In the ever-changing world of business, it is extremely important to be able to identify past trends in order to recognize future opportunities that may or may not affect the short-term or long-term health of a business’s functionality now or in the years to come. According to (E. Cornish, 2004) there are an endless amount of ways to assess future events and when doing so you must make sure to use techniques that you are comfortable with. Three important futuring techniques that are sure to help an organization achieve short and long-term success are (1) scenarios, (2) modeling, and (3) wild cards.
According to Cornish (2004), a scenario is a developing future trend or strategy that describes a story or is explained in a detailed outline form. Usually those companies that utilize scenarios as part of the planning process do so if they are uncertain about future events and their potential impact(s) on the organizational planning. (Fink, Marr, Siebe, & Kuhle, 2005) also state that “scenarios can play a significant and new role in combining the well-structured planning process with the often less-organized and in some planners’ minds more “chaotic” early-warning processes” (p. 376). Nevertheless, a company maybe filled with varying perspectives of problems, and different interests that can turn a good strategy into a bad strategy overnight. Therefore, Fink, et al., (2005) explained four ways executives and managers could deal with these differences in order to create a stronger future for the company. First, recognize the key elements of the strategy as step one, where you identify twenty or less factors in order to discover relationships to where a company sees itself now and where it sees itself in the future. Second, improve and explain future options as step two, while describing what factors of those identified in step one can lead to potential future opportunities within the organization. Third, combine future options with step one scenarios since they are the link between future options of each factor identified in step one to strategy scenarios, while stressing the importance and strategy of each scenario developed by the members of the team. Finally, develop a strategic roadmap, which was referred to as the final step (four) or the identification of all the resources needed for any changes, also known as “windows of opportunities” (p. 367).
(Bracken, 2008) agreed with the insights of Cornish and Fink and describes four additional scenarios that are commonly used by leaders in order to help executives continue identifying business trends. The first was technology, followed by political risks, attrition, and strategic personalities. By no means are these four trends the only trends affecting business; but from the research, (Bracken, 2008) stated that these trends would likely continue to be at the forefront well into the next decade. Bracken (2008) also discussed the necessary leadership skills that would be required to produce future scenarios that could help everyone involved in business transactions as (1) foresight, (2) leverage, (3) agility, and (4) broader perspectives. (Bodell, 2006) research also showed that those organizations that are the most successful using scenarios and/or scanning methods are the ones that use foresight and perspective to identify opportunities, while preparing for what is next. (Bodell, 2006; Bracken, 2008) discussed similar methods that others can be taught in order to learn possible future tracks of their organizations. Those leaders that possess these traits will be better equipped to deal with turbulent times, be ahead of the game within their industry, and able to solve problems by viewing the situation from all possible angles.
The second futuring technique that could help an organization achieve short and long-term success is referred to as modeling and Cornish (2004) defines modeling as “something that we use to represent something else” (p. 70). Although there are a number of different modeling techniques that were/are used, (Wind, 2008) describes a modeling technique in relation to the discipline of Marketing. In fact, marketing, like technology has/is continuing to advance into a rigorous field of work and study. Wind (2008) explained that marketing today is a combination of “analysis, economic, and econometric modeling, behavioral economics, data mining, and techniques,” which are “derived from mathematical psychology” (p. 21). As the world continues to move forward, marketing will also need to continue forward; therefore, Wind (2008) proposed seven strategies modeled after several different disciplines (i.e. finance, customer relationship, supply chain management, operations, etc). Wind’s proposed strategies are an excellent example of how modeling can have major impacts on one specific element or several. (Giunipero, Hooker, Joseph-Matthews, Yoon, & Brudvig, 2008) agree with Wind (2008) and add that those organizational leaders that choose to evaluate past literature, while producing new models will be the ones who are able to determine what future development(s) may occur within a network or organizational framework. Like Wind (2008) modeling technique (Giunipero, et al., 2008) were able to correlate different frameworks, challenges, and trends of the past with new information technology and e-commerce, which is perhaps a new way to solve other strategic issues or help solve global supply chain issues heading into the future based on the past.
The last futuring technique that could help an organization achieve short and long-term success is wild cards. In a recent article published in the Futurist (Petersen, 2009) describes some of the same things in Cornish’s (2004) Futuring about wild cards that Petersen (2009) previously mentioned in his book Out of the Blue, which have continued to shape and reshape the future. In fact, Cornish not only uses Petersen’s work to describe past events but offers his analysis of Petersen’s three basic rules for dealing with wild cards, as also featured in the (Edward Cornish, 2003) article The Wild Card of the Future. Cornish quotes Petersen’s three rules as
(1) We need to think about wild cards before they happen because if we do then we are more likely to find a solution(s).
(2) We must also be able to understand the affects of potential wild cards in order to prepare better for a potential response.
(3) Extreme past and future events require unique approaches in order to help solve them.
Understanding the likelihood of future events can better equip you if/or when those events happen. In fact, both Cornish and Petersen describe some of the past wilds cards that have taken place and remind readers those events that happen unexpectedly may or may not be as uncommon as one may think. The truth is, over the years, wild cards have and continue to transform our own daily lives along with that of the global business environment. However, creating a long-term organizational strategy that transforms multiple partners is just the beginning. (Wagner, 2008) points out that an organization can forecast for the future; however, they cannot predict changes or “wild cards” that may occur outside the normal realm of conducting business. Her work examines several wild cards discussed in a work by Schwartz and Randall (2007) along with the main categories used in long-term business planning. Wagner (2008) identified six trends and forecasts companies utilize to predict future demands (1) demography, (2) economics, (3) environment, (4) government, (5) society, and (6) technology, while offering readers a brief classification of each. Obviously many variables can influence our daily decisions, which can affect long-term business forecasting; therefore, Wagner (2009) noted that many futurists often discuss a single trend across several sectors. This organization of trends has proved to be valuable in understanding many global issues or wild cards that can dramatically affect later business decisions and affect long-term business planning, so there are no surprises that you unprepared for.
This blog post examined three futuring methods that Cornish points out in his book Futuring Methods. Although there are many techniques that can predict the future; scenarios, modeling, and wild cards are the most important to my dissertation, hence the correlation of this work to previous blog posts. Additionally, the tools identified here were developed years ago; however, these tools will continue to be used to identify problems, as we continue to look for new tools and additional ways of predicting the future. We must also remember that we need to continue to think strategically, while remaining dedicated to innovation and technological advancements as a group if we want to continue advancing at the current rates. Regardless of the efforts, a company that uses these three methods to try to predict the future will be better equipped to deal with or plan for those unforeseen events, as they are essential to survival in the world we live in today.
