Customer Relationship Management Systems
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Abstract: Customer Relationship Management (CRM) focuses on customer retention through development of sustainable relationships. Establishment of these relationships is based on customer satisfaction and an organisation's ability to sustain high standards that identify them from competitors. CRM is also concerned with attracting new customers. In order to ensure customer satisfaction, there is need to understand customer requirements through studies which is essentially the function of CRM. Evolution of information technology has given rise to CRM systems which make this function even easier so that long-term profitability resulting from customer loyalty and cost cutting is realized. The use of these systems has proved invaluable so that higher education institutions are highly being encouraged to make use of them in order to enhance their ability to retain existing customers and attract new customers.
The use of Customer Relationship Management Systems is a strategy that has been received with high levels of enthusiasm in the business world. Many businesses have embraced the use of Customer Relationship Management Systems; simply known as CRM systems to enhance satisfaction of existing customers and to attract new customers. This has been referred to as a shift from transaction-specific to cumulative customer oriented satisfaction through incorporating information technology in CRM. CRM systems are attributed to the growing concept of customer-centrism which focuses more on customer satisfaction to increase profitability. Institutions of higher learning have not been left behind and several of them have already turned to the use of these systems.
The high level of competitiveness in institutions of higher learning as more investments are made in the sector has prompted them to adopt more proactive approaches to customer attraction and retention. Constant changes in customer expectations and demands have also played a big role in the adoption of these systems in order to help in meeting these needs. It is however notable that many institutions are still stuck with the traditional manual system of customer care. This is mostly due to the unavailability of funds or ignorance of the benefits that they are likely to obtain from CRM systems. This paper aims at filling this knowledge gap so that institutions of higher learning may realize how much they stand to gain from investing in CRM systems. It clearly demonstrates how they can use these systems to retain existing customers and recruit new ones.
A study conducted in various universities and colleges revealed that customers would appreciate the use of CRM systems which would ensure that their queries are solved efficiently. The fact that CRM could help in saving time made it even more important to the customers. The study which incorporated high school seniors, university and college students, parents, staff and alumni in a study sample made note of the importance that customers placed on efficiency citing that long procedures are tiring and demoralising. Most respondents were quick to note that websites eliminate a great deal of unnecessary inquiries since most of the information required about the institution was likely to be available from the website. This way they did not have to contact the administration when they had questions.
This study reveals that the use of CRM could actually save institutions from the unnecessary expenses resulting from customer dissatisfaction. This is done through the identification of customer needs which are then assimilated into the institutions' strategy to meet these needs. This way, complaints are eliminated which saves the institution from loss of customers and loss of money. Stefanou and Sarmaniotis (2003: 623) note that dissatisfaction of customers is not only costly to the institution but to the customer as well. When a customer loses in a deal, the probability that he or she will utilize an organisation's services again is greatly reduced.
CRM systems could help institutions of higher learning to cut on their costs significantly thereby improving their profitability. In the study, the question of costs is raised and it is considered one of the limiting factors towards the acquisition of CRM systems. On the same note however, the study establishes that the cost involved in the acquisition is worth considering the benefits that the institution is likely to obtain in the long-run once the system is in place. In concluding the study, the need for caution during the selection of CRM systems to be used in the institutions is also emphasised.
1.10 Statement of the problem
Institutions of higher learning are often overwhelmed by the high numbers of customers that they have to handle. Consequently, they end up not satisfying every customer's need and instead opt for ways to collectively address customer needs. This however could be detrimental to the institutions because needs vary from one customer to the other. Further, there is a risk of losing customers as a result of the high number of colleges and universities that have emerged thereby raising the level of competition. In public institutions, it is common for customers who are mainly students being taken for granted. The administration is likely to be tempted to assume that it is the students who require education and hence demand their services and not vise versa. Conant (2003: 3) however notes that this kind of ignorance could culminate into deleterious effects on the institution's performance and even loss of customers. This according to Cleary (2001: 33) would be quite unfortunate because even the best institution is ineffective when its customer focus is lost. Every student, parent, alumni and any other type of customer that the institutions serve is of great importance and deserves to be treated right. For this reason, understanding their needs and integrating this with the company strategy to better satisfy them is quite inevitable. Whenever such kind of a proposition is put forward, several questions are bound to arise: What options do institutions of higher learning have in ensuring that their customers' needs are properly taken care of? Can any given institution cope with the ever changing customer needs in order to satisfy them? What about the ever rising levels of competition? Which is the right criterion to address these issues? Is it possible to gain positive results from their implementation? How much will it cost the institution? These are some of the problems and queries that this paper seeks to demystify.
Many options are available when a company needs to meet its customers' needs. A customer care strategy that caters for the present as well as the future needs of customers is what any modern organisation requires in order to survive the rising levels of competition. The most recent strategy and whose popularity is growing at a high rate among organizations not necessarily in the education sector is the use of customer relationship management systems. As put forth by various studies, customer relationship management systems will undoubtedly help in the provision of better services, management of existing customers and recruitment of new ones in higher education institutions. A proper understanding is however necessary if these institutions are to use CRM systems as their customer care strategy. This study is therefore justifiable and its findings will come in handy in ensuring that higher education institutions can manage their customers better.
1.20 Justification of the study
Increase in competition among institutions of higher learning has been on the rise hence the need for strategies aimed at retaining current customers and attracting new ones. Just like in any other business entity, institutions must aim at satisfying their customers. This way, they are assured of increased profitability. This study will form a discussion on customer relationship management which is in essence a sophisticated way of ensuring customer satisfaction through establishment of sustainable customer relationships. This study could therefore be of great importance to institutions of higher learning which have not yet embraced the use of CRM systems into their programs.
There is a general agreement that technology is advancing at a high rate and that customers are now turning towards information contained on the internet to make their purchasing decisions (Bull, 2003: 593-594). This new trend calls for a change in strategies used by companies to attract and retain new customers. By the use of the internet, customers can now get information about products and services, their prices and unique characteristics which they can then compare to others available over the internet. Making such information available over the internet is therefore very vital in today's business world. This applies perfectly to prospective students and staff who are likely to make use of the internet information to make important decisions about their school of choice. By making use of CRM systems, institutions are able to attract new customers and their customer base can be improved. A study focusing on the importance of CRM systems which are basically computer-based strategies is therefore justifiable as it will help institutions to better understanding of its working and importance.
