CRM & investigation of new Strategies for Successful business

Customer Relationship Management  (CRM) & investigation of new Strategies for Successful business

1. Introduction

In any market, companies want to increase their rate of sales and quality of their services or products regularly to higher and higher points. Therefore, In Today’s business environment, it is almost impossible to unlink Customer Relationship Management (CRM) and success of the Business.

Many researches have done in order to see how CRM effective and important on the success of the business and which way. In fact, Drucker (1954), suggest, “The true business of every company is to make and keep customers” (Jain and Sharma, 2013, p 47.) which is one of the purposes of CRM. Some call it customer relationship management (CRM); others call it customer experience management (CRM), others call it customer-managed relationship (CRM) !
CRM is set of process usually linked to a database, which help an organization keep in contact with customers and deal with their requests, complaints, suggestion and purchase. (Smith and Zook, 2011).

2. Structure of Review

The review covers the definitions of customer relationship management (CRM) and how CRM has influences on a business environment. Further in this review, CRM Models are discussed critically. Finally
Thanks to the common feature of CRM Models, which is an importance of technology, discussion is carried further with the development of IT, and how development of IT helps to involve of e-CRM and enlighten the Social CRM.

3. Definitions of CRM

CRM is ‘a process that addresses all the aspects of identifying customers, creating customer knowledge, building customer relationship, and shaping their perceptions of the organization and it’s product (Pleen, 2005). CRM is the core business strategy that integrates internal process, and functions and external networks to create and deliver value to targeted customers at a profit. It is grounded on high quality customer-related data and enabled by information technologies (Buttle, 2009).
However it’s defined, understanding customers, and their expectation and offering them pre-searched valuable service or products can be the key points of CRM for successful business among competitors. “Nurturing excellent customer relationship builds this defensive wall around a business that most competitors struggle to break down” (Smith and Zook, 2011).


It is inevitable that, companies or entrepreneurs need to develop their own CRM strategies. Literately, there are five models developed that can be helpful for companies to collaborate with them to build operational excellence, product leadership and customer intimacy (Treacy and Wiersema, 1996).
4.1. The IDIC Model
Figure1: The IDIC Methodology. (Pepper and Rogers. 2004).
Peppers and Rogers (2004) established one of the most significant strategic Models for CRM, which was called as IDIC, in 2004. It consists of four operational steps. To Identify; customers and develop intensive understanding, differentiate customers who are more futuristic interact with customers in order to understand customer expectations and their approaches to competitors, customize services and product range to answer their prospects: to build closer one to one relationship with customers (Buttle, 2009)
4.2. The QCi Customer Management Model
The QCi Customer Management Model is another CRM strategy model focus more on costumers rather than CRM process, which show ways to companies in order not to lose customers. QCi points out Customer management by dividing into three significant factors: Acquisition, Retention, Penetration in each of categories has sub stages that gives organizations implementation strategy and shows ways in order not to lose customers.
4.3. Payne’s Five-Process Model
The purpose of CRM is to efficiently and effectively increase the acquisition and retention of profitable customers by selectively initiating, building and maintaining appropriate relationships with them (Payne and Frow, 2006).  According to the Figure 3, in Payne’s Model CRM process divided into five main and sub process that includes strategy development process, value creation process, multichannel integration process which is also known as operational CRM, performance assessment process, as last, information management process or analytical CRM.

1. Customer Relationship Management (CRM) Learning Objectives Define CRM;

Understand the importance of CRM; Explain the determinants of CRM and the key stages in its development; Discuss the main functions and various models of CRM; Explain the role of salespeople as relationship developers Discuss the management of customer relationships.

