The impact and success of CRM Systems
This essay was produced by one of our professional writers as a learning aid to help you with your studies
As has been commented upon in academic research, “today, in the business world, management recognises that customers are the core a business.” Expanding market share for any business relies upon the strength of their ability to be able to attract customers to purchase their product or service. However, it has not been until relatively recently that business has begun to understand that it is not solely the reliance upon attraction of customers that is important to success. Equally, if not more important, is the need to retain the customer and their future loyalty to the product offering or brand, as this is the only way in which the corporation can sustain their competitive advantage over other market players. Moreover, it has also been recognised that there is a significant cost benefit in the retention of existing customers in comparison with adding a new customer and this is especially true in an industry that has reached saturation point, which is certainly the case in the UK mobile telecommunications sector.
1.2 Background on CRM tools and systems
Consequently, it is not surprising to find that an increasing number of businesses are becoming more focused upon the need for including customer relationship management (CRM) processes, tools and systems as a key element of their corporate marketing strategy. Indeed, in a survey conducted by Boston based Bain and Company, which covered 708 corporations across the America's, Europe, Asia and Africa and resulted in 6,373 respondents, 78% were actively using management tools as a key element of their drive for competitive advantage, with the same percentage incorporating customer surveys within this strategic area. With the advancement of technology, both in terms of software, the internet and other developments, these CRM tools and systems have become more innovative as corporations seek to improve their customer retention and loyalty. It is this particular element of the CRM discipline that forms the focus for this dissertation which, by using T-mobile as a case study corporation, intends to undertake an assessment and evaluation of the impact that such tools have upon the corporation's marketing department.
1.3 Case study T-Mobile
T-Mobile is a wholly owned subsidiary of the German telecommunications giant Deutsche Telekom. The current brand name was introduced in 2002. Within its sector, the company is the world's sixth largest mobile communications business, based upon the number of subscribers, and the third largest mobile multinational after Vodafone (UK) and Telefonica (Spain). Globally, the company has over 101 million subscribers. In the UK, T-Mobile has 13 Million subscribers and operates through 294 separate retail locations in addition to its online website. On the 1st July 2010, T-Mobile UK became part of a joint venture with Orange, operating through a new corporation called Everything Anywhere Ltd, which is “jointly owned by Deutsche Telekom and France Telecom.” Together the two businesses account for around 28 million subscribers and share administrative facilities.
As stated, T-Mobile is operating within a highly saturated industry sector, which can be evidenced from recent statistics. For example, as can be seen from figure 1, mobile phone ownership had increased to over 80% by 2008 . More recently, by 2010, this number had risen to around 90% ownership of 2G and 3G mobiles (figure 2), although it should be noted that the number of actual mobiles owned significantly exceeds this figure because many individuals have more than one phone.
Figure 1 Consumer durable statistics
Figure 2 Communications adoption 2010
Source: OFCOM (2010)
In terms of market share, the statistics show that T-Mobile's percentage of the UK market has remained relatively static during the course of the five years to 2009, as indeed has that of Orange, the company with which it has now formed an alliance. In contrast, O2, Vodafone and 3UK have achieved significant share growth during the same period. Superficially, at least, this appears to suggest that the latter corporations have not only managed to secure a greater rate of market share growth than T-Mobile but have also been more successful at retaining the loyalty of their existing consumer base. Consequently, this result suggests that there is a need for improvement in the T-Mobile CRM systems.
Figure 3 Mobile phone market shares
Source: OFCOM (2010)
1.4 Aims and objectives
The aim of this study is to evaluate and assess the impact and success of CRM tools and systems within a practical corporate environment, in other words, it seeks to ascertain the extent to which these tools are achieving their goals of customer retention. Therefore, it is intended to resolve the following research propositions:
1. That CRM tools are having the effect of increasing customer loyalty to the T Mobile brand and improving repurchasing levels.
2. That the marketing department at T Mobile have been successful in introducing innovative CRM tools which has provided the corporation to achieve a competitive advantage over its main competitors within the mobile phone sector.
