CRM Implementation based on macro view

While there are many differences in the way relationship marketing techniques are perceived and defined, and its implementation approaches are conceptualised, what appears from the literature is that there are some factors or antecedents that determine its effectiveness or otherwise. It has been agreed that an organisation should be able to identify such factors and consider them in its CRM implementation strategy (Mendoza et al., 2007; Payne & Frow, 2005, 2013). As such, several studies of CRM implementation focus on identifying those factors described as enablers/key success factors and describing their relationship and impact on CRM implementation and its outcome. This view considers the macro view of CRM focuses on the holistic processes of customer relationship management rather than on customer-facing channels as argued by Reinartz et al. (2004)

For instance, Payne and Frow (2005), reflecting the weaknesses of other CRM studies, conceptualise a CRM implementation model to address various challenges witnessed by some of the previous studies. Their approach to customer management through CRM is to address the extremely general focus of most of the CRM studies on the technology component to the detriment of another aspect of its implementation, such as the people-related factors and customer orientation that are supposed to define CRM strategy. In their study, Payne and Frow (2005; 2013) consider the amalgamation of firms' functional units into a single unit designed

63

to address general customer problem rather than making the profit for the firm alone. In line with the business process view of marketing (Srivastava et al., 1999), Payne and Frow (2005) argued that the marketing function is far beyond the purview of the marketing unit alone. Marketing is a complete process that defines firm activities both in the short run and the long term because the primary objective of business is customer satisfaction (Nguyen, 2012; Reinartz et al., 2004), which can only be achieved when all components of the firm are customer-focused. Therefore, the focal point in their approach to relationship management is the processes that outline how a company, as a whole, performs customer relationship activities.

This view of relationship marketing implementation is situated within the business processes of the firm based on the perception that business process integration is the strength of customer relationship management (Chen & Popovich, 2003; Keramati et al., 2010; Ko, Kim, Kim, & Woo, 2008). The role of marketing is the generation of customer input and integration of this input into business processes for upward transformation into customer output based on certain processes and sub-processes conducted at each stage of customer management (Ray, Barney, & Muhanna, 2004). Thus, important components, where different management/marketing activities are conducted, act as one in the management of customer relationship (Chen & Popovich, 2003; Finnegan & Currie, 2010; Hendricks, Singhal, & Stratman, 2007; Mendoza et al., 2007; Padilla-Meléndez & Garrido-Moreno, 2014; Parvatiyar & Sheth, 2001; Payne & Frow, 2005, 2013; Rauseo, Wittmann, & Raman, 2006).

These studies stress the need for identifying relevant processes or factors that unite the firm towards successful practice and management of customer relationships. To Boulding et al. (2005) and Payne and Frow (2005), development of customer strategy is an important mechanism for CRM implementation. It will help businesses to define who their customers are and to outline how customers can be targeted or segmented using micro, macro or one-to-one marketing segmentation. This view is further corroborated by Chang, Park, and Chaiy (2010); they argue that the essence of creating customer strategy is putting together various processes and resources needed together to create customer information for long term customer management efforts, and efficiently segment customers in order to develop and maintain lasting relationships with them for the benefit of both the firm and the customer.

Corroborating Payne and Frow’s (2005) view, Buttle (2009), Wang, and Feng (2012) conclude that an organisation that wishes to implement CRM should consider the important contribution

64

of information technology. With technology, various channels of customer contact points are integrated to offer a single customer view. Stone (2009) confirmed that information technology is at the forefront of customer information management. Tools such as data repository, computer hardware and software, analysis tools, CRM systems and front and back office applications are in use to collect and manage customer information, generate customer intelligence and determine appropriate marketing responses.

In support of this view, Sigala et al. (2008), mentioned that sales force, outlets, email, direct mailings, call centers, are all connected to the front office and back office applications, which capture customer exchanges with the company and generate important information for company use. Similarly, channel integration represents the metamorphosis of technology; effective development and management of customer strategy depend on efficient interaction between firm and customers and hence provides important information that a firm need to sustain profitable customer relationships. As reported in the previous section (Section 3.4.3.2), channel integration enabled by technology is of relevance to CRM success because it enhances collection and management of customer knowledge for sustained profitable customer relationships (Dimitriadis & Kyrezis, 2008; Finnegan & Currie, 2010; Öztayşi et al., 2011). Complementing Payne and Frow (2005) and Sin et al (2005), while highlighting the key factors of CRM implementation beyond technology, Iriana, et al. (2013) and Padilla-Meléndez and Garrido-Moreno (2014) argue that utilisation of information generated via channel integration enabled by technology for CRM purposes requires organisational structures that support change and customer-centric processes. Iriana, et al. (2013) believe the combination of information systems with structures that support human effort lead to the desired result. The structure should enable customer-oriented behaviour, employee participation and a reward system supported by management commitment. Because the success rate of relationship formation and maintenance is not restricted to having technology alone, top-level management commitment and culture that create benevolence, competence and satisfaction orientation are important CRM success factors.