2. Customer Relationship Management (CRM) What is Customer Relationship Management (CRM)?

CRM is “the development and maintenance of mutually beneficial long-term relationships with strategically significant customers ” (Buttle, 2000) CRM is “an IT enhanced value process , which identifies, develops, integrates and focuses the various competencies of the firm to the ‘ voice’ of the customer in order to deliver long-term superior customer value , at a profit to well identified existing and potential customers ”. (Plakoyiannaki and Tzokas, 2001)

3. Customer Relationship Management (CRM) Understanding Customer Relationship Management (CRM)?

CRM is a business philosophy based on upon individual customers and customised products and services supported by open lines of communication and feedback from the participating firms that mutually benefit both buying and selling organisations . The buying and selling firms enter into a “learning relationship ”, with the customer being willing to collaborate with the seller and grow as a loyal customer . In return,, the seller works to maximize the value of the relationship for the customer’s benefit . In short, CRM provides selling organisations with the platform to obtain a competitive advantage by embracing customer needs and building value-driven long-term relationships .

4. Customer Relationship Management (CRM) Determinants of CRM

Trust The willingness to rely on the ability, integrity, and motivation of one company to serve the needs of the other company as agreed upon implicitly and explicitly. Value The ability of a selling organisation to satisfy the needs of the customer at a comparatively lower cost or higher benefit than that offered by competitors and measured in monetary, temporal, functional and psychological terms.

5. Customer Relationship Management (CRM) Determinants of CRM In addition to trust and value , salespeople must :

Understand customer needs and problems; Meet their commitments; Provide superior after sales support; Make sure that the customer is always told the truth (must be honest); and Have a passionate interest in establishing and retaining a long- term relationship (e.g., have long-term perspective).

6. Customer Relationship Management (CRM) Stages in the development of a Customer Relationship The Pre-relationship Stage

The event that triggers a buyer to seek a new business partner. The Early Stage Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The Development Stage Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The Long-term Stage Characterised by the companies’ mutual importance to each other. The Final Stage The interaction between the companies becomes institutionalized.

7. Customer Relationship Management (CRM) Stages in the Development of a Key-Account Relationship Degree of involvement High Low Nature of customer relationship Transactional Collaborative Pre-KAM Early-KAM Mid-KAM Partnership Synergistic KAM (Millman and Wilson, 1995)

8. Customer Relationship Management (CRM) A Relationship Life Cycle Model High cooperation Low competition Low cooperation High competition Time Pre- relationship stage Development stage Maturity stage Decline stage (Wilkinson and Young, 1997)

9. Customer Relationship Management (CRM) Class Exercise What should the focus and main activities of a global salesperson be in each stage of the relationship development process? Why? (Please justify your answer)

10. Customer Relationship Management (CRM) Functions of Customer Relationship Management

Direct functions (are the basic requirements of a company that are necessary to survive in the competitive marketplace) Profit; Volume; and Safeguard Indirect functions (are the actions necessary to convince the customer to participate in various marketing activities). Innovation: Market; Scout: and Access

11. Customer Relationship Management (CRM) Functions of Customer Relationship Management

Customer sensitivity
Value Creation Process
Technology delivery process
Technology integration
Efficiency, effectiveness
Product delivery process
Concept to launch
Manufacturing process
Customer delivery process
Supply chain
Infomediation (distribution
of information)
(Sharma et. al., 2001)

12. Customer Relationship Management (CRM) The role of salespeople as relationship builders and promoters Salespeople by: identifying potential customers and their needs; approaching key decision makers in the buying firm; negotiating and advancing dialogue and mutual trust; coordinating the cooperation between the customers and their company; encouraging the inter-organisational learning process; contributing to constructive resolution of existing conflicts; and leading the customer relationship development team are the individuals in any organisation who act both as relationship builders and as relationship promoters.