1.30. Objectives of the study
To make this study plausible in addressing the research issues and concerns, several objectives were set to guide the study. The major objective was to determine characteristics of customer relationship management systems that make them useful to higher education institutions and why institutions should adopt them to improve their competitiveness. Other objectives included:
- To find out whether costs of CRM systems impact on organisation ability to attain the systems.
- To establish whether there are any risks involved in the use of CRM systems.
1.40. Research questions
- What constitutes of customer satisfaction according to customer satisfaction theories?
- Does ensuring customer satisfaction contribute to the business effectiveness, productivity and profitability?
- What is meant by Customer Relationship Management Systems? Is there a relationship between Customer Relationship Management and customer satisfaction?
- Are they useful in higher education institutions? If so, how can they benefit from adopting Customer Relationship Management Systems?
1.50. Methodology outline
This study makes the use of reliable sources of information through conducting interviews and using secondary data from previous studies conducted by various scholars in the same field. By making use of an example of Imperial College, this study will show that adopting the use of CRM systems could lead to a tremendous transformation in an institution's service delivery.
2.1. The customer satisfaction theory
- 2.1.1. Customer satisfaction
Customer satisfaction forms the core in the attraction and retention of customers into a business. It is for this reason that customer satisfaction is often considered very vital for business survival. Customer satisfaction is used to refer to contentment, happiness or well-being of an organisation's customers (Anderson, 1973: 38). It is all about doing what is desirable to a customer. In the classical definition however, the degree of correspondence between a customer's expectations and what is actually provided in the perceived product or service is what constitutes customer satisfaction (Stefanou and Sarmaniotis, 2006: 619). Should the service or product exceed expectations or just fulfil it, customer satisfaction is deemed to have occurred. The level of at which the product meets the customer's needs then determines whether the customer is satisfied, moderately satisfied, highly satisfied and so on. Depending on the customer's attitude, this could work well towards improving the business' customer loyalty. If a product or service is below the customer's expectations, dissatisfaction occurs and the probability of losing the customer to competitors increases (Anderson, 1973: 38-39).
In measuring customer satisfaction, a comparison between the expected and the perceived quality are objectively compared. The expected quality is what the customer expects from the company and which should be provided by the company. It is what represent the customer's wishes, expectations and needs and is referred to as the 'Should' factor (Wilson 1991: 152). On the other hand, what the business actually gives the customer is what is referred to as the perceived quality. Perceived quality is known as the 'is' factor (Wilson, 1991: 152).
The basic factors are those referred to as 'must have' aspects or dissatisfiers. Basic factors do not afford the customer any satisfaction and they are deemed to be obvious. In other words, the characteristic is in essence what the customer wants and if this is not there then he would not even buy the product or service in the first place (Croteau, 2003: 25-26). For example, any customer will expect that an institution of higher learning provides education as a prerequisite and is bound to take this for granted. This characteristic does not trigger any sort of excitement from the customer as it is considered normal (Kano, Seraku and Tkahashi, 1984: 40). It is other factors that drive the excitement towards making a particular choice. This leads us to the excitement factors which are also known as satisfiers. These factors are the attractive characteristics of a good or service meant to generate delight in the customer (Croteau, 2003: 26). They are also considered as the factors that distinguish an organisation from its competitors. It is these same features and characteristics that an organisation should emphasise on when advertising their goods to prospective customers so that they choose them over their competitors. Finally, the performance factors serve the purpose of providing the explicit needs of the customer (Conant, 2003: 7). When the performance is high or when the customer's needs are completely met, the result is customer satisfaction. If there is low level of performance however, customer dissatisfaction results and this could cause detrimental effects on the company through loss of customers.
- 2.1.2. Significance of customer satisfaction
Numerous empirical findings are of the view that customer satisfaction forms the basis of establishing competitive advantage. It is through customer satisfaction that the business can be assured of a bright future through repeat sales (Kano, Seraku, Takahashi and Tsuji, 1984: 39-41). Customer satisfaction helps to gain loyalty and hence retain current customers besides attracting new customers to a company. Unsatisfied customers are likely to leave because as Wilson (1991: 156) notes, only four out of every one hundred customers come back to complain. Instead, they go on and switch companies opting to keep the discontentment to themselves. This is to mean that satisfaction is extremely vital for the survival of any business and should therefore be highly regarded. Stefanou and Sarmaniotis, 2003: 619) contend with the fact that retaining the existing customers is much easier than attracting new ones hence the need to build strong customer relationships through striving to satisfy their needs and meeting their expectations. Consumer satisfaction is therefore vital for any organisation's success and should be taken seriously. With this kind of knowledge, business strategies are now being inclined towards customer satisfaction. To do this, Customer Relationship Management has been embraced by many businesses (Grant and Anderson, 2002: 36; Conant, 2003: 21; Light, 2003: 607; Kirker, 1994: 12).
Recommendations made by customers are said to attract almost the same number of customers that the business attracts on its own. This happens through recommendations. Wilson (1991: 103) notes that every satisfied customer is bound to say something positive about the product to her friends and relatives. These individuals could eventually end up being loyal customers to the business thus increasing customer base. Dissatisfied customers will complain and talk ill of the product or service such that prospective customers are discouraged and may never take the company's product following negative remarks from those that had used it before (Wilson, 1991: 157).
2.2. Understanding Customer Relationship Management
The survival of any business is to a large extent determined by the level of customer satisfaction. This understanding has seen the rise in the customer-centrism strategy as a means to retain and attract new customers (Patterson, 2007: 5-6). The rise in globalization has led to high levels of competition so that every business must work towards addressing customer needs to keep them from turning to competitors. According to Oliver (1996: 88) customers are likely to move to competitors if they feel that they are not obtaining what they want. Loss of customers could be detrimental since a business cannot exist without customers. In this kind of competition for customers, the notion of Customer Relationship Management (CRM) has gained an important role in business management. Light (2003: 603-604) refers to CRM simply as the management of company-customer relationships while Stefanou and Sarmaniotis (2003: 617) call it relationship marketing. Seeman and O'Hara (2006: 25) add that CRM aims at increasing customer satisfaction by customizing the service provided to each consumer. Further, Seeman and O'Hara refer to CRM as the process by which business information and consumer information are brought together through a centralized system.
