Customer Relationship Management: an Organizational Survival Approach to Perceive Customer Loyalty

Transcription

1 Customer Relationship Management: an Organizational Survival Approach to Perceive Customer Loyalty Dr. Mehran Molavi1, Ayub Nahardah2 1-Department of Public Administration, College of Human Sciences, Mahabad Branch, Islamic Azad University, Mahabad, Iran. 2-Department of Public Administration, College of Human Sciences, Mahabad Branch, Islamic Azad University, Mahabad, Iran. (Corresponding Author) Abstract In this paper a new perspective concept of CRM (Customer Relationship Management) provides and emphasizes the need for feedback and information to prepare for the implementation of CRM. The author deals with the fundamental principles of customer relationship management and customer satisfaction survey. This paper also focused on the implementation of CRM and loyalty program. Changes related to CRM have serious impact on the development of human resources of the company. Managers must actively participate in the creation of marketing plans and must be fully aware of all the consequences for both parties - financial, manufacturing, operation and impact on profit. Index Terms CRM, loyalty, customer satisfaction survey, implementation of CRM, information feedback, key customer relationship management. Introduction: Generally we can Customer Relationship Management or Customer Relationship Management defined as the form and manner of an organization's customers, it is also in their strategies or activities aimed at the more satisfying the needs of customers by actively creating and sustaining a long-term beneficial relationships with customers. In its essence, the CRM intellectually setting the whole company together with business processes designed to appeal to and keep their customers and provide them with quality service. Generally speaking CRM includes all processes that have direct contact with customers in the field of marketing, sales and service activities. CRM is not a matter primarily technological, even though technology has opened a customer relationship management to new possibilities. In practice, for most organizations, CRM is the process significant internal changes. CRM is therefore first and foremost part of the overall company strategy focused on learning about customers, strengthening their loyalty, boosting their interest in further products and services or the identification of the most productive group of customers to which it may be given special care. The short, CRM is then usually governed by the word system. WHY? It is obvious that define the needs of thousands of customers based on their personal characteristics not easily, 768

2 so come to a number of information technology. System CRM therefore also represents a set of software and hardware technologies and tools that will allow fulfilling establish a strategy CRM. Recently, also often refers to the management of relationships with key customers - KCRM (Key Customer Relationship Management), a natural extension of the concept of CRM. It is based primarily on market segmentation, where each individual potential customer is the market segment. In practice, companies must focus on specific market segments in which I hope that you can show different abilities and in which they can achieve sustainable competitive advantage. Target segment must have the potential MEET business objectives and the company they must have real access. The primary purpose of corporate governance is based on the concept KCRM respond to the new market environment dominated by customers, and generally build such an enterprise to maximize the return on investment for shareholders or participants. Implementation of CRM: In addressing the dissertation concerning the area of customer relationship management performed by the author in April 2005 questionnaire survey focused specifically on the application of CRM approaches in the management of the company. Mentioned questionnaire survey was pilot projects having to check the principle of dealing with the issue of the dissertation with an emphasis on solution methodology and organizational and technical complexity of the solution. The following table indicates the basic characteristics of the sample companies. Number of employees 20 23,07% 20 to ,66% 100 to ,30% Over , 91% Activities of the company In production 42,72% In services 38,12% Both starting 7,10% The average company's focus The domestic market 80,59% Foreign market 26,83% Table 1: Characteristics of the sample It was found that 46% of the companies that responded to questions regarding the use of CRM approaches, this approach at least partially applied. Emphasis is placed on the following activities: personal approach to customers, call centers, care for long-term relationships with customers, Needs and customer satisfaction, professional exhibition and seminars, etc. companies implementing CRM sees its main advantages especially in increasing competitiveness, the findings customer needs and customize the product with these requirements ensure long-term customer relationships, better access to information and easy file sharing customer information between different departments of the company, the ability to better address individual problems with customers and facilitate communication with customers. Some of the companies surveyed also indicated a major drawback that I see in this approach. Quite understandably, it is primarily financial, time and human resources, CRM implementation 769