13. Customer Relationship Management (CRM) Models of Customer Relationship Management The Evans and Luskin (1994) model for effective Relationship Marketing
Relationship marketing inputs
Understanding customer expectations
Building service partnerships
Empowering employees
Total quality management
Relationship marketing outcomes
Customer Satisfaction
Customer loyalty
Quality products
Increased profitability
Assessment state
Customer feedback
(Evans and Luskin, 1994)

14. Customer Relationship Management (CRM) Models of Customer Relationship Management The Brock and Barcklay (1999) model of selling partner relationship effectiveness Independence Relative influence Mutual trust Cooperation Selling partner relationship effectiveness

15. Customer Relationship Management (CRM) Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate , develop and enhance the process that is aimed at building trust and commitment with the customer. Initiating the relationship Engage in strategic prospecting and qualifying; Gather and study pre-call information; Identify buying influences; Plan the initial sales call; Demonstrate an understanding of the customer’s needs; Identify opportunities to build a relationship; and Illustrate the value of a relationship with the customer

16. Customer Relationship Management (CRM) Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Developing the relationship Select an appropriate offering; Customise the relationship; Link the solutions with the customer’s needs; Discuss customer concerns; Summarize the solution to confirm benefits; and Secure commitment.

17. Customer Relationship Management (CRM) Managing Customer Relationships The global salesperson must be involved in the following activities in order to initiate, develop and enhance the process that is aimed at building trust and commitment with the customer. Enhancing the relationship Assess customer satisfaction; Take action to ensure satisfaction; Maintain open, two-way communication; and Work to add value and enhance mutual opportunities.

18. Customer Relationship Management (CRM) Managing Customer Relationships Qualifying prospects for relationship building Opportunities for adding value Potential profitability of customer High Low Low High Use a non customized approach Seek better opportunities elsewhere Build a strong and lasting relationship Focus on loyalty-building program

19. Customer Relationship Management (CRM) Relationship networks The ultimate outcome of a successful CRM strategy is the creation of a unique company asset known as a relationship network. A relationship network consists of the company and its major customers with whom the company has established long and enduring business relationships. The additional aspects of a global salesperson’s job are to: Manage customer value; Act as customer advocate; and Enhance customer loyalty and build a “health” and profitable network of relationships.

20. Customer Relationship Management (CRM)

Summary CRM is a new business philosophy based on trust and value; The core function of CRM is the value creation process; Customer relationships develop over time; The role of global salespeople in the process is that of both relationship builders and relationship promoters; and The basic premise of CRM is to offer superior value to customers in an effort to turn prospects into customers, customers into loyal customers, and loyal customers into partners.


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Microfinance Industry – Research Problem, Question and Objectives

Microfinance Industry
This Chapter provides a breakdown of the research content. The reader is to be provided a sense of the task the author is about to highlight in terms of past research work done and gaps, the research problem/question down to the methodology employed and the delimitation faced during the task.
1.1 Project Background
Microfinance institutions in Cameroon are committed to improve the life of the poor or low-income people through the provision of credits, savings and other financial services. Therefore, they become the core source of funding towards SMEs and the poor. The Economic and Monetary Community of Central Africa (CEMAC) Regulation does not deal with the legal status of the MFI, but only with its activity.

The above regulation defines Microfinance as an activity made by entities that obtained licences to operate in providing loans, collecting savings, and providing specific financial services to the poor that are not able to access the formal banking service. Thus, Cameroon’s MFIs are grouped into three categories such as:
– The First Category of MFIs dealing only with their members (cooperatives, associations, and so on);
– The Second Category of MFIs that provide financial services to people. They must act as Limited Companies;
– The Third category of MFIs is those that only provide loans but must not collect savings.

According to a 2006 CEMAC study, there are 714 MFIs in Cameroon, with over 475 thousand clients, making up 2.9 percent of Continue reading “Microfinance Industry – Research Problem, Question and Objectives”

The Customer Relationship Management : Choice Models

Customer relationship management (CRM) typically involves tracking individual customer behavior over time, and using this knowledge to configure solutions precisely tailored to the customers’ and vendors’ needs. In the context of choice, this implies designing longitudinal models of choice over the breadth of the firm’s products and using them prescriptively to increase the revenues from customers over their lifecycle. Several factors have recently contributed to the rise in the use of CRM in the marketplace:

• A shift in focus in many organizations, towards increasing the share of requirements among their current customers rather than fighting for new customers.
• An explosion in data acquired about customers, through the integration of internal databases and acquisition of external syndicated data.
• Computing power is increasing exponentially.
• Software and tools are being developed to exploit these data and computers, bringing the analytical tools to th edecision maker, rather than restricting their access to analysts.

