Whilst there is a suggestion that relationships between consumers and organizations (see Sheth and Parvatiyar, 1995) and consumers and their brands (see Fournier, 1998) have always been important, it is also recognized that, today, such relationships must be facilitated or at least sup- ported by technology (Dwyer et al., 1987; Blattberg and Deighton, 1991). As a result, the focus within consumer markets has recently evolved from RM to CRM, with CRM (customer relationship man- agement) being defined as ‘information-enabled relationship marketing’ (Ryals and Payne, 2001, p. 3). Although philosophically in line with rela- tionship marketing, the focus in CRM is on the technology, particularly on that technology which attempts to manage all customer touch points and facilitate the integration of various database sys- tems to provide a single picture of the customer (Peppers and Rogers, 1995; Ryals and Knox, 2001).
This picture encompasses the customers’ needs, preferences, buying behaviour and price sensitiv- ity and allows the CRM business to focus on build- ing customer retention and profitability. However, underpinning both approaches is the understand- ing that CRM is a technology tool which facilitates interaction between different databases and differ- ent interaction media in order to facilitate segmen- tation and communication (see Ryals and Knox, 2001). In their introduction to the Journal of Market-
ing special section, editors Boulding et al. (2005)
offer a thorough reappraisal of the history, defini- tion, current position and pitfalls of CRM.
As previously outlined, the relationship mar- keting ideal developed out of the study of exchange in intra-organizational and high-contact services markets. The observed value of relationships in these markets drove attempts to implement simi- lar ideals in mass consumer markets (e.g. Dwyer
et al., 1987), where traditional marketing techniques
were being questioned and customer expectations and competitive pressures were increasing (Sisodia and Wolfe, 2000). However, the operationalization of the relationship marketing ideal in consumer markets requires the exploitation of information technology if it is to be extended beyond applica- tion only to most valued customers, as it was originally conceived (Rogers and Peppers, 1997). Information on customers is critical to developing and maintaining customer relationships (Boulding
et al., 2005). While small organizations with very
few customers find it relatively easy to collect and use relevant information in building customer relationships, larger organizations with mass markets find this practically impossible to do. Thus, information technology, initially in the form of the database was regarded as ‘an agent of surro- gacy to be enlisted to help marketers to re-create the operating styles of yesterday’s merchants’ (Sisodia and Wolfe, 2000, p. 526).
Vast reductions in the cost of information technology brought the promise that relational strategies might be extended to all customers. Unfortunately, the application of technology in these markets has not been unproblematic, per- haps because focus has shifted to technology, at the cost of remembering the ideal it was supposed to support (O’Malley et al., 1997; Fournier et al., 1998; Mitussis et al., 2006). Moreover, the limited understanding of relating to customers means that, contrary to the insight of the IT literature (e.g. Feeny et al., 1997), information systems were imposed that could be incompatible with a firms culture, capabilities and systems (e.g. Piercy, 1998).
The ability to develop successful customer relationships lies in an organization’s capacity to understand and respect its customers, their indi- vidual preferences, expectations and changing needs. While today’s markets are so complex that such customer intimacy may be precluded (Di Tienne and Thompson, 1996) the database is employed by contemporary marketers to try to overcome this problem. In the absence of both intimate knowledge of individual customers and interpersonal contact with them, the database promised an opportunity to capture information on customers in a useful and accessible fashion (Shani and Chalasani, 1992), enabling them to identify individual customers, monitor their buy- ing behaviour (Blattberg and Deighton, 1991) and to communicate with them on an individual basis, often with personalized offers. Although these are essentially the basic elements of database marketing, RM should use such data ‘to build a long-term connection between the company and consumer’ (Copulsky and Wolf, 1990, p. 17).
