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Customer relationship management research paper

Introduction

The core function of for-profit business is to deliver satisfactory services to their customers. For these reasons, businesses operate entirely to acquire, retain and satisfy the needs of highly profitable customers. The current business management systems focus much attention on developing suitable customers’ relationships systems as a sense of security in business operations.  Due to these reasons, customers relationships management (CRM) systems have gained increased prominence in the modern academic and research institutes as a core functional unit in businesses management. More tools, programs, strategies and technological applications have been developed in the recent times to help address customers-oriented decisions that would help in augmenting businesses growths and developments in businesses. These approaches seek to address effective and efficient relationships systems between the companies and their customers (Parvatiyar and Sheth, 2002).

The advantages that businesses gain as a result of acquiring good quality customers are numerous and relates to positive growths in returns and developments over time and scale. These developments are pegged on the realization for the need to develop an in-depth as well as highly integrated customers’ knowledge for purposes of building good corporations and partnerships with highly valuable market destinations (Parvatiyar and Sheth, 2002). However, the emergence of the new technologies and the customers channels have continued to reshape and alter the systems of companies interface with their customers. These alterations have set in place the need for integrating the marketing strategies, sales, as well as the customers’ services functions. It is due to these that scholars have related CRM to the principles of relationship (Payne, and Frow, 2005) marketing that is regarded as one of the most important areas of modern marketing. Owing to the important role that customers’ relationship management plays in establishing a suitable grounding for businesses, the aspect has gained tremendous attention from the research and business communities as a means of improving growth and development in businesses.

Key aspects of customers’ relationship management

As indicated in the previous sections, the primary role of customers’ relationships management in organizations is to promote businesses success by acquiring and retaining high-quality customers. Several factors have to be considered to come up with a suitable management framework for ensuring customers satisfaction. Four primary aspects can be distinguished about achieving suitable customers’ relationship management for organizations. These are discussed hereafter.

Sales management: this is an essential aspect of customers’ relationships management. The whole process of sales management in light of the CRM involves sales forecasting, recording, processing, and tracing of the potential interactions in the market (Kamakura, 2005). This aspect helps the institutions to identify opportunities for revenues collection and realign these opportunities to the workforce performance.

Human resources management: The human resources aspect plays a critical role in ensuring the success of CRM systems put in place. This aspect focusses on the correct, efficient and effective use of HRs, skills and knowledge to solve specific problems in organizations at specific times. Also, the HRM aspect seeks to ensure that the tasks assigned to every employee match their skills and knowledge in the respective areas. The HRM aspect operates on the basis of the need for companies to adopt effective HRM strategies by studying the skills of their workforces against the growth rates being achieved. These helps the businesses to design and implement the strategies needed to achieve maximum development.

Lead management: This aspect focuses on the need to keep track of all sales made by the companies and their distribution across the markets. Sales businesses, marketing firms as well as customers’ executives’ centres are the most benefited by this aspect of CRM (Chen, and Popovich, 2003). This aspect looks at various factors of CRM including management of sales campaigns, designing of sales customized forms and mailing of sales lists besides a host of other activities. The other important part of this aspect is research on the patterns of customers purchase systems in given markets and the potential leads. This helps to maximize the number of sales leads thus improving the sales returns.

Customers’ service: This is the key aspect of CRM which lays emphasis on the collection, analysis and use of customers’ data in different markets. The aspect also focusses on purchase information as well as patterns for various markets and relaying the information to the relevant departments. All major departments in a business unit, including the marketing, sales, and the management teams need information on customers such as their needs, complaints, and purchase patterns to help improve their productive systems. The information helps the relevant departments to deliver fast and adequate solutions to the varied customers’ needs. As a result, the businesses manage to earn customers’ trust and dependability.

Benefits of CRM

Improved customers’ experience: the key reason for implementing CRM systems in businesses is to achieve customers’ satisfaction and consequently, their loyalty. The biggest benefit that companies draw from the good CRM systems is increasing customers’ experience. Through CRM, the market can be adequately segmented, and their specific needs identified for an effective and efficient address. Besides, CRM enables companies to track the business – customers’ relationship systems, the businesses can relate to their customers at the right time and in a meaningful manner. As a result, the businesses can achieve maximum, higher and faster sales for their products. These lead to adequate customers’ identification, retention, management, and satisfaction (Kamakura, 2005).

