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Customer Relationship Management Techniques

Info: 5200 words (21 pages) Essay
Published: 12th May 2017 in Marketing

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Competition between enterprises is becoming more intense in the 21st century. Economy is depressed, the industrial structure is changing, and unemployment is at a record rate in India. Under these competitive pressures, it is important to impress and improve the relationship with the customer. Because of the power of information and telecommunications technologies, business can track their customers and determine what they really want and how they actually use the product. Analyzing the information returned from customers and products, business can provide active and accurate service to the right customer through the right channel at the right time and increase customer satisfaction. This paper refers the Customer Service in Customer Relationship Management (CRM) and Information Technology (IT) concepts to analyze and understand the customers’ needs and realize the competencies of support groups within the enterprise. The customers can therefore be better served and the efficiency and effectiveness of internal company support groups can be improved. The knowledge and experience not accumulated can be solved and the cost of manpower and services reduced.

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A growing number of organizations have implemented or are considering implementing Customer Relationship Management (CRM) strategies for the purpose of becoming more customers focused. Despite this trend, there remains a relative dearth of academic literature relating to examining the realities of achieving such organizational objectives. CRM systems can be viewed as strategic and operational information systems aimed at enabling organizations to realize a customer focus (Bull 2003). A significant number of organizations operating in diverse business environments have or are considering adopting Customer Relationship Management (CRM) systems (Fjermestad and Romano Jr 2003). Despite this phenomenal growth the organizational record of the successful development and utilizing of such systems is mixed. Some studies of CRM systems projects conclude that organizations are struggling to achieve improvements in customer performance (Giga 2001). However, others highlight a more positive scenario (Davenport, Harris et al. 2001). As the organizational adoption and utilization of CRM systems evolves, a clearer appreciation and understanding of how CRM systems can affect customer performance should emerge.

This study focuses on an integrated Customer Relationship Management (CRM) structure to understand the implications and application of business alternatives using a questionnaire with CRM integration on the Textile industry in India. We will study business CRM implementation using “Marketing Strategy Management”, “Customer Value Analysis”, “Customer Relationship Management”, and “Information Technology Application”. This study’s goals are: (1) Analyzes the key factors of CRM success from scholars and the positive CRM implementation effects to construct a CRM model; (2) Compares the differences between business scale and CRM implementation; (3) Compares the differences between business location and CRM implementation; (4) Determines key CRM success factors and related principles to provide a reference for the Textile industry with a defined CRM model.

2. Literature review

2.1 A brief history of Customer Relationship Management

Beginning in the early 1980’s, in the United States Customer Relationship Management was called Contact Management. Information was collected from customers and companies. In the early 1990’s, call centers were generated and the customer service information analysis function was performed through data warehouse, data mining, and others technologies. Now, Web-enabled Call Centers are used to enlarge the market and determine customer initiated value-added services [1].

2.2 The various aspects of Customer Relationship Management

Kalakota and Robinson [9] considered that the appropriate CRM structure could be realized through three aspects: taking customers from other firms, enhancing customer from other firms, and maintaining the current customer base. Different management functions are needed to achieve the integrated CRM structure. By developing relationships between the business and customers, CRM could be separated into taking customers, serving customers, and customer analysis. Business could use customer profiles effectively to provide real-time, excellent customer service. This is a beginning in developing the next customer through analyzing the customer’s needs. To realize the four core relations at the center, CRM makes cycling the customer relation process through customer development and data feedback. It is the final target to make customer satisfied and creating profits in different functional collocation of customer relation. However, we can establish an integrated CRM structure involving three topics: Core Relations, Customer Relations, and Information Technology, by centralizing customer analysis [13].

2.3 The theory of relationship marketing

As the time trend evolving and consumer conscious raising, the traditional marketing theory will develop. Kotler [11] considered that the theory of marketing management is generated by five different operating principles (1) production concept; (2) product concept; (3) sales concept; (4) marketing concept, and (5) social market concept. He also considered that the different levels of customer relationship will separate relationship marketing into (1) basic marketing, (2) reactive marketing, (3) accountable marketing, (4) proactive marketing, and (5) partnership marketing. However, under marketing theory development, the traditional sales principles were not suited to the market of today. In business, the important task is how to use relationship marketing with integrated marketing effectively to strive for customer loyalty. Integrated marketing has progressively formed this concept. Kotler [11] considered integrated marketing as all of the divisions in the business that provide services that make satisfied customers. Executing this involves two levels: (1) sales strength, (2) the collaboration of advertisement and product marketing management. At the same time, all related marketing activities must collaborate with all other divisions. To promote collaboration between all divisions, a business had to execute the external marketing and internal marketing. The external marketing is business adopted marketing activities to the external customer. The internal marketing is how to select, train, and motivate employees to provide the best service to the customer.