Of course, I am always up for other opinions, especially those that involve some of the other futuring techniques used by individuals and business small or large. Shoot me an email, post here, or Tweet me a reply. Until next time, Keep Smiling!!!
References
Bodell, L. (2006). Best practices in scanning. The Futurist, 40(5), 22.
Bracken, P. (2008). Futurizing business education. Futurist, 42(4), 38-42.
Cornish, E. (2003). The wild cards in our future. Futurist, 37(4), 18.
Cornish, E. (2004). Futuring: The exploration of the future. Bethesda, MD: World Future Society.
Fink, A., Marr, B., Siebe, A., & Kuhle, J.-P. (2005). The future scorecard: combining external and internal scenarios to create strategic foresight. Management Decision, 43(3), 360.
Giunipero, L. C., Hooker, R. E., Joseph-Matthews, S., Yoon, T. E., & Brudvig, S. (2008). A decade of SCM literature: Past, present, and future implications. Journal of Supply Chain Management: A Global Review of Purchasing & Supply, 44(4), 66-86.
Petersen, J. L. (2009). How "wild cards" may reshape our future. Futurist, 43(3), 19-20.
Wagner, C. G. (2008). Anticipating wild cards in world affairs. Futurist, 42(1), 6-7.
Wind, Y. (2008). A plan to invent the marketing we need today. MIT Sloan Management Review, 49(4), 21.
Showing posts with label Sales. Show all posts
Showing posts with label Sales. Show all posts
Friday, May 20, 2011
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
(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
Wednesday, March 16, 2011
Leveraging your Organizational Capabilities through CRM for Increased Sales
Often discussed amongst organizational leaders and sales managers are some of the issues, impacts, and activities of sales forces, which are responsible for a company’s overall bottom line results. In fact, activities such as sales calls, sale's success stories, and long-term relationship building are continuing to change the way these issues, impacts, and activities are used to manage customer information, which in turn are helping to increase sales volume, identify additional customer buying habits and requirements, thus increasing customer satisfaction, organizational profitability, and competitive actions. (Raman, Wittmann, & Rauseo, 2006) identified CRM as a technological tool that can help an organizations sales force minimize some of these challenges while helping to increase returns on a sales person’s time invested in exchange for higher sales, revenues, profitability.
However, in spite of the tremendous amount of growth in CRM implementations, many people are quick to point out the high failure rates that these systems have also experienced. (Raman, et al., 2006) reported that in a survey conducted by CSO Insights consisting of 1,337 international companies who have implemented some form of a CRM system, that only 25% actually reported a significant benefit in a sales team’s performance. The most common citing found in the survey was that most of the time organizations lacked proper strategic planning that is required prior to any major system implementation such as that of CRM. Therefore, if an organization carefully plans for a CRM implementation (operational^1 or analytical^2 ) then they will be more likely to segment customers, and market more efficiently while identifying those customers that are more and/or less profitable.
Using some of the strengths and weaknesses found within the literature on a CRM implementation (Raman, et al., 2006) conducted their own qualitative study and developed a grounded theoretical model in order show organizational leaders why they should continue to focus on the CRM technology implementations. Four capabilities are discussed (1) organizational learning, (2) business process orientation, (3) customer centric orientation, and (4) Task-Technology Fit (TTF).
(1) Organizational learning- “organizational characteristics such as size, formalization, centralization, complexity, and interconnectedness on adoption and implementation of innovations” (p. 42)
(2) Business process orientation- an attempt to clarify technological innovations that an organization is considering adapting to match their existing processes (i.e. CRM, ERP, etc)
(3) Customer-centric orientation- an organization’s ability to focus on its customers wants and needs versus that of its internal structure or processes
(4) Task-Technology Fit (TTF)- the degree that technology (i.e. CRM) helps individuals position his/her tasks with that of the organizations desires in order to meet/exceed company needs
The results of (Raman, et al., 2006) study showed that most successful CRM technological implementations occurred when an organization incorporated both operational and analytical characteristics combined with the four main capabilities previous mentioned in order to help guide additional strategic long-term decision making (i.e. sales, marketing, customer service, segmentation, properly identifying profitable, non-profitable, and cross-selling customers, etc). Furthermore, the results of the study opened new doors for research opportunities for those curious to draw on the discussed model or those who want to see if different variations of these characteristics and capabilities would help or slow a CRM implementation.
Although CRM is viewed by many as a technological solution to sales and customer service (Raman, et al., 2006) also identified some of the drawbacks of a CRM implementation. One thing is certain from this review and my analysis of CRM over the last few weeks is that CRM can provide many strategic benefits to those people and organizations that understand and utilize all the tools by properly leveraging this resource to produce higher sales, returns, satisfaction, and profitability. Everyone else who does not fully understand how to build CRM into the strategic long-term plans of the organization should be cautious with an implementation of this type.
Like many of the other articles on CRM that I have analyzed over the last few weeks, (Raman, et al., 2006) proposed yet another model, along with some very interesting follow-up (qualitative and quantitative research) for others to consider who are interested in CRM. Therefore, those people like me who are interested in researching this type system additionally could use this study and model to draw their own conclusions of these type systems. It is one thing to say something about CRM or anything for that matter but actually backing up your statements with actual data is a more effective way to get people to listen. Hence, why I will continue to research and report my findings for those who are interested in this niche technological innovation and all others looking for answers that are credible.
Of course and like usual, I am always open to other opinions of the research that I report, so if you got a thought or want to chime in with some additional insight(s) please drop me a line; otherwise and until next time… Keep Smiling
1 Operational CRM involves functions such as sales, service, support, and marketing.
2 Analytical CRM technologies involve customer information that is used by all organizational departments to analyze data in order to improve business decisions and/or future actions.
References
Raman, P., Wittmann, C. M., & Rauseo, N. A. (2006). Leveraging CRM for sales: The role of organizational capabilities in successful CRM implementation. Journal of Personal Selling & Sales Management, 26(1), 39-53.