To facilitate the robustness of this dissertation and the fulfilment of the aims that have been set, it is intended to conduct the research within the following framework of objectives. The focus of these objectives will be the mobile sector of the UK telecommunications industry, using T Mobile as the case study organisation: -
To provide a brief overview of the definition of CRM and its purpose within a corporate environment, with particular reference to its development and effectiveness of use within the UK mobile telecommunications sector
To provide a detailed examination of the main challenges faced when using CRM tools and identify the latest technologies that are being used to address these issues.
To provide a critical analysis of the way in which the case study organisation, T Mobile, has introduced CRM tools and systems into their business. Moreover, this objective will also seek to investigate how these systems have been incorporated into the latest strategies developed by their marketing department.
The final objective is to use the results of the research conducted t make recommendations for improvement, if applicable.
1.5 Scope and structure of dissertation
To aid clarity and understanding of the content the remainder of this study has been formatted within the following framework. In the next chapter (2) a critical literature review is presented which concentrates upon the definition of CRM, the various tools and systems that are used to improve and enhance its management, as well as identifying how T Mobile have utilised these tools within their CRM strategy. Chapter three examines the methodology options available to the research and provides the reasoning for the methods that have been chosen, as well as indicating the limitations and how these have been addressed. Within chapter four, the research findings are presented and explained and these are further discussed in the chapter (5) that follows. The final chapter (6) brings the dissertation to a conclusion and, based upon the findings that have been discussed, also contains recommendations that are intended to assist the case study organisations and other in maximising the benefits the receive from effective implementation of CRM systems.
Furthermore, as attachments to the main dissertation, additional appendices have been added. These comprise of a biography that provides details of all the publications and other information that has been relied upon and referred to within this study. Additionally, the appendices contain details of the primary research conducted, such as the questionnaires and interviews, together with full details of the responses received.
Chapter 2: Literature review
The academic and corporate interest in the importance of a relationship that a business can and should develop with their customers has been a part of the corporate strategy for some time . In this respect, it has long been recognised that the extent to which a corporation understands its customer and their needs will have a significant impact upon both their achievement of competitive advantage and in developing appropriate marketing strategy . However, since the middle of the 1990's CRM has not only taken the theory and art of interacting with customers to a new, more collaborative level, but the concept itself has become almost inextricably linked with the rapidly developing area of information technology and systems . In other words, from a practical, if not psychological aspect, the majority of CRM related studies are now focused upon its development and practice within the internal and external technologies tools and systems available to the corporation.
Therefore, within this critical review of existing literature the intention, following a brief overview of the various definitions that have been applied to CRM, is to focus upon the CRM, how these are implemented in the IT environment, and to also evaluating the benefits and barriers. Following on from this the relationship between these issues and the manner in which they have been implemented within the case study corporation T-Mobile.
2.2. Defining CRM and its purpose
As has been the case with almost every theory related to corporate strategy and management, there have been a number of attempts at providing a comprehensive and robust definition for the term CRM. These have ranged from the complex to the simple. At the former end of this scale is the lengthy definition that was used by Payne and Frow for the purpose of their research study into this area.
Figure 4 CRM definition
Source: Payne and Frow (2006, p.168)
However, as Payne and Frow indicate the term, which gained prominence in the 1990's, has in the past been defined as “CRM can be interpreted as a process of digitizing a staff's knowledge about his or her customers.” Nevertheless, in view of the connection that exists between CRM and IT, perhaps the simplest and most appropriate definition that exists can be more succinctly described as it being “information-enabled relationship marketing.”
2.2.1 Purpose of CRM
In terms of the purpose of CRM systems, from the corporation's viewpoint, the consensus of opinion is that this can be applied to five key areas, which are as follows:
1. Acquisition of new customers
The purpose being to secure new customers whose values equate with those that the firm or its brand is delivering. In financial terms, this will also reduce the fixed cost per customer, which can add further value by, for example, reducing product price.
2. Increasing revenue from existing customers
This is achieved by encouraging existing customers to purchase other products or accessories, which in the mobile environment might consist of additional apps.
3. Improving customer retention rates
Aimed at improving customer loyalty which will result in a continuation of their repurchasing habit
4. Reducing recurring costs
Improvements made to internal/external systems should lead to a reduction in the cost of delivering messages and services to the customer without impacting adversely on quality
5. Reduce costs of acquisition
Helps to improve the efficiency of attracting new customers, which has cost benefits
2.2.2 Key changes brought about by introducing CRM
As can be seen from the following table (1), the design, execution and implementation of the CRM process within the business has an impact upon four key areas of its operations.