In spite of this growth in marketing practice, CRM research in academia remains nascent. This paper provides a framework for CRM research and describes recent advances as well as key research opportunities. See∼mela for a more complete version of this paper.
Keywords: customer relationship management, direct marketing

What is CRM?
Analytical customer relationship management (CRM) is the process of collecting and analyzing a firm’s information regarding customer interactions in order to enhance the customers’ values to the firm. Firms exploit such information by designing strategies uniquely targeted to consumer needs. This process enhances loyalty and increases switching costs, as information on consumer preferences affords an enduring competitive advantage. $By integrating various data (e.g. across purchases, operations, service logs, etc.), choice re-searchers can obtain a more complete view of customer behavior. These developments cut across industries, including banking, telephony, Internet, and other areas that have received limited attention in the marketing literature. In addition, each industry likely has unique challenges of its own.

We differentiate between analytical CRM, which is the focus of this paper, and behavioral CRM. Analytical CRM involves using firms’ data on its customers to design longitudinal models of choice over the breadth of the firm’s products and using them prescriptively to increase the revenues from customers over their lifecycle. In contrast, behavioral CRM uses experiments and surveys to focus upon the psychological underpinnings of the service interaction, or the managerial structures that make CRM effective.

A focus on CRM is warranted given the explosive growth of the analytical CRM applications in industry (Market forecasts analytical CRM revenue to increase from $2.4 billion in 2003, to $43 billion in 2007). Technological enhancement in information technology and increased addressability of customers via new channels has fueled this growth. Thus, it is surprising there are only few papers that seek to assess the state of research in this area, or outline the challenges unique to this area. This paper seeks to address this void.
What Novel Implications of CRM Exist for Choice Modeling?
Choice decisions in the context of CRM include firm choices (whom to target, when and with what) and customer choices (whether, what, when and where to buy). Several aspects make CRM a novel and potentially fruitful domain of inquiry for choice researchers:

* CRM applications typically involve massive amounts of data. These include many observations and many variables.
• CRM applications often involve an inward looking view of the customer, as competitive information is often impossible to obtain.
• Analytical CRM is typically dynamic, as trade-offs in current programs are made against future revenues. In conjunction with large data, this implies that new optimization techniques are needed to cope with such problems.
• Low response rates are often the norm, calling for more flexible response models than the popular logistic regression model.
• Unlike many scanner-panel applications, customers are addressable (Blattberg and Deighton, 1991). As a result, it is common to run large field experiments in these settings and control the sampling approach, affording a greater degree of control over the choice task. Addressability also implies it is easier to target consumers.
A Framework for CRM Research
CRM research can be organized along the customer lifecycle, including customer acquisition, development and retention strategies. Customer acquisition extends from the channels customers use to first access the firm (Ansari et al., 2004) to the promotions that bring them to a firm. The value of a customer can also be enhanced by the firm through appropriate development strategies such as delivering customized products (Ansari and Mela, 2003) and cross-selling (Kamakura et al., 1991, 2003). Finally, early detection and prevention of customer attrition can also enhance the total lifetime of the customer base, if efforts are focused on the retention of valuable customers.

The customer lifecycle implies that each customer has a value over his or her tenure with a firm. Estimating the lifetime value of a customer by itself requires sophisticated modeling, as it involves predictions of both revenues and retention probabilities. Several approaches exist to measure customer lifetime value (CLV). The relative merits of these different approaches is considered in Jain and Singh (2002) and Venkatesan and Kumar (2003). However, scant evidence exists regarding the accuracy of CLV predictions. There may be considerable room for improvement based on criteria such as out of sample validation, especially at the individual level.

The Pareto/NBD model of lifetime value may offer promise in the forecasting of lifetime value (Reinartz and Kumar, 2003), and recent advances by Fader et al. (2004) mitigate the computational burden of this model. Incorporation of covariates using a proportional hazards model and the addition of discounting to the Pareto/NBD could enrich this literature. Other fruitful areas for inquiry include the role of network effects in lifetime value, the effect of time aggregation and aggregation across a household, the role of predictors other than past purchases on lifetime value (such as inbound contacts or marketing), and a better accounting of costs.