However, in spite of the tremendous amount of growth in CRM implementations, many people are quick to point out the high failure rates that these systems have also experienced. (Raman, et al., 2006) reported that in a survey conducted by CSO Insights consisting of 1,337 international companies who have implemented some form of a CRM system, that only 25% actually reported a significant benefit in a sales team’s performance. The most common citing found in the survey was that most of the time organizations lacked proper strategic planning that is required prior to any major system implementation such as that of CRM. Therefore, if an organization carefully plans for a CRM implementation (operational^1 or analytical^2 ) then they will be more likely to segment customers, and market more efficiently while identifying those customers that are more and/or less profitable.
Using some of the strengths and weaknesses found within the literature on a CRM implementation (Raman, et al., 2006) conducted their own qualitative study and developed a grounded theoretical model in order show organizational leaders why they should continue to focus on the CRM technology implementations. Four capabilities are discussed (1) organizational learning, (2) business process orientation, (3) customer centric orientation, and (4) Task-Technology Fit (TTF).
(1) Organizational learning- “organizational characteristics such as size, formalization, centralization, complexity, and interconnectedness on adoption and implementation of innovations” (p. 42)
(2) Business process orientation- an attempt to clarify technological innovations that an organization is considering adapting to match their existing processes (i.e. CRM, ERP, etc)
(3) Customer-centric orientation- an organization’s ability to focus on its customers wants and needs versus that of its internal structure or processes
(4) Task-Technology Fit (TTF)- the degree that technology (i.e. CRM) helps individuals position his/her tasks with that of the organizations desires in order to meet/exceed company needs
The results of (Raman, et al., 2006) study showed that most successful CRM technological implementations occurred when an organization incorporated both operational and analytical characteristics combined with the four main capabilities previous mentioned in order to help guide additional strategic long-term decision making (i.e. sales, marketing, customer service, segmentation, properly identifying profitable, non-profitable, and cross-selling customers, etc). Furthermore, the results of the study opened new doors for research opportunities for those curious to draw on the discussed model or those who want to see if different variations of these characteristics and capabilities would help or slow a CRM implementation.
Although CRM is viewed by many as a technological solution to sales and customer service (Raman, et al., 2006) also identified some of the drawbacks of a CRM implementation. One thing is certain from this review and my analysis of CRM over the last few weeks is that CRM can provide many strategic benefits to those people and organizations that understand and utilize all the tools by properly leveraging this resource to produce higher sales, returns, satisfaction, and profitability. Everyone else who does not fully understand how to build CRM into the strategic long-term plans of the organization should be cautious with an implementation of this type.
Like many of the other articles on CRM that I have analyzed over the last few weeks, (Raman, et al., 2006) proposed yet another model, along with some very interesting follow-up (qualitative and quantitative research) for others to consider who are interested in CRM. Therefore, those people like me who are interested in researching this type system additionally could use this study and model to draw their own conclusions of these type systems. It is one thing to say something about CRM or anything for that matter but actually backing up your statements with actual data is a more effective way to get people to listen. Hence, why I will continue to research and report my findings for those who are interested in this niche technological innovation and all others looking for answers that are credible.
Of course and like usual, I am always open to other opinions of the research that I report, so if you got a thought or want to chime in with some additional insight(s) please drop me a line; otherwise and until next time… Keep Smiling
1 Operational CRM involves functions such as sales, service, support, and marketing.
2 Analytical CRM technologies involve customer information that is used by all organizational departments to analyze data in order to improve business decisions and/or future actions.
References
Raman, P., Wittmann, C. M., & Rauseo, N. A. (2006). Leveraging CRM for sales: The role of organizational capabilities in successful CRM implementation. Journal of Personal Selling & Sales Management, 26(1), 39-53.
Friday, March 11, 2011
Measuring Customer Relationship Management (CRM) Effectiveness in Order to Reduce Costs and Increase Sales
There are a number of applications or systems that an organization can use evaluate their current market share, profit margins, customer relationships, loyalty, and satisfaction. One such application or technological system most commonly used to analyze these trends is referred to as Customer Relationship Management (CRM). According to (Ja-Shen, Yen, Li, & Ching, 2009) CRM systems are a major marketing and/or services tool that can help an organization take full advantage of its customers by identifying trends in their customers buying behaviors, needs, and future expectations in order to maintain and grow relationships. Although a number of studies have researched and proven that a CRM implementation can enhance an organizations performance with increases in sales, few have focused on how these same systems can further develop more customer relationships, while increasing a company’s market share. As a result of these findings (Ja-Shen, et al., 2009) recent study examined three other factors (marketing, operations, and human resources) of CRM, which they believed could help organizations improve or grow their customer relationships, thus creating more organizational profitability and market share.
When an organization improves its relationship between marketing, operations, and human resources, they become better equipped to disseminate CRM data, which can then lead the organization to make additional innovations, while taking responsive actions. (Ja-Shen, et al., 2009) refer to this dimension of CRM as the Information Technology (IT) or Customer-Focused Information Technology (CFIT) segment, which is the first of three dimensions of interest in their analysis that supports the operations of a company’s CRM processes. The second dimension of interest in (Ja-Shen, et al., 2009) study was referred to as Relationship Marketing (RM), which was identified as the root efforts of a CRM process that can help an organization manage and improve its new and existing relationships with its customers in order to increase customer satisfaction, all while creating additional long-term profitability. Finally, (Ja-Shen, et al., 2009) referred to the third dimension of interest in their study as Customer-Focused Organizational Climate (CFOC) or the human resource side, which deals with an organizations culture to accept, use, and build upon any CRM system in order to help the organization develop, maintain, and grow customer relationships.
(Ja-Shen, et al., 2009) empirical study found that together (marketing, operations, and human resources) with (CFIT, RM, and CFOC) the most common view of CRM as a marketing application or complement of a company’s information technology or CFIT should also include the other two dimensions (RM and CFOC). If an organization wants to excel in the global market it is imperative that more organizations focus not only on advancing their information technology through systems such as CRM but that they also need to use CRM system data to create additional programs that focus more on the retention of current customers (needs) and acquisition of new customers (expectations). Only then will more businesses develop deeper understandings of their customer bases, while being able to target and market more effectively, resulting in more value, satisfaction, and cross or up-selling possibilities.