Table 1 key change elements of CRM
Source: Gurau et al (2003, p.211)
It is apparent that the two main elements of this change are the effect that it will have upon firstly, the customer and, secondly, the business employee's. From a customer aspect, the process will be focused upon understanding and satisfying their needs, which at the same time will provide them with a greater sense of being appreciated and respected by the firm as their views are being listened too. The other aspect, which is interrelated with the first, is ensuring the efficiency of understanding that the staff have in terms of operating the new CRM system as, only through this approach will the customer satisfaction determinants be fulfilled.
2.3 CRM theoretical models
There have been several theoretical CRM models developed over recent years, which have set out to provide an understanding of the way that these processes work and the interaction between the various elements. Of these, it is considered the two that provide the greater amount of detail about these processes are the QCI (figure 5) and Payne's five processes (figure 6) models.
Figure 5 QCI model
Source (Buttle 2009.19) QCI model developed by a consultancy firm
Figure 6 Payne's five processes m model
Source (Buttle 2009, p.20) Payne's five process model
The benefit of the QCI model is that it shows the revolving and continuing cycle of the CRM customer based element. In other words, it defines the triple task of which is to win-back old customer, target new ones and continue to learn from the information gathered from the consumer so that the value of the product and brand can be constantly evolving to meet their changing needs and demands. Another important element of this model is that it indicates the bi-directional approach or communication between the various elements, which is essential in the development of a successful customer relationship programme.
Conversely Payne's model, which has been adapted from Michael Porter's ‘value chain,' takes a straight line approach and splits the process into two distinct parts, these being the primary steps, related to external and customer activity, and the supporting direction, which is related to internal operations. In focus therefore, this model is targeting the impact of the relationship between the customers on the one hand and the profitability of the business. Nevertheless, it is apparent in both cases that there needs to be a robust link between all of the component parts and it is this link which has been found to be best created through the adoption and implementation of appropriate CRM IT systems.
2.4 CRM and IT
As this review has revealed earlier, most CRM tools and systems are now implemented through the use of information technology and this is increasingly being seen as the most appropriate manner of controlling and measuring customer relationship. Nonetheless, in terms of corporate acceptance of this situation, this has been slower in materialising. However, this position is rapidly changing as indeed can be evidenced from a survey conducted in 2002 which showed corporate employee's satisfaction with IT CRM systems increased from 35% in 2000 to 78% in 2992.
It is apparent from this change of opinion that corporate employees have now begun to recognise the main advantages that exist within the new IT developments in CRM, which have been clearly identified within academic research (Table 2).
Table 2 difference between old and IT based CRM
Source: Gurau et al (2003, p.201)
One interesting observation becomes immediately apparent from a review of this list is the increased interactivity force and power of the customer and the impact that this has upon the corporation's and its drive for competitive advantage. For example, not only does the Internet provide bi-directional between the customer and the corporation, it also allows for the same to occur between customers, which means that their influence upon other and potential customers is much greater within the World Wide Web environment. For this reason, it is important that the best practice is adopted for the CRM systems.
2.4.2 Best practice for CRM in IT
The first important factor to remember, which is linked to that discussed in the previous section is that CRN management tools usage on the internet should not be confined to just being price driven. The reason for this is that most online retailers have resorted to this approach, which reduces its competitive advantage for the firm. In addition therefore, the Internet message also has to achieve customer satisfaction “to increase competitive advantage” against other online competitors.
The level of the customer satisfaction both with the product and with the relationship that he or she enjoys with the firm is a key factor in determining the extent of their loyalty to the firm and their repurchasing behavioural patterns. Moreover, as indicated within the following diagram (figure 7), if there is a significant level of dissatisfaction being experienced, the person in question can act as a disruptive force. Through the communication means available on the Internet, these ‘dissatisfied' customers can create adverse perceptions in the minds of potential new customers about the quality and appropriateness of the product and brand. This could act as a deterrent, dissuading these new customers from an initial purchase trial.