Increased sales accountability: accountability in every business is a suitable aspect of businesses management. The management has to verify and manage their sales markets and customers base effectively to achieve adequate returns. Companies that lack proper tools used to manage their customers’ relationships systems are bound to lose some of their customers through the cracks developed through the systems. CRM systems help to eliminate these problems by introducing an important management layer into the business operations: accountability, to the CRM processes (Chen, and Popovich, 2003).

Improved role playing among employees: for customers’ services to be excellent, the employees must play their roles effectively. To achieve these, they need to understand their primary responsibilities regarding the execution of various activities that amount to customers’ satisfaction. The employees, therefore, have to operate within these frameworks throughout the CRM lifecycles. As a result, it is easy to identify anything that goes wrong within the systems especially where the said responsibilities aren’t met. These include identifying what went wrong, the sources of shortages and the appropriate remedies to the identified problems thus ensuring that they do not occur again.

Impacts of quality management systems on CRM

Quality management is a critical component of CRM associated with the addition of positive outcomes to the CRM systems of organizations. For the stiffly competed business world common in the modern times, quality concerns are integral to achieving effective CRM (Havlíček et al., 2013). According to Kašík, and Havlíček (2009), it is the quality of the organizations’ services provision that forms the basis for companies’ competitiveness. This is because adequate quality provisions help to win the customers’ choice of a particular organizations’ services and products among a wide variety of choices from different companies. Further, due to increasing competition among companies, customers awareness and increased contact, customers are looking for the best quality products and services from business units. In response to increased quality demands among customers, there has been an increased availability of high quality and better services rendered to the clients. As a result, companies are on the run to improve their brands quality and attract more customers in return.

The primary aim of companies’ enactment of CRM systems is to develop products and services that help to meet the customers’ requirements. For these reasons, the staffs and employees all strive to satisfy the customers’ varied quality demands. The quality management systems are developed from the perspectives of attaining the clients’ needs as well as expectations. When the customers are satisfied with the companies’ products and services, it is certain that their needs would be satisfied too (Kašík, and Havlíček, 2009). Due to these, the quality management forms an important component of ensuring the delivery of effective customers’ relationship management. Companies are on the run to ensure that all the companies’ key processes such as product design, quality, and lines meet the customers’ values and needs sufficiently. These perspectives arise following the recognition that quality has become a very powerful marketing tool for companies in the modern competitive business fields. Many scholars such as Havlíček et al. (2013) have, therefore, maintained that quality management is a marketing discipline for all profit-oriented organizations.

Various CRM systems also integrate quality management tools such as total quality management, the ISO certifications, and balanced scorecard to develop high-quality products that meet the quality needs of the market. Market segmentation processes, as Kašík, and Havlíček (2009) highlights is an important consideration for quality management systems adopted by companies currently. The primary focus of these market segmentation processes, therefore, tend to focus primarily on the quality needs of the markets targeted by various kinds of goods and services. These helps businesses to identify the varied quality needs of the respective markets and develop products and services that best suits these conditions. Due to these, quality management tools and systems forms an integral and important component for customers relationships management approaches as a means of finding an appropriate and effective solution to customers’ needs. These recognitions help the respective companies to attract and retain good quality customers besides achieving loyalty.

Processes necessary for achieving effective CRM

Effective implementation of good customers’ relationship management systems by companies has been linked to successful performance in the target markets. The whole process of attaining successful customers’ relationship management systems within companies is an elaborate and complex process which involves many players. Some of these processes have been discussed in this section. The processes of CRM implementation describes a series of elaborate steps followed in implementing an effective CRM system in a company. Mishra and Mishra (2009) describes CRM processes as a series of activities that are performed by an organization to achieve effective customers’ relationship management systems. Depending on the company’s profiles and structures, the processes are defined. These different processes can be grouped into different classes depending on the organizational approaches to CRM implementation. These include customers-oriented processes, customers-facing level processes, cross-functional processes and the macro-level processes. This research shall describe a general process of CRM implementation.

