Wednesday, March 23, 2011

Customer Relationship Management (CRM) in Sales-Intensive Organizations

Over the last several decades technology has continued to change the way organizations manage, strategize, communicate, build relationships, procure vendors, create marketing campaigns, and track customer inquiries. According to (Tanner Jr, Ahearne, Leigh, Mason, & Moncrief, 2005) CRM currently ranks in the top five of most corporate strategies in over 60% of companies, as these systems allow leaders to manage processes, communicate more with their customers, while growing organizational marketing effectiveness and increasing customer and vendor retention rates. Additionally, Tanner Jr, et al., (2005) identified three important aspects of most CRM systems. The first is Strategic CRM, which is the organizational decision making process that helps define and/or build a customer-oriented business strategy with their business processes, and technology implementation. In other words, “the ability to define and implement a right customer → right strategy → right organization → right channel → right people → right rewards success model” (p. 169). The second is Analytical CRM, which are the processes used to analyze customer and industry information in order to provide information that is more accurate and will guide the company’s future marketing efforts. Finally, Operational CRM, which is the business process such as sales, marketing, service, support, etc. All of these important aspects of CRM and resource allocations across all channels accompany a firm’s relationship strategy and point to four issues at the strategic level (1) account management issues, (2) organizational or sales structure, (3) cultural issues, and (4) enterprise-level knowledge management.

(1) Account management issues- a strategic issue that involves how sales organizations use CRM to review the different way that accounts are managed (i.e. territory, key account management, and collaboration).
(2) Organizational and/or sales structure- CRM has allowed more organizations to place more emphasis on selling based on customer needs across many different organizational departments (i.e. field and divisional sales, electronic and team selling, call centers, supply-chain personal and vendors, partners, etc).
(3) Cultural issues- the degree to which an organizations culture may or may not be more inclined towards a CRM implementation (i.e. sales organizations commission based tend to be non-supportive of CRM versus those organizations that offer base plus commissions).
(4) Enterprise-level knowledge management- CRM systems allow leaders the ability to access vast amounts of information in order to predict, develop, and market new products and/or services. This enabling can create a general view of an organizations customer, which in turn can create even more sales and marketing campaigns that are effective.

As more and more organizations gain a better understanding of CRM, these systems will require more researchers to look at the specific benefits that CRM technology can provide a company throughout the entire organization. Therefore, Tanner Jr, et al., (2005) framework, and research for use in analyzing systems such as CRM and Sales Force Automation (SFA) could enable more organizations to achieve even higher levels of performance, procure more vendors, ROI, sales, satisfaction, and enhanced business relationships. Since these five variables are also some of the same drivers in my research analysis this study just like the others analyzed over the last several weeks should allow me the opportunity to determine if the proposed framework in this study will be the best way to determine if a CRM technology is the most important change initiative in SCM. Over the next two weeks, I will make my determination and of course report my findings for additional feedback or comment. Otherwise, if I do deem CRM to be the most important you can expect a more thorough analysis and discussion of this system in the weeks and months ahead as I apply other scholarly pieces into a real world dissertation that will be published in late 2012. Until next time, keep smiling, as it really does look good on you! Cheers

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