An idea closely related to customer lifetime value is consumer lifetime value (Du and Kamakura, 2005). The distinction pertains to the perspective of the decision maker (firm vs. consumer), scope of information, and the approaches used to compute the value of a customer. Customer lifetime value is typically an inward-looking view of the consumer predicated on firms’ internal records for the purpose of determining the value of the customer to the firm. In contrast, consumer lifetime value encompasses all behaviors of a consumer across multiple or competing firms and assumes the perspective of a consumer making inter-temporal choices over categories and time so as to maximize his or her utility.

Consumer lifetime value models, which often combine internal and syndicated data, are generally applicable in industries where customer tenures are long, needs change over time and can be linked to life stages, and consumers trade-off future for current utility (such as savings and consumption). Ideally, consumer lifetime value models can be linked with internal firm records to obtain a better sense of which consumers to target. Consumers with a low share of wallet but a high consumer lifetime value may be especially attractive to a firm.

Our discussion of the state of CRM research proceeds using the customer lifecycle framework (acquisition, development and retention), and we shall describe the issues and methodological challenges unique to each stage.
The objective of acquisition strategies is to obtain more and profitable customers. For example, new home buyers are targeted for home insurance. In spite of its importance, identifying potential customers for acquisition is an area of scant attention. In general, acquisitions are profitable if the expected value of attaining the customer (over the lifetime) exceeds the cost (Blattberg et al., 2001). However, forecasts of likely response are predicated upon past response, and subject to regression to the mean if based on selection from such past response. Deeper analysis of appropriate probabilistic thresholds for mailing could yield significant advances in this area.

Customer acquisition occurs across an array of channels (e.g., direct television, direct mail, Internet, telemarketing, etc.) and researchers have begun to assess the efficacy of channel acquisition strategies and their effect on subsequent behaviors (Bolton et al., 2004; Verhoef and Donkers, 2005; Thomas, 2001). For example, Bolton et al. (2004) argue that customers acquired through channels with a price emphasis tend to be less loyal. A related issue pertains to referral programs, and there has been little analytical research on the efficacy and design of these programs.

Classic behavioral models of consumer adoption (need recognition followed by information search, purchase, and post-purchase service encounters) are useful in comprehending the effects of multi-channel acquisition strategies, as some channels are likely better for information search, while others are better for service or purchase. Thus, acquisition in a multi-channel environment should consider the interaction between these channels (Blattberg et al., 2004).


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CRM Applications and Technology

2.1.5 Customer Relationship Management CRM Applications and Technology

According to Barton (2002) there is a dynamic shift in today’s Customer Relationship Management CRM marketplace. He categorizes Customer Relationship Management CRM life cycles into two where he said a close butting head has been taking place. The two life cycles are Client/ Server technology and Web-based, e-customer.

Client/ Server technology lifecycle predominately supports employee-facing CRM systems which are there in helping internal sales, marketing, and customer service personnel. Users of this type of Customer Relationship Management CRM systems may not have their CRM automation software to be web-based from the ground-up (Barton 2002). Example of vendors providing such service is Onyx.

Web-based, e-customer lifecycle is newer to Client /Server technology. This supports more customer-facing Customer Relationship Management CRM systems where customers use the web browsers to access company specific information and services. Barton claims that the increasing availability of these new Web-based tools has helped to accelerate the remarkable growth enjoyed by the Web-based, e-customer lifecycle. Example of Vendors providing this service is Epiphany.

There are various types of CRM solutions which have been shown in figure 2.2 below categorizing these solutions into Continue reading “CRM Applications and Technology”

The Customer Relationship Management Frameworks/Models, IDIC Model

2.2 The CRM Customer Relationship Management Frameworks/Models

A various range of comprehensive Customer Relationship Management CRM models have been developed. The author introduces five of them in this chapter.

