Relationship management conceptualisation and definition

While firms prioritise relationship-marketing programmes as never before, researchers in the area are debating as to what exactly constitutes CRM (Agariya & Singh, 2011; Das, 2009; Finch, O’Reilly, Hillenbrand, & Abeza, 2015). Discussion on CRM definition continues. The business community and academia consult each other all in a quest for the unified meaning of CRM. Although the research in the area is ongoing, efforts to find common ground on what CRM is all about seem to be far from over (Bonnemaizon et al., 2007; Kevork & Vrechopoulos, 2009). However, Zablah et al. (2004), Parvatiyar and Sheth (2001) and Payne and Frow (2005) have attempted to find a common acceptable definition of CRM for the development of the discipline, but still, the misconceptions continue.

Firms continue to implement relationship marketing strategies based on different views, and hence fragmented results consistently continue to manifest themselves (Bonnemaizon et al., 2007; Nguyen, Lee-Wingate, & Simkin, 2014). Scholars and practitioners have linked lack of consistent results to the different views that surround the definition of relationship management in the organisation (Harker & Egan, 2006; Karakostas et al., 2005; Nguyen, 2011; Payne & Frow, 2005). Even the financial services sector, an industry described as most amiable to relationship management strategies (Awasthi & Purnima, 2013; Farquhar & Panther, 2008; Meadows & Dibb, 2012), is not immune to these misconceptions. According to study findings of U.K financial services by Karakostas et al. (2005), staff reported different definitions of

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CRM. This view of different understanding was corroborated by Payne and Frow (2005) in their study, as depicted in Figure 2.

Ahearne et al. (2012), Ngai (2005) and Nguyen (2012) highlighted these views and suggested that despite wide acknowledgement and acceptance of CRM, its studies remain diverse and have failed to present a single view of its implementation method. Bonnemaizon et al. (2007) and Nguyen, Lee-Wingate, et al. (2014) argued that the challenge of CRM conceptualisation comes from its conceptual background, which originates from marketing, management and information technology. In recent times, marketing processes were elevated from a functional activity to overall company activity of relationship management. With the recent development in information technology, relationship marketing combines the potential of information technology to perform the relationship management function in an organisation (Grönroos, 1994; Ngai, 2005). Therefore, it shares marketing, management and information technology perspectives (Ngai, Xiu, & Chau, 2009; Saarijärvi, Karjaluoto, & Kuusela, 2013). Thus, academics define it in a different way. Likewise, practitioners implement different methods of relationship marketing.

For Payne and Frow (2005) and Payne (2006), CRM is implemented based on inconsistent definitions and conceptualisation. They report that these different perspectives are present at both the departmental and the organisational level of many firms; they later highlighted CRM level of understanding and implementation in the organisations’ strategy. Some of these perspectives are broad while some are restricted to particular technology solutions. In the end, they summarised them under three categories as figure 2 depicts as a particular technology solution; wide-ranging technology; and customer-centric strategy.

Figure 3.1 CRM perception

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For Agariya and Singh (2011), aspects of management and marketing are evident in relationship management conceptualization that broadly outlines how the relationship is initiated and managed to ensure customer retention. Different processes that require various inputs from strategy, information systems, and human resources units of the firm are combined in relationship management implementation. These strategic processes, emotional and behavioural human efforts are combined to attract and retain customers (Ryals, 2005; Ryals & Knox, 2001). Consequently, management of resource usage and human effort is critical in customer management success. Thus, most CRM definitions are aligned to either all or one of these areas of study. For instance, CRM is defined as the following:

(i) Strategy (Bohling et al., 2006; Boulding et al., 2005; Payne & Frow, 2013), (ii) Philosophy (Ryals & Knox, 2001; Zablah et al., 2004), and

(iii) Technological tool (Peppers & Rogers, 1993)

Despite this, Kumar and Reinartz (2006) believe the misconceptions are as a result of the different understanding between CRM software vendors/practitioners and academics. In academic literature, relationship management is seen as strategic effort concerned with customer management which combines organisational processes, human effort and information system capabilities to improve customer satisfaction and customer value (Becker et al., 2009; Palmatier, Scheer, Houston, et al., 2007). Meanwhile, vendors continue to develop software that by its nature conducts sales and marketing automation and links front office and back office to form customer databases as customer management tools (Chen & Popovich, 2003a; Ngai, 2005). For Kumar and Reinartz (2006), this vendor perception influences the adoption of CRM with less resort to the strategic and philosophical aspects that the concept promotes. In support of Ryals and Knox (2001), several scholars (e.g., Garrido-Moreno & Padilla- Meléndez, 2011; Mendoza, Marius, Pérez, & Grimán, 2007; Padilla-Meléndez & Garrido- Moreno, 2014) believe technology alone cannot constitute CRM when processes that encourage relationship orientation and customer retention are missing. Furthermore, CRM conceptualisation must include customer satisfaction orientation and relationship orientation culture, because these two concepts are part of the philosophical aspect of lasting relationships that the customer relationship aims to achieve.

By implication, one of the challenges faced by CRM is the problem of conceptualisation because different definitions are found and are being used by practitioners based on the prescriptions of technology vendors (Nguyen, Lee-Wingate, et al., 2014). Where the

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technology aspect is acceptable to the firm, the focus will be on the use of a technology that may end up hurting other essential factors of CRM implementation: customer orientation/philosophy based on strategic orientation (Payne & Frow, 2013; Ryals & Knox, 2001). This focus on technology alone is reflected in recent relationship management literature as a challenge to CRM implementation (Chikweche & Fletcher, 2013; Jaber & Simkin, 2016; Kale, 2004). Consequently, the need for other factors to complement the use of technology in CRM development and implementation has been emphasised as essential for CRM to yield the expected results (Cambra-Fierro et al., 2016; Kim, Kim, & Park, 2010; Reinartz et al., 2004). As reflected in the academic literature (Becker et al., 2009; Jaber & Simkin, 2016; Palmatier et al., 2006; Sigala et al., 2008), relationship marketing implementation is based on a combination of customer orientation that defines the use of business processes to develop customer strategy supported by technology. Therefore, CRM tools without philosophical or strategic approaches are incompletely able to achieve satisfaction quality and customer retention. As Figure 3 depicts, customer philosophy binds all other activities of customer retention because it is the central pillar that ensures the success of customer relationship strategy (Pedron & Saccol, 2009).

Figure 3.2 CRM perspectives

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The literature on relationship management places significant emphasis on philosophical aspects of CRM, as scholars argue that technology is only a conduit for relationship marketing philosophy implementation. The philosophy of customer centricity guides the strategic role of people in relationship initiation and management based on training that involves changing their behaviour from selling-centric behaviour to customer-oriented behaviour (Ahearne et al., 2012; Becker et al., 2009; Hennig-Thurau, 2004). Therefore, banks need to embed emotional and behavioural aspects of relationship management into the staff mindset to pave the way for friendly and customer-centric behaviour during customer-firm interactions (Wulf, Odekerken- Schröder, & Iacobucci, 2001; Yang, 2012). In the study of CRM implementation in emerging markets, Abdul-Muhmin (2012) finds that successful implementation of relationship management techniques is dependent on the staff perception of the concept. When staff understanding of CRM leans towards the philosophy of customer centricity that guides the strategy of the firm, customer management strategy of the company is likely to yield results, and hence the effective implementation of relationship marketing. On the contrary, staff perception of CRM as technological tools may affect its implementation and harm other aspects of the strategy (e.g., philosophy). Thus, the relationship management effort of the firm is more effective when staff uphold customer centricity (Pedron & Saccol, 2009).