Major components of CRM include communication management, marketing, recruitment, customer support and service among others. It is a strategy that places the customer as the major focus in the organisation. Stefanou and Sarmaniotis (2003: 613-617) refers this as a customer-centric strategy where understanding the customer life cycle is essential. There is also need to understand the ever changing customer needs triggered by changes in lifestyles and income changes. CRM has often been described as a shift from the transaction-specific to cumulative customer satisfaction through relational orientation (Raab, 2008: 132). In order to satisfy this prerequisite, CRM has been divided into two major procedures; the operational function and the analytical function. While the operational function involves the collection of data from customers, the analytical function is concerned with analysis of data in order to understand the customer needs so that they can be effectively addressed (Peelen, 2005: 63). Data can be collected through the use of interviews and questionnaires, customer feedback, complaints and physical reactions among others. Using this kind of information, the customer service department can easily determine whether customers are satisfied with their products or not (Kirker, 1994: 14). If they are not satisfied, strategies aimed at addressing the various needs must be formulated. With the increasing level of globalisation, technological advances are being strongly felt in the business world. Further, customer relationships have become more complex due to consumer mobility and the rise of suburbs (Milliron, 2001: 52). Customer tastes and preferences are changing by the day as people embrace the modern world. In response to this, more companies have taken up technology-led techniques to further enhance their performance. It is for this reason that the CRM systems have emerged and companies are now turning from the manual CRM to computerised CRM.
2.3. Customer relationship management systems
The use of Customer Relationship Management in institutions of higher learning is a relatively new genre of technology operations whose popularity is growing at a high rate (Light, 2003: 605). The application which is computer-based has aided in making sure that the relationship between customers and businesses can be effectively managed (Peelan, 2005: 79). Information Technology advances have been a catalyst in customer relationship management systems. Traditional analysis of data is slowly becoming outdated and the use of software to perform such duties is being adopted by the day. CRM systems have gained widespread popularity especially with the so called "forward thinking managers"(Croteau, 2003, 29). These systems not only analyze customer needs effectively but also make work easier for managers thus saving the time required for data analysis. Bradshaw and Brash (2001: 522) define CRM systems as a combination of discrete software tools which serve the purpose of enhancing customer satisfaction, reducing costs, identifying new opportunities, increasing revenue and attraction new customers among others. They note that organisations have no reason to fear initial costs of acquiring these systems because the benefits to be gained in the long-run exceed the costs incurred in the acquisition. Research shows that sophisticated technology has brought about the emergence of more advanced CRM systems (Milliron, 2001: 51). Further, it is notable that organisations that are currently using these sophisticated CRM technologies are gaining competitive advantage over their competitors who make use of basic data collection approaches (Abbott, Stone and Buttle, 2001: 27). Information Technology has aided companies to effectively customise their customer care procedures so as to ensure that they are well served.
Following the emergence of CRM which aims at individualising customer needs, companies are now demanding technologies which make it easier to keep records about individual customers. This eliminates high numbers of record which have to be retrieved every time a customer visits the business (Bull, 2003: 31).Using the various CRM systems available in the market, it is possible for companies to collect all available data about a certain customer which is then saved in the company database. Whenever an enquiry is made by this customer, the customer care representative just needs to feed the necessary details in the database to retrieve everything about the consumer (Grant and Anderson, 2002: 26). This way, it is becomes easier to address these customers' needs depending on the situation at hand.
The use of web technology is one of the most prevalent applications of CRM technology (Milliron, 2001: 52). Savvy managers have realised the high rate at which the world is suddenly becoming computerized. The ease of internet navigation and development of broadband services has turned customers into active internet users. To maximise on this, internet marketing has emerged with more companies now displaying their goods in popular web pages such as networking sites (Kotler and Fox, 1995:96). It is not only the goods that they advertise on the internet however, websites containing company information have been developed so that customers can easily access any information they desire from the website (Light, 2003: 605). Most websites often have customer inquiry sections where questions can be asked and complaints deposited (Light, 2003: 606). The use of chat rooms to answer customer questions directly from the help care desk is also used in certain sophisticated websites. While websites are likely to serve customers who are already familiar with the company, new ways of directing prospective customers have been established. In popular web pages for example, clicking on a certain advertised good or service takes the prospective customer to the company's website where he or she can now access more information on about the company and other goods and services offered by the company. This is to mean that while company websites were previously used by companies to showcase their activities and other information about the company, they are now doubling up as marketing tools to retain existing employees and obtain new ones (Light, 2003: 606).
2.4. Customer relations in institutions of higher education
Starting the mid-80s and into the late 90s, many higher education institutions engaged themselves in restructuring and engineering their administrative operations so that costs were reduced and consequently better services could be provided (Grant and Anderson, 2002: 24). The focus is slowly shifting from these operational changes meant to improve service delivery to identification of customer needs. These needs are then being used to identify the areas that need to be improved in order to effectively satisfy customers. This has been described as a proactive action because institutions can learn what their customers want then work towards satisfying these needs before they lose them to other institutions which meet such needs (Bull, 2003: 593). Customer relationship management (CRM) is fast gaining popularity as more institutions realize that maintaining healthy relationships with customers is vital for business success. Organisations that make use of customer relationship management report increased sales resulting from the good relationships established with their customers (Croteau, 2003: 29). Customer relations management (CRM) enables the analysis of past customer behaviour in a bid to anticipate future trends and hence do everything in their capacity to ensure that customer needs are met. While many institutions have embraced CRM, few have ventured into the use of customer relationship management technologies (Conant, 2003: 3-5). For some, it is because of inadequate information about customer relationship management (CRM) systems while for others is because of fear of initial costs associated with installing such systems.