2.2.1 THE IDIC Model

The IDIC is described as below (Figure 2.6)
Figure 2.6: The IDIC Methodology ( Peppers and Rogers, 2004)

The IDIC Model has been developed by Peppers and Rogers (2004) According to IDIC model, companies should take four actions in order to build closer one-to-one relationships with customers:

  • Identifying who the companies’ customers are and building a deep understanding of them.
  • Differentiating their customers in order to identify which amongst them have most value now and which offer most for the future. Besides, the differentiation can allow the companies to devise and implement customer specific strategies designed to satisfy individually different customer need. The clients represent different levels of value to the company and they their needs are radically not the same from the enterprise. According to Peppers and Rogers (2004), the customer differentiation task will involve an enterprise in categorizing its customers by both their value to the firm and by what needs they have.
  • Interacting with them in order to ensure that companies understand customer expectations and their relationships with other suppliers or brands. Thus, companies must improve the effectiveness of their interactions with clients. Each successive interaction with a customer should take place in the context of all previous interactions with that customer. A conversation with a customer should pick up where the last one left off. Effective customer interactions provide better insight into customer’s needs.
  • Customizing the offer and communications to ensure that the expectations of customers are met. Indeed, the company should adapt some aspect of its behaviour toward a customer, based on that individual’s needs and value. To involve a customer in a relationship, a company needs to adapt its behaviour to satisfy the customer’s expressed needs. This might entail “mass-customization a product or tailoring some aspect of its service” (Peppers, Rogers and Dorf, 1999).

2.2.2 The Quality Competitiveness Index Model (QCI)

QCI are independent specialists who assist blue chip companies in managing customers. They are both strategic Continue reading “The Customer Relationship Management Frameworks/Models, IDIC Model”

CRM : The Quality Competitiveness Index Model QCI

The Quality Competitiveness Index Model (QCI)

QCI are independent specialists who assist blue chip companies in managing customers. They are both strategic theorist and foremost practitioners (Hewson et al, 2002). The QCI model shown below is described as below.

The above is described as a customer management model, omitting thereby the word “relationship”. At the centre of the model, they highlight a range of activities needed by companies to perform in perspective to acquire and retain customers. This model also features people performing processes and utilizing technology to assist in those activities.

The Customer Relationship Management CRM Value Chain Model

The CRM value chain (figure. 2.7) is a model which businesses can follow when developing their CRM strategies (Buttle, 2004). This model had been developed by a range of SMEs such as IT, software, telecoms, financial services, retail, media, manufacturing, and construction. This model is built from strong theoretical principles and the practical requirements of business.

Figure 2.8: The CRM Value Chain (Buttle, 2000)

The main purpose of this model is, according to Buttle (2004), to ensure that the company builds long-term mutually-benefical relationships with its strategically-significant customers. Thus, some customers are merely expensive to acquire and service.

Buttle has identified four types of strategically significant customer (SSC) such as the high life-time value customer that is a key SSC and the present day of all margins that might be earned in a relationship. He stated that tempting as it may be to believe, not all high volume customers have high LTV. If they demand JIT, customised delivery, or are in other ways costly to serve, their value may be significantly reduced. We know of one company that applied activity-based costing disciplines in order to trace process costs to its customer base […] as consequence the company re-engineered its manufacturing and logistics processes, and salespeople negotiated price increases

The second group of SSC is according to the above author “benchmarks” that are customers that other ones copy. For instance, a manufacturer of vending machine equipment is prepared to do business with any company because “they can tell other customers that they are supplying to the world’s biggest vending operation” (Buttle, 2000).

The third group of SSCs are customers ‘inspirations’. They are the ones that find new applications, “come up with new product ideas, find ways of improving quality or reducing cost. The may be the most demanding of customers, or frequent complainers, and though their own LTV potential low, they offer other significant sources of value”.

