CityUniversity
of Seattle
CUSTOMER RELATIONSHIP MANAGEMENT AND
ITS CONTRIBUTION
TO CUSTOMER SATISFACTION
By
Panagiotis C. Filippopoulos
A THESIS REPORT
Presented to the project Management Program in the
School of Management of
City University of Seattle
In Partial Fulfillment of the Requirements
For the Degree of
MASTER OF SCIENCE OF PROJECT MANAGEMENT
CityUniversity
of Seattle
June/2007
Customer Relationship Management and its Contribution to Customer Satisfaction
2
Customer Relationship Management and its Contribution to Customer
Satisfaction
I, Panagiotis C. Filippopoulos, do hereby irrevocably consent to and authorize the City
University of Seattle Library to file the attached thesis Customer Relationship Management and
its Contribution to Customer Satisfaction and make such paper available for use, circulation,
and reproduction by Library users at the City University of Seattle Library and all site
locations.
I state at this time that the contents of this paper are my own work and completely original.
____________________________________________________________(Signature)
____________________________________________________________(Date)
APPROVED:
______________________________________________________, (Thesis Advisor)
Signature
Date
___________________________________________________, (Program Director)
Signature
Date
Customer Relationship Management and its Contribution to Customer Satisfaction
3
BIOGRAPHY
Panagiotis C. Filippopoulos
Panagiotis C. Filippopoulos was graduate of Neo Iraklio High School in Athens
and accomplished to pass the examinations to T.E.I. of Piraeus in the Department of
Business Administration in 2000. He succeeded in effecting his studies after four years.
Panagiotis has worked in the space of course of six months to an insurance company.
He has given a feast to the Customer Relationship Management (CRM) of the insurance
company.
For the time being he is not working, but he is focused on fulfilling successfully his
duty and obligations towards the program of Postgraduate Studies in Project
Management conducted by the City University and T.E.I. Piraeus.
Customer Relationship Management and its Contribution to Customer Satisfaction
4
ABSTRACT
Panagiotis C. Filippopoulos
Customer relationship management and its contribution to customer satisfaction
The thesis examines CRM and its relations with customer satisfaction for project
managers. CRM is about creating not only strong relationships with your clients but
also having a database with information regarding customers, evaluating this
information and using it for the benefit of the firm. Often project managers look after
only the work progress but not to receive some good knowledge regarding their
customer and increase customer satisfaction which will guarantee more projects from
the same customer in the upcoming months or years. The thesis concludes that Project
managers shall develop some CRM practices in order to stay with competition and have
better relations with their customers. This will help the firms to acquire more projects
since they will take advantage and make better deals for the firm.
Customer Relationship Management and its Contribution to Customer Satisfaction
5
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Customer Relationship Management and its Contribution to
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10. List of Figures (if applicable)
11. Text of Report
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c. Review of Literature
d. Methodologies and Procedures Used
e. Results
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Customer Relationship Management and its Contribution to Customer Satisfaction
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CityUniversity
of Seattle
Thesis Approval Form
STUDENT NAME
ADDRESS
11,
Filippopoulos Panagiotis Christos
Last
First
Middle
Ymittou
Street
COURSE NO. PM. 600 CREDITS
Str.
2
TERM
N.Iraklio
City
Spring
I.D.# 20063487
Attikis
State
YEAR 2007
14121
Zip
TITLE OF THESIS
Customer Relationship Management and its Contribution to Customer Satisfaction
Statement from student: This research report is an original work never published or
submitted to any other university. All sources used in the writing of the thesis are
identified. I understand that an electronic and a bound copy of my thesis may be placed
in the City University of Seattle Library and will be accessible to the public.
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Customer Relationship Management and its Contribution to Customer Satisfaction
7
TABLE OF CONTENTS
Chapt er 1 – Int ro duct io n .................................................................................... 8
1.1 I mpo rt ance o f to pic ................................................................................ 11
1.2 Purpo se o f t he st ud y ............................................................................... 12
1.3 Relat io n t o t he pro gram ......................................................................... 14
Chapt er 2 – Problem st at ement ....................................................................... 15
2.1 Rat io nale ................................................................................................... 15
2.2 Hypo t hesis ................................................................................................ 16
Chapt er 3 – Review o f lit erat ure .................................................................... 18
3.1 Introduction to CRM...................................................................................... 18
3.2 Benefits of CRM ............................................................................................ 19
3.3 Defin ing CRM .......................................................................................... 21
3.4 CRM’s o perat io ns ................................................................................... 22
3.5 The impo rt ance o f po st -sales relat io ns .............................................. 26
3.6 Why CRM is impo rt ant ? ........................................................................ 29
3.7 Why not CRM? ........................................................................................ 30
3.8 CRM St rat eg ies ........................................................................................ 31
3.9 Archit ect ure o f CRM .............................................................................. 32
3.10 Ach ieving effect ive CRM ................................................................... 34
3.11 The I nt ernet and Cu st omer relat io nship management .................. 36
3.11.1 The expansio n of t he Int er net ..................................................... 36
3.11.2 The impact o f t he use o f e- mail fo r CRM ............................... 40
3.11.3 Ot her imp act s o f t he use o f I nt ernet for cust omer relat ionship
........................................................................................................................ 42
3.12 Cust o mer sat isfact io n .......................................................................... 48
3.13 Service valu e and cu st omer sat isfact ion ......................................... 51
3.14 Relat io nship bet ween Cust omer ’s sat isfact io n and t he pro ject ’s
per fo r mance ..................................................................................................... 52
Chapt er 4 – Met ho do lo g ies and procedures used in t he st udy ................ 54
Chapt er 5 – Result s ........................................................................................... 56
Chapt er 6 – Discussio n, Conclu sio ns, Reco mmendat io ns ........................ 58
Bib lio graphy........................................................................................................ 62
Customer Relationship Management and its Contribution to Customer Satisfaction
LIST OF FIGURES
Figure 1
What Do Customers Want? ………………………………. 25
Figure 2
The process of customer’s decision making
after the purchase of the product. …………………………...28
8
Customer Relationship Management and its Contribution to Customer Satisfaction
9
Chapter 1 – Introduction
In t he p ast few year t he organisat ions - ent erpr ises have begun t o
fo cu s o n relat io ns wit h t heir cust omers.
When Tom Pet ers and Ro bert
Wat er man (198 2) impo rt ed t he phrase “clo se t o your cust omer” as part
o f t heir evaluat io n o f Amer ica’s t op 40 co mpanies,
t hey expressed a
o pin io n t hat gained co nt inuo usly ground according t o which a successfu l
ent erpr ise hear s and pays at t ent ion car eful to it s her cust omers.
S ince 19 82 t hing s have changed t o management . New concept s
have appear ed and managers have underst ood t he va lue o f cr eat ing
sust ainable co mmunicat ions wit h t heir cust o mers but also wit h t heir
shareho lder s. One o f t he key concept s t hat helps fir ms t o impro ve t heir
relat io ns wit h cu st o mer s and t o explo it t he knowledge t hat cust omer s
can g ive t o t he fir ms is well k no wn as Cust o mer Relat io nship
Management , or wide-known as CRM.
The annual level o f spend on CRM funct ion, t echniques, st rat egies
and t echno logy is enor mous. In t he US A alo ne, acco rd ing t o indu st r y
co mment at o rs, an amo u nt t ot aling so me 0.5 per cent o f t he ent ire
eco no my was sp ent o n o ut source CRM services in 2004. In t he U. K. it
has been calcu lat ed t hat call cent ers now emplo y more people t han t he
car, co al and t ext ile indu st r ies co mbined (Webber, 2002).
Customer Relationship Management and its Contribution to Customer Satisfaction
10
Do es t hat mean t hat CRM is cr it ical t o t he sur viva l o f co mpanies ?
Po ssibly indu st r y leader s t hink so. Increased co mpet it io n, glo balisat io n,
t he gro wing co st o f cust o mer acquisit io n, and high cust omer t urnover
are major issues in disparat e ind ust r ies. CRM is a co mb inat io n o f
business pro cess and t echno logy t hat seeks t o under st and a co mpany’s
cust o mers fro m a mu lt ifacet ed perspect ive: who t hey are, what do t he y
want , and what do t hey like? Research shows t hat effect ive management
o f cu st omer r elat ionship is a source of co mpet it ive different iat ion
(Kalako t a & Ro binso n, 1999).
Deliver ing hig h qualit y service and achieving high cust o mer
sat isfact io n has been clo sely linked t o profit s, cost savings, and market
share. Acco rd ing t o Pet er Drucker “T he business o f business is get t ing
and keep ing cu st o mer s” (Drucker, 1997).
Therefo r e to ret ain cu st omer s, means for a fir m t hat it must have a
st ronger fo cu s o n measur ing and managing t he individual cust omer
relat io nship. In short , all co mp anies are in t he ser vice bu siness, t hat is,
sat isfying cu st o mer need s, which, t her efore, must be measured and
t racked. The o ld parad ig m was pr ice, qualit y, and ser vice. The new
paradigm is pr ice, qualit y, ser vice convenience, value, so lut ion and
abo ve all, t o have an improved co mmu nicat io n wit h t he co nsu mer.
Customer Relationship Management and its Contribution to Customer Satisfaction
11
1.1 Importance of topic
Glo bal eco no my and bus iness pract ices has changed a lot dur ing
past years. New co ncept s, t echno logies and manager ial concept s have
emerged. Glo balisat io n and uncert aint y have forced fir ms t o seek for an
alt er nat ive wa y t o gain and acquir ed co mpet it ive advant age. Many fir ms
have rea lised t hat in o rder t o have sat isfied cust omer s t hey will have t o
develop capabilit ies t hat will give t he opport unit y t o t he fir m t o sat isf y
t he cu st o mer s’ demands and t o develop product s and ser vices t hat wil l
creat e sat isfied cu st o mer s.
It is also import ant to ment io n t hat tho se changes have also
alt ered
co nsu mer s
behaviour ;
nowadays
consumer s
have
bet t er
kno wledg e abo ut a pro duct and t hey are well infor med for corporat e
pract ices t o wards t heir cust o mers. Cart wr ight and Green (1997) have
said t hat a fir m t hat want s to be called “a successful fir m” shall use
CRM pract ices. Cart wr ig ht and Green (1997) also say t hat a fir m ca n
impro ve it s efficiency and incr ease it s sales vo lu me by 20% if it s
management decides t o imp lement a CRM program.