Seeman and O'Hara (2006: 26) note that at least 75 percent of the students entering higher education institutions have a substantial exposure to technology. The new generation of students are described as technology savvy students due to their undeniable contact with technology. As a result, their expectations about technology resources available in the institutions are very high (Milliron, 2001: 16). From what they have learnt over the internet and other technology literature, technology has been used to make procedures easier for customers unlike when manual systems were used. In their minds, institutions of higher learning should fall under this group that has acquired these systems in order to serve them better. Their absence therefore could frustrate their expectations which could culminate to serious consequences (Croteau, 2003, 31). For existing students, they could change schools and discourage their counterparts from joining the school. The use of CRM also serves the purpose of unifying the university or college administration such that the needs of customers can be catered for without having to move from one office to another.
Many businesses today have now introduced websites through which they serve their customer's needs. In the same trend, colleges and universities should take on this innovative method of communication to reach out to their customers without necessarily requiring them to visit the institution physically (Kotler and Fox, 1995: 96). This reduces physical and geographical barriers through providing all the information that current and potential customers would like to know about the institution. In designing a website, the technician involved must collect all the information that the institution wishes to put on the site (Milliron, 2001: 17). This information is then arranged in such a way that given links can lead the customer to the desired departments so as to access the required information.
This section of the paper quantifies the ability of the study to effectively satisfy the set objectives. Besides giving the procedures, methods and samples used in the study, it also outlines major limitations faced during the study.
3.1. Research scope
The essence of this study is to establish whether Customer Relationship Management Systems could be of help to higher education institutions. As such, the study delimits itself to the role of customer relationships in institutions of higher learning. The importance of Customer Relationship Management systems forms the basis for this study and hence the advantages of this strategy form a core subject of the study. Due to the large geographical coverage of institutions and financial constraints, only schools in Madrid and Canterbia in Spain were used for the study.
3.2. Data and data collection
Collection of data forms influences the outcome of the study to a large extent. For this reason, the data collection procedure was applied in the best way possible to enhance efficiency and to give the most accurate results. Both primary and secondary data were applied in the study.
- a) Primary data
Factual information from the respondents was vital in making effective conclusions. To obtain this information, two separate types of questionnaires were set. These focused on current customers and potential customers. For simplicity, senior high school students who are most likely going to join universities and colleges after graduating were interviewed to determine the qualities they considered important in a college. Further, they were required to suggest the various components they would like incorporated in the college and university CRM systems. Current customers included students at colleges, staff, parents and alumni. The questionnaire directed at this group was aimed at finding out the application of CRM in their schools and how they thought it could be better improved to by incorporating technology. For those whose schools had already adopted CRM systems, they were asked to give the advantages they had witnessed and the difference with what they heard from colleagues in other schools not using CRM systems. Questionnaire were read out and filled by the researcher as the respondent gave their views.
- b) Secondary data
Equally important was the use of secondary data which gave the study a theoretical background. Without the use of books, journals and periodicals among other written works, there was no way of justifying the concept of Customer Relationship Management Systems. The literature review in particular was solely dependent on previously published works. As such, secondary data was highly employed in the study.
3.3. Sample selection, technique, and size
The study sample consisted of ten college students, ten university students, twenty high school seniors, twenty staff members and a random selection of twenty parents and alumni of various colleges and universities. Due to the large population of probable respondents, a method for selecting a sample had to be identified. The strategic sampling method was used to identify respondents for the study.
3.4. Ethics of the research methodology
Before the beginning of the study, an objective of reducing respondents' compromise as far as possible was set. The views contained in the questionnaires were for research purposes only and no third party was allowed to come into contact with them. With such an assurance, respondents felt free to give out information considered sensitive. For privacy purposes, no respondent was required to give out his or her name during the interviews. This raised confidentiality as required in scholarly research.
3.5. Limitations of the study
As much as the given methodology served the desired purpose of satisfying the objectives of the study, several constraints posed a challenge to the researcher. To start with, the high levels of expenses involved in travelling and printing questionnaires were overwhelming so that the study did not utilise as many respondents as could have been necessary to bring out better results. Secondly, poor responses gave scanty information thus limiting the quantity of valuable findings. Most of the high school seniors for example did not understand the meaning of CRM systems such that this question was not properly answered. Again, there was a general kind of fear to disclose views on the administration thus limiting data collected. The limitation of time was also prevalent and an extended period could have given better results in the end.
Most of the students interviewed seemed concerned about the administrative procedures which are at times too hectic for the students. Quoting from one student's questionnaire, they are termed as 'necessary evils' which if eliminated could make their work easier. 70 percent of the university and college students suggested the implementation of a website where students could give their details register at the comfort of their homes without having to undergo the rigorous administrative procedures. For the staff, they desired a system whereby their needs could be effectively addressed by reducing procedures on leave, benefits and expectations by the management. Overall, the use of CRM systems was quite welcome as it promised better and easier modes of customer support. Out of the seven colleges and universities from which the recipients were obtained, three had CRM systems and the customers (consisting of students, parents, alumni and staff) were quick to note that the systems had greatly improved service delivery. Several students ascertained that they had made the school their choice because of the information that they accessed about the school from the web.
4.1. Interviews with high school seniors
High school seniors are considered an important target for higher education institutions since they are potential customers in the institutions. Their views should therefore receive a great deal of attention from the higher education institutions' administration.
A - High level of academic performance
B - Institution that provides a variety of extra-curricular activities
C - Institution with friendly staff who are ready to assist students
D - Institution where tiresome procedures are minimized
E - Assorted comments.
It is notable that quite a majority confessed to having preference for schools that provided more extra-curricular activities even though their performance was not particularly stunning. Extra-curricular activities are almost as important as academic performance with the former taking 31 percent while the latter took 31 percent. This means that as institutions advertise about their academic performance, consideration about extra-curricular activities is also important. 23 percent of the students wanted a school where customer representatives paid attention to their problems and assisted them accordingly. 16 percent were for schools where tiresome procedures involved in registration, acquisition of funds, clearance procedures among others were highly minimized. Assorted comments which were not as prevalent such as trade marks, size and popularity of the school made up the remaining 5 percent of the analysed findings.