The fourth one deal with what Buttle (2004) calls “cost magnets” relating to those that absorb a disproportionately high volume of fixed cost, thus enabling other, smaller customers to become profitable

John Stevenson (2007), asserts that the CVC includes four stages:
– The first stage deals with grouping customers in order to determine which of customers are most profitable. The result the companies should seek is their target customer base. They should rate and segment their clients into groups that are most desirable to do business with they meet their criteria for what a desirable customer is. This is called, according to Stevenson (2007) the Customer Portfolio Analysis.

– The second stage deals with the customer intimacy. Having found the segments the firms want to pursue, they need to get to know the ones in that segment very well and better than their competition knows them. Briefly, they want to appear that they know them intimately by, for example, in knowing their birthday, the number of children they have and their respective birthday.

– The third stage relates to Value Proposition Definition. Thus having understood as much as they can about the customers they have chosen to serve, companies are then in a position to create a specific and tailored value proposition for them.

Buttle (2000) previously raised five steps to profitable relationships that are, customer portfolio analysis (CPA), customer intimacy, network development, value proposition development and managing the relationship.

Very briefly, the CPA analyses, according to Buttle (2000), the customer base to identify customers to target with different value propositions. The customer intimacy involves the business in getting how to know the selected customers as segments or individuals and building a customer data-base which is accessible to all those whose decisions or activities impact upon customer attitude and behaviour. Buttle involves the network development as the third step wherein a strong network of relationships is to be built with employees, suppliers, partners and investors who understand the requirements of the chosen customers.

The fourth stage involves developing, with the network’s compliance, propositions which make value jointly to the customer and the company. At this stage so far, the network has to work together to create and deliver the chosen value(s) to selected customers, Great value is “found more effective and more efficient solutions of customers problems” (Buttle, 2000). The final step is to manage the customer relationship.

However, the above activities or stages need to be managed. Companies need to manage each customer through their lifecycle. To enable the management of the customer lifecycle and the stages within of portfolio analysis, intimacy, and value proposition development, automated data systems are necessary.

2.2.4 The Payne’s Five Forces Model

This is a comprehensive model developed by Adrian Payne’ The model identifies five core processes in Customer Relationship Management CRM such as the strategy development process, the value creation process, the multichannel integration process, the performance assessment process and the information management process. They can be grouped into strategic CRM, operational Customer Relationship Management CRM and analytical CRM.

Figure 2.9: The Strategic Model for CRM (Payne, 2006).

Payne (2006) also introduced a strategic framework/model (Figure 2.8) for Customer Relationship Management CRM consisting of five generic processes such as Strategic Development, Value Creation, Multichannel Integration, Information Management, and Performance Assessment.

The Strategy Development process is concerned with integrating the business strategy from the organization angle and the customer strategy as to how firm interact and choose their customers. The Value Creation process with the main purpose of identifying the value the firm can create for the customer and the value the organization can also benefit from. The Multichannel integration consists of all the virtual and physical channels with which the firm plans to interact with. But the main thing here is that, regardless of the channel contact, the aim is to create an experience that is uniform and also common.

The Information Management process consists of many different of data repository IT systems, back and front office applications and analytical tools. It is thus necessary to access the visibility of the system so the need for performance assessment process set in and it is concerned at the strategic mon itoring can be used to determine customer satisfaction and standards,

. Various authors have proposed Customer Relationship Management CRM strategy framework. Buttle (2001) provides a Customer Relationship Management CRM value chain that identifies a series of ‘primary stages’ highlighted above. These are helpful as it considers implementation issues. Sue and Morin (2001) develop a framework for CRM based on initiatives, expected results and contribution. However, this framework is not process-based and, as the authors acknowledge, many initiatives are not explicitly identified in the framework. Winer (2001) outlines a model, which contains: a database of customer activity; analyses of the database; decisions about customers to target; tools for the customer targeting; how to build relationships with the targeted customers; privacy issues’ and metrics for measuring the success of the Customer Relationship Management CRM program. All these frameworks provide some useful insights; however Payne and Frow (2005) argue that none appear to adopt an explicit cross-functional process-based conceptualisation; they used an expert panel of executives with the extensive experience within the CRM and IT sectors to identify specific cross-functional processes. Thus the both authors identify five CRM processes including: strategic development; value creation; multi-channel integration; information management; and performance assessment (figure. 2.7).

