2.4.3
Knowledge can either be gathered for, about or from the customer. These three, while related are different in several ways that will be discussed in more detail below, CRM helps an organisation to understand and consolidate knowledge about the customer through a customer database, while KM supports the management of such knowledge with a key objective to leverage off what is known and keep costs down while bringing about efficiency. Customer knowledge (CK) is knowledge that is in the mind of the customer and different customers have varying knowledge depending on the organisation, product and industry they interact with (Gibbert et al, 2005). Customer Knowledge Management (CKM) is a term used by Garcia-Murillo and Annabi (2002) and involves incorporating customer insights into product development and throughout the entire product life cycle can be extremely invaluable. While the differences and interaction between CRM, KM and CKM will be discussed briefly below, it is important to realise that the focus of this study is on CRM and KM rather than on CKM. However, because they are related, it is important to understand the difference but to also highlight that incorporating CKM aspects into this study will significantly change the scope and focus of the study since it is more internally focused and is looking at the knowledge that resides within the organisation and with the employees rather than that which is held by customers and that can enable customers to input into product development and customer experience.
While it is clear that there are distinct differences between CRM, KM and CKM they all interact with each other and need to be understood in this way. For example, the database that is derived out of CRM would require a KM strategy to ensure that the knowledge is shared and efficiencies are derived from it. CKM if introduced to the process will provide useful input into the actual customer experience which would in turn inform product and process development that would help retain the customer base – a key metric in CRM. With CRM, KM and CKM, one feeds into the other as shown in Table 5 below.
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Table 5 Relationship between KM, CRM and CKM (source: Gilbert et al, 2003)
From the table above, it can be noted that CRM, KM and CKM differ in several ways ranging from:
• The type of knowledge sought - KM seeks information for employees, CRM; about customers, CKM about customer experience and product/service innovation
• Axioms – KM seeks insights from past experience, CRM seeks to retain customers while CKM seeks to know what customers say and experience
• Rationale – KM integrates knowledge for efficiency; CRM mines customer knowledge from internal sources; gaining direct knowledge from customers
• Objectives – KM’s objective is to avoid re-inventing the wheel and cost cutting; CRM is for maintaining the customer base while CKM is for collaboration with customers
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• Metrices – KM is measured against budget; CRM is measured using customer satisfaction while CRM measures performance against competitors and contribution to customer success
• Benefits – KM improves customer satisfaction; CRM customer retention while CKM benefits the organisation by way of organisational learning
• Recipient of incentives – KM benefits employees; CRM benefits customers just as CKM does
• Role of the customer – in KM the customer is passive, in CRM customer is tied to product/service by loyalty schemes while in CKM the customer is active and participates fully in value creation
• Corporate role – in KM the organisation encourages employees to share their knowledge among each other; in CRM, the organisation builds lasting relationships with customers while in CKM the organisations allows customers to be co-creators of value
CKM, KM and CRM have been brought together by researchers such as Zanjani et al (2008), Alryalat et al (2008) and Gebert et al (2002), and their primary concern was to look at a way of using KM to support a systematic Customer Knowledge Management (CKM) process that enhances CRM. Some of the models that are direct outputs of these studies are the Customer Knowledge Management (CKM) model (Zanjani, 2008) and the Customer Knowledge Relationship Management (CKRM) process (Alryalat et al, 2008). These, however, simply demonstrate that CRM, KM and CKM can be brought together into models that seek to improve organisations but do not show how KM can add value to CRM with a view to improving profitability particularly at SBM. It is, important, therefore to focus on the components that are key to this research study. This research is mainly concerned with increasing profitability through CRM and finding ways of overcoming the weaknesses of CRM by deploying some KM concepts. It is mainly driving the customer profitability by harnessing and sharing knowledge (KM) about the customer (CRM). The work by Gerbert et al (2002), found that KM is a service provider for CRM in that information for and about customers that is generated through marketing, sales and service activities such as campaign management, contract management and complaint management can be used for interaction and channel management and thereby adding value to the entire customer process in an integrated manner. In the sense inferred by Gerbert et al (2002), this CKM model as presented in the Figure 7 below could be beneficial for this research in that CRM
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information is used to enhance the customer process without necessarily engaging the customer to get the information but acquire such information during the sales, service and marketing processes. In addition to this, the study is relevant in that it was conducted using AR methodology which could be a relevant research method for this study and will be considered in more detail in the methodologies chapter.
Figure 7 Customer knowledge management (CKM) model (source: Gerbert et al, 2002)
The concepts in this particular CKM model will be used in the study and is relevant to the study in that it does not advocate that actual customer interviews be carried out but rather that the information gathered from customers through the sales, service and marketing processes be used. For purposes of this research, such information will be composed of the results from research surveys such as the Customer Evaluation of Banking Services (CEBS) and the feedback gathered through the customer feedback registers as well as the experiences of customer facing staff. However, the model in itself does not enable the full resolution of the problem that this study seeks to resolve and this is the problem of how this effort can result into a more profitable end for SBM and how aspects of IT/IS challenges can be addressed. In addition to this, it still remains untested in terms of its practical application in resolving the problem that exists at SBM.
Another model that could be useful to this research is the work by Liew (2008) who developed a model that links CRM, KM and strategic planning with a view to ensuring organisational success by integrating CRM and KM activities at a strategic level. This approach ensures that organisations give strategic importance to CRM and KM activities
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while developing the core competencies that support them. Liew’s (2008) views are aligned to the work considered above by Sahaf et al (2011), Appiah-Kubi (2010) and Frei et al, (1998). The model is useful as far it proposes that CRM and KM should be incorporated at corporate planning level and this is a concept that will be used in this study as the model claims that it helps CRM and KM initiatives to be more successful. A weakness of this model however, is that it does not guide the actual CRM and KM strategy and how it can be implemented to improve profitability. More models will therefore be explored.
Dehghani et al (2013), set out to develop a structural equation model using data from 306 Iranian hotels looking at the relationships between KM and CRM prosperity. The results of the study show that when the KM abilities, the CRM technology and the customer-centric direction are integrated into and internalised by the whole organisation, the organisation can indeed create an organisational capability in CRM that is difficult to copy and reproduce and hence a source of sustainable competitive advantage. This study gives credence to the study at hand and while it provides a model, this model is more theoretical than practical and is based on historic data rather than real life and current data as can be developed in a research that uses AR as a mode of study. Further to this, the model was developed in the Iranian hotel industry as opposed to the Malawian banking industry, specifically SBM which is the subject of this study. It would be useful to compare the findings in the study just discussed with those found in the practical framework proposed in this study. However, this is an area that needs further exploration.
The final model considered in this study is the KM model, Business process, Culture, Process and Infrastructure (BCPI) developed by Kandadi (2006) and is presented in Figure 8 below. The model also stresses the importance of incorporating KM concepts at a strategic level. The BCPI model aligns well to the thread of components that have emerged in literature relating to RB, CRM and KM; these are people, process and systems. In addition, it was developed using a case study methodology in six distributed organisations across Germany, India and the UK. The model groups the 25 elements that impact on KM and these are divided into four core organisational dimensions: Business focus; culture, process and Infrastructure (BCPI).
56 Figure 8 Components of Business Focus (source: Kandadi, 2006)