3 (as expensive IT systems, training of personnel, etc.) and a certain increase in administrative activities. Specific difficulties in the practical implementation of CRM was primarily the stimulation and motivation to improve access to customers, misunderstood by some, adapted to the needs of existing software customer relationship management, changes to existing structures sharing information between different departments and elimination of duplication of information. But one can say that in the long run for many companies benefit from the introduction CRM outweigh the disadvantages and difficulties. For businesses that do not apply yet have access CRM, at its introduction prepares 15%. As already mentioned, one of the main difficulties encountered during the implementation of customer relationship management is a misunderstanding on the part of employees, lack of motivation and stimulation, etc. In connection with this, it was examined whether companies implementing CRM conducted staff training in the area of customer relationship management. A positive response was obtained in only 23% of cases, so it can be seen determine the cause of the problem in a lack of training and information to employees. Each company applying CRM should have established its vision in this area, which should be in line with the overall vision or strategy of the company. Of the companies surveyed has developed its vision for CRM 25% and 72% of them to believe that this vision is fully in line with the overall mission (vision) of the company. It was found that CRM vision is most often focus on customer satisfaction and creating a customer-oriented organization gain a competitive advantage, penetrate new markets, foster business growth and building long-term relationships with customers. Interaction and customer information: In some companies, which have been implemented solutions in CRM, often shows that this is an isolated partial solution. CRM interaction with customers must be fully applied throughout the organization structure. In the first phase, the customer is interacting with marketing action notice tendered, respectively. Services (personal letters, websites, advertising in print, television or radio, etc.). In the next stage the customer search for companies, respectively. Its products, using one of the channels of commerce or. Sam is contacted by sales. During the time the customer uses the product purchased, or take advantage of various services (Services) - Additional Information, call center, contacting the customer service personnel, etc. is located within the product life cycle and have a variety of options to contact the company. In a single contact point leaves the information that is important for the company to maintain and develop relationships. The main problem is that the information collected about customers are located somewhere in the business, but may not be available where they are needed. The first task is therefore to gather all the valuable information in one database, and the second task consists in ensuring access to information wherever they are needed. One survey of reality in the studies concerned were right also whether, in a given undertaking a comprehensive database that collects data from Youthful departments of companies entering into interaction with customers. Positively to this question answered 69%, which is significantly higher than in the case of a query on the approaches CRM. At the same time, with regard to the above, it is clear that he is the fulfillment of one of the basic conditions for the implementation of customer relationship management, and it would be worthwhile to consider whether, in these companies should not be Implemented a CRM system completely. Within this part of the questionnaire was left a space for the software that is for the purpose of customer database is used. Many companies did not mention the name of the software on the grounds that it 770

4 considers sensitive data. Of those who reported software is most commonly SAP, MS Access, AS 400, LCS NORIS. A large share also has its own software or software delivered directly to order. For a successful CRM is necessary to create a new organizational unit responsible for ensuring the uninterrupted sequence of interaction, planning, control and management. Asked whether in the enterprise or company, there is a separate unit for CRM, 19% answered yes. It also examined which services operate in the area of customer relationship management in the absence of an independent department for CRM. In most cases, these activities are pursued in a marketing department, sales and trade. Customer Satisfaction Survey: Customer is the core of all organizational efforts and activities because evaluates the extent to which the requirements are met. The organization must therefore be concerned about customer satisfaction levels and take on the level of satisfaction of business stakeholders (employees, suppliers, partners, shareholders, etc.). During the process of satisfaction, an organization can determine the level of satisfaction with each character quality. Data on the overall level of satisfaction with these can be obtained either by direct query to the total satisfaction or by calculating the aggregate basis derived from customer satisfaction with each character quality. Take customer satisfaction surveys are one of the areas for which the questionnaire aimed. On this basis, it can be stated that most businesses to a greater or lesser extent, conducts regular surveys of customer satisfaction with their products. The most commonly used criteria of customer satisfaction are: turnover frequency of purchases, average size collection of goods, etc. Key factors in customer satisfaction interviewee sees companies most often included in the price and product quality, reliability and delivery accuracy, short delivery times, the high-quality service and timely innovation. Figure 1 graphically expressed as the ratio between the forms used for customer satisfaction surveys. As the graph shows, the most common is the implementation of a satisfaction survey on their own. Undertakings, which carry out exploration own means most frequently, used electronic, written, personal or telephone interviews. 771

5 FIG. 1: use of modes of customer satisfaction survey in the sample Level of preparedness for the implementation of customer relationship management: The strict use of the concept of CRM, respectively. KCRM leads to far-reaching changes in the organization of the firm, the responsibility, reporting, control systems, even in product design. Any company that is preparing for the implementation of customer relationship management must bat is able to answer questions such as: How important are company for each market factors? What are the capabilities of our business in different areas of activity? To what extent are our activities effectively? How important are setting a target for us? Jake will be the impact on our business CRM implementation, respectively. KCRM? etc. A large part of its success depends on the integration and coordination of these three activities: Identification, analysis and selection of market segments and needs customers, Creation of appropriate products and services Business activities focus on key customers exchanged within target segments. FIG. 2 shows the resulting values for answers to questions about how the enterprise value of the examined samples of their skills in the above areas. For each area was given in a range from 1 to 5, with 5 the best value 772

6 FIG. 2: The ability level of the sample in selected areas As stated in the above activities play an important role coordination. Often they can effectively coordinate these activities to defend E.g.: Poor internal communication within the marketing strategy, Inadequate channel for feedback from the business of marketing inputs and service agents Insufficient efforts to promote marketing strategies from top to bottom. Findings derived from the survey are shown in Figure 3 Enterprises assess this question its effectiveness in those activities again with a scale from 1 to 5, where 5 indicates the value of the activity as very effective. FIG. 3: The effectiveness of these activities for the sample Let us now with the consequences of ineffective coordination. Due to poor internal communication with traders may try to sell goods irrespective of any potential candidates they 773

