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.

Customer Relationship Management (CRM) Software, Applications, and Business Performance

Many different products, services, processes, and systems offered across the globe have had their own unique trials and tribulations throughout their existence. Customer Relationship Management (CRM) systems are one of those products that have had success along with failure in many of the world’s markets. As more companies continue to collect and access more customer data through programs such as CRM they will continue to increase their capabilities of using this data in order to fragment it into more sophisticated client messages through web based supply chains, mobile messaging, and ecommerce technologies. As a result of these new abilities and this newly constructed dependence through CRM implementation, those companies that encourage and promote the benefits to its employees will be the ones that create a cultural climate that fosters even more client centric innovations, while increasing organizational profitability. However, I found in (Ang & Buttle, 2006) literature review that many of these same CRM systems also tend to focus too much on the software itself or “a one-size fits all approach” versus the actual use or implementation, which is or has caused many CRM implementations to add to the increases in problems or in functionality and flexibility.

Considering both the negatives and positives of a CRM implementation, (Ang & Buttle, 2006) conducted a study throughout the Australian economy that focused on customer retention, customer acquisition, and customer development. The results of their study yielded three major insights

(1) First was that less than 40% of those companies surveyed throughout Australia were found to not use any type of CRM system (i.e. market analysis, lead generation, or customer profiling) to support the their operations or clients in any way
(2) Secondly, if an organization uses a CRM system as part of their overall strategic plan, they are more likely improve their retention, acquisition, and customer development rates significantly resulting in more return on investments and increases in company profitability
(3) Lastly, an organizations overall size seemed to determine the success rates with a CRM implementation (i.e. the larger the organization the more dissatisfied they were versus the smaller organizations who most of the time seemed more satisfied with CRM software)

From (Ang & Buttle, 2006) analysis and study of CRM systems in the Australia market there are still many organizations out there that are still undeveloped or lack a clear understanding of the real benefits that CRM can provide their company and long-term strategies. It is no secret that a company’s relationship with its customers cannot only strengthen the organization internally but also externally by providing its customers with superior service and added benefits. Additionally (Ang & Buttle, 2006) show readers that those organizations that want to achieve higher customer retention, customer acquisition, and customer development are the companies that want their customers to be more satisfied, thus increasing the organizations revenues and profitability. However, in order for these systems to gain more credibility manufacturers and vendors of these programs will have to build different systems for different companies based on size and location. This is exactly what I am looking for, as I continue to look for the key elements in the research that customers are demanding, which will allow me the ability to bridge any gaps in the literature in order to see more growth, enhanced business performance, and return on investments through CRM or other technological system implementation. Therefore, this article much like the others reviewed in previous posts are providing me with all the pieces that I will require to conduct a study, make recommendations, and contribute additionally to a niche market such as customer relationship management or enterprise resource planning.

Of course, I am always searching for other opinions, so if you got one let me hear it, as I continue upon in my research. Until next time-- Keep Smiling

References
Ang, L., & Buttle, F. (2006). CRM software applications and business performance. Journal of Database Marketing & Customer Strategy Management, 14(1), 4 - 16.