Ever y fir m has it s o wn st akeho lders; employees, cust omers, supp lier s
et c. It is impo rt ant to bu ild so me st rong relat ionships wit h t hem, but most ly
wit h cust o mers.
Customer Relationship Management and its Contribution to Customer Satisfaction
12
At t he most fu nd ament al level, ever y company has cust omer s, and
each co mp any has t o maint ain so me basic infor mat ion about t ho se
cust o mers. (e.g. names, address, purchases, cont ract s, invo ices, et c).
Therefor e ever y co mpany should have some basic CRM t echno logy t o t rack
and ser ve t heir cust omer s. Th is is achie ved basically b y pro v id ing sales,
mark et ing, and ser vice p ersonnel w it h bet t er, more co mplet e cust o mer
in fo r mat io n, t hereby est ablish ing a mo re pro fit ab le relat io nsh ip wit h
cust omers, and redu cing o perat ing cost s.
 Sales
o rgani zation s
can
short en
the
sales
cyc le
and
impro ve/ incr ease sales per for mance, average order size, and
revenue p er cust o mer.
 Marketing o rgani zation s can incr ease campaign response rat es,
while at t he same t ime t hey gaining new cust omer s.
 Custo mer
service
organi zation s
can
increase
ser vice
pro duct ivit y and cust omer r et ent io n by decreasing ser vice co st ,
respo nse t ime and request reso lut ion t ime.
Thu s it is impo rt ant to have a look at how t he fir m can improve it s
relat io nship wit h it s st akeho ld ers, and mo re precisely wit h it s cust o mers.
1.2 Purpose of the study
The purpo se o f t he st ud y is t o invest igat e t he adopt ion o f cust omer
relat io nship management (CRM) by Greek companies.
Cust o mer relat io nship is a subject which has been r epeat edly invest igat ed
in a lar ge nu mber o f st ud ies. Throughout t he last decade t her e has been an
Customer Relationship Management and its Contribution to Customer Satisfaction
13
incr easing u nder st and ing o f cust omer relat io nships and as a result man y
o rganizat io ns have at t empt ed to impro ve and adopt t his kind o f met hod.
Cust o mer relat io nship management can cause significant effect s at bot h t he
ind iv idual and t he o rganizat ional leve l.
In t his st ud y CRM is in vest igat ed in r elat ion t o a var iet y o f fact ors. Mo re
spec ifically, t he fact o rs t hat are examined are:
•
t he familiar izat io n o f t he emplo yees wit h cust o mer relat ionship
management
•
t he improvement in cu st o mer sat isfact io n
•
t he pro duct ivit y improvement t hrough CRM
•
t he way CRM impro ves int eract io n wit h cust o mer s
•
t he awareness o f CRM int roduct io n in Greek fir ms
•
to what ext ent t raining was sat isfact or y
•
t he import ance of up t o dat e t echno lo g y in imp lement ing CRM
•
in what co nt ext s Greek fir ms design product and ser vices based o n
t he cust o mer needs
•
t he incr ease in cu st o mer sat isfact ion when CRM is used.
Due t o t he fact t hat t he Greek market was familiar wit h t he t er m and
t heo ret ical po int o f view o f CRM, t her e has been a limit ed number o f
resear ches int o t he Greek market . Therefore, it is int erest ing t o invest igat e
CRM since in t his wa y t he current st udy can cont r ibut e t o t he exist ing
limit ed resear ch abo ut t his subject or similar o nes ( if t here are any) i n
Greece.
Customer Relationship Management and its Contribution to Customer Satisfaction
14
1.3 Relation to the program
CRM is a co ncept t hat is co nnect ed wit h many aspect s o f pro ject
management . Fo r examp le it ensures t hat t he fir m fo llo ws a qualit y
pro gram t hat will lead to customer sat isfact io n.
CRM is st ro ng ly linked wit h qualit y management since it gives added
value t o t he fir m and it can be p art o f t he fir m’s qu alit y pro gram.
The modu les o f t he MSPM program o f st udy provide background for t his
st ud y, for example, how fir ms have t o fo llow cert ain regulat ions and t he
law. The mo st import ant of t he var ious modules relat ed direct ly t o t he
CRM issu e, like PM 511 (Pro ject Qualit y Manage ment ); and Kerzner’ s
book, which was used in many modules, and which is a valuable source
o f k no wledg e t hat will co nt r ibut e a lot to t his pro ject . Ano t her u sefu l
mo d u le was PM 512 - T he Cust omer into t he Pro ject Process, whic h
fo cu sed on t he part s o f Pro ject Manag ement in re lat io n wit h t he fir m’ s
abilit y t o impro ve cu st o mer relat ions t hrough t hose project s.
Customer Relationship Management and its Contribution to Customer Satisfaction
15
Chapter 2 – Problem statement
Many fir ms do no t analyze cust omer sat isfact io n at t he beginning o f a
project , and do no t measure it t hroughout t he pro ject , result ing in a los s
o f market posit io n.
2.1 Rationale
Cust o mer Re lat io nship Management is useful because t he fir ms ca n
ut ilise it in order t o measure t heir cust o mer ’s sat isfact io n and t o fin d
ways t o
impro ve
it .
Ho wever,
many
project
managers
have no t
und erst o o d it s usefu lness.
It is we ll k no wn t hat co ncept s such as glo balisat ion and t he econo mic
and macro env iro nment al inst abilit y on many market s have pushed many
fir ms t o seek fo r new met ho ds t hat will help t hem t o survive. CRM is a
co ncept t hat is st rongly relat ed wit h t he manag ement o f cu st o mer
relat io nships. This he lps fir ms t o impro ve t he relat io nship wit h t he ir
client s and t o est ablish lo ng t er m and successful r elat io ns wit h t heir
client s b y impro ving t heir sales procedures.
CRM is a business philo so phy. I n t his philo sophy fir ms acqu ire t he
capabilit y t o underst and bet t er t heir client s’ needs, and at t he sa me t ime
t hey have t he o ppo rt unit y t o impro ve t heir co mmu nicat io n wit h t heir
Customer Relationship Management and its Contribution to Customer Satisfaction
16
client s and t o impro ve t he ser vice t hat t hey pro vide t hem and t o beco me
mo re co mpet it ive.
CRM is a new co ncept fo r market ing and management . It is based upo n
t he co ncept o f cu st o mer sat isfact io n. CRM has t o do wit h managing
t echno logical improvement s wit hin a fir m – in which we can include t he
Int ernet , pro cesses, reso urces, and in general improving t he way t hat a
fir m appro aches it s client s. T he enviro nment in which CRM operat es is
ver y co mplicat ed and t his means t hat fir ms t hat want t o improve t heir
cust o mer relat ionships will have t o change t heir int er nal processes but
also t heir behavio r t o wards t heir client s. The applicat ion o f CRM
t heo r ies requ ires a bet t er communicat io n wit h t he client t hrough so me
t echno lo g ical means such as t he I nt er net , and so me new models o f
ad min ist rat ion. According t o t he abo ve, we under st and t hat CRM must
have a st ro ng u nder st and ing of t he new t echno logies.
2.2 Hypothesis
“CRM can imp rov e the quality in a p roj ect”
This pro ject will show t he usefulness of CRM for project managers and
ho w
t hey
can
st akeho lder s.
use
it
to
impro ve
t heir
r elat io nship s
wit h
t heir
Customer Relationship Management and its Contribution to Customer Satisfaction
17
It will reco mmend ho w co mpanies can use CRM o n t heir pro ject s t o
incr ease
cust o mer
per fo r mance.
sat isfact io n
and
t herefore
impro ve
t he
fir m’ s
Customer Relationship Management and its Contribution to Customer Satisfaction
18
Chapter 3 – Review of literature
3.1 Introduction to CRM
These are t urbulent t imes in t he wor ld of organizat io n and t her e is
ever y ind icat io n t hat it will cont inue for years. Behind t his t urbulence lies
a ser ies o f freq uent ly cit ed environment al fact ors: Techno logical advances,
deregu lat io n o f mar ket s et c. t hat has creat ed int ensified g lo bal co mpet it io n.
These fact ors have changed and co nt inued t o change t he d ynamics o f
mark et p lace but t he o nly t o ol t hat perceived t o make sense, being t he mo st
pot ent and effect ive t o compet e glo bally in t his emer ging mar ket ing
enviro nment is Cust omer Relat io nship Management (CRM).
The
wo r ld
is
beco ming
a
‘buyer s’
market ,
wher e
increasing
d iscer ning cu st o mer s ar e free t o select t heir glo bal market place. High ly
empo wered and in fo r med cust o mers have Cust o mer Relat io n Management
(CRM) a mo st impo rt ant area t o concent rat e upon by t he market s. St udies
have pro ved t he wo rt h o f CRM in t urning t he cust omer ser vices int o
cust omer’s sales. CRM wo rks on t he t heme o f ret aining exist ing cust o mer s
i.e., mo st bu sinesses get cust omer s but successful businesses keep t hem.
Keep ing cust omers happy is not just public relat io ns; it ’s an essent ial p art
o f so u nd business st rat egy. (Bhadur i, 2005)
Cust o mer relat io n management (CRM) is defined as a business model
t hat has as it s pr incip le goal t o ident ify, ant icipat e and under st and t he
Customer Relationship Management and its Contribution to Customer Satisfaction
19
need s o f po t ent ial and current cust o mer s in order to increase ret ent ion,
growt h and pro fit abilit y. CRM inc ludes a ser ies o f business and t echno log y
fu nct io ns t hat co nt r ibut e t o t he successful management o f t he lifecyc le o f
cust o mer and part ners relat io nship s: fro m mar ket ing and acq u isit io ns t o
ser vice and ret ent io n ( Wald and Mar sden 2001), meaning t hat is mo re
pro fit ab le t o ret ain a cu st omer t hat to acquire a new one. Hence t he
co mpanies change t heir fo cus fro m pur suing t he aim o f selling t o t he
max imu m nu mber o f peo p le t o concent rate on developing relat ionship wit h
t heir exist ing cu st o mer s.
T herefore, CRM is a ‘bus iness st rat egy not a
t echno logy’. It uses t echno logy t o accomplish t his goal, since CRM is
depending upo n t he capt ure, st orage and analys is o f cust o mer-relat ed dat a;
ho wever it needs t o be embraced as a business model t hat ut ilizes
t echno lo g y fu nct io ns in o rder to deliver persona lized ser vices t o custo mer s
and part ner s.