2.4 Value Compass Perspectives

The value compass determines the value of four customer relationship perspectives was brought out by Wayland [5]. It is the strategy the best value of collaboration between business and business through correct connection. We will introduce the four perspectives that the value compass decides the value of customer relationship as follows.

2.4.1 Customer Portfolio Management

Customer portfolio management means that how to choice the valuable customer relationship and management principles. It can be separated into three items: (1) Market level. Business makes the portfolio target as all customers in the wide market. The best purchasing-power customer is the best valuable customer. (2) Group level. The object is certainty distinguish or different type group customers. They could give the supplier rich feedback. Managers provide service, which satisfies customers’ special needs. (3) Individual level. Business has to know deeper customer knowledge and adopt individual management when the needs are very different in relation value, preference, and individual needs.

2.4.2 The setup of value position

The value position is meaning that the value exchange degree between buyer and seller. Business will provide much service in the value chain or total experience for the customer to increase the value of the customer relationship. This can be separated into three items: (1) Core product. It can be defined clearly as the special part of customer value chain. Supplier can improve core product or service to reduce the cost of customer. (2) Extended service. Increase more related buyers’ value chain or total experience. This means that sellers could provide much service for customer to achieve the customers’ needs. (3) Total resolution alternative. It is wider value position that sellers will intervene in buyers who satisfied or achieved targets to adopt activities including the interrelation and communication channel between them.

2.4.3 Value-added role

Value-added role is how business seeks out obtaining the best profit feedback position between customer and suppliers in related value chain. It can be separated into three roles: (1) Product manager. This is a series of interrelated activities and business behaviors that provide a product to buyers; (2) Process manager. It is a multi-perspective connected model between a customer and supplier. The process manager customer relationship involves all position in value position, but it refers to the wider value exchange; (3) Network manager. It involves multi-perspective between buyers and sellers and the connection of related groups.

2.4.4 Reward and Risk sharing

The interactive between customers and suppliers is basic on value creating and value sharing. There are three different represented positions as follows: (1) Market-base sharing. It is the basic model of the reward and risk sharing. This was decided by the market and possessed neutral characteristic. (2) Expression-base sharing. In the future, it will hold and operate the price of some products that are risk-taking and uncertainty. They usually determine the risk by negotiation to develop the extend relationship. Quality assurance and after-selling service is common model of risk-taking. (3) Result-base sharing. It is partnering all most people mean joint risk-taking. However, the sharing reward is based on the degree of plan success.

Customer portfolio management

Added-value role

Reward and risk sharing

The setup of value position

Individual

Group

Product manager

Market

Process manager

Network manager

Result-base

Expression-base

Market-base

Core product

Extend service

Total resolution alternative

Figure 1: Value compass

2.5 Customer Service Management

There are three customer service parts including construct service system, after-sales service, and satisfaction investigation. The services provided involve before sales, sale, and after-sale. As business can provide perfect selling process in spot, they can keep the customer to increase opportunity of profit. However, all kinds of follow-up service, it can not only strive customer loyalty and compensate for customer dissatisfied but also stop negative product information from spreading. At the same time, as better understanding of what satisfies the customer, the business learns to provide improved products and services.

2.5.1 Service System Construction

Rohit [12] considers that when a business builds a service system, a service design and service delivery process are involved. (1) Service design. Considers the product characteristics suitable for different services. (2) Service delivery. Considers the environment in which the service is provided, and a whole set of alternatives to ensure that service quality is achieved between the salesman and customer. Until now, most business has established a specific customer service department to handle customer related services. The administration in charge of design and controlling customer service, planning and executing all kinds of sales services occur on the spot. It, the call center or service center, will help the business deliver customer service.

2.5.2 After-sales service Management

After-sales service is all kinds of services asked for after the sale is completed. This is separated into extended service satisfaction, confirmation management and after-sales service. (1) Satisfaction confirmation management. Business takes the initiative for completed consumer to confirm the product use condition and satisfaction. In the execution of after-sales services, how much resources the business inputs is divided into four items: (a) product questionnaire feedback, (b) acknowledgement letter delivery, (c) telephone interviewing, (d) sales interview. (2) The management of customers complain. An example of the general customer call process, business should obey the following principles to increase customer satisfaction: (a) Calm down the customer’s feelings, (b) List the emergency, (c) Express concern, (d) Afford redress, (e) Conduct a follow-up investigation.