While the concept of CRM is an increasingly popular and hot topic throughout the world, research into the systems effectiveness on increased market share, profitability, customer relationships, and satisfaction is rather limited. Therefore, (Ja-Shen, et al., 2009) analysis provide three important dimensions (1) RM, (2) CFIT, and (3) CFOC of Customer Relationship Management Effectiveness (CRME). In order to improve the understanding of CRM systems it is dimensions such as these that managers will need to consider as they are continuing to identify the strengths and weaknesses of these programs, so they can continue to retain, update, and analyze the mass amounts of data collected to develop a deeper understanding of customers needs and wants. More importantly, these factors are even more important for individuals that want to reduce costs, while finding new ways to increase sales, Return on Investments (ROI), or enhancing their business’s performance.
This analysis of CRM systems is yet another example of the type of benefits that this supply chain function can provide organizations that truly are looking to grow their business. Therefore, I will continue to provide additional updates into this niche market, as I continue to refine my research in hopes of finding the supply chain function that can contribute most to the additional growth of Small-to-Medium Enterprises (SMEs). Of course, your opinions are always welcome as I truly welcome any additional insights that you may be able to provide. Otherwise, keep smiling since it really does look good on you—Cheers!!!
References
Ja-Shen, C., Yen, H. J. R., Li, E. Y., & Ching, R. K. H. (2009). Measuring CRM effectiveness: Construct development, validation, and application of a process-oriented model. Total Quality Management & Business Excellence, 20(3), 283-299.
When an organization improves its relationship between marketing, operations, and human resources, they become better equipped to disseminate CRM data, which can then lead the organization to make additional innovations, while taking responsive actions. (Ja-Shen, et al., 2009) refer to this dimension of CRM as the Information Technology (IT) or Customer-Focused Information Technology (CFIT) segment, which is the first of three dimensions of interest in their analysis that supports the operations of a company’s CRM processes. The second dimension of interest in (Ja-Shen, et al., 2009) study was referred to as Relationship Marketing (RM), which was identified as the root efforts of a CRM process that can help an organization manage and improve its new and existing relationships with its customers in order to increase customer satisfaction, all while creating additional long-term profitability. Finally, (Ja-Shen, et al., 2009) referred to the third dimension of interest in their study as Customer-Focused Organizational Climate (CFOC) or the human resource side, which deals with an organizations culture to accept, use, and build upon any CRM system in order to help the organization develop, maintain, and grow customer relationships.
(Ja-Shen, et al., 2009) empirical study found that together (marketing, operations, and human resources) with (CFIT, RM, and CFOC) the most common view of CRM as a marketing application or complement of a company’s information technology or CFIT should also include the other two dimensions (RM and CFOC). If an organization wants to excel in the global market it is imperative that more organizations focus not only on advancing their information technology through systems such as CRM but that they also need to use CRM system data to create additional programs that focus more on the retention of current customers (needs) and acquisition of new customers (expectations). Only then will more businesses develop deeper understandings of their customer bases, while being able to target and market more effectively, resulting in more value, satisfaction, and cross or up-selling possibilities.
While the concept of CRM is an increasingly popular and hot topic throughout the world, research into the systems effectiveness on increased market share, profitability, customer relationships, and satisfaction is rather limited. Therefore, (Ja-Shen, et al., 2009) analysis provide three important dimensions (1) RM, (2) CFIT, and (3) CFOC of Customer Relationship Management Effectiveness (CRME). In order to improve the understanding of CRM systems it is dimensions such as these that managers will need to consider as they are continuing to identify the strengths and weaknesses of these programs, so they can continue to retain, update, and analyze the mass amounts of data collected to develop a deeper understanding of customers needs and wants. More importantly, these factors are even more important for individuals that want to reduce costs, while finding new ways to increase sales, Return on Investments (ROI), or enhancing their business’s performance.
This analysis of CRM systems is yet another example of the type of benefits that this supply chain function can provide organizations that truly are looking to grow their business. Therefore, I will continue to provide additional updates into this niche market, as I continue to refine my research in hopes of finding the supply chain function that can contribute most to the additional growth of Small-to-Medium Enterprises (SMEs). Of course, your opinions are always welcome as I truly welcome any additional insights that you may be able to provide. Otherwise, keep smiling since it really does look good on you—Cheers!!!
References
Ja-Shen, C., Yen, H. J. R., Li, E. Y., & Ching, R. K. H. (2009). Measuring CRM effectiveness: Construct development, validation, and application of a process-oriented model. Total Quality Management & Business Excellence, 20(3), 283-299.
Wednesday, March 2, 2011
Why you Should Develop a Customer Relationship Management (CRM) Strategy at your Company?
With changing global trends like outsourcing, consolidation, mergers, and acquisitions many organizations are looking for new ways to manage collected data in order to identify new clients, potential disruptions, and other selling opportunities. One such process that offers a company different analyses tools is through the implementation of a system such as Customer Relationship Management (CRM). (Lassar, Lassar, & Rauseo, 2008) explain that those leaders that develop a better understanding of CRM systems now, along with some of the things CRM systems can and cannot do will be the ones to build a “strategic vision that integrates people and processes with technology to maximize a firm’s investment” (p. 68). It is this type of strategic thinking that will then allow for more employee buy-in, and value within and outside the organization.
CRM has been around since the 90s in various forms and has continued to change with the introduction of new technology; however, its main focus has not changed too much and that is to help managers collect, share, and analyze customer data in order to make better strategic decisions on pricing, customer needs, and new services. Alternatively, a simpler definition is that CRM allows managers and employees a way to view data from multiple sources, in different angles, throughout the company. According to (Lassar, et al., 2008) CRM technology has four distinct features (1) contact data, (2) demographic data, (3) transactional data, and (4) relationship data.
(1) Contact data- often referred to as the simplest form of data, contact data includes items such as name, address, position, etc, which help employees build better relationships with their clients while providing a better way to identify anticipate their needs or concerns
(2) Demographic data- this feature is often described as a clients attributes or characteristics (i.e. entity, geography, size, requirements, etc), which help managers profile and predict a current or potential clients profitability
(3) Transactional data- this CRM feature helps outline historical event such as outcome of a meeting, interaction, and account history, which can help managers effectively manage client relationships, personalities, motivations, and expectations
(4) Relationship data- this feature allows managers to identify potential client problems or concerns, in order to generate more referrals and higher retention
If an organization uses a CRM system correctly, they will be able to recognize the importance of their client demographics and become more equipped to uncover problems faster, build better relationships, obtain new referrals, and gain a competitive edge over their competition as a result. However, often this strategy is easier said, than done, as a major challenge with any CRM implementation is employee participation and adoption. Therefore, much like any technological implementation encouraging employee buy-in or by designing the business strategy first, an organization will be more equipped to train its employees on the technology value, which will ultimately enhance the business processes (Lassar, et al., 2008).