3.2 Benefits of CRM
CRM syst em o ffer s a range o f benefit s which are d epend ent o n t he
d ifferent modules o f a CRM syst em adopt ed. For example a CRM modu le
for web- based sales will result t o a large cost -savings since t he cust omers
can ser ve t hemselves. Also organizat io ns t hat support emplo yees t hrough
co nt act cent er sho uld increase cust o mer sat isfact ion because quer ies should
be answered mo re qu ick ly since t he cust omer det ails ar e readily available.
Furt her mo re, it suppo rt sales represent at ives or account manager s meet ing
and face-t o -face wit h cust o mer s, mak ing t he m mo re effect ive, since
cust o mer needs and want s as well as cust omer orders can be t racked fast er
Customer Relationship Management and its Contribution to Customer Satisfaction
20
and easier. Ano t her mo du le t hat a CRM can be support is out bound
mark et ing co mmunicat io ns, fo r examp le d irect mail and email camp aig n
sho u ld r esult in lower cost s and higher responses since t he o ffer s and
in fo r mat io n can be d ir ect ly t arget ed t o the r ight people, and in t his wa y
wast age can be reduce (Chaffey and Wood 2005).
Based o n a cust o mer ’s sur vey made fro m S iebel (2002), t he
fo llo wing benefit s wer e report ed by adopt ers of CRM:
•
8 per cent increase in revenue (t hrough bet t er t arget ing o f
cust o mers in market ing campa igns, g iving a great er respo nse,
selling
mo re
pro duct s
to
exist ing
cust omer s
and
reducing
cust o mer at t rit io n.
•
18 per cent increase in emplo yee product ivit y (cust omer cont act
can be hand le mo re rapidly since informat io n can be provided
fast er and pro cesses part ly aut omat ed.
•
18 per cent increase in cust o mer sat isfact ion; (t his ar ise since
infor mat io n is more readily t o hand and fulfillment should be
improved. i.e. t he cust omer s receive t heir product or services o n
t ime. Also redu ce at t rit ion, increase cust omer ret ent ion and
cust omer lo yalt y.
•
13 per cent increase in cust omer ret ent ion due t o bet t er t arget ed
co mmunicat ion.
•
13 per cent decrease in operat ing cost s, due t o t he fact t hat fewer
st aff is req u ir ed t o ser ve cust omer s, manage processes and
pro vide bet t er t arget ed co mmunicat ion wit h less wast age.
Customer Relationship Management and its Contribution to Customer Satisfaction
21
In addit io n t o t he abo ve t here are also so me o t her benefit s wh ich are
impo rt ant to ment ion.
•
Protecting exi sting invest ment s: meaning t hat if a CRM so lut io n
can make yo ur cu st o mer co nt act st aff more effect ive and efficient ,
wit hout chang ing a lot t he syst em and t he so ft ware t hat you alread y
have, t hen ret urn on in vest ment (ROI) can be co nt ro lled and easy t o
realize (Ha ll 2 004).
•
Emp loyee’ s tu rnov er: if you have lot s of t urnover in depart ment s
t hat int eract daily wit h cust o mers, yo u lo osing opport unit ies t o bu ild
st ro ng relat io nship s ever y t ime a st aff members leave. Wit h CRM
you will st ill know client needs and also will have a hist o r y o f t heir
co nver sat io n capt ured in yo ur CRM syst em (Hall 2004).
3.3 Defining CRM
The t heo ret ical definit io n o f CRM can be given t hrough t he
fo llo wing defin it io ns:
CRM is business p hilo sophy. I n t his philosophy fir ms acqu ire t he
capabilit y and abilit y t o underst and bet t er t heir client s’ needs, and at t he
same t ime t o t hey have t he opport unit y t o impro ve t heir co mmu nicat io n
wit h t heir client s and t o improve t he ser vice t hat t hey provide t hem and
to beco me mo re co mpet it ive. (Cann, 1998)
Galbreat h (1999) st at es t hat CRM is a business act ivit y t hat gives
t he oppo rt unit y t o t he fir m t o evaluat e, develop and sust ain sat isfied it s
Customer Relationship Management and its Contribution to Customer Satisfaction
22
client by g iv ing t he r ig ht product to the r ight mo ment t hrough t he
co rrect dist r ibut io n channel at t he r ight cost . CRM develops sale s
t hro ugh t he co mput er izat ion o f t he organisat ion, t he t echno logica l
develo p ment and t he co rrect communicat ion wit h t he client . I n general,
CRM simplifies t he relat io ns bet ween t he fir m, it s su pp lies and it s
client s.
Cart wr ight & Green (1997) st at e t hat CRM’s t arget is t o help t he
fir ms t o build lo ng t er m and pro fit able r elat io nsh ips w it h t heir client s b y
improving t he cust o mer ’s ser vice qualit y. It is proven t hat a fir m ca n
incr ease it s per fo r mance by r educing it s sales cost s up t o 20% when t he
fro nt -office ser vices ar e linked wit h t he operat ion backbone syst em.
3.4 CRM’s operations
This p art will analyse so me CRM’s operat io ns. More precisely:
1. Wit h t he use o f CRM t he fir m has t o focus on t he cust omer and t o
underst and it s needs. At t he same t ime it has t o decode t he
messag es t hat it receives fro m t he cust omers base for t he ser vices
t hat it provides t hem.
2. CRM need s fro m t he fir m t o segment t heir market s in order t o
define t he needs o f each segment and pla n how it can improve it s
co mmunicat ion on each seg ment .
3. The fir m must impro ve it s mark et info r mat io n syst ems and u se
so me management info r mat io n syst ems ( MIS) t hat will be part o f
Customer Relationship Management and its Contribution to Customer Satisfaction
23
t he CRM’s o perat io ns. This is because if t he fir m does no t have
t he r ight and co nt inuo us research upon t he cust omer s’ behaviour it
is no t easy t o have an effect ive use o f CRM.
4. The co rrect use o f CRM guarant ees t hat the client will r eceive t he
r ig ht pro duct / services. (ht t p://sales. mo nst er.co.uk)
So , all t he o perat io ns o f CRM must have t he fo llo wing:
Go od kno wledge o f t he market needs.
The mar ket ing mix must be ad just ed according t o t he consumer s’
need s.
The fir m mu st have a go o d knowledge o f t he consumer s’ behaviour a s
it is d efined fro m market research.
Go o d knowledge o f moder n t echno logy.
In order t o have a bet t er under st and ing of how we can manage our
relat io nship s wit h
t he
client s
we
ought
to
under st and
what
t he
co nsu mers want fro m t he fir m. Fredr ick Reichheld (1998) d id a sur ve y
fo r his art icle Beyo nd Cust omer Sat isfact io n t o Cust omer Lo yalt y. I n
t his sur vey he found t hat t he fo llo wing::
•
10% wit h 40% of t he client s t hat say t hat t hey are sat isfied fro m
t he fir m’s product s and ser vices may sh ift to anot her fir m
•
It cost s five t o seven t imes more t o find new cust omer s t han t o
maint ain t he current cust omer s.
Customer Relationship Management and its Contribution to Customer Satisfaction
•
24
The 98% o f t he d issat isfied cust o mers never co mp lains. It just
shift s t o ano t her fir m or brand wit hout saying anyt hing.
•
Consumers t hat are to t ally sat isfied have six t imes mo re chances
to re-purchase a fir m’s product in t he fo llow ing t wo years t han a
ju st sat isfied cust o mer.
•
A 5% reduct ion on t he number of consumers t hat leave may br ing
an increase o f 30% up t o 85% on profit s.
In o rder to have a client who is fully sat isfied t he fir m mu st
und erst and his needs and t o sat isfy it s expect at ions. Fir ms t hat do not
underst and o r t r y t o under st and t he expect at ions o f t he client s will have
pro blems. T he mo re co mpet it ive is a market , t he more difficult is t o
sur vive a fir m wit ho ut sat isfying it s c lient s’ expect at ions.
I f a fir m want s t o sat isfy t he expect at ions of it s client s, it will have
to fo cus o n t hree ar eas. Tho se are :
1. Cust o mizat io n
2. Personal relat io nships
3. Aft er-Sa les (Galbreat h, Rogers 1999)
Figur e 1 shows t he abo ve relat io n.
Customer Relationship Management and its Contribution to Customer Satisfaction
25
After-Sales Service
Customi z ati on
Personal
Relationship
Customer Relationship
Management
What Do Customers Want?
Figur e 1.
Ever y consumer has different needs and want s. When t he fir ms
had t o increase t heir pro duct ion
The bu ild o f per so nal r elat ions can push t he fir ms for furt her
expansio n o f t heir pro fit abilit y and o f t heir cust omer base. As it is bee n
said abo ve, up t o t he 40% o f t he cust omers shift brands or product s. The
o nly way t o stop t his and reduce t he nu mber o f leaver s is t o bu ild lo ngt erm perso nal relat io ns bet ween t he fir m and t he client . In o rder t o do
t his, t he fir m w ill have t o fo cus on t he client , to list en t o him and sat isf y
Customer Relationship Management and its Contribution to Customer Satisfaction
26
his o r her d emand s. I n t his way t he fir m can creat e mut ual respect wit h
it s client .
(Βhot e 1996)
3.5 The importance of post-sales relations
The consumer ’s decis io n making process does not stop when he or
she purchases so met hing. Co nsumer cont inues t o t ake decisio ns and
evaluat es t he fir m aft er t he process o f pur chas ing so met hing.
Oft en t he co nsu mer doubt s for t he cho ice and
t he co nsumer
believes t hat ano t her cho ice could be bet t er. In t his case, t he consumer
will d ecide not to re-purchase t he product .
A fir m t hat want s t o reduce t his ‘insecur it y’ will have t o add so me
ser vices t hat will su ppo rt t he cust omer ’s decis io n and t hey will make t he
co nsu mer t o feel t hat he / she t ook t he r ight cho ice. So, t he fir m can use
sever al inst rument s o f CRM t hat will help t hen fir m t o mak e t he
co nsu mer t o feel secure. So me o f t hose inst rument s are t he fo llo wing:
Advert isement
Direct e-mail.
Fo llo w up e- mails.
We u nder st and t hat a fir m does not only have t o deliver it s product but
also t o affect t he po st -sales behaviour o f t he co nsumer in r elat io n t o t his
part icular pro duct . This can happen t hrough t he building o f lo ng-t er m
Customer Relationship Management and its Contribution to Customer Satisfaction
27
relat io ns and wit h CRM t ools inc luding relat io ns t hrough I nt er net
fu nct io ns.
