CRM- based Customer Knowledge Management

Transcription

1 CRM- based Customer Knowledge Management ZHANG Guangming Economics and management school, Wuhan University, Wuhan, , P.R.China Abstract: The main problems for customer relationship management and the concept and operational tactics of customer knowledge management are discussed. Based on the CRM and customer knowledge theory, this paper suggested that total customer knowledge management and the integration of the internal knowledge and customer knowledge should be emphasized. Key words: Customer, Customer Relationship Management, Customer Knowledge Management Introduction With the rapid development of technology, especially the Internet technology, significant changes have taken place in the market environment as well as customers values. Hence, customer relationship management(crm)has become the paradigm of the new methods for marketing management. Accordingly, the transformation in the operating strategy, corporate culture and operational procedures and so on symbolizes the entering into an era of knowledge management featured by digital economy and knowledge economy. Under such circumstances, the only way for an enterprise to establish competitive advantage is to build a strongly distinguished brand and enforce CRM. Based on this, the enterprise should fully explore and utilize customers information to implement customer knowledge management (CKM) and combine it with corporate knowledge. This paper firstly analyzes the main problems existing in the CRM and then further analyzes the concept of CKM, its characteristics and the operating strategies. 1. CRM and its main problems Gartner Group first put the concept of CRM forward. The nature of CRM is to emphasize a sustainable long-term relationship with customers and cultivate customer loyalty, which reflects a customer-oriented strategy. In the fiercely competitive environment, the obtainment of corporate competitive advantages is probably not only to provide related products and services to receive customer satisfaction, but also make customer feel satisfied with the relationship established between them and companies. However, we hold the view that the acquisition of customer knowledge, especially the potential knowledge is far more important than acquiring customer loyalty. Hence, the aim of CRM should be extended from merely cultivating customer loyalty to obtaining and exploring customer knowledge and making customer a value-added collaborator. Ernst young(2001)pointed out that in the process of implementing CRM, the major two challenges are internal corporate organization and acquisition of relevant information. The results of Gartner Group also reveal that 55% of CRM projects are abortive. (Rigby,2002).Many companies know too much about the knowledge of customers behavior but know little about how to utilize it. Another common phenomena is to concentrate on the management of existing customer knowledge while ignore the exploration and management of potential customer knowledge, not to mention the integration of corporate knowledge and customer knowledge. Thus, only enforcing CRM is far from enough because CRM can only establish a platform and channel to acquire customer knowledge. What a company should do is to explore and utilize this knowledge to convert customer to collaborator. Therefore, based on the above analysis, we think that the value created by the customers to enterprises may not be necessarily reflected by profits, but by the knowledge and potential values in the customer relationship. Some preeminent enterprises such as GE Haier hold that the complaints from customers are the best gifts which fully proves that knowledge from unsatisfied customers may be more valuable. This kind of knowledge can be conducive to improve the quality of products, services and procedures in 417

2 order to create more value. Hence from the perspective of knowledge management, we cannot measure the customer value wholly by customer relationship and loyalty. 2. CKM and its operating model 2.1 The concept of CKM and its characteristics Li & Calantone (1998) put forward the concept of customer knowledge competence. He thought the market knowledge competence and customer knowledge competence are two related but different concepts. The former refers to comprehensively ability to obtain and integrate market information including customers and rivals information whereas the latter refers only to ability to obtain and integrate customer knowledge. The formation of customer knowledge competence is affected by four factors including customer information process, marketing-it interface, senior management involvement as well as employee evaluation and reward systems. Gibbert et al. (2002) further put forward the concept of CKM He thought that CKM refers to the exploration and management of the remaining knowledge in customers mind. He emphasized empowering to customers and regarding customers as partners and acquiring customer knowledge through direct interaction with customers that is an extension of CRM and KM. CRM will focus on the management of existing customer knowledge which is the customer characteristics and preferences identified in the past. In the information age, more and more emphases are laid on organizational study and internal integration of staffs knowledge, but usually ignore the function of customer knowledge. Being an important resource of a company, the value of customer knowledge is embodied in the following aspects. Through the continuous purchase, usage, maintenance of the products, customers have accumulated many experiences. These experiences combined with their changeable demand for products and services will be crucial for a company to predict market trend, identify market oppurtunites, improve products and services and appropriately make corporate objectives. They can help to enhance the predicting ability, responding ability and value-creating ability of an enterprise, which may compose of the basis for competitive advantages in a dynamic environment The development of Internet technology will surely aids CKM as a useful tool Table 1 shows the comparison among the characteristics of CKM, KM and CRM (Gibbert et al., 2002). 418