Developing an enterprise-wide commitment: this is the initial process of the implementation and entails developing an acceptance through commitment towards implementing CRM systems in the organizations. This stage involves recognizing and identifying the necessary expertise, skills, and talents required to implement the CRM system. This is because the enactment of CRM system involves the participation of many different segments of the organizations such as the sales departments, marketing, management finance, distributions and the manufacturing sectors among others (Rababah et al., 2011). By developing commitment towards initiating and developing the willingness and commitment to ascertain these aspects, the companies places themselves on the path to gaining a necessary ground for input before CRM systems are implemented.

Creating a CRM steering teams: This is the second step to the implementation process and comes after a commitment has been attained. The teams are drawn from the committed groups/ sections or departments whose acceptance have been sought and attained. The selection of this team is a critical factor in the development of a successful CRM. The teams developed forms the nucleus of the CRM system and is responsible for making the key decisions that help to run the entire process. The team is also responsible for communicating the details as well as the benefits likely to be generated from the CRM programs to all participating and affected companies. Some of the common teams’ compositions include the management, the sales and marketing representatives, the IT/ technical experts, and the finance departments, etc. all representing an interest group in the implementation process.

Business needs analysis: this stage involves identifying and analyzing the business goals and needs. This is a critical factor in establishing an effective CRM system for any information. This involves assessing the current processes undertaken at the company and determine the factors that need to be automated through the CRM system. This is to ensure that all holes are identified and fixed to guarantee and efficient and effective CRM implementation process.

CRM action plan development: This stage involves the development of a ‘blueprint’ for implementing the CRM system into the company. The plan has to detail all the processes and actions that need to be conducted to make the CRM system a reality. It describes the plan from the beginning to the end of the implementation plan, the benefits the companies need to accrue from the CRM installation.

Technology and software selection: All CRM programs are driven by the technological applications to promote as well as optimize the sales and marketing processes targeted by the company (Rababah et al., 2011). As a result, the relevant technology/ software must be selected based on the knowledge of the firm’s infrastructure, skills, levels of expertise, the customers’ needs and goals.

Installation and implementation of the CRM systems: Following the completion of the processes described including setting the right infrastructure in place, the next move is to implement and install the system into the company’s operations. This can take long depending on the needs of the organization.

Role of internal staff in achieving effective customers’ relations

Customers’ satisfaction: Internal staffs are the first stepping stone towards achieving an efficient customer’s satisfaction. The internal staffs are responsible for direct interaction with the clients on behalf of the company hence represents the face of the company to the clients. The belief that companies must provide excellent services to their customers must not change when dealing with in-house customers. These needs are developed on the premise that customers are a vital component of the businesses. As a result, the ability of the companies to accomplish their demands satisfactorily is essential to accomplishing the goals of the companies. Therefore, for an effective implementation of customer relationship management, an organization should provide proper guidelines to the internal staffs regarding the many roles that are attached to them.

Handling clients’ information: The staffs are responsible for collecting information from the customer including the potential customer, their demands, information on purchasing power and trends, and any other expectations they have for the organization. Besides, following the successful gathering of such information, the staffs are involved in creating a database on the various characteristics of the clients’ base to assist the management in making vital decisions regarding the creation of appropriate products and services that suites the customers’ demands for various markets.

Creating customers trust and value: for the companies to attract and retain high-value clients’ base, it must satisfy their demands and specific needs. This must be accomplished without neglecting the ability to provide excellent services that promote the value proposition and thus promoting trust. Trust is a primary requirement for the success of any relationship established between the companies and their clients. Since the internal staffs relate directly to the clients, identify the clients’ unique needs and value characteristics, and develop products that satisfy these needs, they help to influence the companies’ relationships with their clients directly.

Role of external stakeholders in achieving effective customers’ relations

The external stakeholder includes all people whose relations affect the organizations remotely. They include the general society, the government bodies and the customers among others. Khasawneh et al. (2012) observes that a healthy and a fruitful association is needed with the external agencies having in mind that CRM deals with the flow of information across all departments. The external stakeholders, therefore, becomes a crucial segment as all the functioning, growth and profitability of a business are all embedded in them directly. Some of these roles are discussed below.