Precisely, West brook and Oliver (1991) are st at ing t hat t he
defin it io n o f cust o mer sat isfact ion for a product is t he consumer s ’
st ance t o wards t he pro duct t hat purchased. The co nsumer evaluat es t he
pro duct and it s ser vices and decides whet her it will cont inue wit h t he
same fir m or not . CRM on t his defin it io n is t he mean t hat affect s t he
cust o mer’s st ance to wards t he product and it s ser vices.
Figur e t wo , sho ws t he process o f cust omer’s decis io n making aft er
t he purchase o f t he pro duct .
Customer Relationship Management and its Contribution to Customer Satisfaction
Purchase
Insecurity after the
purchase
28
Non use of
the
product
Use / Consumption
of the product
Rejection
No response
Evaluation of
the product
Disatisfaction
Response
CRM
Brand loyalty
Satisfaction
Re-purchase
Change of brand
Figur e 2.
The pro cess o f cust omer’s decis io n making aft er t he
purchase o f t he product
Customer Relationship Management and its Contribution to Customer Satisfaction
29
3.6 Why CRM is important?
The annual level o f spend o n CRM t echnolog y is enor mous- in t he
US A alo ne, according t o indust r y co mment at ors, an amo unt tot aling
so me 0.5 p er cent of t he ent ir e econo my will be spend on out source
CRM ser vices by 2004. I n t he U. K. it has been ca lculat ed t hat cal l
cent ers no w emplo y more people t han t he car, coal and t ext ile indust r ies
co mbined ( Webber, 2002).
Does t hat mean t hat CRM is cr it ical t o t he sur viva l o f co mp anies ?
Po ssib ly indu st r y leader s t hink so. Increased co mpet it io n, glo balisat io n,
t he growing co st o f cust o mer acquisit io n, and high cust omer t urnover
are major issues in disparat e ind ust r ies. CRM is a co mb inat io n o f
bu siness pro cess and t echno logy t hat seeks t o under st and a co mpany’s
cust o mers fro m a mu lt ifacet ed perspect ive: who t hey are, what do t he y
want , and what do t hey like? Research shows t hat effect ive management
o f cu st omer r elat ionship is a source of co mpet it ive different iat ion
(Kalako t a & Ro binso n, 1999).
Deliver ing hig h qualit y service and achieving high cust omer
sat isfact io n has been clo sely linked t o profit s, cost savings, and market
share. Acco rd ing t o Pet er Drucker “T he business o f business is get t ing
and keep ing cu st o mer s” (Drucker, 1997).
Customer Relationship Management and its Contribution to Customer Satisfaction
30
3.7 Why not CRM?
On t he o t her hand CRM has so me disadvant ages as well. One o f
t he d isadvant ages o f CRM is t hat it is ver y d ifficu lt to imp lement
acco rd ing t o Richard Fo rsyt h a co nsu lt ant specialist in t he Cust omer
Relat io nsh ip Manage ment in t he Bus iness to customer market . (Business
week, 2001).
One furt her po int - it 's ver y hard t o make mo ney out of CRM
when t he value o f each relat io nship is ver y lo w. CRM require s
consid erable invest ment , and is only value when t he cost / cust omer is
ins ig nificant co mp ared wit h t he opport unit y t o increase cust o mer value.
(www.cr m- fo ru m.co m).
Anot her
vit al reaso n fo r t he failur e Cust o mer Relat io nship
Management failur es is t he pro fo u nd negat ive imp act immed iat ely in t he
mark et so leaders t hink many mo re t imes befo r e t hey ju mp int o a
who lesale CRM t ransfo r mat io n says Vic. Dat t a, a member in BT
Market ing So lut io ns St rat eg ist . Finally Dick Lee wr it es t hat CRM is not
o nly about t echno logy, in fact t he t echno lo g y alo ne will no t achieve
anyt hing. The su ccess o f CRM st rat egy/ project will depend more so on
and cu lt ure o f t he o rganizat io n behind it and t heir abilit y t o embr ace
and
achieve
fo ru m.co m).
chang e
wit hin
t he ir
own
organizat io n.
(www.cr m-
Customer Relationship Management and its Contribution to Customer Satisfaction
31
3.8 CRM Strategies
It is vit a l t o see cust omer relat ionship management no t as
so met hing t hat is a st and-alo ne, a separat e programme t o be develo ped
and operat ed ind epend ent ly o f ot her business st rat egies, but as an
int egral part of t he way t he co mpan y d o business. Bo t h a lo ng-t er m
d ialo gue wit h t he cust o mers and t he int egrat io n o f t he idea o f CRM int o
brand ing st rat eg y are cr it ical t o t he success o f t he approach. Here ar e
so me o f t he mo st vit al st rat egies.
Int egrat ed mark et ing via cont inuous dia lo gue - which is k no wn as
t he co nt act st rat eg y. A good overall market ing plan will nor mall y
co nt ain a nu mber o f o t her p lans for co mmunicat ing wit h cust omer, eac h
co nst it ut ing one or more campaigns.
A camp aig n is a per iod o f st ruct ured communicat io n. Dur ing t he
campaig n, cust o mers receive o ne or more co mmunicat ions and respo nd
to t hem. T he desired and result - usually more sales – is achieved.
Ano t her st rat eg y is t he Dat a qualit y. CRM requires high qualit y
in fo r mat io n abo ut cust o mers if it is t o be effect ive. T his infor mat io n
ma y have been co llat ed fro m var io us dat abases- sales o rder ent r y,
cust o mer ser vice, salespeo ple’s files, responses t o market ing campaigns
and so on. This is cr it ical in manag ing relat io nsh ips wit h cu st o mer s
pro act ive ly.
Customer Relationship Management and its Contribution to Customer Satisfaction
32
Fina lly br and ing is vit al in t he CRM st rat egy. Branding is t he
mark et ing co ncept t hat mak es int egr at es t he market ing mix and makes
t he relat io nship wit h cu st o mers more coherent . This is defined as t he
co mp let e set o f valu es t hat cust o mers der ive fro m t he co mpanie s
o ffer ing. Br and ing
is an asset
t hat
remains valuable even aft er
invest ment in creat ing it has been reduced. A st rong brand can sur vive
weak mark et ing fo r a per io d (Stone & Woodcock, 2000).
3.9 Architecture of CRM
There ar e t hree part s o f applicat io n archit ect ure of CRM:
•
Operationa l: aut o mat io n t o t he basic business processes ( market ing,
sales, ser vice)
•
Analytica l: Support to
analyze cu st omer
behavio r,
imp le ment s
bu siness pro cesses ( in for mat io n obt ained) alike t echno logy.
•
Collabo rativ e (CO-o perat io nal): E nsures t he co nt act wit h cust o mer s
(phones, ema il, fax, web, po st , in per so n).
Operationa l CRM
Operat io nal CRM fo cus ma inly o n t he direct support of t he day t o
day needs and want s of cust omer facing emplo yees.
Customer Relationship Management and its Contribution to Customer Satisfaction
33
Operat io nal CRM so lut ion provide st at e of t he art t echno logy t hat
enables sales peo ple and ser vice engineers t he access t o complet e hist or y o f
all cu st o mer int eract io n wit h your co mpany, regardless o f t he t ouch po int ,
seco ndly
enables
a
360-degr ee
view
of
your
cust o mer
while
yo u
int eract ing, and t hird ly it delivers personalized and effic ient market ing,
sales, and ser vice (Cooper, 2002).
Analytica l CRM
Analyt ical CRM is t he use o f ana lysis, modeling and evaluat ion o f
cust o mer d at a t o creat e a mut ually benefic ial relat io nship bet ween t he
co mpany and t he cu st omer. Also analyt ical CRM can help co mpanies
max imize cust o mer pro fit abilit y and lo yalt y (Beck and Summer 2001).
Collabo rativ e CRM
Co llaborat ive CRM is t he int eract io n wit h cu st o mers t hro ugh t he
var ious dep art ment o f t he co mpany, such as sales, market ing, and t echnica l
suppo rt t hat share any infor mat io n t hey co llect fro m t heir int er act ion wit h
cust o mers, which is a so lut ion t hat br ings people, process and dat a t oget her
so companies can impro ve t he qualit y o f cust omer ser vice, and obviously t o
incr ease cu st o mer sat isfact io n and lo yalt y.
Furt her mo re Co llabo rat ive CRM provides so me ad d it io nal benefit s:
•
Enables cust omers int eract io n t hrough all co mmunicat ion channel
•
Enables web co llabo rat ion t o reduce cust omer ser vice cost
Customer Relationship Management and its Contribution to Customer Satisfaction
34
•
Int egrat es call cent er enabling per sonal cust omer int er act ion
•
Int egrat es view o f t he cust omers while int eract ion at t he t ransact io n
level
(Cooper, 2002).
3.10 Achieving effective CRM
In o rder fo r CRM t o be effect ive, an organizat ion must fir st ident if y
what k ind o f cust o mer infor mat ion it is looking for and decide what it
int end s t o do wit h t hat info r mat ion. I nfo r mat io n about cust omers have t o
analyze and used pro per ly for each cust omer.
Hence because co mpanies
can co mmu n icat e wit h several ways t hrough a cust o mer, i.e., by ma i l
campaign, web sit e, call cent ers, and/or mobile sales force st aff, a so lid
CRM syst em have t o link up each o f t hese point s. This co llect ed dat a flows
t hro ugh all d epart ment s in t he organizat ion and t his help t he co mpany in
having a ho list ic view o f each cust omer and pinpo int areas where bet t er
ser vices ar e need ed (Deck 2001).
Mo reover,
CRM
can
be
mor e
efficie nt
by provid ing
product
in fo r mat io n, pro duct use in for mat io n, and t echnical assist ance on web sit e
t hat are accessib le 24 ho urs a day, t he y can provide a mechanism t hat users
can ap ply t heir co mp laint s, as well as a mechanis m t hat can so lve t he
pro blems befo re o t her cu st omer s exper ience t he same dissat isfact ion,
develo p ed appro ach and separat e cust omers based o n t heir needs and want s,
Customer Relationship Management and its Contribution to Customer Satisfaction
35
so lat er yo u can des ig n a ser vice st rat egy for each one based on t hese
ind iv idual req uir ement s (wik ip ed ia 2007).