3 From table 1, it can be easily seen that CKM is the extension and integration of CRM and KM. It is an update principle of marketing management. The role of customer has undertaken significant and profound change, which makes costumer knowledge become an importance part of corporate knowledge. The customer has become the creator of the company s value and in turn also the mutual benefactor. Hence, customer is one of the company s most important assets. Meet customers needs and provide customer satisfaction is the precondition of maintaining customer relationship and cultivation customer loyalty. While to achieve this, a company needs to emphasize CKM and make customer knowledge an indispensable part of corporate knowledge. Though cooperate with the customers can a company gain more. 2.2 The operating model of CKM The enforcement CKM needs to analyze according to different phases and choose different approaches according different customer kinds, relations and loyalty. Gibbert et al. (2002) concluded five styles of CKM including prosumerism, team-based co-learning, mutual innovation, communities of creation, joint IP/ownership (table 2) Prosumerism is the preliminary style of CKM, which mainly acquires individual s suggestive knowledge to improve products, procedures and profitability. It is also a common style adopted by many enterprises at present. Team-based co-learning means that establish study team with customers to acquire CK, usually through the way of project management. Mutual innovation refers to through the collection of original ideas from companies and customers to innovate. Communities of creation refer to combine customers who have professional knowledge in order to communicate with them to achieve interactive innovation. Joint IP/ownership is the ultimate stage of CKM in which CK will become an indispensable part of corporate knowledge and customers will become an indispensable part of corporate assets. Table2 Five Styles of CKM 419

4 The operation of CKM needs firstly to identify potential target customer group and regards them as an important source of knowledge and studying partners. Besides, a company should establish customer relationships to different degree of intimation according to the different target customer groups and in different phases of life cycle of customer relations, a company should choose different mode of CKM too. When acquiring CK, integrations should be on different level inside the enterprises. There are mainly four kinds of knowledge flow between companies and customers (Wang Yonggui, et al. 2002): (1) Knowledge flow is on the level of organizations. Through cooperation a company can directly absorb knowledge and together explore new knowledge. (2) The internal management supports the delivery of products or services and provides a good environment for it as well. (3) Knowledge flow is on the level of projects. In the process of cooperation with customer, a company provides products and services with recessive knowledge elements and reflects some of CK in it. (4) Provide opportunities to absorb knowledge and learn through doing it on the level of individual and team in the process of closely interactive delivery of products and services. 3. Conclusion and suggestions 3.1 Integrate customer knowledge to form total customer knowledge management (TCKM) CK not only includes the knowledge collect form the past CKM, such as their preferences, their distinct knowledge, but also includes the remaining information in customer s mind and some potential knowledge. CKM focuses on the latter. We suggest that a company needs to integrate them to form TCKM. Analysis of existing KM can further help to identify and tag potential KM in order to transfer potential customer to loyal customer and enrich the CK system. 3.2 Integrate CK into corporate knowledge to establish an interactive KM system On the basis of TCKM, a company should further Integrate CK into corporate knowledge in order to form an interactive KM system. The interaction of CK and corporate knowledge is an exterior form of corporate knowledge management and it is also an important source of a company s competence. 3.3 Exert the core functions of an enterprise and cultivate competitive advantages and core competence. The enterprise is the mainspring in the interaction with customers. It is the explorer and integrator of the resources. However, TCKM as well as the interaction of CK and corporate knowledge cannot be automatically accomplished. Instead, the enterprise should exert the core functions and establish a favorable corporate culture, internal mechanism of operating, studying and motivating, the basis for resources and abilities and external coordinating mechanism of customer communicating, cooperating and sharing. Being the main body, a company should convert CK into corporate knowledge, convert recessive knowledge to obvious knowledge, convert knowledge to competitive advantages and core competences. 3.4 Customer relationship is the basis of CKM and Internet is a crucial tool to achieve it The acquisition, interaction, management and integration of CK must be based on the good relationship between the companies and customers. Therefore, without customer relationship, there will be no CKM, not to mention the integration. So that CRM is the basis of CKM, and enhancement of CKM will in turn benefit CRM. The Internet technology is not only an important tool for CRM and CKM,but also a significant impetus. So a company should make use of it to explore and manage CK in order to achieve interactive relations with customers and base TCKM on Internet technology. References [1] Li, T., & Calantone, R. J. The impact of market knowledge competence on new product advantage: Conceptualization and empirical examination. Journal of Marketing, 62, 1998, [2] Michael Gibbert, Marius Leibold, Gilbert Probst, Five Styles of Customer Knowledge Management and How Smart Companies Use Them To Create Value,European Management Journal Vol.20, No.5, pp ,

5 [3] Alexandra J. Campbell, Creating customer knowledge competence: managing customer relationship management programs strategically, Industrial Marketing Management 32 (2003) [4] Heinz K. Stahl, Kurt Matzler, Hans H. Hinterhuber, Linking Customer Lifetime Value with Shareholder Value, Industrial Marketing Management, 32, , [5] Simon Knox, Loyalty-Based Segmentation and the Customer Development Process, European Management Journal, Vol.16, No.6, , [6] Gartner Group, Customer Relationship Management, Huaxia Press, 200. [7] Wang yonggui, Yang long, Yang yongheng, Customer relationship management:system discuss on customer network and knowledge management, Journal of Chongqing University(social science edition),vol.9, No.2, 2002(In Chinese). The author can be contacted from: 421