As highlighted by (Lassar, et al., 2008) and others in my previous posts, CRM implementation can help an organization develop a deeper understanding of the industries they serve, their markets, and their clients needs, which can result in a major competitive advantage in a very competitive and global market. Although some CRM implementations require extra time, energy, and effort those companies that embrace CRM as a true business strategy will be the ones to use such a technological system as a true solution in order to identify additional opportunities, while continuing to grow. Regardless of the decision or process used, a company must continue to look for the best way to analyze customer data, in order to find new ways to satisfy its current and potential customers, which CRM clearly does. In addition, and as I again have mentioned in multiple other posts, CRM is a hot topic that offers many businesses the opportunity to collect and analyze customer data for future sales, marketing, and business development campaigns. If CRM implementation is taken seriously and is done correctly this system process can yield many positive effects throughout an organization, while continuing to increase sales, enhance a business’s performance, all while creating more return on investment. Over the last several weeks, my research has continued to allow me to continue analyzing this one niche in order to understand what effects CRM is truly having on a company’s long-term strategic plans. As they say research doesn’t lie and so far…so good… on the quest of discovering the best technological systems for SMEs and MNCs to implement alike!!!
Of course, I am always open for comments and would love to hear your thoughts on CRM, ERP, etc., or any other business processes that are continuing to change the landscape of your organizational development. Until next time, keep smiling—Cheers!!!
Reference
Lassar, W., Lassar, S., & Rauseo, N. (2008). Developing a CRM strategy in your firm. Journal of Accountancy, 206(2), 68.
CRM has been around since the 90s in various forms and has continued to change with the introduction of new technology; however, its main focus has not changed too much and that is to help managers collect, share, and analyze customer data in order to make better strategic decisions on pricing, customer needs, and new services. Alternatively, a simpler definition is that CRM allows managers and employees a way to view data from multiple sources, in different angles, throughout the company. According to (Lassar, et al., 2008) CRM technology has four distinct features (1) contact data, (2) demographic data, (3) transactional data, and (4) relationship data.
(1) Contact data- often referred to as the simplest form of data, contact data includes items such as name, address, position, etc, which help employees build better relationships with their clients while providing a better way to identify anticipate their needs or concerns
(2) Demographic data- this feature is often described as a clients attributes or characteristics (i.e. entity, geography, size, requirements, etc), which help managers profile and predict a current or potential clients profitability
(3) Transactional data- this CRM feature helps outline historical event such as outcome of a meeting, interaction, and account history, which can help managers effectively manage client relationships, personalities, motivations, and expectations
(4) Relationship data- this feature allows managers to identify potential client problems or concerns, in order to generate more referrals and higher retention
If an organization uses a CRM system correctly, they will be able to recognize the importance of their client demographics and become more equipped to uncover problems faster, build better relationships, obtain new referrals, and gain a competitive edge over their competition as a result. However, often this strategy is easier said, than done, as a major challenge with any CRM implementation is employee participation and adoption. Therefore, much like any technological implementation encouraging employee buy-in or by designing the business strategy first, an organization will be more equipped to train its employees on the technology value, which will ultimately enhance the business processes (Lassar, et al., 2008).
As highlighted by (Lassar, et al., 2008) and others in my previous posts, CRM implementation can help an organization develop a deeper understanding of the industries they serve, their markets, and their clients needs, which can result in a major competitive advantage in a very competitive and global market. Although some CRM implementations require extra time, energy, and effort those companies that embrace CRM as a true business strategy will be the ones to use such a technological system as a true solution in order to identify additional opportunities, while continuing to grow. Regardless of the decision or process used, a company must continue to look for the best way to analyze customer data, in order to find new ways to satisfy its current and potential customers, which CRM clearly does. In addition, and as I again have mentioned in multiple other posts, CRM is a hot topic that offers many businesses the opportunity to collect and analyze customer data for future sales, marketing, and business development campaigns. If CRM implementation is taken seriously and is done correctly this system process can yield many positive effects throughout an organization, while continuing to increase sales, enhance a business’s performance, all while creating more return on investment. Over the last several weeks, my research has continued to allow me to continue analyzing this one niche in order to understand what effects CRM is truly having on a company’s long-term strategic plans. As they say research doesn’t lie and so far…so good… on the quest of discovering the best technological systems for SMEs and MNCs to implement alike!!!
Of course, I am always open for comments and would love to hear your thoughts on CRM, ERP, etc., or any other business processes that are continuing to change the landscape of your organizational development. Until next time, keep smiling—Cheers!!!
Reference
Lassar, W., Lassar, S., & Rauseo, N. (2008). Developing a CRM strategy in your firm. Journal of Accountancy, 206(2), 68.
Monday, February 28, 2011
Are e-Technologies such as Customer Relationship Management (CRM) changing how Organizations Market, Sell, and Provide Customer Service for their Products and/or Services?
Are e-Technologies such as Customer Relationship Management (CRM) continuing to change the ways that organizations market, sell, and provide customer service for their products and services? According to (Ross, 2005) Yes! In fact, (Ross, 2005) describes and provides some of the main functions of most CRM programs. CRM has three essential responsibilities (1) Marketing; (2) Sales, and (3) Service and collectively these three functions can help an organization improve on the best ways to provide its customers with better and/or expanded relationships, which in turn usually result in additional company profits. CRM has been around for quite some time but over the last several years, CRM programs have continued to be one of the hottest segments, as they continue to evolve due to the growing popularity of the internet and new computerized toolsets. As a result of these advances organizations are continuing to use new CRM programs to create even more visibility of their products and services, while attracting, retaining, and enhancing new and/or existing customer bases.