Achieving effect ive cust omer relat io n management require at
mo st t ime o rganizat io ns t o adopt a new per spect ive, for example a
t radit io nal cu st o mer ser vice is so met hing you ‘do t o’ t he cust omer, while
mo d er n cu st o mer relat io n management
meaning t hat
is ‘done wit h’ t he cust omer,
yo ur relat io nships wit h cust o mers should
be st raig ht ,
suppo rt ive, and alwa ys bu ilt for lo ng-t er m (Gifford 2004).
Organizat io ns
t hat
have
many
mo ment ar y
relat io nships
wit h
cust o mers co nseq uent ly have t o spend a lot of mo ne y on finding new
cust o mers. T hat ’s wh y CRM co nsider a ‘cheap’ so ft ware imple ment at io n
becau se t he co st o f keep ing exist ing cust omer s is a t iny fr act io n of t he co st
of acqu ir ing new cust o mers (Gifford 2004).
Furt her mo re in an o rganizat io n is ver y import ant to know which
cust o mers fit int o which cat ego ry and t hen t r y t o manag e t hem acco rd ingly.
Cust o mers t hat are hig h ly sat isfied fro m your product are good ‘advocat es’
fo r yo ur o rganizat io n, so yo u have t o t reat t hem wit h specia l car e. Fro m t he
ot her hand cu st o mer s t hat is dissat isfied wit h your product and ser vices
have lit t le o r even no lo yal for your organizat ion, t herefore t hose o ne yo u
should seek t o rebu ilt relat io nship and t rust , and t he most import ant a long
fut ure relat io nship (Giffo rd 2004).
Customer Relationship Management and its Contribution to Customer Satisfaction
3.11
The
Internet
and
Customer
36
relationship
management
3.11.1 The expansion of the Internet
There are many definit io ns abo ut t he I nt ernet . What we can sa y as
an
in it ial
st at ement
is
t hat
t he
Int ernet
is
not
a t echno logica l
develo pment in t he way new processors are, but is a dr iving force for t he
creat io n and develo p ment o f new t echno logies and in t hat sense it ca n
in flu ence o ur lives. Ho wever, t here are definit io ns t hat can help us
und erst and t he I nt er net concept . One o f t hem fo u nd in Markham (1998)
suggest s t hat t he Int er net begu n as a go ver nment al and milit ar y
co mmunicat io ns net wo rk in t he ear ly 1970’s. It was t hen used b y
acad emics at research inst it ut es as a t ool which linked co mput ers for t he
shar ing o f dat a and r esearch infor mat ion. T he I nt er net has now co me
int o use by many co mput er users as a med iu m fo r co mmu nicat io ns,
ent ert ainment , research and t he purchase o f product s and ser vices. A
descr ipt io n fo u nd in Tur ban (2002) gives so me specific t echnical det ails
abo ut t he way it o perat es: “Net worked comput ing connect s mult iple
co mput ers and o t her elect ronic devices t hat are locat ed in severa l
d ifferent locat io ns by t eleco mmu n icat io ns net wo rks, includ ing w ir eless
o nes. Th is allo ws u sers t o access infor ma t ion st ored in several different
phys ical lo cat io ns and t o communicat e and co llaborat e wit h people
separ at ed by great geo graphic dist ances. Alt hough so me people st ill us e
a st and-alo ne co mput er exclusive ly, t he vast major it y o f people use
Customer Relationship Management and its Contribution to Customer Satisfaction
37
co mput ers co nnect ed t o a g lobal net worked enviro nment known as t he
Int ernet o r t o it s co unt erpart wit hin organizat io ns, an int r anet . An
int ranet is a co rpo rat e o r gover nment net work t hat uses I nt ernet tools
such as Web bro wser s, and I nt er net protocols. Anot her co mput er
enviro nment is an ext ranet , a net wo rk t hat uses t he I nt ernet to link
mu lt ip le int ranet s”.
The cr eat io n and t he rapid development of t he Wor ld Wide We b
and o t her I nt ernet applicat io n such as e- mail and e- co mmerce, ha s
per mit t ed co mp anies t o reach cust o mer s in market s where t hey could not
reach wit ho ut having t he int ernet , and t o compet e effic ient ly wit h t he
t radit io nal supp lier s o r even wit h larger fir ms, so met hing t hat can not
happen
on
t he
t rad it io nal
market ing
(De
Kare-S ilver,
1998).
Alt er nat ively, t he co mput er t echno lo g y an d t he I nt er net applicat ions t hat
have e merged dur ing t he past decade have o ffered for t he fir st t ime in
mark et ing 's hist o r y t he po ssibilit y t o co llect , process, ana lyse, and
efficient ly u se large vo lu mes o f dat a, and t o adopt a personalised
mark et ing appro ach fo r ever y cust o mer, whereby we have mo ved fro m
mass market ing t o one-t o -o ne market ing ( Rayport and Jaworski, 2001).
On t he o t her hand, t his has changed t he nat ure of co mpet it io n. For
examp le t he fact t hat no w a small fir m can equally co mpet e a larger fir m
(see t he examples o f Linux vs MS Windows) is an evidence t hat t he
Int ernet have chang ed t he nat ure of co mpet it ion and t he ent r y barr ier s
Customer Relationship Management and its Contribution to Customer Satisfaction
38
have lo wered, t he market size has became even glo bal and t he low cost s
o f o nline act iv it ies have changed t he nat ure of co mpet it io n. No vo ,
(2001) has st at ed t hat t he o nly way t o survive on t his new environment
is t o creat e a st rong brand na me but mo re impo rt ant is t o bu ild lo ng-t er m
relat io ns wit h t he client s u sing t he Int er net . The cust o mer shall not be
co nsid ered as a t arget but rat her it shall be co nsidered as t he business
part ner t hat will help t he fir m t o expand. According t o Novo (2001) t he
co nsu mer is a business part ner t hat will help t he fir m by ind icat ing ways
to impro ve it s ser vices o r it s product s feat ures.
The cust omer relat ionship manag ement (CRM) syst ems desig ned t o
imp le ment and deliver t o o nline cust omers ser vices t hat can be bet t er
provided
fro m
t he
I nt ernet
rat her
t han
t he
t radit io nal
business
co mmu nicat ion channels.
The imple ment at ion o f CRM has an impact on a nu mber o f
business ar eas and depart ment s wit hin an organisat io n inc luding sales,
IT, o perat io ns and et c. I n t his case we will fo cus on t he implement at io n
o f CRM fro m t he I nt er net . Bradshaw and Brash (2001) also assert ed t hat
imp le ment ing CRM is cert ain t o invo lve t he dep lo yment o f new
t echno lo g ies
inclu d ing
t he
I nt ernet .
The
operat ion
of
I nt er net
t echno lo g ies g ives an insig ht int o t he rat e o f growt h o f elect ronic CR M
app licat io ns (e-CRM), which are based on t he use of I nt ernet or int ranet
net owrks. A st ud y by AMR Resear ch, as st at ed fro m Ness et al, (2001)
Customer Relationship Management and its Contribution to Customer Satisfaction
39
fo u nd t hat t he CRM so ft ware market would be wort h more t han $16
billio n by 2003.
On t he ot her hand,
CRM is no t alwa ys successfu l. A fir m t hat
want s t o use an e-CRM syst em ma y have t o t hink t hat t he elect ronic
cust o mer relat io nship management is no t always t he best po ssib le
so lut io n. Ear ley (2002) fo und in a research o f a large number o f
businesses t hat 75 t o 85 per cent of elect ronic CRM implement at io ns
fail.
Rheault and S her idan, (2002) st at ed t hat several fir ms fail t o
develo p an I nt ernet based cust omer relat io nship program because t he y
can no t adjust t he e-CRM so ft ware and it s applicat ion t o t he real need s
o f t he fir m.
So me issues t hat t he fir ms t hat want t o imple ment elect ronic CRM
have t o co nsider are t he fo llowing:
 The per sonnel must have been t rained t o use t he I nt ernet
 The co nsu mers mu st be familiar wit h t he Int er net
 The fir m must adjust it s o perat io ns and t he syst ems t o imp lement
t he pro po sed e-CRM p lan.
 The e-CRM plan must be in co n ju nct io n wit h t he aims o f t he
co rporat e strat egy
Customer Relationship Management and its Contribution to Customer Satisfaction
40
To co nclude, t he fast expansio n o f t he Int ernet has given t he
o pport unit y on many fir ms t o communicat e wit h t heir client s cheap and
efficient ly t hrough t he fo llowing ways:( Klein, L, Quelch, J. A 1996):
1. By ad vert ising t heir pro duct s.
2. By info r ming t he client s wit h const ant product infor mat ion updat es.
3. By let t ing t he c lient s t o have o n- line t ransact ions wit h t he fir m
The ex ist ence o f t he I nt er net allo ws t he client s t o have access o n
millio n o f web p ages and o ffer s and t his is t r icky. On t he one hand t he
fir ms can addr ess t heir o ffers o n millio n o f u sers but o n t he o t her hand
t heir client s are exposed on many o t her o ffers o n a g lo bal scale. Fo r
examp le, a fir m may be a pr ice leader in one count r y o f EU but t he same
pro duct may be much cheaper in US A because o f t he differences o n t he
d ifferences o f t he exchange rat e t hat favours t he US do llar.
3.11.2 The impact of the use of e-mail for CRM
E lect ronic Ma il, which is also well k no wn as e- ma il, is o ne o f
t he best mean build ing relat io ns bet ween a fir m and it s c lient s t hro ug h
t he I nt ernet and t herefo r e we will examined it as a separat e Int er net
fu nct io n.
Customer Relationship Management and its Contribution to Customer Satisfaction
41
E- mail, has a ser ies o f advant ages t hat ma y help t he fir m t o
bu ild it s relat io ns cost effect ive and increase t he sat isfact io n o f t he
client bases. (Hamel, G 1998):
1. Direct co nt act wit h client
2. It is cost effect ive, co mp ar ing t o ot her means such as t radit ional mai l
and fax.
3. The fir m can also send big files inclu ding phot os, brochures and
vid eos, which is import ant fo r t he fir m. Fo r examp le an ad vert isin g
fir m can send a preview o f it s wo rk in avi (wh ich is a v ideo file)
mo de. The client can wat ch t he avi video and make suggest ions upo n
t he vid eo . This is a u niq ue o ffer t hat can be done only wit h e- ma il.
4. There is no pro ble m wit h t he t ime zo nes fro m count r y t o count r y
neit her t o int errupt t he cust omer fro m his daily act ivit ies since emai l
is not making any sound like phones does or fax. I n addit io n t o t his,
t he message arr ives even when t he client has swit ched o ff t he
co mput er
5. Through an e mail t he fir m can in fo r m it s client base, pro mo t e so me
new offer s and maint ain so me go o d relat io nship s wit h client .