On average, most high school seniors expressed a desire to have details of their future universities and colleges so as to help them compare what each had to offer. Given the geographical locations of schools of their preference, visiting the school prior to admission could prove difficult hence the need to have a website from which they could access the details of the institution. Most of these students ascertained that they had visited several websites with the prevalent reason being to understand what the school has to offer. Journals were also proposed as good sources of information that could be useful for potential students to access required information. In another finding, there were those students who could have liked to talk directly to the customer care representatives through a chat system in order to ask personalised questions which are impossible to obtain from the school website. These views are a representation of how these students are well vast with knowledge about information technology and its application.
4.2. Interviews with college and university students
This group of students seemed to be more informed about CRM systems than their counterparts in high school. Only three college students out of ten had never heard about CRM systems while two university students out of the ten interviewed found the term quite new to them. This is probably because they have been more exposed to technology and know how this could be used to improve customer relationships. They were also aware of their needs having experienced college or university life for some time. According to those whose schools were already using CRM systems, there was a general agreement that these systems had made their lives easier. Among the most significant benefits are identified were as follows:
A) Reduced registration procedures.
B) Easier access to the institution services from one source (centralisation of customer relations matters).
C) Better access to the courses being offered in a particular semester without necessarily having to visit the department involved.
D) Quick response to queries.
E) Ability to report their grievances and comments which can then be implemented in the institution's strategies.
Basically, those whose institutions had not made use of CRM systems felt that by doing so, their needs would be effectively met. More than half or these students from the seven colleges and universities complained of numerous procedures that often took a lot of their time as they were required to move from one department to the other to obtain relevant information. Besides this, 15 percent of the respondents cited that they would rather not report their grievances to the administration because this would take a long time to accomplish. They also found it hard to find help from the administration offices because of the long queues ands need for appointments that frustrated them. They desired to have what their counterparts whose management had installed CRM systems. This way, they could enjoy the benefits listed above.
4.3. Interviews with staff
Besides the students, these are the next most important customers in institutions of higher learning such that meeting their needs is extremely important. This is because they highly impact on the overall satisfaction of the other customers (McDonough, 1994: 437). Students for example would not be satisfied if they are not taught well. By catering for the employees, the administration ensures that they deliver their best and hence retain students within the institution. All the staff members interviewed were familiar with the use of CRM systems. Three out of the twenty respondents had used a CRM system in another school and used this to compare their current experience with their new employer. 60 percent of the staff members put the use CRM systems to improve access to their benefits, leave and payment details among others as their first proposal in the things they would like incorporated in their CRM system. Twenty percent proposed that the use of CRM systems could come in handy in improving their relationship with the management. Their questions could be effectively solved and they also believed that other prospective members of staff could easily access information that they could use to decide whether they desired to work in the institution.
4.4. Interviews with parents and alumni
Results obtained from parents and alumni were combined and analysed together because these two groups were not considered to be significant customers in the institutions based on the level of contact with the administration. For the parents for example, their contact with the administration was during the admission of their children and when they wanted to make enquiries about their performance. It was however notable that parents play a significant role in determining which college or university their children will attend. Five out of the eight parents who were interviewed expressed their preference for a system that would aid them in selecting the best school for their children. Since the parents interviewed already had children in the various institutions, 30 percent of the parents could only express their needs to have a system whereby they can monitor their children's performance. This could be done through providing their performance on a database where parents could access them. Besides this function, parents were keen about welfare of their children with 56 percent of them citing the need for their children's complains to be addressed. This would ensure that they learn in a favourable environment.
For the alumni, the most important thing was for them to easily access the alumni activities so that they could keep a proper track of what was expected of them. Three out of the twelve alumni members commented on a tendency of their schools not to update them on the level where their projects had reached so far. With the introduction of CRM technology, they were assured of obtaining the progress and thus gauge whether their contributions were being put to proper use. For two of the alumni whose schools had implemented the CRM system use, they commented on the effectiveness of CRM systems in making the institution a better place to learn and interact with the management. This was unlike during their years when the systems had not been implemented. Being former students, they cited long procedures and lack of a centralised system as a barrier to effective customer care in institutions of higher learning.
4.5. Overall suggestions about Customer Relationship Management
A summary of the suggestions were combined to come up with an illustration of what customers thought were the most important items to be incorporated in the CRM systems when they are designed. The desire for websites that make it easier for customers to access information was prevalent in the responses given by students, parents and alumni with 29 percent of the sample population giving it in their response. This was followed by the need for centralized operations so that customer needs could be solved from one core place thus eliminate lengthy procedures. This suggestion accounted for 18.3 percent of the total views and was closely followed by the need for increased customer care representatives which took up 16.4 percent. The rest were ranked as shown in the table below.
|Websites to give necessary information||1||29|
|Centralise activities to avoid the trouble of running from one department to the other||2||18.3|
|Increase the number of customer care||3||16.4|
|Introduce 24 hour customer response||4||8|
|Give emails from which customers can send messages about their concerns.||5||7|
|Distribute journals with school information to interested current and potential customers.||6||6.5|
Table 1: Overall Suggestions made about CRM in descending order
4.6. The case of Imperial College - London
Findings from a recent study about higher education institutions that have adopted CRM systems revealed that these institutions witnessed tremendous change after the installation of the systems. Among the various universities which have already embraced the use of CRM systems is Imperial College and which can acclaim to the benefits of using the system to enhance customer relationships. Imperial College which has earned itself an attractive reputation is a science-based university which is based in London. The university's teaching and research activities are popular with courses such as engineering, medicine, natural sciences and business being the major courses offered at the school (Imperial College, 2009).
Imperial College started off with its project to replace their existing system with a CRM service. This was with the realisation that the system they had been using was now out of date and no longer giving them enough cost benefits. The use of CRM which is improving in popularity also looked like a good bargain for the school and they could use this to improve the level of customer care at the institution. The management approached RightNow; a business solutions company based in UK to order the installation of their RightNow CRM solution (Imperial College, 2009). This was after rigorous consultations with analysts who ascertained the probability of increasing efficiency and reducing costs should a CRM system be adopted. True to their word, the CRM system has served the university in a great way. Reduction in administrative costs stemming from the improvement in procedures has been witnessed (RightNow, 2009:1). Reduction in procedures also depicts that time taken to perform certain procedures has decreased; saving the administration time to do other worthwhile activities.