Therefore, to ensure competitive advantage is maintained a high level of customer satisfaction with both the product and the brand and its service and promotion must be maintained, to such an extent that, as Shrimp and Madden “a triangular love relationship” develops between the brand product and customer.
Figure 7 Customer satisfaction matrix
Gurau et al (2003, p.201)
2.6 CRM tools, systems and their objectives
2.4.1 Use of Internal Tools and systems
With regard to the internal implementation and management of CRM processes, the core factor is for the business to comment this process using a two-step process:
This step focuses upon the business and customer strategy review. Business strategy is to commence with an overview of the internal and external business environment. Customer strategy involves examining the existing and potential customer base to identify which segment is most appropriate for the business product
Consists of building a multichannel objective, which means that s number of channels must be managed in an integrated manner
The multiple channels that are referred to in step two above will include a number of activities. For example, perhaps the most important of these is the need for a data depository (or memory bank) from which information can be mined and retrieved. In addition, the business will need to have front and back office applications which a) interface with customers, and b) include back office applications that support internal administrative, supply and logistical processes. All of these elements must be aimed at improving the quality of service marketing that is applied to the external CRM tools. In other words, they should be designed to enhance the service value chain operated by the business and from the business viewpoint, the effective management of its customer base.
Another of the beneficial uses of internal CRM tools is that it can be integrated with other computerised systems, providing information to areas such as the supply chain, resource planning and even financial systems
2.4.2 Use of external CRM tools
In essence, most of the external CRM tools will be related to marketing , especially those that are focused upon the Internet and, in this respect can provide opportunities that can be used to adopt new marketing models that will enable the marketer to get “inside the lives [and minds] of your customer.”
Within the offline environment, many businesses have used these systems for the purpose of direct mailing and the creation of loyalty and reward programmes, all of which are designed to improve customer retention and loyalty. Alternatively, in the online environment the marketers are provide with three main marketing opportunities, which include the development of a brand website and involvement with social networking, as well as online advertising. In relation to all of these opportunities, the focus for the marketer must be upon the creation of an interactive dialogue between the business and the customer to ensure the objectives and needs of each party are met.
However, it is equally important, having implemented these processes, that their performance is monitored, which means that control systems, such as a KPI's or Balanced Scorecard approach needs to be also included within the process.
2.7 CRM at T-Mobile
In relating the above elements of the literary review to the case study organisation, T-Mobile, the extent to which this corporation has followed the advices and processes described in the previous section can now be identified. It is apparent from a visit to their website that the company is offering similar promotional material and product descriptions to those of other mobile organisations. Furthermore, in terms of building a customer relationship the site also offers a discussion forum, although it has to be said that this is not immediately apparent unless one visits the ‘contact us.' Similarly, with the same criticism, the company has also engaged with online social networking, though this appears to be limited to the ‘Twitter' site at present.
Consequently, when all of this activity is added to the data that is collected from the contact us site and the further customer details that are required when requesting help, or making a payment, it is also apparent that the organisation must have the internal CRM systems available to enable it to develop a data depository. From this, the business would be able to produce a targeting programme that can design offers for a specific group of customers, where existing or new.
In summary therefore, it can be concluded from this review that the main elements required for the implementation of a successful CRM system that will deliver the goal and objectives of the business, must be based upon the following key factors:
Creating basic functions, structure and content that are designed to deliver customer satisfaction and are designed to prevent the death of the relationship
Ensuring clarity of definition, good leadership and help from the supply chain to achieve objectives
Effective management, use and control of the information acquired and evaluating the ongoing performance
Focus on committed customers and a loyalty programme with financial incentives tend to lead to a greater level of customer satisfaction. Also learning to see the brand through the customer's eyes
Concentrate upon firing up the front line
Within the following chapters, it will be discovered the extent to which T-Mobile's current CRM tools and systems have succeed in these goals and objectives.
Chapter 3: Research methodology
One of the most essentials prerequisites for the conduct of any study of this nature, which includes both an understanding of the theoretical processes and their transition into a practical commercial environment, is ensuring that the appropriate methodology is chosen for use . The following sections outline the approach that has been adopted for this dissertation.