6. The co nsu mer can send it s co mpla int s or any enquires and t o have a n
immediat e response fro m t he fir m, which is ver y impo rt ant fo r a
CRM pract ice.
Customer Relationship Management and its Contribution to Customer Satisfaction
3.11.3
Other
impacts
of
the
use
of
42
Internet
for
customer relationship
In t he case t hat a fir m decides t o use t he Int ernet as it s main t oo l
fo r k eeping good relat io ns wit h it s client s it will have t o use so me eCRM so ft ware such as S AP. In using CRM so ft ware applicat io ns,
o rganisat io ns will o ft en be faced wit h a cho ice o f different vendors and
so ft ware. The abilit y t o select t he r ight solut io n will impact great ly o n
t he level o f success and ret urns gained fro m t he applicat ion. I n
part icu lar:
•
The fu nct io na l charact er ist ics o f applic at io ns being cons idered
need t o be t ho ro ughly r eviewed t o ensure t hat t hey fit wit h t he
o rganisat io n's cu lt ur e and processes. This ma y invo lve t he use of a
cro ss- funct ional t eam.
•
The t echnical archit ect ure of t he applic at io ns should ideally be
co mpat ible, eit her d ir ect ly or t hrough middlewar e, wit h ot her
syst ems wit hin t he organ isat io n.
•
Reso urce
allo cat io n
will
significant ly
affect
t he
t ypes
of
app licat io n t o be select ed and t he level t o which applicat io ns ca n
be co nfigured fo r t he organisat io n.
•
A rea list ic expect at io n of financial and operat ional ret urns and
benefit s t hat would be g ained b y t he imp lement at io n o f d ifferent
t yp es o f app licat io ns.
•
Defin it io n o f a CRM st rat egy t hat would be delivered or enhanced
by so ft ware app licat io ns.
Customer Relationship Management and its Contribution to Customer Satisfaction
•
Develo pment
of
t echnical
and
management
skills
43
vit al
to
successful imple ment at io n o f e-CRM so lut ions. (Adebanjo, 2003)
Thu s creat ing an e-CRM so lut ion, or in general an I nt ernet based
cust o mer relat ionship syst em is no t an easy jo b. It is co st effect ive t o set
up a web sit e but t here are t asks much more difficult t o do t hat e-CRM
mu st be t aken ver y ser io usly. Feinberg and Kad am (2002) did a researc h
and creat ed a list o f fu nct io ns t hat relat ed t he I nt ernet wit h cust o mer
relat io nship and t heir imp act on t he businesses. The mo st import ant are
t he fo llo wing:
•
Site cu stom ization. T he I nt ernet br ing s eno r mo us amo u nt s o f
in fo r mat io n t o t he deskt op. While t his is an advant age, it can also
be an eno r mo us d isad vant age, since t he user ma y not be able t o
read ily access t he in for mat io n he needs. Therefor e, sit es offer
cust o mizat io n feat ures allo wing t he user to filt er t he cont ent t he y
see. T hus, if t he user, on t he fir st visit , cust omizes t he sit e t o suit
his t ast es and preferences, he will see t he cust omized cont ent on
subsequent
visit s.
(Examp le:
www. yahoo.com;
www. my. yaho o .co m)
•
Alternative channel s. These ar e t he different ways for t he
co nsu mer t o co nt act t he co mpany. For inst ance: e- ma il, fax, t o llfree nu mber s, po st al address, call- back butto n, vo ice o ver IP and
bullet in board. Tradit io nally, o nly t o ll- free number s and post a l
addresses co u ld be used by cust o mer s t o reach t he co mpany.
Ho wever, o ver t he past few years, e- mail has emerged as a n
Customer Relationship Management and its Contribution to Customer Satisfaction
44
import ant tool for co mpany-cust omer communicat io n. It offer s
o pport unit ies fo r improving cust o mer service and reducing cost s.
Unlike t elephone co mmu n icat io n, which is synchro no us, e- mai l
co mmu nicat io n
is
asynchronous.
This
reduces
cost s,
since
cust o mer ser vice qu er ies will now be handled in count r ies wit h
lower labor cost s, by t aking advant age of t he t ime- differ ence.
Also, e- ma il t ransmissio n happens o n t he I nt ernet , which is
essent ially a pu b lic ser vice and t hus t he co mpany does not incur
sig nificant transmissio n cost s.
•
Local sea rch engine. T his feat ure allows t he vis it or to search on
key wo rds t o qu ick ly lo cat e t he r equired cont ent on t he Web sit e.
This feat ure is he lpful for t hose sit e visit ors who are looking for a
spec ific piece of infor mat io n.
•
Mem bership. T he v isit or can request a password. Wit h t his
passwo rd he can co nt inue sur fing on password-prot ect ed We b
pages wit hin t he Web sit e. This feat ure allows t he co mpany t o
co llect perso nal in fo r mat ion fro m users, when t he user regist er s
fo r t he me mber ship. It also allows t hem to t rack t he cust o mer 's
behavio r at t he sit e o ver t ime. T his knowledge allo ws t he bus iness
to assess which cust o mer s are wort h ret aining by looking at
current and pro sp ect ive cust omer pro fit and cust omer defect
pat t erns.
•
Mailing li st. To receive more infor mat ion, t he vis it or can add
his/ her e- ma il address t o a list t o receive aut o mat ed e- mails.
Oft en, t his is called a news let t er. This feat ure allows t he co mpany
Customer Relationship Management and its Contribution to Customer Satisfaction
45
to bu ild a dat abase o f e- mail addr esses o f po t ent ial u ser s o f t he
co mpany's pro duct or service.
•
Site tour. T he visit or can fo llo w a t o ur t hro ugh t he Web sit e. T his
allo ws user s t o get familiar wit h t he Web sit e cont ent s.
•
Site m ap. This is a hierarch ical d iagram o f t he p ages o n t he We b
sit e, also called a sit e overview, sit e index, or sit e map. This
feat ure is help fu l in underst anding t he general st ruct ure of t he
Web sit e.
•
Intro duction for first-tim e users. Vis it ors, who ent er t he sit e for
t he fir st t ime, can sur f t o an int ro d uct io n page co nt aining
infor mat io n about "Ho w to use t he sit e most effic ient ly". This
feat ure co u ld help at t ract prospect s and facilit at e a first -t ime
purchase.
•
Chat. Th is feat ure allows a vis it or to chat real-t ime wit h o t hers.
Specifica lly, t his co u ld mean chat t ing ot her vis it ors on t he sit e or
wit h t he cu st o mer ser vice personnel. T his feat ure, while not used
wid ely yet , is lik ely t o see a mar ked inc rease in use, as I nt ernet
penet rat io n increases and bandwidt h const raint s decrease glo bally.
•
Online purchasin g. Visit ors are able t o purchase ser vices or
pro duct s o nline. T his feat ure is pro bably t he most cr it ical part o f
t he Web sit e.
•
Product
info rm ation
online.
Visit ors
can
read
product
in fo r mat io n o n t he Web sit e. T his feat ure is cr it ical since We b
sur fers g at her pro duct infor mat ion o n t he Web and subsequent l y
bu y t he pro duct fro m a br ick-and- mort ar store.
Customer Relationship Management and its Contribution to Customer Satisfaction
•
46
Custom ization po ssibiliti es. Vis it o rs can cust o mize t heir ser vice
o r pro duct o nline befo r e order ing. For inst ance, a vis it or may want
to assemb le o nline a PC of a configurat ion t hat is not list ed on t he
Web sit e. Or a jeans pant bu yer can d es ign a pant t hat fit s his o r
her body shape exact ly.
•
Preview pro duct. The (cust omized) product can be viewed befor e
purchasing. The pro duct can be viewed in a mot ion pict ure or a
demo.
•
External link s. The visit or can easily and seamlessly link t o
co mp lement ar y pro duct s fro m ot her companies.
•
FAQ’ s. Fr equent asked quest ions and t heir answers are available
fo r read ing. T his feat ure act s as self- help for cust omer s looking
for answer s t o t heir q uer ies. Like ot her infor mat io n on t he We b
sit e, t his co u ld po t ent ially help in reducing cont act cent er t raffic.
•
Problem solving. Cust omers can so lve pr oblems wit h product s or
ser vices t hemselves wit h o nline self- help rout ines. T his feat ure is
not ver y prevalent since cust o mer s sho w resist ance t o using t his
feat ure.
•
Com plaining ability. Co mp la int s and pro blems can be d et aile d
o nline. The Web sit e has a specific area for cust omer s t o log in
t heir co mp laint s and g et act io n. .
•
Product h ighlight s. T he benefit s o f a par t icular product s/ser vices
are hig h lig ht ed. This feat ure allows t he company t o highlight
pro duct s o r services t hat may be relevant in a part icular co nt ext .
Customer Relationship Management and its Contribution to Customer Satisfaction
47
The co nt ext co u ld be a part icular fest ival or a season, amo ng
ot hers. This feat ure also prompt s repeat traffic.
•
Request for ca talog. Allo ws t he user t o request a cat alog.
•
Quick order ability. T his feat ure basic ally allows t he user to
check o ut t he pro duct wit hin t hree-clicks. Amazon.co m pio neered
t his feat ure. Becau se o f int ellect ual propert y issues, ot her sit e s
use var iant s o f Amazo n's 3-click process.
•
Ability to t rack ord er status. T his feat ure allows t he user t o find
o ut which st age o f t he shipping process his/ her order is in.
Cust o mers ar e more lik ely t o feel sat isfied if t he y k no w o f t he
st at us of t heir order t han if t hey do no t
•
Mem ber ben efits. Descr ipt ion o f benefit s of shopping or of being
a sit e member.
•
Order. T his feat ure allows t he user t o place an order wit hin t hre e
clicks.
•
Speed of downlo ad page. T he Web sit e was considered fast if t he
Web pag es do wnlo ad ed in less t han 15 seconds.
•
Account inform ation. I f t he user had regist ered on t he sit e, t he
feat ure allo wed him t o view his per sona l infor mat ion t hat he has
g iven t o t he sit e. This could include his credit card infor mat io n, if
he has aut ho r ized t he Web sit e t o ret ain t his infor mat ion for repeat
purchases.
•
Custom er servi ce pa ge. T hese pages give det ails o n cont act ing
cust o mer ser vice.