According to RightNow, 2009: 1), the relationship between the school and the students and staff has greatly improved since the college now gives more consistent and accurate information. Due to the popularity of the university, the administration had to contend with high numbers of prospective students calling in to enquire about the courses offered at the university and admission process. The overwhelming emails and calls from prospective students as they try to enquire about the college have now reduced significantly. During its resolution, Imperial College had realised that many enquires kept coming through from prospective students who basically asked about the same thing so that there was a lot of repetition (RightNow, 2009: 1). Responding to many simple enquiries highly impacted on the administration's productivity due to the time wasted on these enquiries. A website where all this information could be presented was a perfect solution for this. RightNow designed a self-learning medium online where students, staff and prospective customers can access information about the school twenty four hours a day every single week. Information about various questions about the school, special events, information for students and staff, employment opportunities, library services among others are properly displayed on the website. Icons for students, alumni, staff, business, media and prospective students are displayed on the school website so that each of these unique customers can access details that are tailor-made just for them. Whenever prospective students visit the website, a link known as 'prospective student' is displayed such that they can go get information about the school.
Interesting things such as life at the university, maps, student experiences and advantages associated with joining the university are given. All these are used as advertising tools and they are meant to attract more students into the school. One hundred questions that are commonly asked by students and their answers are displayed so that they do not have to make enquiries directly to the admission (Imperial College, 2009). In case the question that they desire to ask is not contained in the one hundred questions, a facility known as 'Ask a Question' also available. What is interesting about the technology is that the system goes through the questions to find whether there are questions that can be answered using the information available on the website (RightNow, 2009: 1). This way, 28 percent of the emails are not submitted to the administration reducing the work load for the staff even more. The rest of the emails are sent to the administrators who answer the questions directly. Should the question be considered a relevant question, the question could be added to the knowledge base to avoid the question again in future. 98 percent of prospective student now enjoy self-service through the web. In the first twelve months of the web based solution attracted an average of 1,200 visitors per month at Tanaka Business School; a part of the college where it was first implemented (RightNow, 2009: 2). In the next two years, at least 10,949 answers had been given in through the system and the rate of email and telephone receipts soon after was greatly reduced. The admission can now concentrate on other important requirements within the college so that efficiency has been greatly improved.
Discussion and Implications
5.1. Implications of using CRM
Institutions of higher education possess no difference to other types of businesses when it comes to customer satisfaction. The challenge adoption of customer-centrism as the way forward in retaining existing customers and attracting new ones therefore looms like a huge crowd over the management of the institutions. If institutions of higher learning do not respond adequately to this paradigm shift, they could end up being losers to hands-on competitors. It is notable that all the stakeholders in the school deserve to be treated well since they affect the institution to a large extent (Patterson, 2007: 5). This justifies the need for effective customer relationship management. With the changes in demands among students and parents and with the rising level of competition as colleges and universities adopt more proactive measures to deal with their customers, there is need to adopt a keen eye and forge forward towards utilizing CRM technologies to enhance customer relations. Wilson (1991: 103) notes that the level of customer satisfaction is a direct determinant of loyalty and possibility of obtaining prospective customers. This is because as Wilson (1991: 104) notes, customers rarely come back to complain when they are not satisfied but rather move on to make use of competitors' products and services. Worse still, word of mouth which influences a business' performance to a large extent plays the role of discouraging potential customers when their counterparts are not satisfied. Customers tell friends and relatives about products and services they have used before and depending on whether they praise or disregard the products or services, they are likely to influence the choices made by these relatives to a large extent (Wilson, 1991: 157). The best thing to do is to make sure that the comments made are positive; and this can only be done by providing what the customer requires. Knowing a customer's needs requires that an organization discovers these needs through various techniques (Bull, 2003: 599). This is where Customer Relationship Management comes in. The business aims at obtaining important information regarding the needs of its customers through asking opinions on what customers would like and answering to queries and complaints about existing products and services (Oliver, 1996: 154). These views are then integrated into the institution's strategy to cater for these needs as well as to improve on quality where the business has failed. This way, customer's needs are met and their satisfaction directly translates to loyalty and praise for the business thus maintaining sustainable profits (Raab, 2008: 123). Institutions are not any different from businesses since as it is now, colleges and universities literally have to compete for students due to increased levels of competition and changes in customer needs. The adoption of Customer Relationship Management Systems is therefore a good idea for institutions of higher learning which are interested in retaining current customers and attracting new ones.
Given the changing needs of customers in higher education and the high levels of technological revolution, it is absolutely necessary that institutions embrace the use of Customer Relationship Management Systems (Karimi and Gupta, 2001, 132). This way, they will be in a better position to handle their customers and thus increase their competitiveness. From the research findings, it was notable that most students in universities and colleges thought that the administration procedures were long and cumbersome. RightNow (2009:1) suggests CRM systems as a perfect solution to this. This is a system that takes advantage of technology to effectively address customer needs while improving profitability.
5.2. How CRM systems can help higher education
Based on the theory discussed above, it is prevalent that for any business to survive, customer satisfaction is inevitable. Another note is that competitiveness of a business' products and services is derived from their uniqueness so that managers must always aim at winning customers by being innovative (Stefanou and Sarmaniotis, 2003: 627). Institutions of higher learning can therefore benefit greatly from the use of CRM systems to enhance customer satisfaction. In the use of CRM, emphasis is placed on understanding the customer through building relationships then seeking to address their needs (Raab, 2008: 103). Proper reporting systems and response to queries is therefore of great importance. When an institution installs a CRM system, it is bound to handle the customers better as will be discussed in this section of the paper thus enhance their level of satisfaction.
- 5.2.1. Personalised or individualised service
One of the major aims of the use of CRM is to personalise customer relations so that each customer is served according to his or her need (Bull, 2003: 599). This is usually done through establishing databases with accounts for each customer. These accounts provide various details about the customers showing their preferences and specialised needs. This ensures that when the administration is addressing the customers' needs, they can effectively analyse the situation before giving the right conclusion (Grant and Anderson 2002: 27). An example is the use of a web-based system where every customer is placed in a certain category such as student, prospective student, alumni among others. Whenever this person logs onto this category, there are sub-classes from which he or she can select one that best suits his or her interests.
