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PROCEDURE OF SUCCESSFUL PREPARATION AND IMPLEMENTATION OF CRM IN THE COMPANY Viliam LENDEL, Milan KUBINA University of Žilina, Faculty of Management Science and Informatics, Slovak Republic e-mail:
[email protected],
[email protected] Abstract Using information technology is a challenge for businessmen to raise their competitive advantage. Whether the business processes are run successfully or not is decided by daily job of company workers. This article deals with CRM processes, their work in implementation of CRM in company. The largest part of this article deals with prepared procedure of successful preparation, implementation and innovation of CRM. This procedure consists of four basic stages, which interact with each other. Content of individual stages is specified in an article step by step. Effective CRM implementation requires a front-line information system that shares relevant customer information across all interface units. Relational databases, data warehousing, and data mining tools are thus very valuable for CRM systems and solutions. Keywords: CRM, CRM process, procedure, customer, preparation, relation 1
INTRODUCTION Customer relationship management (CRM) is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. [1] Communication with customer partners is a necessary process of relationship marketing. It helps in relationship development, fosters trust, and provides the information and knowledge needed to undertake the cooperative and collaborative activities of relationship marketing. Customer relationship management is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer, vendor, partner, and internal process information.
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There are three aspects of CRM, which can each be implemented in isolation from each other: - Operational CRM - automation or support of customer processes that includes a company’s sales or service representative, - Collaborative CRM - direct communication with customers that does not include a company’s sales or service representative (“self service”), - Analytical CRM - analysis of customer data for a broad range of purposes. Several scholars studying buyer-seller relationships have proposed relationship development process models. Building on that work a four-stage CRM process framework will be developed. This framework comprises of the following four subprocesses: [1] - A customer relationship formation process, - A relationship management and governance process, - A relational performance evaluation process and - A CRM evolution or enhancement process. Figure 1 depicts the important components of the process model.
Figure 1 The CRM Process Framework [1]
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2
SUPPORTING PROCEDURE FOR SUCCESSFUL PREPARATION OF CRM IN THE COMPANY Proposed supporting procedure for successful preparation of CRM in an organization has four general phases, which are interlock. These general phases are: 1. Effective work with information. 2. Change of organizational structure. 3. Change of thinking. 4. Successful preparation of CRM.
effective work with informations
change of organizational structure
change of thinking
successful preparation of CRM
Figure 2 Individual phases of the procedure Figure 3 depicts the important components of the supporting procedure for successful preparation of CRM in organization.
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individual phases
Procedure of Successful Preparation and Implementation of CRM in the Company
enablers (input)
expected results (output)
accumulation of all valuable informations in database effective work with informations
communication between sales, marketing und services
arrange for information access
more individual contacts with customers
apply principles of effective work with informations
managerial function
creating and interpretation of employees vision of change
change of organizational structure
necessary knowledges assurance to change
quality CRM
motivational system upgrade work with integrated tools of areas IT
needs of people
successful change creating of competent action plan
accumulation of financial and personal resources
required situation ideal display
development of individual scenarios
confidential and fast prognoses
apply causal process
more time of customer
effective process control and investing in customer
troublefree running of business processes
change of thinking orientation of effects
quality of people
knowledges upgrade about products, services and behaviour from customer point of view
successful preparation of CRM
quality of head office
assigning of priority to missing processes of CRM
identification of all processes related to CRM
revision of processes
creating own process model of CRM
diferentiation of competition
phase identification of development processes CRM, in which the company wants to be
replacement of image
Figure 3 Supporting procedure for successful preparation of CRM in organization 2.1 Effective work with information This phase informs about necessity of effective work with information in process of successful preparation of CRM in organization. Company can achieve this work by realization of following processes: - Accumulation of all valuable information in database, - Arrange for information access,
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Apply principles of effective work with information. enablers (input)
expected results (output) accumulation of all valuable informations in database