2.2.5 The Dasai et al /Conceptual Model

The conceptual framework was developed by Dasai el al (2007) in which consideration is driven towards competitive CRM performance from both internal and external perspectives. The dynamic capability for CRM is the key source for competitive CRM performance considering the rapidly changing nature of the business environment today which erodes the values of existing competencies (figure.2.8 below)

Figure 2.10: Conceptual Model (from Desai et al, 2007)

The figure 2.8 above comprises resources re-configurability, social networking capability and market orientation as the drivers of dynamic capability for CRM. While the IT variables which are the CRM technology and knowledge management are the moderators linking the relationship between dynamic capability for CRM and competitive CRM performance. As such, the direct impact of IT competence variables should be tried and seen on competitive CRM performance.

2.2.6 The Forrester Model

The Forrester CRM model is grouped into four types such as: Strategy; Process, Technology; and People. The model produced results in the findings on over hundreds of companies using CRM as strategically, thorough analysis of over number of vendors’ solutions providers and also with discussion with about numerous consultants. For firms willing to kick-start their CRM programs or for those that are finding it tough to get best out of their CRM programs after it has been launched. Also, the performance scorecard (figure 2.9) highlights the criteria used by companies to measure the overall performance using CRM.

Figure 2.11: Forrester CRM Model (from Forrester Research, 2008)

Figure. 2.12: CRM Performance Scorecard (Forrester Research, 2008)

The author notices that the above scorecard looks similar that produced by Gartner Group (IDM, 2002). Yet, few criteria were used. Thus it should be suitable to assert the Forrester’s CRM performance scorecard is an improvement of Gartner’s one. Table 2.1 presents Gartner performance scorecard.

Table 2.1: Gartner’s CRM Performance Scorecard (IDM, 2002)

2.2.7 The Maturity Model

Gartner’s CRM Maturity Model is a tool in which the group used in rating enterprises in terms of their capabilities in effectively using CRM. To determine the category in which an enterprise is placed on the model, they are first evaluated in terms of Overall CRM vision and strategy, consistent valued-customer experience, organizational collaboration, processes, information, technology, metrics.

All these elements were what composed of the Garner’s performance measurement scorecard which was discoursed earlier on but the difference is that, haven scored your performance based on this elements, the maturity model will then enable the firm to know where they are at the present and where they want to be over a period of time, what the requirement they will need to achieve that status. It is a very useful tool as each enterprise, that aims to satisfying their customer and also to maintain a lead in its industry, should make use of maybe at every set intervals. Table 2.2 shows what the model is looks like.

Table 2.2: Gartner’s CRM Maturity Model for Enterprise (Gartner Group, 2001)

From the frameworks analyzed above, it was observed by the researcher that there are similarities which cut across them. Using Forrester Research as a benchmark and placing frameworks by Dasai et al and Payne on both sides of Forrester’s framework, each of the components in the framework were linked together, making it clear that they all similarly have in them all the four elements components of Forrester’s framework.

Dasai Framework
Forrester Framework
Payne Framework
Customer Focus
Organization Focus
Dynamic Capability of CRM
CRM Technology
Knowledge Management
Industry Control
Strategy Development
Value Creation
Multi-channel Integration
Information Management
Performance Assessment

Figure 2.13: Different Frameworks Summary (By the Author)

The Figure 2.13 above shows what each of these frameworks contains. Looking at the strategy, this is focused on customer and organization in one side; and strategic development and value creation on the other side. A successful company should understand how the customer base can be turned into an asset through the delivery of a value proposition. According to Close et al (2001), it provides objectives, segments and customers, and it should define how resources will be used interactions.

Respectively the organization, this involves the change of culture, structures and behaviour in order to ensure that the staff, partners and suppliers work together to deliver what is promised. However, the researcher will only consider the Forrester’s framework as a basis of our further research.

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