- 5.2.2. Coordination of departments
The use of CRM system serves the purpose of coordinating departments in an organisation so that they work together in harmony to provide a wholistic approach in customer satisfaction. Grant and Anderson (2002: 25) note that the division of departments and offices in institutions of higher learning makes it difficult for coordinated customer support. As a result, customers have to move from one department to another to satisfy their needs. The use of a CRM system could help in solving this predicament through forming a common communication and interaction platform for customers. From the survey conducts among the various customers in institutions, it was evident that this is a factor that is quite disturbing for students who have to contend with tiresome procedures. Grant and Anderson (2002:26) are of the view that all the students' concerns including registration, admissions and information on bursaries, school fees and scholarships among others can be effectively controlled from a central point. By providing a system where students can access such information, their lives would be made much easier thus improving their satisfaction with the school's management.
- 5.2.3. Improved efficiency
CRM improves customer care representatives' efficiency in answering to customers' needs. This greatly helps in the shaping an institution's relationship with customers so that they are proud to be associated with an institution that meets their needs (Raab, 2008: 105). Using CRM, an institution can establish a central system where all the calls are handled. Using the person's code that is recorded in the database, the system recognizes the caller and gives instructions that direct the call to the relevant department. Besides the call centre, the website helps to reduce the number of students calling the customer care department. This is especially so with prospective through answering some of the most commonly asked questions (Cleary, 2001: 33). This means that the customer care representatives only cater for a few questions which is bound to reduce their workload (RightNow, 2009: 1). They can also effectively serve the students and other customers with the establishment of CRM systems because they are not overwhelmed by work.
Due to the ease with which customers can access help with the introduction of CRM in an institution, customer responsiveness is enhanced (Bruhn, 2003: 78). This is of great help to the institution in two major ways. Firstly, the institutions can learn the customer life cycle. This aids in improving customer relations since the customer care representatives know how to treat individual customers depending on their experience with the institution. Secondly, any views including complaints and compliments will go far into improving customer relations at the institution (Conant, 2003: 8-9). The use of CRM helps institution to come up with a defined process that can be used to satisfy customer needs more easily.
There is a general shift from transaction based relationships with customers to total customer relations in a bid to create lasting impressions on customers (Ishikawa, 1990: 54). This way, the customers keep coming back and bring others with them. In order to maintain this kind of healthy relationships, every institution must consider ways in which way it can please customers and CRM systems form a perfect criteria. According to Anderson and Kerr, 2002: 103), if an organisation does not retain current customers, operational costs are likely to escalate. This is because additional costs will have to be incurred each time that the organisation has to acquire new customers. There is therefore need for organisations to treat their current customers well. In institutions, this mostly applies to staff since the organisation aims at retaining them for as long as possible. Getting new staff members may cost the school highly during recruitment and training of staff. Loss of students due to poor customer relations or poor satisfaction of their needs should be completely eliminated so as to ensure that the school continues operating profitably.
- 5.2.4. Improved marketing strategies
Grant and Anderson (2002: 29) praise the use of CRM systems by indicating that they have great potential to promote e-business. This forms a web-based interaction between the customers and the institution. It is through this medium that institutions can effectively communicate with their customers and thus meet their needs appropriately. Bradshaw and Brash (2001: 525) note that these customers can use the same technology to pass over their comments and complaints to the administration. This not only helps to address the customers' needs by addressing the problems indicated but also helps the organisation to avoid any loss of customers and consequently loss of profits due to customer dissatisfaction. Customer Relationship Management can also double up as a marketing tool (Milliron, 2001: 15). Websites are a good example and their use in addressing customers' questions and concerns is highly valued among successful businesses. Using CRM systems, the institutions can advertise themselves and the courses they offer and any other benefits pertaining to the students and employees as their major customers. Web developers have now designed creative ways in which institutions can advertise the various services that they offer. For example, links connecting to pages that could be of interest to a particular student pop up whenever he or she links to the web (Milliron, 2001: 16). An example is where a student records acting as her interest in extra-curricular activity. Whenever he or she opens his or her account in the institution's website, links connecting to the acting clubs and societies can pop up detailing the current and future events. This is a feature that plays a huge role in the attraction of new students into colleges and universities as they can gauge the available activities at the school.
- 5.2.5. High returns on investment
Customer Relationship Management Systems could prove costly during the set up due to the high levels of expenses in acquisition of new technologies and training of staff. (Conant, 2003: 8-9) however notes that this soon turns into advantages to the institutions. The use of CRM systems helps to assimilate information so that customers are given accurate information (Stefanou and Sarmaniotis, 2003: 629). This is because data analysis which is conducted after collection of data helps to give a proper understanding of what the customers need so that these needs can be addressed with relative ease. Customer Relationship Management Systems help to reduce customer complaints. This according Bruhn (2003: 48) is very effective in saving money that would in other circumstances been used in catering for customer complaints and cases of dissatisfaction. Wilson (1991: 103) notes that dissatisfaction of customers is not only costly to the institution but to the customer as well. When a customer loses in a deal, the probability that he or she will utilize an organisation's services again is greatly reduced. Besides this, the customer relations established help to retain customers so that sales do not reduce thus leading to losses. The use of CRM systems has been known to reduce the costs incurred by institutions significantly. According to Anderson and Kerr (2002: 147), institutions are likely to use up more money in attracting new customers if they do not create a good name among the present customers. By providing proper customer relations, they are able to keep from the costs that would otherwise reduce their profitability (Patterson, 2007: 7). CRM systems save time taken to take care of customers so that the employees can concentrate on other things thus making them even more effective. As a result, more income is likely to be realised.