3.2 Research philosophy
The philosophy adopted for the study has been based upon a combination of the positivism and interpretivism approach. In relation to the former, the benefit is that it allows the researcher to introduce previously published facts and concepts that can be reviewed objectively, for example, in this case such a modus would include previously published academic literature and the opinions of expert observers. Interpretivism, on the other hand, permits the researcher to observe the reactions and perceptions of individuals, which in this case would be those who supply mobile product and the consumers who use them.
3.3 Methodology strategy
With a study that combines the theoretical with the effectiveness of its transitioning into a practical environment, the methodology chosen would rely upon either the quantitative or qualitative approach, or a combination of the two. The former allows for a more detailed and study of specific elements or opinions, for example, as would be gained from the use of an individual case study organisation or the conducting of interviews. The latter relies upon a large scale of investigation and, in this respect the use of existing academic resources or the conducting of a survey would have the desired outcome.
3.4. Choice of research methodology
In considering the appropriate approach that would be suitable for this dissertation, the author has heeded the advice from other academics that a combination of the qualitative and quantitative approach might enhance the results and findings and has therefore decided upon this method. The reason for this choice is based upon the fact that, although only one organisation is being included as a case study, the size of the consumer market is considerable. The intention with the latter is to seek a consensus of opinion from these consumers as to what CRM strategies and tools are most likely to affect their purchasing and loyalty choice and for what reason. The data and information required from these approaches will be amassed through the secondary and primary data collection processes.
3.5. Secondary data collection process
Secondary data comprise two areas of research, both of which will have been pre-published and generally available in the public domain. For the first part, this will include publications related to theoretical concepts related to the key elements of CRM and the models and tools developed which are available in books and journals located in either bookstores, libraries or reputable online publishing websites. The second part is the collection of statistics and other external opinions that have been made available from the Office of National Statistics, the OFCOM regulator and other NGO organisations or expert observers.
3.6. Primary data collection process
Regarding the collection of primary data, three approaches have been used. The first of these was the case study itself, for which T-Mobile's own website has been used in conjunction with reviews related to the corporation that have been published by other industry observers. However, to appropriate and robustly address the aims and objectives of the dissertation it was also determined that there was a requirement for the researcher to gather information, opinion and evidence from those considered to have a more intimate involvement with the industry sector . To achieve this situation it was decided to use an approach that combined the use of semi-structured interviews together with consumer surveys .
3.6.1. Semi-structured interviews
For the purpose of semi-structure interviews, two employees from the case study corporation were chosen and, in addition, a representative from the OFCOM regulator and a consumer group . The benefit of this approach was that it provided the researcher with the ability to achieve an understanding of the CRM tools and strategies implement by the T-Mobile Corporation, as well as their views and opinion as to the success of these methods.
3.6.2. Questionnaire and survey
The questionnaire took the form of an online survey , which was targeted to social networking groups as well as a similar survey conducted at one of T-Mobile's retail location, where the corporation's customers formed the respondents. These surveys, to which only the researcher had access to the results, were aimed at providing a collective consumer view and opinion in relation to the benefits the considered applicable to them from CRM processes. The questionnaire itself was constructed with a range of question styles. From the closed type which was used for responses such as age and gender, to the ‘linert' style, which is designed to test the degree to which the consumer agrees or disagrees with a specific statement, with five choice options being available.
3.6.3. Ethical issues within primary research
There are issues that need to be appropriately addressed with any primary research. Predominantly, these are related to data and privacy protection. In the design, construction and implementation of the semi-structured and survey used within this particular dissertation the ethical issues were dealt with in the following way. Firstly, as can be seen from the questionnaires, there were no questions that required the divulgence of any person data save for age and gender. In other words, no information of a personal or financial nature was requested. Furthermore, it was made clear to the respondents that their involvement with the survey was a matter of personal choice. With the interviews, again it was confirmed that participation was voluntary and, moreover, that privacy would be protected by not indicating the interviewee by name. In addition, in this case transcripts of the interview were sent to each participant for their agreement prior to the results being included within this study.
Therefore, it is considered that the primary research processes have been implemented in a manner that cannot be seen to have caused harm to the respondents and, furthermore, comply with current protection legislation and codes.