2.5.3 Customer Satisfaction Investigation

A complete customer satisfaction investigation should have overall planning to raise the validity and reliability in investigation result. The identification and supporting of senior manager will affect the result. Only senior manager support should set the investigated target to achieve customer satisfaction through developing research, analysis, and result application. We can separate the complete customer satisfaction investigation process into eight items as follows: (1) senior manager support; (2) investigation target identification; (3) investigation plan; (4) questionnaire list; (5) questionnaire execution; (6) questionnaire result analysis; (7) information sharing; (8) investigation review.

2.6 Information Technology Construction

Information technology infrastructure and construction could provide the needed competitive information technology resources. They are also the key factors of forming basic strength difference. Davidoow et al. [7] considered that when information technology infrastructure and construction could allow new business strategies to appear and provide integrated connectivity mechanisms. [4]. Applegate et al. [2] considered a broad definition of information technology that included information technology infrastructure and information technology related operation and opportunity. However, Ken [10] considered that information technology construction could provide an overview of business owned information technology, possible technology, and implies business operation. This connects organization structure and business strategy. Information technology infrastructure is an information technology capability to help business information integration and sharing. Weill [14] considered that the information technology capacity of technology infrastructure possesses not only information technology, but also technology perspectives that provide basic operation levels, communication, software equipment, network systems and management perspectives. Furthermore, Broadbent et al. [4] consider that information technology capacity should also involve the scope of reach and range in business; the scope of reach is connection level of information technology capacity and the range of reach is provided service of information technology capacity.

3. Methodology

3.1 The structure of Customer Relationship Management

This study focuses on the cognition and application of CRM in the Textile industry in India. We analyzed the difference between Marketing Strategy Management (MSM), Customer Value Analysis (CVA), Customer Service Management (CSM), and Information Technology Application (ITA) with different characteristics (see Figure 2).

Different location

H1

Different scale

H2

Different employees’ characteristics

H3

Marketing Strategy Management

Customer Value Analysis

Customer Service Management

Information Technology Application

Apply CRM structure

Figure 2: Research structure

3.2 Hypotheses

The hypotheses developed in this work are shown in Table 1.

Table 1: Hypotheses

Hypotheses

H1

The difference in different location to MSM, CVA, CSM, and ITA.

H1a

There is no significant difference in location to Marketing Strategy Management (MSM).

H1b

There is no significant difference in location to Customer Value Analysis (CVA).

H1c

There is no significant difference in location to Customer Service Management (CSM).

H1d

There is no significant difference in location to Information Technology Application (ITA).

H2

The difference in different scale to MSM, CVA, CSM, and ITA.

H2a

There is no significant difference in scale to Marketing Strategy Management (MSM).

H2b

There is no significant difference in scale to Customer Value Analysis (CVA).

H2c

There is no significant difference in scale to Customer Service Management (CSM).

H2d

There is no significant difference in scale to Information Technology Application (ITA).

H3

The difference in employee characteristics to MSM, CVA, CSM, and ITA.

H3a

There is no significant difference in employee characteristics to Marketing Strategy Management (MSM).

H3b

There is no significant difference in employee characteristics to Customer Value Analysis (CVA).

H3c

There is no significant difference in employee characteristics to Customer Service Management (CSM).

H3d

There is no significant difference in employee characteristics to Information Technology Application (ITA).

3.3 Variable description

The structure is combined with Marketing Strategy Management, Customer Value Analysis, Customer Service Management, and Information Technology Application in Customer Relationship Management. The variables are described in Table 2.