It can be argued that sales is the most important function of a CRM program but how can this be when the program is not the one who actually makes the sale? Thus, (Ross, 2005) suggests that a salesperson’s role should become even more important than before, as CRM programs advance and more sales professionals develop more defined and mutually supportive relationships between their companies, with suppliers, and customers. This now changing sales force paradigm, assisted by CRM programs will more than likely continue to broaden both selling and buying habits of all small to large organizations in the years ahead. For that reason (Ross, 2005) further defines the major components and functionalities of CRM and Sales Force Automation (SFA)
(1) Contact Management- one of the first components of CRM, which enables a company to manage prospect information, while providing follow-up and tracking information
(2) Account Management- this segment allows employees and managers useful ways to effectively market products to that of customer wants
(3) Sales Management- this tool was designed to help employees keep track of a set of sales activities in order to promote sales, while providing reminders and greater productivity
(4) Opportunity Management- this segment is often referred to as the pipeline of potential customers that highlights a new opportunity, those involved, potential revenue, and proposed closing date for a product or service
(5) Quotation Management- this component assists individuals in the configuration of pricing, inventory, and process availability for a prospective customer
(6) Knowledge Management- tools that assist in the standardizing and automation of the sales process where information such as policies, presentation materials, contracts, etc. can be stored and used for further analysis and reporting
Once a company understands some if not all of these segments, which are important to their continued long-term growth they will be more equipped to handle any problems that may occur after a sale. Once considered a drain on profitability of a company’s revenues, customer service through investments in programs such as CRM has now become a necessity that creates growth, hence a vital link between an organization and other supply chain processes. (Ross, 2005) leaves readers with six metrics developed by (Giffler, 1998; Pechi, 2000):
• On average a company will lose half its customers over a 5-year timeframe
• If a company reduces defections by 5%, then they could boost profits from 25-85%
• An organization typically spends 5x more on customer acquisition than on retention
• 65-85% percent of customers who defect do so without being dissatisfied with their former supplier
• A completely satisfied customer is 6x more likely to make an additional purchase than a satisfied customer
• Happy customers tend to tell five people about their experience versus a dissatisfied customer who will tell at least 9
Over the last few weeks, I have continued my examination of CRM, which is an important element of SCM, enhanced business performance, and long-term growth. Much like the previous works examined (Ross, 2005) does an excellent job at defining some of the main reasons that leaders need to consider and develop this element when constructing a long-term strategic plan. In the changing landscape of business and supply chain processes technology that assists employees with buying, selling, etc. will do nothing but improve organizational efficiency and effectiveness, while providing additional resources that allow more interaction with customers and the marketplace. Therefore, CRM has and will continue to be my emphasis of analysis over the next several weeks, as I continue to develop a niche subject for business leaders to consider in finding a better way to manage and utilize collected data to their advantage, which is part of the larger part of my Doctoral research.
Of course any opinions, suggestions, or thoughts as to the importance of this or other supply chain concepts is also appreciated, as I continue to look for the most effective ways to build sales, increase awareness, and create additional long-term growth for SMEs and MNCs alike!
References
Ross, D. F. (2005). E-CRM from a supply chain management perspective. Information Systems Management, 22(1), 37.
It can be argued that sales is the most important function of a CRM program but how can this be when the program is not the one who actually makes the sale? Thus, (Ross, 2005) suggests that a salesperson’s role should become even more important than before, as CRM programs advance and more sales professionals develop more defined and mutually supportive relationships between their companies, with suppliers, and customers. This now changing sales force paradigm, assisted by CRM programs will more than likely continue to broaden both selling and buying habits of all small to large organizations in the years ahead. For that reason (Ross, 2005) further defines the major components and functionalities of CRM and Sales Force Automation (SFA)
(1) Contact Management- one of the first components of CRM, which enables a company to manage prospect information, while providing follow-up and tracking information
(2) Account Management- this segment allows employees and managers useful ways to effectively market products to that of customer wants
(3) Sales Management- this tool was designed to help employees keep track of a set of sales activities in order to promote sales, while providing reminders and greater productivity
(4) Opportunity Management- this segment is often referred to as the pipeline of potential customers that highlights a new opportunity, those involved, potential revenue, and proposed closing date for a product or service
(5) Quotation Management- this component assists individuals in the configuration of pricing, inventory, and process availability for a prospective customer
(6) Knowledge Management- tools that assist in the standardizing and automation of the sales process where information such as policies, presentation materials, contracts, etc. can be stored and used for further analysis and reporting
Once a company understands some if not all of these segments, which are important to their continued long-term growth they will be more equipped to handle any problems that may occur after a sale. Once considered a drain on profitability of a company’s revenues, customer service through investments in programs such as CRM has now become a necessity that creates growth, hence a vital link between an organization and other supply chain processes. (Ross, 2005) leaves readers with six metrics developed by (Giffler, 1998; Pechi, 2000):
• On average a company will lose half its customers over a 5-year timeframe
• If a company reduces defections by 5%, then they could boost profits from 25-85%
• An organization typically spends 5x more on customer acquisition than on retention
• 65-85% percent of customers who defect do so without being dissatisfied with their former supplier
• A completely satisfied customer is 6x more likely to make an additional purchase than a satisfied customer
• Happy customers tend to tell five people about their experience versus a dissatisfied customer who will tell at least 9
Over the last few weeks, I have continued my examination of CRM, which is an important element of SCM, enhanced business performance, and long-term growth. Much like the previous works examined (Ross, 2005) does an excellent job at defining some of the main reasons that leaders need to consider and develop this element when constructing a long-term strategic plan. In the changing landscape of business and supply chain processes technology that assists employees with buying, selling, etc. will do nothing but improve organizational efficiency and effectiveness, while providing additional resources that allow more interaction with customers and the marketplace. Therefore, CRM has and will continue to be my emphasis of analysis over the next several weeks, as I continue to develop a niche subject for business leaders to consider in finding a better way to manage and utilize collected data to their advantage, which is part of the larger part of my Doctoral research.
Of course any opinions, suggestions, or thoughts as to the importance of this or other supply chain concepts is also appreciated, as I continue to look for the most effective ways to build sales, increase awareness, and create additional long-term growth for SMEs and MNCs alike!
References
Ross, D. F. (2005). E-CRM from a supply chain management perspective. Information Systems Management, 22(1), 37.
Sunday, February 13, 2011
Customer Relationship Management (CRM) as an Important Business Process in Supply Chain Management (SCM)
As mentioned in my previous post on Feb. 12th, 2011 (Wu, 2010) described some of the ways CRM has/is becoming a critical part of organizational and/or strategic planning, as competitive pressures increase and customers continue to defect from large and small organizations alike. Expanding on some of these same principles (Lambert, 2010) also examined some of the reasons why some organizations succeed while others continue to fail at managing this business process, especially in regards to Supply Chain Management (SCM). In fact, (Lambert, 2010) explains that CRM and SCM provide four important linkages (See Figure 1.3) within and throughout the supply chain, which all result in increased profitability of one or multiple customers over any given time.