Since the external stakeholders are affected by the events of the companies directly, they must be in agreement with strategies set by an organization to achieve satisfaction for purposes of guaranteeing a fruitful promotion of the growth of an organization in one way or another. The contemporary management thinks through stakeholders as a pivotal part of the organization and in case of CRM, these structures are also pertinent to external stakeholders. The external agencies form a basic part of an organization and be able to implement these philosophies making the two to have a common platform for performing their functions (Payne and Frow, 2006).  This in itself will bring in a systematic strategy to various approaches of business, and therefore, there is a profound importance that CRM will result in an effective and efficient process for the organization.

The entire process of implementation of a suitable CRM is dependent on the flow of valuable information about the market and the clients’ base. Information sharing, therefore, becomes very instrumental in meeting the aims and goals that both the internal and the external stakeholders need to achieve for the organization (Payne & Frow, 2006). Information sharing brings harmony and unity into the organization, and this will help in streamlining the business and other individuals to move in one accord towards a common goal. A lot of information is that drives the CRM systems within organizations is generated from the external market (external stakeholders). This includes insights into the customers’ tastes, preferences, market consumption characteristics, etc. As such, information sharing will combine the efforts of both the parties to be in unison towards propelling a common benefit and objective to the organization.

Loyalty Schemes and customer relationship management

A loyalty scheme is a reward program that different organizations offer to customers who frequently make the purchase or visit their stores for services. It may provide a customer with advanced access to different new products, special sales and free goods and services. Loyalty programs are some of the most effective ways through which customer retention levels usually improve. This in it is very vital since the cost of bringing in new customers are usually high when compared to that which is involved in their retention meaning that there is a boost in profitability in retention. Loyalty programs are therefore a plus in improving and maintaining good relationship with different customers and the organization (Safari et al. 2016).

The current marketplace is very competitive. Thus, customers will find it easier to switch companies and services at will. Loyalty schemes, therefore, are a suitable strategy to ensuring customer retention for the organizations. In a situation where the organization wants to build a loyal clientele, it will be forced to keep its customers satisfied enough. When a customer is satisfied, they will find it hard to change their supplier to another contender especially when they provide the same services or sell the same products. This helps the companies to maintain a good customers’ bank despite the increasing competition.

Loyalty schemes programs provide two primary functions: giving customers rewards for brands loyalty and the provision of vital information on consumers to the issuing organization. Many companies can evaluate anonymous purchases by the use of loyalty reward programs which will give additional information concerning products that can be purchased in unison and also whether some coupons are attractive than others. To excel in customer loyalty, the organization will have to strive to meet the customers’ expectations and outcomes (Safari et al. 2016). These can be achieved, for instance, by confirming that the product can deliver what the organization promised. Similarly, the customer must be able to be comfortable with the product at the time of purchase.

By understanding the customers’ needs using any of the available reward schemes; it can be a highway to deliver on most of the numerous customers wants. Some organizations, therefore, can succeed and purpose to deliver value to most of these customers and be able to earn their lifetime loyalty. A good way to an organization can gain the understanding of its customers is through working with suppliers, distributors and even the retailers. This helps in gaining the understanding of what majority of customers wants regarding good value products and even the in-store promotions. All in all, a combination of insight together with creativity, value and scale can push an organization to a high level (Khasawneh et al. 2012).

The loyalty program has some advantages that if followed in a proper manner, will ensure that an organization can produce a high customer benefit to both the new and existing ones. First, it allows an organization to focus primarily on those important customers while at the same time improves on the level of satisfaction. In an ideal situation, loyal customers are seen to have high purchasing rate than others, and hence, they bring a lot of cash flow to the organization. With an increased loyalty to an organization, there are high chances of it increasing its profitability also an extension at the time of order placement by the organization (Safari et al. 2016).

Secondly, a loyal customer is an advocate for any business since they become so close to the business to the extent that they can muster some of the basics of the organization. They are the one who will recommend the business to others resulting in reduced marketing cost. Their endorsement is greater than what direct marketing could have created to their friends and relations.