- 5.2.6. Efficiency in dealing with student needs
This discussion is undertaken because students form an integral part of any higher education institute. As a matter of fact, students are the major customers that institutions serve and they therefore command a great deal of attention. While introducing this research, it was noted that the number of students that institutions handle could be overwhelming so that their needs are not effectively met. Further, a note was made about the tendency of ignoring the students' needs based on the fact it is students who require education and must therefore attend school. This makes them reluctant to take student issues seriously which is quite frustrating to students. Grant and Anderson, 2002: 226-27) note that all such notions must be eliminated. They cite the increased levels of competition for students among universities and colleges which has heightened. In order to retain existing students and attract new ones, Kotler and Fox, 1995: 78) contend that higher education institutions must aim at raising their level of competitiveness. Competitiveness can only be achieved through understanding customer needs and seeking to satisfy them. This way, they would not have to switch to competitors who can effectively satisfy them. Constant change in needs among the students is also considered as an important factor that the administration should focus on.
According to Patterson (2007: 5), higher education institutions should not view the marketing task as a one time event but as an activity which they need to keep up throughout the life cycle of the student. Further, she suggests that the use of CRM systems can play a vital role in understanding student patterns of satisfaction so that the necessary measures can be taken to better satisfy their needs. This way, students can be retained in the institutions since they would have no reason to leave. Students are said to have more power when it comes to making choices on the schools the schools they wish to attend than their parents do. According to Patterson, 2007 (5-6), this is a new trend and it is not the olden days where parents made choices for their children. The youth of nowadays demand an exciting schooling environment which higher education institutions should aim at delivering accordingly. They have developed special preferences in terms of the schools that they want to attend. Also notable is that their level of interaction with technology is quite high, which means that incorporating technology into the customer care management is a step further in satisfying their needs. Seeman and O'Hara (2006: 26-27) note that high school graduates are now very choosy and go through a variety of institutions before they can eventually settle for a choice.
While the institutions' academic performance matters, other factors including extra-curriculum activities offered by the school, marketability of the institution's graduates in the job market and satisfaction cited by the alumni about their experience in the institution among others really matter in the students' ultimate decision making (Cleary, 2001: 33). For this reason, colleges and universities have to compete to win the favour of these potential customers. They must understand the evolving needs as they arise and acting quickly to cater for them. Failure to do this could retard the institution's advancement denying it of the desired level of profitability. All this rotates around customer satisfaction which is best achieved when the needs of customers are identified. The use of CRM systems could prove to be quite essential in integrating student needs into the school management strategies to gain a competitive advantage over other institutions. Marketing and improved customer relationship through the use of CRM is one way of accomplishing this objective. The use of a website for example is an effective marketing tool. The fact that students can obtain all the information about the school, administration, courses and benefits available to them upon enrolling in the school puts the institution at an advantage.
5.3. A word of caution
While higher education institutions embark on adopting CRM strategies, it is worth noting that the CRM systems just like any other system could let the institution down. Chen and Popovich (2009: 675) warn that even though vendors may promise 100 percent success in the use of their systems, this is not always guaranteed and project failures are likely to occur. Failure rates have been known to go as high as 65 percent. This leads to high losses considering the high level of expense involved in installing such systems. Bogus systems could also impact on customers if they do not provide the desired service so that the institution would end up losing this portion of customers (Conant, 2003: 9-11). It is therefore quite important that attention is paid and consultations done before acquisition of CRM systems. To avoid failures, institutions must take caution before investing in a particular system by conducting research. This will ensure that the company's resources are not wasted through failures and poor returns on investment.
Chen and Popovich (2009: 678) go on to show how an institution could waste money used in investing in CRM systems that are never put to use. They note that organizations often invest in CRM systems and do little to ensure that they are being used for the right purpose. It is therefore common to find that the customer's enquiries are rarely addressed and that the sites are barely updated to incorporate new changes. If other institutions are performing this function, chances are that prospective students and staff could prefer them so that institutions that do not pay attention are likely to lose business. In other circumstances, the employees are not properly trained so that the results are haphazard leading to loss in confidence among the employees and consequently dissatisfaction among customers (Chen and Popovich, 2009: 680). The institutions should therefore make sure that the implementation of a CRM system is followed by staff training which will ensure that they perform as expected.
Customer relationship management presents itself as a solution to the unending problems that higher learning education institutions normally encounter in handling customers. By making use of CRM systems, not only will institutions of higher learning retain their current customers but also attract new customers as well following proper understanding of their needs and concerns. CRM systems have been identified as useful strategies in a world where customer-centrism has taken the lead in improving business profitability. Customer-centrism as a business strategy has been emphasised due to the realisation that besides providing quality goods, there is need to be proactive through identifying customers' current and future needs. Directing the organisation's activities towards meeting these needs is what defines its competitive edge against other organizations in the same sector. It is therefore extremely vital that institutions of higher learning embrace the use of CRM systems so as to enhance their performance. The advancement in the use of technology is also a catalyst towards the use of CRM systems given the high knowledge about computers among institutions' major customers. This is also due to the shift towards e-marketing as a way of attracting new customers. We realise that the use of a CRM system helps a great deal in reducing the expenses incurred by an institution so that profitability is enhanced.
From the case study of Imperial College, it is true to say that the use of CRM systems can greatly improve the situation in any institution. For example, the use of RightNow CRM solution has decreased the administrative costs incurred by Imperial College in answering prospective student queries most of which are repetitive. Instead of using up a lot of time catering for such queries, the administrative department can now concentrate on other things thus saving on time and improving the ease with which they handle their customers. It is not only in reducing the customer query burden that the CRM systems prove useful. It is evident that websites can still be used as advertising tools so that the institution can afford to attract more customers. Existing customers also have a chance to leave their views on the website thus facilitate the level at which the customer needs are addressed.
The need to be cautious in the acquisition of CRM systems from vendors is of great importance. This is with the realisation that it is possible to lose customers if the system does not work as expected. As indicated in the study, this could result from failure to address customer needs as well as poor training on the part of the employees so that they cannot make it work to the company's advantage.
Having considered all the advantages of having a Customer Relationship Management system, it would be true to conclude that institutions of higher learning can effectively retain existing customers and attract new customers into the institution. By making sure that the students, staff, alumni and parents are adequately satisfied, colleges and universities will ensure that these groups do not turn to competitors. Their recommendations can attract new customers to the institution thus increasing the customer base. This is besides the fact that CRM systems by the use of web-based technologies have a high potential for the attraction of new customers into the organisation.
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