communication between sales, marketing und services
arrange for information access
more individual contacts with customers
apply principles of effective work with informations
Figure 4 Effective work with information 2.2 Change of organizational structure If company applies principles of effective work with information, it can proceed to the second phase. Principal aim of this phase is successful implementation of change of organizational structure. enablers (input)
managerial function
expected results (output)
creating and interpretation of employees vision of change
necessary knowledges assurance to change
quality CRM
motivational system upgrade work with integrated tools of areas IT
creating of competent action plan
accumulation of financial and personal resources
Figure 5 Change of organizational structure
successful change
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If company top management wants to successfully manage these changes, it is necessary for the company to realize following processes: - Creating and interpretation of employees vision of change, - Necessary knowledge assurance to change, - Motivational system upgrade, - Accumulation of financial and personal resources, - Creating of competent action plan. 2.3 Change of thinking Realization of change of organizational structure in the company fails. Company must achieve the change of thinking. The companies, which want to succeed, must think about effects of their activities. The company can achieve change of thinking by realization of these processes: - Required situation ideal display, - Development of individual scenarios, - Apply causal process, - Effective process control and investing in customer. enablers (input)
needs of people
expected results (output)
required situation ideal display
confidential and fast prognoses
development of individual scenarios more time of customer orientation of effects
apply causal process
effective process control and investing in customer
troublefree running of business processes
Figure 6 Change of thinking in company Company must principally aim for the needs of people. Investment in customer doesn’t always cost marketing and sales. Investment orientation of effects meaning,
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that the company renounce of actual cash flow for account for assurance of future cash flows thanks to good relationships. 2.4 Successful preparation of CRM If a company has achieved effective work with information, a change of organizational structure and a change of thinking, it is prepared for entering the fourth priority phase. enablers (input)
quality of people
quality of head office
expected results (output)
knowledges upgrade about products, services and behaviour from customer point of view
assigning of priority to missing processes of CRM
identification of all processes related to CRM
revision of processes
creating own process model of CRM
diferentiation of competition
phase identification of development processes CRM, in which the company wants to be
replacement of image
Figure 7 Successful preparation of CRM In this phase the company builds CRM. For its successful building it is necessary to realize these processes in the company: - Knowledge upgrade about products, services and conduct from customer point of view, - Identification of all processes related to CRM, - Creating own process model of CRM, - Phase identification of development processes CRM, in which the company wants to be, - Assigning of priority to missing processes of CRM. 3
CONCLUSION The formation process of CRM refers to the decisions regarding initiation of relational activities for a firm with respect to a specific group of customers or to an individual customer with whom the company wishes to engage in a cooperative or collaborative relationship. It is important that a company be able to identify and differentiate individual customers. In this process, there are three important decision areas: [1] - Defining the purpose (or objectives) of engaging in CRM,
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Selecting parties (or customer partners) for appropriate CRM programs and - Developing programs (or relational activity schemes) for relationship engagement with the customer. The company can also enhance marketing effectiveness by carefully selecting customers for their various programs, by individualizing and personalizing their market offerings to anticipate and serve the emerging needs of individual customers, by building customer loyalty and commitment; by partnering to enter new markets and develop new products. [2] Even though a company may serve all customer types, few have the necessary resources and commitment to establish CRM programs for all. REFERENCES [1]
[2]
[3] [4] [5]
[6]
SHETH, J. N., PARVATIYAR, A.: Customer Relationship Management: Emerging Practice, Process, and Discipline. Journal of Economic and Social Research. 2001. pp. 8-18. SHETH, J. N., PARVATIYAR, A.: Relationship Marketing in Consumer Markets: Antecedents and Consequences. Journal of the Academy of Marketing Science. 1995. pp. 255-271. HEIDE, J. B.: Interorganizational Governance in Marketing Channels. Journal of Marketing. 1994. pp. 71-85. DOHNAL, J.: Řízení vztahů se zákazníky. Grada Publishing, Praha. 2002. ISBN 80-247-0401-3. STORBACKA K., LEHTINEN J. R.: Řízení vztahů se zákazníky (Customer Relationship Management). Grada Publishing, Praha. 2002. ISBN 80-7169-813X WESSLING H.: Aktivní vztah k zákazníkům pomocí CRM. Grada Publishing, Praha. 2002.
