate how far products and services supplied by a company can successfully fulfill different customer expectation and demand. Building close relationships with customers to enhance customers‟ relationship perceptions (CRPs) is one of the key that determine the overall performance of companies [19]. Nowadays, most consumers have high expectations on products and services. Companies, to maintain their competitive status in the market space, have to transform their companies‟ business model into more user-centricity for consumer communications networks [1]. To increase customer satisfaction, many companies have started implementing different method of connecting with existing customers and prospect customers. Email, phone, web chat, SMS and other telecommunication device or technology are few common ways for the organization to further approach to the customers. Additionally, different type of communications may lead to different results as well. Other issues may arise if the contact channels are not so secure for certain group of customers. Keep in touch is important between the companies and customers. Companies that develop new way of interactions model to be able to contact with current and potential customers will pioneer in their customers retention rate and also monopoly the market after collecting and understanding the current needs of most customers. Kotler [17] stated that satisfaction refers to a person‟s feelings of pleasure or disappointment resulting from comparing a product‟s perceived performance (or outcome) in relation to his or her expectations. Satisfaction can be associated with feelings of acceptance, happiness, relief, excitement, and delight [14]. Hokanson [13] defined the factors that affect the overall customer satisfaction include friendly employees, courteous employees, knowledgeable employees, helpful employees, accuracy of billing, billing timelines, competitive pricing, service quality, good value, billing clarity and quick service. VI. E-CRM Implementation Literature Review
Elements of successful implementation of E-CRM have been proposed by experts from various fields. Theories, models and related E-CRM methodologies have been suggested and implemented by different scale of business models. For example, Cunningham et al. define taxonomy of required CRM analyses into five categories which include customer analysis, customer service analysis, profitability analysis, sales and marketing analysis, and product analysis. These analyses are still useful for the ECRM implementation process nowadays. Many researches showing that cross-selling or upselling for existing customers can generate twice much gross revenue than new customers [25]. Besides, acquiring new customers require five times more than the costs of retain current customers [18]. This relationships demand longer period of monitoring, updating and maintaining comparing to conventional CRM system. As mentioned in the first paragraph, customer analysis in Cunningham et al. [7] taxonomy for CRM analyses involving customer segmentation analysis, customer retention analysis, customer attrition analysis and customer satisfaction analysis. In this paper, customer satisfaction is the main goal to achieve after implementation of E-CRM. Customer satisfaction analysis is a study to build up long-term relationships between customers and the company by observing the customers‟ perception and analyzing customers‟ survey responses about the company and its products and services [7]. Elements of an E-CRM system have been concluded by Jelassi and Enders [16] where four criteria need to be taken into consideration during the process implementation. Customer selection, customer acquisition, customer retention and customer extension, which are the four elements of E-CRM system, mainly focus on improving customer loyalty to the company‟s products and services. Customer selection as discussed by Ahmed [2], refers to customer targeting, segmenting, and mass customization which fulfills the individual needs and maintains a low-cost position via mass-market operations. Customer acquisition focuses on promotion and other incentives to acquire new customers and to serve existing customers to come online while customer retention change one-time customers to regular customers and keeps them as long as possible in online environment [2]. Lastly, customer extension emphasis on maximization of customer lifetime value (CLV) [2]. VII. Discussion Through the surveys conducted by most experts, we conclude that E-CRM system requires customer‟s detailed information include age, financial status, occupation, personal interest and other profile that describe the customer daily activities and leisure activities to the company. By collecting customer data and information, company can easily design customizable products or
services that fit different expectation of different customers. E-CRM system features that include customer management help company to store and provide access to all customer information from each level of organization. Besides, E-CRM requires knowledge management that act as a centralized knowledge base to handles and shares customer information with the assistance of new information system [9]. Other management system needed such as account management, case management, back-end integration, reporting and analysis. Analyzing customer data and history of purchasing power is an important step to measure the effectiveness of E-CRM to the overall performance of a company [23]. Estimation process always needed during the process of E-CRM strategy implementation. Before estimation started, personal interest and preferences of customers will be recorded based on the history of communication between employees and customers. Price centricity and defining purchasing pattern of a customer on certain type of products or services will provide company with deeper understanding about their existing customers‟ point of view over a new products or services. Based on the outcome of the analysis, new marketing strategy is designed to further cross-selling or up-selling to existing customers [23]. New breed of gross revenue will soon arrived just by promoting company‟s new products or services through various communication channels, especially when existing customers request for help via email, online chatting, phone calls and other telecommunication media. Most companies paying attention on after sales services and follow-up for latest companies‟ activities or products. Evaluation of E-CRM system including the effects of current promotion plan and alternatives to neutralize the negative influences towards company‟s overall performance will help measuring the level of customer satisfaction toward company and its products or services.
support, efficient and cost reduction [2]. E-CRM system helps to collect, update and fulfill orders remotely and accurately. Achievement of customer satisfaction requires long-term of maintaining, monitoring and updating process to retain existing customers and recruit new customers. E-CRM system provides as a tool that centralized all the customer data into single database storage and allow each department in the company to exchange customer profile. Undeniably, E-CRM system has brought more benefits to most companies. However, there are still some unsolved constraints for small-scale companies after implementation of E-CRM system. Most conventional business companies are encouraged to transform their business model into more technology-centricity and customer-centricity. Due to the transformation of business process, changes of quality of service may lead to more customer disloyalty within the perspective of existing customers. Traditional processes of communicating with customers provide clearer view for customer to understand the company and its products or services. Customer satisfaction involved tracking, detecting and solving customer enquiries and problems upon the company and its products or services. To achieve better customer satisfaction level, process implementation of ECRM system in a company should carefully plan to avoid unnecessary mistakes and affect company overall performance. Advancement of technology and information system provides most companies with off-the-shelf software to leverage their customer relationship department with a better electronic system. Qualitative and quantitative research towards company and its products or services should be conducted thoroughly in both employees and customer perspective. Better understanding of how employees communicating with customer and the reaction of customers when facing a problem related to the products or services.
VIII. Impacts of E-CRM Integrating the new technology such as Internet, telemarketing, e-mail or direct mail with customer relationship management system has built up electronic customer relationship management (E-CRM) system for the business and marketing industry. Obviously, most companies with a proper E-CRM implementation deal with more positive impacts than negative impacts. Communication with customers and accessing to the same transaction history and information about customers in an organization with E-CRM software system will lead to an increment of customer loyalty implicitly. Chances of understanding the customer expectations level concerning quality will provide organization with deeper look at the level of customer satisfaction. Time and resources allocation for most profitable customers can help company to find the best customer and treat them as a premium group. Other positive impacts of companies with E-CRM software system are improving the customer service and
IX. Conclusion E-CRM, integrating with new information system including Internet, telemarketing and e-mail, plays a role as a software system that connects between customers and company‟s department. E-CRM, in future, with sufficient empirical data for different industries, provides a reference works for most companies to outline the plan and procedures for the implementation of E-CRM system. Defining the importance of increasing the level of customer satisfaction provides a clearer view of purchasing pattern for companies to evaluate their business model. Other analyses include customer retention rate are vital to increase the overall performance of the company. Traditional business model companies should seek for advice about implementation of E-CRM system. Other factors during the process of E-CRM implementation that may influence the outcome or change the fate of a company should be defined so as to provide
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