Table 2: The variables in CRM structure

Variables

Item

Marketing Strategy Management

1. Business make customers become partner to participate the value interchange.

2. Carry out marketing strategy with 4P principles.

3. Each department should pursue for improving service process continuously.

4. Business should set the marketing performance assessment principles to be total marketing.

5. Take customer profile to design sales activities.

6. Take automatic technology assistant tools to design sales activities.

Customer Value Analysis

1. Lead in data warehousing to setup and analyze customer profile.

2. Adopt data mining to analyze consumer behavior.

3. Establish specific department to analyze customer profile.

4. Adopt customer value analysis to identify target customers.

Customer Service Management

1. It is urgent task to make quick service system as well.

2. Improve quality initiatively to satisfy customer as well.

3. Analyze customer respond question as well to improve service quality.

4. After owning perfect internal customer, business will have satisfied external customer.

5. Business should make investigation of customer satisfaction and apply it.

6. There is a rise trend of customer satisfaction by implementing CRM.

Information Technology Application

1. Business and customer interchange continuously by operating information.

2. The database is the CRM base.

3. Make the best profit by applying customer database to provide marketing service.

4. As customer profiles do not be integrated, the utilization ratio of them falls.

5. Lead in the supporting technology which CRM need.

6. Adopt Internet and others related tools to provide convenient customer service.

We adopted descriptive statistics, reliability analysis, t-test, One-way Analysis of Variance (ANOVA) by SPSS for Windows 10.0 to analyze the Textile industry in India.

4. Analysis and result

4.1 The questionnaire sample structural analysis

We emitted 640 questionnaires and recovered 194 in 2008. The total recovery ratio was 30.31%. Sixty-eight of the 194 returned questionnaires were invalid, making the valid recovery ratio 19.69%. This study was directed at business proprietors and unit leaders. The proprietors occupied 29.37%, senior managers occupied 48.41%, and the middle managers occupied 22.22%. The sample showed that the average business experience was 11-15 years occupied 53.18%, above 16 years occupied 26.98%. The education levels for this sample were above college occupied 93.65%. In sum, the sample had be representative to realize the questionnaire meaning when they answered. The reliability was tested by the Cronbach’s α value to each perspective (See Table 3). All perspectives reliability represent high reliable with total questionnaire Cronbach’s α value is 0.8446 (above 0.7). The Customer Value Analysis perspective (Cronbach’s α = 0.7989) and Customer Service Management perspective (Cronbach’s α = 0.7908).

Table 3: Reliability analysis

Perspectives

# of questions

Cronbach’s a

CRM overview

8

0.7285

Marketing Strategy Management

6

0.7998

Customer Value Analysis

4

0.7989

Customer Service Management

6

0.7908

Information Technology Application

6

0.7277

Total

30

0.8446

4.2 The analysis of difference in different location to CRM overview

This paper studied the different location relation to CRM first. There was a more positive view in “We will have clear CRM direction and target in the future” and “We should established specific department to maintain and improve customer relation” with Central India area businesses than Northern and Southern area businesses. There was more positive view in “There is a rise-trend of total satisfaction with customer” with the central area businesses than northern and southern area businesses. For this reason, lots of resources are available in Central India. This fuels Textile industry development in the central area.

4.3 The analysis of difference in different location to MSM, CVA, CSM, and ITA.

This study used One-way ANOVA to test the significant difference in different location to MSM, CVA, CSM, and ITA (See Table 4). We find that there is not any F-value significant in different location to MSM and CVA perspectives and the entire Mean is above 4. The opinions of sample in MSM and CVA perspectives are the same. We support the H1a and H1b. In the CSM perspective, there is not also any F-value significant in different location to this one, but only on “After owning perfect internal customer, business will have satisfied external customer” and “Business should investigate customer satisfaction and apply it” the mean between 3.3 to 4.0, the others are above 4. The opinions of sample in CSM perspective are the same. We support the H1c. Finally in the ITA perspective, there is only “Adopt Internet and others related tools to provide convenient customer service” the F-value shows significant (P= 0.005) in different location to this one. The others are not significant and the entire Mean is above 4. Most sample opinions in this perspective were the same. We support the H1d.

Table 4: Statistic Analysis

Items

Mean

Standard error

F

Significant

Marketing Strategy Management

Carry out marketing strategy with 4P principles.

4.51

0.54

0.51

0.951

Each department should pursue for improving service process continuously

4.04

0.70

0.523

0.594

Business should set the marketing performance assessment principles to be total marketing.

4.17

0.64

0.133

0.875

Business make customers become partner to participate the value interchange.

4.13

0.85

1.070

0.346

Take automatic technology assistant tools to design sales activities.

4.16

0.63

0.295

0.745

Take customer profile to design sales activities.

4.27

0.55

0.008

0.992

Customer Value Analysis

Adopt data mining to analyze consumer behavior.

4.43

0.53

0.290

0.749

Lead in data warehousing to setup and analyze customer profile.

4.12

0.69

0.716

0.491

Establish specific department to analyze customer profile.

4.26

0.67

0.979

0.379

Adopt customer value analysis to identify target customers.