(Figure is Omitted from this post but available at http://www.image.seventimesseven.com/CRM-and-Supplier-Relationship-Management.jpg) Figure 1.3. CRM and Supplier Relationship Management
As noted in Figure 1.3, the success or failure of a CRM process is growth and/or profitability and if harnessed correctly then CRM software could provide managers within a company the ability to gather more data from more customers, while providing customized products and/or services that should increase customer relationships and loyalty. On the other hand, (Lambert, 2010) also explains that there are also four main reason that CRM implementation could fail or decrease growth and/or profitability. The first is implementing a CRM system before a clear strategy is created. The second is implementing a CRM system before preparing and/or embracing the organization for such an advancement. The third is assuming that a CRM system is the answer (i.e. the more is better approach) and finally not understanding how to build relationships correctly or with the wrong clients. As far as creating a strategy for CRM implementation success (Lambert, 2010) identified five strategic sub-processes that are extremely valuable.
(1) Review corporate and marketing strategies- The CRM team should consistently review the corporate and/or marketing strategies to make sure that the company now and later continues to target the correct markets.
(2) Identify criteria for segmenting customers- This sub-process of CRM should help identify the criterion that is used to segment different customers in different markets.
(3) Provide a clear set of guidelines for product and/or service agreements- In this sub-process the CRM team should develop a set of guidelines that identify the revenue and/or costs associated with certain product or services.
(4) Develop a set of frameworks or metrics- This sub-process involves identifying the main areas of interest in regards to specific customers on the company’s profitability.
(5) Develop a set of guidelines to share- The CRM team should use this sub-process to develop specific processes that are being ignored, which could create win-win solutions for both the company and customer if solved.
In addition, to the five sub-processes (Lambert, 2010) also discusses seven operational sub-processes that closely relate to the first five discussed strategic processes, however Lambert adds (1) the need to continue monitoring customer accounts internally for any abnormal trends and (2) the additional need to measure performance by generating profitability reports for both internal and external analysis.
If an organization prepares properly by following some if not all of these strategic and operational steps described by Lambert in a CRM system implementation, then the chances of growing profits, relationships, and effectiveness in a Business-to-Business (B2B) or Business-to-Customer (B2C) setting are greatly increased. However, the ultimate measure of success in a CRM implementation across the enterprise and throughout the supply chain is the financial growth of the entire network as CRM systems should be a more effective way to migrate everyone to the most successful and efficient structures.
As discussed by (Lambert, 2010) there are many reasons that CRM implementation succeeds as well as many reasons why CRM implementation fails. Although the main people responsible for a success (i.e. information technology, sales, marketing, etc), there is no reason to suggest or believe that other organizational leaders in finance, logistics, research, administration, etc should not contribute to a successful launch or re-invention. As with any successful process, usually it is not only one person responsible for success but also the entire team as a whole. If more companies embrace this frame of thinking, then more companies will likely benefit from a CRM implementation or any technological advancement that an organization is considering in order to build, grow, and cultivate relationships that will last a lifetime. Relying on technology alone is not enough and those who embrace this frame of thinking will ultimately end up looking at the project in the end as what went wrong. Therefore, in order to avoid that thinking later, remember to strategically plan the work and work the plan. This is what I am doing now, as I continue to research and analyze the best and most efficient ways or systems such as CRM that organizations can utilize in order to create better Return on Investment (ROI), enhanced business performance, or additional long-term growth as I prepare to enter the applied research phase of my Doctoral work. This is my second report on CRM analysis, which is in agreement with the findings of (Wu, 2010), thus making this another important piece of my Dissertation, and as always I warmly welcome any comments, questions, or suggestions
References
Lambert, D., M. (2010). Customer relationship management as a business process. The Journal of Business & Industrial Marketing, 25(1), 4.
Wu, Y. (2010). Applying the strategic approach to assess customer relationship management. International Journal of Organizational Innovation (Online), 2(3), 186.
(Figure is Omitted from this post but available at http://www.image.seventimesseven.com/CRM-and-Supplier-Relationship-Management.jpg) Figure 1.3. CRM and Supplier Relationship Management
As noted in Figure 1.3, the success or failure of a CRM process is growth and/or profitability and if harnessed correctly then CRM software could provide managers within a company the ability to gather more data from more customers, while providing customized products and/or services that should increase customer relationships and loyalty. On the other hand, (Lambert, 2010) also explains that there are also four main reason that CRM implementation could fail or decrease growth and/or profitability. The first is implementing a CRM system before a clear strategy is created. The second is implementing a CRM system before preparing and/or embracing the organization for such an advancement. The third is assuming that a CRM system is the answer (i.e. the more is better approach) and finally not understanding how to build relationships correctly or with the wrong clients. As far as creating a strategy for CRM implementation success (Lambert, 2010) identified five strategic sub-processes that are extremely valuable.
(1) Review corporate and marketing strategies- The CRM team should consistently review the corporate and/or marketing strategies to make sure that the company now and later continues to target the correct markets.
(2) Identify criteria for segmenting customers- This sub-process of CRM should help identify the criterion that is used to segment different customers in different markets.
(3) Provide a clear set of guidelines for product and/or service agreements- In this sub-process the CRM team should develop a set of guidelines that identify the revenue and/or costs associated with certain product or services.
(4) Develop a set of frameworks or metrics- This sub-process involves identifying the main areas of interest in regards to specific customers on the company’s profitability.
(5) Develop a set of guidelines to share- The CRM team should use this sub-process to develop specific processes that are being ignored, which could create win-win solutions for both the company and customer if solved.
In addition, to the five sub-processes (Lambert, 2010) also discusses seven operational sub-processes that closely relate to the first five discussed strategic processes, however Lambert adds (1) the need to continue monitoring customer accounts internally for any abnormal trends and (2) the additional need to measure performance by generating profitability reports for both internal and external analysis.
If an organization prepares properly by following some if not all of these strategic and operational steps described by Lambert in a CRM system implementation, then the chances of growing profits, relationships, and effectiveness in a Business-to-Business (B2B) or Business-to-Customer (B2C) setting are greatly increased. However, the ultimate measure of success in a CRM implementation across the enterprise and throughout the supply chain is the financial growth of the entire network as CRM systems should be a more effective way to migrate everyone to the most successful and efficient structures.