The limitations that can be seen to 'potentially' affect the chosen methodology can be described as follows. Concerning the secondary research process, the main concern is to ensure two things. Firstly, it is important to ensure that the data has been collected from reliable sources and is, as far as can be assessed, free from bias or inaccuracies. Secondly, it is also important to ensure that the research relied upon is the most current available.
With the primary research, it is equally essential to ensure that bias is not allowed to affect the design in terms of things like questions. In addition, the other limitation is related to the sample size selected for these events.
Within reason it is considered that, taking into account the restrictions in relation to issues such as time, cost and geographical locations, the research conducted for secondary and primary purposes has reduced the impact of these limitations to acceptable levels.
It is the researcher's considered opinion that the methodology adopted for this study, as set out within this chapter, was sufficiently robust as to add value to current research into the area of customer relationship management and, in addition, has adequately addressed the aims and objectives..
Chapter 4: Findings and data presentation
The findings presented within this chapter include those related directly to the case study data provided in the introductory chapter, as well as the results of the primary interview and questionnaire results.
4.2. Case study and interview findings
One factor that has become apparent about T-Mobile and its development over the past few years is that the UK market share for the business has not increased, in other words, if there has been any customer gains, these have been countered by similar levels of losses. This result appears to indicate that, to date at least, the business CRM process is not perhaps as robust as other competitors are, particularly when compared with O2 and Vodafone. However, this view of the CRM process does not appear to be a viewed shared by the two representatives of T-Mobile who took part in the semi-structured interview.
4.2.1. Interview findings
The full transcripts of these interviews can be found in appendix 2, where it will be apparent that the majority of the questions were based upon the CRM tools and systems as they related to the online activity of the business. What was clear from the opening question was that all of the interviewees, including the two T-Mobile and two external organisation representatives, were agreed that CRM, when implemented effectively, bring a value to the business, which, as noted, is believed helps build this relationship:
“Yes, I do think that CRM has a value. It has taken a while to realise what that is. However, I believe now that the greatest benefit is that it brings us closer to the customer and, equally important, allows us to respond to them in much less time than was previously the case” (Mr A)
The next point of interest was in respect of the implementation process itself. Although accepting that there had been some difficulties in this area, for T-Mobile it was not considered a major issue, which others thought would be the case:
“If you adopt a robust change management strategy for the business, CRM should be no more difficult to implement than any other internal system. True, one can never say that implementation will be perfect but most good corporations should not experience significant difficulties” (Mr C)
The next few questions put to the interviewees related specifically to the website, its suitability and ease of use the extent to which it got its message across to the consumer. The responses, as outlined below, were generally positive in all of these areas:
“It certainly gets the product message across and I believe that it is relatively easy to navigate. It also provides a lot of opportunity for customer feedback and discussion, which helps us to keep in touch with their needs” (Ms B)
“From a surfer's viewpoint, I would say the T-Mobile site is relatively simple and easy to navigate” (Mr B)
“Obviously, I would say that the main focus of the website in sales orientated. However, in addition to this it is also a ideal vehicle for market research. It helps us to find out how customer needs are changing and that provides us with a basis for future product development” (Mr A)
However, a number of the interviewees did notice an issue that needed improvement, which was directly related to the CRM element. This was explained particularly well by one of the external interviewees:
“My personal opinion is that the main issue is in fact the CRM process. Apart from the standard link to contact us, which some consumers are adverse to using, indications as to how the customer can communicate with the business online need to be enhanced, for example, by making access to the discussion forum more visible” (Mr C).