4.31

0.58

1.256

0.289

Customer Service Management

It is urgent task to make quick service system as well.

4.30

0.58

0.038

0.963

Improve quality initiatively to satisfy customers.

4.33

0.80

0.743

0.478

After owning perfect internal customer, business will have satisfied external customer.

3.34

0.91

1.167

0.315

Business should make investigation of customer satisfaction and apply it.

3.93

0.64

0.472

0.625

There is a rise trend of customer satisfaction by implementing CRM.

4.27

0.64

0.244

0.784

Analyze customer respond question as well to improve service quality.

4.30

0.55

0.043

0.958

Information Technology Management

Database is the base of building CRM.

4.41

0.53

0.408

0.666

Business and customer interchange continuously by operating information.

4.42

0.51

0.878

0.419

As customer profiles do not be integrated, the utilization ratio of them falls.

4.41

0.56

0.757

0.471

Adopt Internet and others related tools to provide convenient customer service.

4.51

0.52

5.505

0.005**

Lead in the supporting technology which CRM need.

4.31

0.74

0.914

0.404

Make the best profit by applying customer database to provide marketing service.

4.06

0.42

0.939

0.394

Note: *p<0.05; **p<0.01; ***p<0.001

4.4 The difference in capital to CRM analysis

This study found a more positive view for “It could solve most customers’ questions by implementing CRM” with above 80 million (NTD) capital businesses than the capital between 5 million to 80 million businesses, and for “We should established specific department to maintain and improve customer relation” and “There is a rise-trend of total satisfaction with customer”. There was a more positive view for businesses above 20 million capital than those with capital between 5 million to 20 million. This shows that there are more implement and effectiveness in CRM practical application with higher capital businesses than lower ones.

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4.5 The analysis of difference in different scale to MSM, CVA, CSM, and ITA.

This study used One-way ANOVA to test the significant difference in scale to MSM, CVA, CSM, and ITA. We find that there is not any F-value significant in different scale to MSM and ITA perspectives and the entire Mean is above 4. The sample opinions for MSM and ITA perspectives were the same. We support the H2a and H2d. In the CVM perspective, there is only “Adopt data mining to analyze consumer behavior” the F-value shows significant (P= 0.003) in different scale to this one. The others were not significantly different and the entire Mean was above 4. Most sample opinions in this perspective were the same. We support H2b. In the CSM perspective, no significant F-value was found for different scale to this one, but only on “After owning perfect internal customer, business will have satisfied external customer” and “Business should make investigation of customer satisfaction and apply it” the mean between 3.34 to 4.0, the others are above 4.27. The sample opinions for the CSM perspective were the same. We support H2c.

4.6 The different MSM, CVA, CSM, and ITA profile analysis.

4.6.1 Position

We found a significant difference (P< 0.05) in “Take customer profile to design sales activities” with the proprietors than for middle managers after LSD analysis in MSM perspective. The reason is proprietors were more positive about developing sales and market by taking customer profile (See Table 5). And the same opinions are in CVA and CSM perspectives. However, there is significant (P= 0.010) in ‘As customer profiles do not be integrated, the utilization ratio of them falls” with proprietors and senior managers than middle managers. The reason for position above senior managers stress on customer profiles. If there is no integrated system about customer profile, it is loss to company.

Table 5: One-way ANOVA of different position

Item

Proprietor

Senior manager

Middle manager

Supervisory manager

Employee

F

P

LSD

Marketing Strategy Management

Carry out marketing strategy with 4P principles.

4.41

4.53

4.59

0.920

0.402

Each department should pursue for improving service process continuously

3.97

3.98

4.26

1.688

0.190

Business should set the marketing performance assessment principles to be total marketing.

4.03

4.15

4.41

2.838

0.062

Business make customers become partner to participate the value interchange.

3.85

4.24

4.26

2.622

0.077

Take automatic technology assistant tools to design sales activities.

4.03

4.13

4.41

2.967

0.055

Take customer profile to design sales activities.

4.15

4.22

4.52

4.062

0.020*

1 > 3

Customer Value Analysis

Adopt data mining to analyze consumer behavior.

4.32

4.44

4.56

1.452

0.238

Lead in data warehousing to setup and analyze customer profile.

4.03

4.18

4.11

0.516

0.598

Establish specific department to analyze customer profile.

4.15

4.31

4.30

0.658

0.520

Adopt customer value analysis to find out target customer to promote fully.

4.24

4.31

4.41

0.656

 

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