The loyalty scheme is one of the fundamentals ways an organization can get to know its customers (Saelee et al. 2015). When providing customers with loyalty products and services, it provides a good avenue for generating information that can be used to improve on the weaknesses of the organization. It provides a good spotlight to the understanding of the behaviors of customers by highlighting on the worst and best among them. It can be highly profitable to lose bad customers than to gain new ones. While loyal customers will bring massive profit to the organization CRM, generate good information that will distinguish those customers that are only able to purchase discounted goods which in the long run will cost the organization a run for its money.

Other than these, loyalty schemes can be instrumental in winning back the lapsed customers. These customers provide an easier way of winning them than those cold prospects. These customers know the organization and likewise to the organization, and therefore, it is easier to predict how far they want to go with the organization. Moreover, the information generated by the loyalty scheme can be used for other valuable insights (Venugopal and Priya, 2015).  It helps in highlighting defection rate or pattern and also the need to change product selection. This information will help in knowing the products that customers usually purchase and hence an indication of choosing lines that need expansion.

Customer Relationship Management at Tesco

Marketing is one of the most powerful tools for any organization to come close to its customers (Agbaje, 2014). Tesco is one of the largest stores with big retail chains stocked with many household products. Since the retail store deals directly with customers, CRM is very important for them in one way or the other. CRM in the organization makes it easy to carry out marketing and sales promotion while at the same time assisting in provision of good customer services. The better service that the organization provides can be dated back to the times when they first offered quality products at competitive prices.

The first move towards customer management was in 1994 when the company launched a One In Front scheme so as to reduce the time taken by customers at the check-out counter. This effort received great support from customers although it was marred by challenges during peak hours. In the following year, they launched the Clubcard, which was the precursor to well informed CRM. The initiative was a milestone in making Tesco believe that it would make them serve their customers well.

Though Tesco is a giant retailer and the most renowned implementer of CRM, it is very hard to find their implementation with no shortfalls. In some areas, the marketing departments will find themselves focusing too much on the technological components of the CRM at the expense of its primary role which is the customer. The best mission that any CRM tends to meet is that of being customer centric and hence it provides a good avenue for understanding these customers (Saelee et al. 2015), valuing them and then gaining their profound loyalty. Tesco, therefore, should spend more time on using CRM towards making strategic business decisions. More time is important in the evaluation of business decision that aligns with CRM instead of giving more emphasis on other side components (Agbaje, 2014).

Tesco staffs are the foundation for the good popularity that the organizations have amassed in the last days. Across all its division, the company is striving towards empowering their employees to offer great quality customer care to it, customer, and all time they pay courtesy call. The company is always on the move of training its staff on the different technology that impact on the organization directly and also to assist in the provision of good working conditions. The company’s employees, and with the good working relationship usually respond to queries that are from customers in an efficient manner that usually result in them getting good performance.

Conclusion

Customers’ relationships management is an emergent form of management that companies around the globe grapple to sustain as competition keep rising from every quarter. CRM involves managing the customers’ demands, expectation and needs to deliver satisfactory services and develop suitable products that meet these expectations. This enables the companies to not only acquire new clients in the stiffly competed business world but also retain most of their clients. The principle behind CRM is that the more information an organization has on its customers, the more likely it is to achieve its ultimate goals of marketing. CRM involves the management of customer relationship in some interfaces with the organization as an entire process. From the application of the CRM, it might be discussed as a sales force and most importantly the customer service support unit. However, CRM is composed of all the processes that have direct and direct impact on customers.

 

References

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Safari, M., et al. 2016. An Empirical Model to Explain the Effects of Electronic Customer Relationship Management on Customer e-Satisfaction and e-Loyalty: Evidence from Iranian Service Shopping Websites. Journal of Internet Banking & Commerce, 21(S2): 1-11.

Saelee, R., et al. 2015. A conceptual framework of customer relationship management capability and marketing survival. Allied Academies International Conference: Proceedings of The Academy Of Marketing Studies (AMS), 20(2), pp. 94-105.

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