Customer Relationship Management and its Contribution to Customer Satisfaction
•
48
Com pany histo ry/p rofile. T hese Web pages give t he co mpany
backgro und. In t he case o f ret ail shopping sit es, t here will be a
link t o t he co rpo rat e Web sit e.
•
Posted p rivacy p olicy. Privacy concerns are coming to the fore with
increased Internet penetration. Today, most sites have a privacy policy and post
it on their Web site. This not only assures the customer that his information is
protected, but will also protect the company from lawsuits from perceived
privacy violations. (Feinberg and Kadam, 2002).
3.12 Customer satisfaction
Cust o mer sat isfact io n is beco ming an increasingly out st anding
to pic in many fir ms and in academic research. A mot ivat ion behind t his
int erest is t hat cust o mer sat isfact io n is believed t o be associat ed wit h
product ive cu st o mer behaviour fro m t he fir m's po int o f view. A number
o f emp ir ical st ud ies ind icat e t hat t here is a link bet ween cust omer
behavio ur- t herefo re t he d ecis io n t o buy or not a product / service - and
cust o mer sat isfact io n. Fo r inst ance, a posit ive associat io n has bee n
o bser ved bet ween cu st o mer sat isfact ion and lo ya lt y ( Taylor and Baker ,
1994) and bet ween cust o mer sat isfact ion and t he t endency t o reco mmend
t he supplier 's o ffer t o ot her cust omers (Parasuraman et al., 1988).
Cust o mer sat isfact ion is one of t he
major
indicat ors of a
successful fir m and main ly depends on t he way t he co mpanies ar e
provid ing t heir d ifferent product s or services. Chr ist o p her et al. (1993)
Customer Relationship Management and its Contribution to Customer Satisfaction
49
have defined ser vice qu alit y as t he abilit y of t he organisat ion t o meet or
exceed cu st o mer exp ect at io ns.
Thus, o ne o f t he mo st desir able aspect s for a company is t o get a
po sit ive feed back fro m it s cust omer s in order to gain a co mpet it ive
ad vant age ( Zeit hma l & Bit ner, 2003). “S ince t he 1980s, for t he ma jor it y
o f fir ms, t he deliver y o f high- qualit y ser vices became a market ing
pr io r it y” (Parasuraman et al., 1988), as it is one o f t he mo st vit al fact ors
fo r a co mpan y in p ursu ing cust o mer sat isfact ion. However, eac h
co mpany’s limit at ion is t hat it canno t id ent ify and meet it s cust o mers ’
expect at io ns and co nseq uent ly, t he cust omer gap bet ween a co mpany and
it s cust o mers is ar ising ; “expect at io ns are t he reference point s t hat
cust o mers have co ming in t o a ser vice exper ience; percept ions reflect
t he ser vice as act ually r eceived” ( Zeit hma l & Bit ner, 2003).
Thu s, a pro ject manager has t o consider several ser vice issues
such
as,
t he
co mpet ence
of
his
project
it s
per for mance
in t he
mark et p lace and generally, how it handles t he several ser vices it
provides t o it s cust o mers. According t o Baker & Lamb (1993) t he
ser vice
qua lit y
evaluat io ns
invo lve
bot h
t he
out comes
and
t he
develo p ment o f t he d iffer ent qualit y charact er ist ics o f t he ser vice
deliver y.
Customer Relationship Management and its Contribution to Customer Satisfaction
50
Mo reo ver, as t he aim o f t he ser vice qualit y is based o n t he
cust o mer sat isfact io n, where mo st of t he t imes t heir expect at ions ar e
ver y hig h, “a d ist inct ive and unequivo cal management approach as wel l
as o rganizat ion co mmit ment is requ ired” (referred in Su lt an & S impso n,
2000). I f t his will be acco mplished, t he desired zone o f t olerance t hat
ma y pro bably lead t o t he adequat e one will be r eached ( Zeit hmal &
Bit ner, 200 3); as it will be high, it will be t he reason for get t ing t he
appro pr iat e feed back fro m t he cust o mers.
Ho wever, acco rd ing t o t he consumer evaluat ion process and t he
SERVQUAL mo d el t he ser vice qualit y cannot be easily evaluat ed
(Sult an & S imp so n, 200 0); alt hough, ser vic ing a pro ject will be
evaluat ed aft er exp er iencing t he provided ser vices (Zeit hmal & Bit ner,
2003). On t he o t her hand, t he SERVQUAL model descr ibes t he ser vic e
qualit y by using five d imensio ns which are re liabilit y, assurance,
t angibilit y, emp at hy and responsiveness. The mo st import ant dimensio n
o f per cept ual SERVQUAL model is t he reliabilit y and t he less import ant
is t he t ang ib ilit y (S u lt an & S impson, 2000) as t he fir st t hing t hat co mes
in t he manag er’s mind when choosing on who is go ing t o deliver a
project is ho w reliab le is t he pot ent ial part ners but also for what can be
it s po st -pro ject ser vices
In o rder to id ent ify t he sources of cust omer sat isfact io n for
incr easing t he valid it y o f t he given infor mat io n, a co mpany has t o use
t he appro pr iat e met ho d, co llect t he appropriat e dat a t hat will be
Customer Relationship Management and its Contribution to Customer Satisfaction
51
co llect ed by a specific sample and t hen present t he appropr iat e out put
(Zeit hma l & B it ner, 2003).
3.13 Service value and customer satisfaction
The fir st t hink t hat a fir m needs is t he consumer s. I n t he case o f a
pro ject t ho se are t he client s, t he fir m t hat supplies t he pro ject manager
wit h a t ask t o do. The consumer s
can choose fro m a var iet y o f
alt er nat ive fir ms and t heir ser vices. On many cases so me pro ject
manager s and t heir co mpanies do only provide t he pro ject and no furt her
ser vices, such as po st -sales ser vices or so met hing similar t hat gives
added valu e o n t he pro ject manager ’s work.
Ko t ler (2003: 60) defines t he cust omer per ceived value as fo llows:
‘Cu st o mer perceived value is t he differ ence bet ween t he prospect ive
cust o mer’s evalu at ion o f all t he benefit s and all t he cost s o f an o ffer ing
and t he p erceived alt er nat ives. Tot al cust omer value is t he perceive d
mo net ar y value o f t he bu nd le o f econo mic, funct ional and psycho logica l
benefit s cust o mers expect fro m a given market offer ing. Tot al cust omer
co st is t he bu nd le o f co st s cust omer s expect to incur in evalu at ing ,
o bt aining u sing and d ispo sing o f t he give n market offer ing. ’
The co nsu mer will evaluat e t he alt er nat ive o ffers using so me
personal cr it er ia and he /she will decide for which o ffer gives him / her
great er value. S er vice valu e and what t he co nsu mer will receive will no t
Customer Relationship Management and its Contribution to Customer Satisfaction
52
o nly d et er mine t he cu st o mer ’s sat isfact io n but also t he cust omer lo yalt y.
Sat isfact io n can be defined as t he emot io ns t hat result fro m t he cust o mer
perceived value in co mb inat io n wit h his / her expect at io ns. (Four nier, S
& Glenmick, D. 1999: 6).
3.14 Relationship between Customer’s satisfaction and
the project’s performance
Service qualit y has beco me an import ant subject for many fir ms,
inc lud ing t he large fir ms and t heir cont ract ors do ing t heir pro ject s,
alt ho ugh
so me
fir ms
st ill
ig no re
t he
impo rt ance
of
cust o mer’ s
sat isfact io n and ser vice qu alit y for t heir fir ms.
Acco rd ing t o Zemke and Bell (1990: 45) st at e t hat it is ver y
co mmo n seeing
ad vert isement s where
organizat io ns showing
t heir
co mmit ment t o t he ser vices t hat t hey provide t o t heir consumer s but in
realit y t here is a g ap bet ween what t hey promise and what t he co nsumer s
are act ually r eceiv ing.
Capo dag li and
Jack son (1998: 60) ar e claiming t hat
many
o rganizat io ns seem t o deem t heir consumers as a t rouble, alt hough t he y
do not admit it . Many o rganizat ions have signs and missio n st at ement s
ind icat ing t hat t he cu st o mer ’s sat isfact ion is t heir pr ior it y but in realit y
o nce a client ent ers t he fir m’s st aff is t reat ing him bad.
Customer Relationship Management and its Contribution to Customer Satisfaction
53
The reaso n for t his is t hat many fir ms and t heir st aff have no t
und erst o o d t hat t here is a relat io n bet ween t he consumer ’s sat isfact io n
and t he q ualit y o f t he perceived ser vices and o f course o f t he
o rganizat io n’s per fo r mance.
Zeit haml (20 00) made a research and found t hat t here is a st rong
co rrelat io n bet ween t ho se t hree fact ors (cust omer sat isfact ion, ser vice
qualit y and o rganizat io nal p er for mance). Koska (1990) and Nelso n et al.
(1992) are examin ing t he case o f ser vice qualit y and organizat iona l
profit ab ilit y in t he ho sp it al indust r y and bot h researcher s found a st rong
co rrelat io n bet ween t ho se t wo fact ors. Addit io nally Aaker and Jacobso n
(1994) a co rrelat io n bet ween t he t hr ee fact ors on t he account ing
ind ust r y. Bes ide t his, sat isfied co nsu mers br ing not only pro fit abilit y
but also t hey help t he o rganizat ion t o improve it s reput at ion t hroug h
wo rd o f mo ut h and t o gain market share. All o f t he above are helping t he
fir m t o impro ve it s per for mance.
Customer Relationship Management and its Contribution to Customer Satisfaction
54
Chapter 4 – Methodologies and procedures used
in the study
This pro ject is a lit erat ure review. It will invest igat e t he relat ed lit erat ure
o f Cu st omer Relat io nship Management and how it cont r ibut es on cust omer
sat isfact io n.
The p urpose o f t he met hodology must be significant wit h t he purpose o f
t he d issert at io n. In t his case t he purpose of t he st udy is t o invest igat e
t he ado pt io n o f cu st o mer relat io nship management (CRM) by Greek
co mpanies and ho w it creat e cust o mer sat isfact ion in order t o benefit
pro ject managers who are using CRM po licies.
The insp irat io n fo r t his r esearch came fr om per sonal work exper ience,
where t he aut ho r no t ified t he lack of CRM po licies and CRM philosophy
but also fro m read ing bo o ks like Cann (1998).