In assessing the interviewee's perception of the consumer response to the CRM element of the website, this being related to communications and information gathering, the consensus of opinion was that, because of the rise in popularity of social networking, most consumers were not concerned about disclosing information online, providing it was not of a personal or financial nature. However, in return, they did expect to be treated correctly by the company, which as the marketing representative from T-Mobile acknowledged was an area they focused upon managing effectively, as she explained:
“We have dedicated IT people who role it is to ensure that our response to any issues that are raised by customers are dealt with quickly. They may not be able to answer every question, but at least they can respond to the customer and tell them when they will have the answer. Communication is important and the discussions allow us to maintain this effectively” (Mr A)
With regard to other online activity by T-Mobile, this was confirmed by their representative to be occurring in a number of areas:
“Yes of course. We are on Twitter, which allows us to let people know about new products. Our TV advertising can often be found running on sites like YouTube, which gets the message across to a global audience. Finally, members of our staff are also interactive with other social networking sites” (Mr A)
The final aspects of the questions put to the interviewees related to the benefits in cost terms and whether it had improved the customer experience, thereby improving retention and loyalty. In relation to cost, their was agreement that CRM had certainly been beneficial in this respect, both in relation to reducing the cost per customer With regard to the improvement of customer perception, the following is the opinion of the T-Mobile interviewees:
“Obviously, the customer is better placed to answer this question than me. However, from the interactions we have with customers, the general view appears to be that they find the experience of dealing with the company now that it has all the online facilities, much better than in the past” (Mr A).
However, as will be shown in the next section, this perception may not actually agree with the reality of the consumers feelings.
The questionnaire survey was conducted in two parts, with one being carried out online, with the help of T-Mobile, and the other being conducted at two of their retail sites. Full results are attached in appendix one, with the graphical results being used for this section of the dissertation. The total number of respondents was 121 over the three locations, with the age demographics as indicated in table 3.
Table 3 Question 1
Please indicate your age group
18-25 19 19 12 50 41.32%
25-40 10 9 5 24 19.83%
40-56 12 8 5 25 20.66%
56 + 8 7 7 22 18.18%
The next two questions focused upon the choice of provider and the quality of the phone product (figures 8 and 9). Not surprisingly given the locations, 40% were T-Mobile customer. In relation to the quality of the product, although 60% found these to be average or above, it should be worrying for the providers that such a large percentage were not satisfied with the product.
Figure 8 Question 2
Figure 9 Question 3
The following pair of questions focused upon how the respondents used their phones and what had enticed them to buy it in the first place (figures 10 and 11). Text messaging was the main usage, but what was considered interesting was the fact that a very similar percentage used their phone mainly for connection to the Internet, which shows the increasing popularity of online usage for mobile phones.
The increase in the online connection with the mobile phones sector is also reflected in the fact that nearly 40% purchased their phones through or because of this medium; with on the spot high street decisions to purchase being relegated into third position behind the enticement of the company's advertising material.
Figure 10 Question 4
Figure 11 Question 5
In the first two of the questions that related more direct to the management issues of CRM, it was concerning to note that despite the fact that a reasonably high percentage of consumers were of the opinion that the customer service they received was good (45% approx, figure 12), a slightly larger percentage were of the opposite opinion, and this was reflected in the fact a significant majority indicated that they were not committed to purchasing future products from the same mobile provider (figure 12).
Figure 12 Question 6
Figure 13 Question 7
Questions 8 to 10 focused upon the respondent's perception of T-Mobile's promotional activity. Another concern arises here for T-Mobile in that the response to the website was not as positive as might have been expected (figure 14). In contrast however, there was a very positive response to the company's advertising campaign (figure 15), although it did not appear that either of these promotional activities would make any difference to the consumer buying habits (figure 16).
Figure 14 Question 8
Figure 15 Question 9
Figure 16 Question 10
Next, with questions 11 through to 14, the survey focused upon the quality of the product and service provided. Wit h regard to the product (figure 17), Text and Internet fared best and cost worse and this is also evidence in the responses to question13 (figure 19).
Figure 17 Question 11
The quality of the provider coverage was also an issue for many of the respondents (figure 18).
Figure 18 Question 12
Figure 19 Question 13
Consequently, it was not surprising to find that a reasonable percentage of the sample, were of the opinion that other provider's products and services would be better (figure 20).
Figure 20 Question 14
One key aspect of CRM is how corporations earn customer loyalty. It is apparent that, for these respondents that, of the areas this element of CRM addresses, the product is the one that is productive in this respect with communication between provider and customer considered as least effective.
Figure 21 Question 15
Next the respondents were asked how their provider communicated with them and in this respect the Internet again had a slight edge over other methods (figure 22). This again confirmed the growing importance of the Internet within the mobile phone sectors promotional and customer relationship activities.