In support of this view, Osarenkhoe and Bennani (2007) emphasise creating a link between culture change and the utilisation of technical resources during CRM implementation and hence management of the CRM programme through periodic assessment of goals and performance. Osarenkhoe and Bennani (2007, p. 149) highlighted CRM as more than just technological tools as they added the need for a customer-facing function "which entails

65

managing the social structure of a relationship cross functionally" as one of the enablers of successful management of customer relationship implementation. Also, several studies (Kim & Kim, 2009; Öztayşi et al., 2011; Payne & Frow, 2013) highlighted the need to include performance measurement of CRM processes that define how CRM activities are measured.

In their conclusion, Singh and Saini (2016) argue that despite popular argument on the needs of identifying important internal process and their relationship and contribution to effective relationship management, market orientation and other external factors can affect relationship management.

However, recent studies expand the CRM macro view beyond internal organisational processes alone. Some of these studies consider external customer data as an integral part of broader company management of customer relationship processes. They believe limiting relationship management to internal process of the bank may restrict understanding customer needs and hence provision of customer service that improve his experience. In such contributions, Singh and Saini (2016) see experience management as an important part of CRM implementation efforts. Data that reflect customer expectations and experience that represents the emotional component of customer satisfaction should be included in customer management. This will give the firm a complete view of customer experience at all stages of the relationship management journey. This conclusion was further supported by Lemon and Verhoef (2016), who argued that expectations and experience of customers formed critical data in the customer management process. Thus, the firm should not concentrate on functional and traditional benefits of CRM alone; firms should embark and be active in creating a pleasant experience for the customers across all the firm's customer contact points as an enabling factor for effective CRM implementation and customer loyalty. Functional benefits such as value propositions and rewards are important, but these are not the main measure of customer loyalty in the contemporary service environment (Singh & Saini, 2016).

Review of the literature shows several studies that focus on identifying factors or important processes of relationship marketing at the organisational level. Many of these studies (e.g., Cambra-Fierro et al., 2016; Chikweche & Fletcher, 2013; Finnegan & Currie, 2010; Iriana et al., 2013; Kale, 2004; Mendoza et al., 2007; Sarmaniotis, Assimakopoulos, & Papaioannou, 2013; Steel et al., 2013) focus on identifying important processes or factors that influence effective CRM practice and management of customer relationships. They believe the management of customer relationship requires an effective collaboration of all functional units

66

of the firm; it requires change management to position bank employee on serving customer. At the same time, technology is required to integrate customer contact points and coordinate all other functions that result in effective customer relationship management. By implication relationship management process that considers macro support the view that satisfaction quality improves relational quality. Thus, integration of organisational processes is to ensure that all organisational factors are directed toward customer satisfaction and hence excellent customer-bank relationship. Some of those frequently cited factors are outlined in Table 3.2

Table 3.2 Critical success factor for relationship management implementation SN Critical success

factor

Description References

1 People-related factors

This includes training of people on how to relate with customers, generation of technical knowledge and skill on relationship management techniques, and overall culture change that changes staff’s mindset to customer-centric orientation.

Kumar and Reinartz (2012), Cambra-Fierro et al. (2016),

2 Technology- related factors

Technology was cited as an important mechanism for effective customer relationship management. Information technology includes computer hardware and software used to create customer database.

Kim et al. (2010), Payne and Frow (2005)

3 Business Process

Business processes represent functional and organisational competencies that are necessary for conducting CRM activities effectively. They also include routines of relationship initiation and management with customers.

Keramati et al. (2010), Payne and Frow (2013)

4 Knowledge management

Knowledge management involves all the processes of collection, storage and dissemination of customer data. It involves collection and analysis of customer transactions, interactions, service experience and purchasing behaviour into essential customer knowledge, which is later used to predict customers’ future consumption patterns.

Meadows and Dibb (2012), Garrido-Moreno et al. (2014)

67 5 Organisation

structure/culture alignment

It involves the creation of an organisational structure that supports customer-centric activities and customer satisfaction-oriented behaviour. It also includes culture change that permeates customer relationship-compatible behaviour.

Kale (2004), Meadows and Dibb (2012)