The creation of a ‘special status’ between company and customers (Czepiel, 1990; Rowe and Barnes, 1998) relies on fostering customer intimacy (Jackson, 1985). In order to achieve this, data on transactions is held in the customer database and this is overlaid with demographic, geodemo- graphic, lifestyle data and a range of other data sources including country court judgements (CCJs), electoral register, etc. The data are fused and held in a data warehouse where ‘biographic data’ (Evans, 1999) on individual customers can be viewed. Thus, within an RM strategy, the database becomes a key knowledge tool for the organiza- tion (Di Tienne and Thompson, 1996; Evans et al., 2004) and is used to simulate indicia of intimacy and connectedness. In addition to databases, other technologies have developed that ‘can give com- panies a host of opportunities for communicating with the customer and have information on hand to engage, inform and direct each customer with complete knowledge as to the customers’ prefer- ences and behaviours’ (Gordon, 2000, p. 512). These developments include the Internet, tele- coms and computer telephony in call centres. These technological developments have served to make systems that are supposed to make RM more affordable and, perhaps, more effective for com- panies operating in mass markets (Rapp and Collins, 1990; Sisodia and Wolfe, 2000).
Some of the new technologies have opened up new channels of dialogue, which can be cus- tomer initiated as well as organization initiated.
This being the case, efforts must be made to capture data at all interactions and make that information available for subsequent conversations. This is possible when technology is used at the customer interface to secure real-time or near real-time interaction (Gordon, 2000). This has resulted in a need to move beyond the customer database as the basis of RM and to link the central information centre with call-centre software and Internet sys- tems that allow direct interaction, as well as into other functions that contain histories of customer interaction (such as accounts and product service departments).
However, if relationship management support systems develop ad hoc from product unit cus- tomer databases a number of different CRM pro- grammes may be implemented within a single organization (O’Malley and Mitussis, 2002). These systems might reflect the various organizational silos (e.g. product or brand divisions, direct mar- keting) or different channels (particularly true when Internet channels are introduced). As a result, customers may obtain a very different experience, offer or outcome depending on when, why and with whom in the organization they interact. Thus, rather than treating each customer with the con- sistency, fairness and respect one might expect in a relationship (Sheaves and Barnes, 1996; Boulding
et al., 2005), customers often get competing rela-
tional offers from different parts of the organiza- tion. This can lead to an exacerbation of privacy issues with customers becoming increasingly con- cerned with organizational intrusion (Patterson
et al., 1999) a perception that might actually trans-
late into a reduction in consumer trust (O’Malley
et al., 1997; Fournier et al., 1998). From a more
pragmatic viewpoint, there is little reduction in marketing costs because several divisions are incurring direct communication costs, and may continue to maintain their own databases. Finally, the inconsistencies (in communication style, offer content and occasionally salutation) demonstrate to customers that they are unimportant (whilst simultaneously advocating a ‘meaningful’ rela- tionship). Thus, as O’Malley and Mitussis (2002) demonstrate there are several problems that result when RM is overlaid onto the existing organiza- tional structure and systems without any consider- ation for how relationships might be appropriately pursued and developed (i.e. relationship devel- opment process). ‘Organizations continue to approach relationship marketing using the same structures that were appropriate for the market- ing era, a time when product, price, promotion
and distribution channels were discrete, pre- established and one-way. In short, today’s organi- zation is often designed for the technologies and processes appropriate for transactions, not relation- ships’ (Gordon, 2000, p. 506). Thus, (relationship) language structures consumers’ expectations (e.g. Mitussis and Elliott, 1999) but (transaction) tech- nology structures their experiences. It is important that to employ CRM effectively, due attention is paid to both customer and competitive data, evolv- ing technologies and customer-focused organiza- tional forms. Therefore implementation requires difficult integration of channels, technologies, customers and employees as the basis of com- petitive advantage (Boulding et al., 2005).
Many problems stem from the fact that, because RM ‘in mass markets is a relatively new topic for research, very little is known about how an organizations’ relationship marketing efforts affect . . . customer satisfaction, the perceived future value of the relationship, trust and related behaviours’ (Bhattacharya and Bolton, 2000, p. 340). In any case, such problems simply magnify the importance of ensuring that there is an appropriate customer-centric culture and employee skill-set prior to the introduction of a relational strategy (Crosby and Johnson, 2001). These observations are reinforced by Gruen (2000), who argues that companies that have successfully implemented RM have done so by trial and error rather than on the basis of any theory. Despite such problems with CRM implementation, the concept of rela- tionships has also become hugely popular within the branding literature. That is, marketers are not content to develop relationships between con- sumers and organizations, but are also keen to nur- ture relationships between consumers and their brands as is discussed below.