The main p art o f t he lit er at ure review will fo cus on Cust o mer Relat io nship
Management , t hen cu st omer sat isfact io n and how t his is linked wit h
Cust o mer Relat io nship Management .
The r esearcher relied o n secondar y sources and on researchers t hat have
alr ead y o ccurred. Mo st o f t he resear cher s der ived fro m t he Int er net and
fro m elect ronic dat abases like emer ald and EBSCO.
Customer Relationship Management and its Contribution to Customer Satisfaction
55
The aut ho r o f t his d issert at ion used t hose dat abases t o recover dat a
regard ing CRM and it s effect s on cust omer sat isfact io n. This means t hat
he fo cused o n t ho se t wo issues by examining art icles co ming fro m t hose
t wo fields.
The aut ho r had ident ified sources fro m bot h fields o f research and he
wrot e t he lit erat ure review. T hough he did not found so many r esearches
o n CRM and pro ject management he concluded by wr it ing t he out come
o f t he research based o n his o wn views and acco rd ing t o what he lear nt
dur ing
t he pro cess
o f wr it ing
t he
concept ual
framework
o f t he
d issert at io n.
The art icles fo u nd and t he books used helped t he aut hor to make his
seco ndar y research, He u sed case st udies and researches, like t he one
made fro m Micro so ft in o rder to sho w t he valu e o f CRM fo r mo der n fir m
and how it can impro ve cust omer sat isfact io n in order to help t he
co mpanies t o att ract mo re cust omer s.
The reaso ns fo r no t mak ing a pr imar y r esearch was t hat not many Gr eek
pro ject manag ers are u sing CRM, so it will be vogue t o go ahead wit h a
pr imar y research, as it was consult ed fro m t he super visor.
Customer Relationship Management and its Contribution to Customer Satisfaction
56
Chapter 5 – Results
Fro m t he seco ndar y research and lit erat ure review we have found
t hat CRM is a new co ncept for market ing and management . It is based
upo n t he co ncept o f cu st omer sat isfa ct io n. CRM has t o do wit h
manag ing t echno logical impro vement s wit hin a fir m – in wh ich we ca n
inc lude t he I nt er net -, pro cesses, resources and in general t o improve t he
way t hat a fir m appro aches it s client s. The environment in which CRM
o perat es is ver y co mp licat ed and t his means t hat fir ms t hat want to
impro ve t heir cust omer relat io nsh ips will have t o chang e t heir int er na l
pro cesses but also t heir behavior t owards t heir client s. The applicat io n
o f CRM t heo r ies requ ir es a bet t er commu nicat io n wit h t he client t hro ug h
so me t echno lo g ical means such as t he I nt ernet and so me new models o f
ad min ist rat io n. Acco rd ing t o t he abo ve, we under st and t hat CRM must
have a st ro ng u nd erst and ing o f t he new t echno logies and o ff course
st ro ng leadersh ip and go o d knowledge.(Galbr eat h and Rogers 1999).
I f we t ake as example Micro so ft , t hey imp le ment fo ur basic t oo ls fo r
excellent per fo r mance in cu st omer relat io n management :
•
Analy ze sa les data: By det er mining what sold well in t he past ,
manu fact urers can mak e pred ict io ns abo ut what mig ht sell well in t he
fut ure. This enables co mpanies t o make market ing campaigns fo r
pro duct s t hat mig ht sell well wit h cert ain group of cust omers.
•
Custo mi ze sa les: Manufact urers can easily t arget t he r ight cust omer
wit h t he r ight va lue proposit ion based on spec ific product and feat ure
Customer Relationship Management and its Contribution to Customer Satisfaction
57
request . This has as a result for co mpanies t o predict act ivit ies, suc h
as cu st o mizes pro mo t ions.
•
Imp rove
custo mer
service:
“When
cust o mer
infor mat io n
is
maint ained in a cent ral locat io n, it ’s much easier for sales and
cust o mer ser vice repr esent at ives t o access and use t he dat a in t he
field and on sales calls. Sales represent atives, for example, can cop y
t he in fo r mat io n t o a handheld device t o use while selling product s
away fro m t he o ffice. Not only can t his cust omer dat a be used t o
enhance t he current sales t ransact io n, t he infor mat io n can also be
used t o cro ss-sell o t her product s”.
•
Expedite o rders: Cust o mer order management is anot her key fact o r
in t he success o f a co mpany. E xcellent cust o mer ser vice inc ludes
accurat e and fast o rder processing. Wit h t he help o f a good CRM
so lut io n, it is easy t o locat e specific orders and t rack t he st at us o f
t hat order fro m init ia l p lacement to final deliver y (Micro so ft 2005).
Customer Relationship Management and its Contribution to Customer Satisfaction
58
Chapter 6 – Discussion, Conclusions,
Recommendations
In br ief, CRM is a concept t hat has conquered business wor ld
dur ing t he last years. It can help t he fir ms t o impro ve t heir relat io nsh ip
wit h cu st o mer s and cr eat e a lo yal customer base. CRM is also a n
essent ial fo r pro ject s. Pro ject s can benefit a lot fro m t he usage o f CRM
po lic ies no t o nly t o increase t heir cust omer s’ sat isfact io n but also to
creat e a po sit ive image and est ablish a lo yal cust omer base.
Fro m t he pr evio u s chapt ers we found out t wo major co ncept s; t he
concept o f bu ild ing st ro ng relat ionships wit h your st akeho lder s, and
mo st ly t he client s and t he value o f having sat isfied cust o mers and how
t hey can affect t he o verall per for mance of not only t he pro ject but also
o f t he co mpany in general.
Oft en pro ject manager s look out t he project but not on how to build
st ro ng relat io ns wit h t heir c lient s. Fo r so me manag ers t his ma y no t be
impo rt ant , ho wever a goo d CRM program ma y be import ant on t wo
cases:
1) when t he cu st o mer finds so me errors
2) when t he cust o mer decides t o assign on a project manager anot her
pro ject .
Customer Relationship Management and its Contribution to Customer Satisfaction
59
On bo t h cases a go o d CRM program will creat e a sat isfied cust omer and
it ma y affect so me decis io ns. A CRM program, will impro ve t he qualit y
o f t he ser vices pro vid ed o n t he cust omers.
An example has t o do wit h t he pro ject updat es and meet ings. On many
cases pro ject managers are so busy t hat t hey forget t heir meet ings t o
br ief t heir cu st o mers o n t he progress of t he pro ject . This sit uat io n
creat es a d issat isfied cu st o mer who is likely not to chose again t he same
cont racto r or in general not to have a good cooperat io n, which wi l l
creat e pro blems o n bo t h sides.
Ho wever, a go o d CRM program but also philosophy, oft en wit h a
simp le so ft ware such as o ut look express or Google’s calendar but also
wit h expensive CRM so ft ware such as SAP ’s so ft ware, can help a
project manager t o organize it s work.
CRM lead s t o a cust omer sat isfact ion which also leads int o
cust o mer ret ent io n, wh ich is ver y import ant for a project manager in
o rder to keep his o r her cu st omer s and t heir pro ject s. Cust o mer ret ent io n
is a co re co ncept o f pro ject manageme nt but also o f ot her areas o f
mark et ing and management such as consumer market ing. Organizat io ns,
rat her t han t r ying t o co mp let e just a single t ransact io n, at best may have
to fo cus o n creat ing a relat io nsh ip. Co nseq uent ly t heir effo rt s ar e
det er mined o n pro fit at a relat io nship level rat her t han at a t ransact io n
level. The pro cess resu lt s in ent repreneur s searching not merely for new
cust omers but also fo r new product s and ser vices t hat are appropr iat e t o
Customer Relationship Management and its Contribution to Customer Satisfaction
60
t heir cu st o mers’ need s. T his enables t hem t o ext end cust omer lo yalt y
and d evelo p t he relat io nship. T he process of creat ing and maint aining a
st ro ng relat io nship wit h cu st omer is recognized as cust o mer ret ent ion.
Lo yalt y and ret ent ion are t he ke y for a pr oject manager’s success. I f we
assu me t hat t he pro ject manager and his company are do ing so me fine
jo b a CRM policy maybe t he po int o f d ifferent iat io n against it s
co mpet it o rs who ma y also o ffer t he same qualit y o f pro ject s. In addit io n,
po st -pro ject ser vices are o ft en ignored fro m pro ject manager s. When
t hey believe t hat t hey have finished t heir project t hey t hink t hat t he y
have fin ished it and t hey abandon t heir cust omer s in order to seek a new
pro ject . Ho wever, a go o d CRM will help t he pro ject manager and his
cust omers t o creat e st ro ng relat ionships but also t o deliver so me qualit y
ser vices.
Cust o misat ion
and
post -sales
ser vices
are
also
p la ying
an
impo rt ant role. Many fir ms have o n t heir mind o nly t he sales wit ho ut
co nsid er ing t he po st -sales effect s. T he fir ms t hat give added value t o t he
client by giving at t ent io n t o t heir post -sales ser vice can gain cust omer s’
respect and lo yalt y t hat is so impo rt ant fo r fir ms. Fro m t he co nsu mer s’
side, t his will g ive him / her an added value and he/ she feel t hat t he
fir m r esp ect s his o r her needs.
Regard ing cu st o mer sat isfact io n, it is import ant in order to ret ain
cust o mers we must have a st ronger focus on measur ing and managing
t he ind ividual cust omer r elat io nship. I n sho rt , all co mpanies are in t he
ser vice bu siness, t hat is, sat isfying cust omer needs, which, t her efore,
mu st be measured and t racked. T he o ld paradigm was pr ice, qualit y, and
Customer Relationship Management and its Contribution to Customer Satisfaction
61
ser vice. The new parad ig m is pr ice, qualit y, ser vice co nvenience, value,
so lut io n and abo ve all, t o have an impr oved co mmunicat ion wit h t he
co nsu mer.
To co nclude, fo r a pro ject manager is not enough t o produce a n
excellent pro ject but to creat e st rong relat io nships wit h all st akeho lder s,
fro m t he sup p lier s up t o t he client s, t here is a need t o creat e a number o f
sat isfied and co mmit t ed st akeho lder s. CRM will help t he pro ject
manager t o t ake easier jo bs fro m cust omers t hat has alr eady worked for,
creat e t rust wit h his supp liers and provide it s fut ure cust omers wit h
so met hing mo re t han do ing a pro ject ; int egrat ing qualit y ser vices in t he
pro ject .
Customer Relationship Management and its Contribution to Customer Satisfaction
62
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