As discussed by (Lambert, 2010) there are many reasons that CRM implementation succeeds as well as many reasons why CRM implementation fails. Although the main people responsible for a success (i.e. information technology, sales, marketing, etc), there is no reason to suggest or believe that other organizational leaders in finance, logistics, research, administration, etc should not contribute to a successful launch or re-invention. As with any successful process, usually it is not only one person responsible for success but also the entire team as a whole. If more companies embrace this frame of thinking, then more companies will likely benefit from a CRM implementation or any technological advancement that an organization is considering in order to build, grow, and cultivate relationships that will last a lifetime. Relying on technology alone is not enough and those who embrace this frame of thinking will ultimately end up looking at the project in the end as what went wrong. Therefore, in order to avoid that thinking later, remember to strategically plan the work and work the plan. This is what I am doing now, as I continue to research and analyze the best and most efficient ways or systems such as CRM that organizations can utilize in order to create better Return on Investment (ROI), enhanced business performance, or additional long-term growth as I prepare to enter the applied research phase of my Doctoral work. This is my second report on CRM analysis, which is in agreement with the findings of (Wu, 2010), thus making this another important piece of my Dissertation, and as always I warmly welcome any comments, questions, or suggestions
References
Lambert, D., M. (2010). Customer relationship management as a business process. The Journal of Business & Industrial Marketing, 25(1), 4.
Wu, Y. (2010). Applying the strategic approach to assess customer relationship management. International Journal of Organizational Innovation (Online), 2(3), 186.
Saturday, February 12, 2011
Customer Relationship Management (CRM) as a Strategic Approach
Throughout the last decade, organizations have continued to look for ways to create new strategies in order to retain customers, while improving service quality based on new competitive measures. One such way these organizations are creating, these new strategies are through advancements in technological programs such as CRM. (Wu, 2010) describes CRM as “a 360 degree projection which requires not only technology implementation but also strategic making and other integration in an organization” (p. 187). Additionally, CRM can be defined as those tools or technological advancements that help organizational leaders manage, develop, or assist employees in the day-to-day interactions with customers, suppliers, and other business partners. Wu quotes Giga (2001) who discovered that only 30.7% of companies worldwide actually consider CRM as a strategic tool that can help their respected organizations achieve some of their long-term goals, which in turn makes it very difficult for others to adopt this as a strategic initiative, hence why some 70% of companies overall fail to implement or utilize CRM correctly. However, if CRM is used correctly within an organization the research shows that companies are better able to build relationships (internally or externally), target new customers more effectively, and assist others by providing consultative solutions for a distinct product or service. There are four characteristics of a well-defined CRM system
(1) A CRM system that provides a 1-to-1 solution to a customer’s needs which will enhance communication, relationships, satisfaction, and service.
(2) A CRM system that provides a company’s sales force with a better way to track client interactions while providing useful information for follow-up, repeat, or future sales.
(3) A CRM system that allows employees to warehouse, mine, and customize data, which helps a company, stay ahead of its competitors.
(4) A CRM system that provides predictable sales demand, growth, and prospects in order to meet the needs of a company’s current and future clients.
(Wu, 2010) found that those organizational leaders, which understood the four main characteristics of CRM systems, would be the ones that could take advantage of its competitors, thus creating a competitive advantage within any given industry. However, before any CRM system implementation (Wu, 2010) suggests that these same organizational leaders also carefully analyze five important aspects referred to as “Porter’s Five Forces (1) Bargaining power of customers, (2) Threat of substitutes, (3) Threat of new entrants, (4) Extent of rivalry between existing competitors, and (5) Power of suppliers” (p. 195).
(Wu, 2010) provides readers with some of the reasons that CRM system implementation succeeds, while at other times fails because of the lack of understanding about what CRM actually is. The fact of the matter is many CRM system implementations fail because organizational leaders lack experience, knowledge, and a clear strategic vision of what they can or cannot do with such a system. Therefore, before a company decides to invest or re-invest in a CRM system it is clear that more organizational leaders need to develop a clear-cut strategy to adopt in order to avoid any potential risks that such a system implementation may cause. Although there are tremendous, amounts of benefits that CRM systems can provide organizations (i.e. reduced costs, increased customer satisfaction, along with gaining new and retaining other customers) a proper system implementation will only occur if leaders strategically plan for its integration and use. This is the beginning of my in depth analysis of one of the most important variables that make up the foundation of my Dissertation and I look forward to exploring this concept more and reporting my results in the weeks if not months ahead.
Reference
Wu, Y. Applying the strategic approach to assess customer relationship management. International Journal of Organizational Innovation (Online), 2(3), 186.
(1) A CRM system that provides a 1-to-1 solution to a customer’s needs which will enhance communication, relationships, satisfaction, and service.
(2) A CRM system that provides a company’s sales force with a better way to track client interactions while providing useful information for follow-up, repeat, or future sales.
(3) A CRM system that allows employees to warehouse, mine, and customize data, which helps a company, stay ahead of its competitors.
(4) A CRM system that provides predictable sales demand, growth, and prospects in order to meet the needs of a company’s current and future clients.
(Wu, 2010) found that those organizational leaders, which understood the four main characteristics of CRM systems, would be the ones that could take advantage of its competitors, thus creating a competitive advantage within any given industry. However, before any CRM system implementation (Wu, 2010) suggests that these same organizational leaders also carefully analyze five important aspects referred to as “Porter’s Five Forces (1) Bargaining power of customers, (2) Threat of substitutes, (3) Threat of new entrants, (4) Extent of rivalry between existing competitors, and (5) Power of suppliers” (p. 195).
(Wu, 2010) provides readers with some of the reasons that CRM system implementation succeeds, while at other times fails because of the lack of understanding about what CRM actually is. The fact of the matter is many CRM system implementations fail because organizational leaders lack experience, knowledge, and a clear strategic vision of what they can or cannot do with such a system. Therefore, before a company decides to invest or re-invest in a CRM system it is clear that more organizational leaders need to develop a clear-cut strategy to adopt in order to avoid any potential risks that such a system implementation may cause. Although there are tremendous, amounts of benefits that CRM systems can provide organizations (i.e. reduced costs, increased customer satisfaction, along with gaining new and retaining other customers) a proper system implementation will only occur if leaders strategically plan for its integration and use. This is the beginning of my in depth analysis of one of the most important variables that make up the foundation of my Dissertation and I look forward to exploring this concept more and reporting my results in the weeks if not months ahead.
Reference
Wu, Y. Applying the strategic approach to assess customer relationship management. International Journal of Organizational Innovation (Online), 2(3), 186.
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