7 are willing to listen to them. If they cannot sell it considers that the product price is too high, or that do not have corresponding parameters. A part can only act on the fact that most of the time addressed improperly potential customers. Unless the company established channels for constructive feedback, it means that there is no mechanism, as could those who are in direct contact with potential or actual users of the product contributes to product design or marketing strategy. NOW planners thus lose valuable information coming from everyday dialogue with customers. Promoting marketing philosophy from top to bottom, results in a barrier between the marketing planners and those who must implement the plan. These people and are gradually weakening motivation and effort to achieve results, as they have allowed only limited participation in business planning. The concept of customer relationship management is able to give many businesses a practical framework for it in order to carry out these activities. In practice, this means that this is a new dimension not only self-governance relationship with the customer, but also the internal structure of the company, to develop its products, business objectives and indicators used to measure results. Basic principles of long-term relationships with customers: No relationship with the customer does not last too long, if not permanently built on the principle of "give and take" with the role of each of the parties to this relationship are clearly defined. Generally, we can say that every company should adhere to the following four basic principles: Good knowledge of what is important for the customer - every business should have a clear idea about the optimal ratio between price, quality and speed to optimize their own performance, but also respect the customer needs and interests. It is necessary to analyze and understand the market and customer priorities. Open and clear communication - it is important not to turn communication into a one way process. It should leave enough space especially for complex and long-term option the customer's choice. Knowledge and analysis of competition promises - you need to keep "an ear to the ground" in order to uncovered promises competition, which seems too good not to be true. The company may also reveal exaggerated promises competition a mere comparison with their own skills. Adherence own promise - If the company reaches such a relationship in which he and customers say the truth, what you mean and mean what you say, then customers will more easily accept the terms of the company as of the longstanding and predictable relationship. Customer loyalty and loyalty programs: Customer loyalty can be defined as a regularly recurring stereotype in the shopping behavior of consumers. Do not have to buy everything - are important reasons why buys the bond strengths of the brand (not PRICING argument). Each loyalty program must include evaluation criteria for success of the program. The most commonly used the following criteria: Increased turnover and profits through repeated purchase, the size of a shopping cart, the active work of the segments; Improving the efficiency of business processes; 774

8 Soft criteria - customer satisfaction, fulfillment of expectations, the degree of customer engagement, enhance the image, level of complaints, market share, improved distribution, proportion and POWER on key categories, an improved ability to withstand competitive pressures. For the sample, it was found that 38% of businesses performs mapping of customer loyalty or even has a build loyalty programs. In most cases, these loyalty programs based on rebates and discounts, in some cases, customers within these programs achieve various gifts as rewards for repeat purchases etc. Conclusion: The last area that was the subject of a pilot survey solutions dissertation is the impact of CRM implementation, respectively. KCRM financial, material and human resources and sales organization. If the company decides to fully apply the principles of customer relationship management, meaning that for him, among other things, the courage to take the risk allocation of resources towards a few carefully chosen customers, respectively. Customer groups. This entails some drawbacks such as.: Dependence on a smaller number of customers, and consequently a greater vulnerability of business Potential pressure on profit margins, if the customer decides to abuse its privileged position, The likelihood that you will act more professional partners who will be able to push through more challenging conditions in relation supplier-customer. In connection with the implementation of the concept of customer relationship management becoming increasingly important sales function of the company. However, the traditional sales approach differs in several aspects - the search method customers, better adaptation of products, greater importance of work organization, a proactive approach to customers, the effort to permanently gain competitive advantage and focus on long-term benefits and profits unlike short-term focus of traditional sales approach. Changes associated SCRM have serious impact on the development of human resources of the company. Managers must actively participate in the creation of marketing plans and must be fully aware of all the consequences for both parties - financial, manufacturing, operation and impact on profits. For answers to questions about the law of that area has been found that most of society does not expect much effect the implementation of CRM in financial, material and human resources and sales organization. It was an average rate of 2.75 in the range of 1 to 5, the value of 1 corresponds to a small value 5 large impact. References: 1) Boulding, W., Staelin, R., Ehret, M., & Johnston, W. J. (2005). A Customer Relationship Management Roadmap: What Is Known, Potential Pitfalls, and Where to Go. Journal of Marketing. 2) Chen, I. J., & Popovich, K. (2003). Understanding Customer Relationship Management: People, Process and Technology. Business Management Journal. 775

9 3) Herington, D., & Peterson, G. (2000). Making sense of e-cm: setting the strategic agenda for sales automation. Proceedings of DCI Customer Relationship Management Conference, Boston, MA. 4) Kelvin, P. G., & Yen, H. J. R. (2003). Internet Retail Customer Loyalty; the mediating role of relational benefits. International Journal of Service Industry Management. 5) Payne, A., & Pennie, F. (2005). A Strategic Framework for Customer Relationship Management. Journal of Marketing. 6) Schiffman, L. S., & Kanuk, L. L. (2007). Consumer Behavour.Upper Saddle River, New Jersey: Pearson, Prentice Hall. 7) Winer, R. S. (2001). A Framework for Customer Relationship Management. California Management Review. 776