Figure 22 Question 16
The final two questions (17 and 18) focused again on customer service and the impact that this would have upon consumer retention and loyalty. In the first of the results (figure 23) customer service featured as the lowest element that would attract consumers to a provider and this was reflected in the reiterated evidence that a sizable percentage of the respondents would not commit themselves to remaining with the same provider in the future (figure 24).
Figure 23 Question 17
Figure 24 Question 18
It is apparent from all of the findings that have been presented within this chapter that there is a divergence of views on the effectiveness of CRM between the corporation, as per the interviews, and the external evidence, both statistical and from survey results. It is these differences that will be further discussed in the following chapter.
Chapter 5: Analysis and discussion
The focus of this dissertation has been to assess and evaluate the effectiveness of CRM processes within a practical environment. The findings disclosed in the previous chapter indicate that, at least in relation to T-Mobile, there are some areas of doubt in this respect, the cause of which forms the basis of this analysis and discussion.
5.2. The effectiveness of CRM at T-Mobile
The findings from the interviews and survey appear, to a certain extent, to contradict each other. For example, while T-Mobile recognises the importance of CRM, as have others that have featured in the literature review, and the management believe it is achieving the desired objective, this is not the perception of the consumer. The survey respondent's perception is that, in at least two of the key areas that CRM is intended to make a positive contribution to customer retention and loyalty, there appear to be failures. These are customer service and interactive communication.
Clearly, the respondents do not believe that the communication process is as effective in this case as academic theory has suggested it should be and is therefore not delivering to customer satisfaction. Perhaps part of the cause for this could be said to be related to the structure of the company's website. There is agreement amongst the interviewees that the link to the discussion forum on T-Mobile's website is not immediately apparent. With the average time consumers spend looking for such detail on a site being measured in seconds; this could be perceived as a major drawback to this site achieving the clarity of function and message that is recommended for best practice. Similarly, this defect might also be partly responsible for the fact that the quality of customer service has received such an adverse response in the survey. If customers believe they are not being listened to and their needs and demands are not being satisfied, they more likely to migrate to other competitors, which is what appears to be happening in the case of T-Mobile. At the very least, this migration is matching the level of new customers being attracted to the company. Consequently, as has been evidenced from the lack of increase in market share, it can be concluded that the CRM policy and strategy is not being implemented in a manner that is enabling T-Mobile to achieve a competitive advantage over other corporation's operating within this industry sector.
Based upon the previously presented findings and these brief discussions of the issues, it is considered that T-Mobile has to implement changes to its current CRM processes. These are required as part of an effort to improve the level of consumer retention and loyalty to a position where it will result in the company achieving a more sustainable position of continuing growth of its UK market share. Recommendations related to these changes are presented within the concluding chapter of this dissertation.
Chapter 6: Conclusion and recommendations
In concluding this research project and the case study related to T-Mobile, it is now possible to resolve the propositions that were set out within the introductory chapter and also to present recommendations related to the improvements required by the company as well as future research.
The initial propositions set were as follows:
1. That CRM tools are having the effect of increasing customer loyalty to the T Mobile brand and improving repurchasing levels.
2. That the marketing department at T Mobile have been successful in introducing innovative CRM tools which has provided the corporation to achieve a competitive advantage over its main competitors within the mobile phone sector.
The statistical market share evidence and the results of the survey conducted during this study indicate that the first proposition has not been proven. The company's market share position has remained stagnant during the past five years at least. Furthermore, it has failed to sufficiently convince consumers that it is a corporation with whom they can build a robust relationship. Certainly, this applies in relation to the currently level of CRM being sufficient to both offset consumer losses and increase market share.
Regarding the second proposition, there is some evidence that some benefits have been derived from the innovative use of CRM within the marketing department, particularly in relation to the company's current advertising campaigns. Nonetheless, here again it is apparent that, taken in isolation, this success has not been sufficient to provide impetus for market share growth.
The recommendations that are being made relate to two areas, these being improvements to CRM suggested for T-Mobile and considerations for future research.
There is a need to redesign and re-launch the company website, with particular attention being focused upon promoting the business discussion forum and links to other online social networking activities, in a prominent position. This promotion should be apparent irrespective of the page of the website that consumers might visit.
It is recommended that the business conduct a comprehensive programme of market research, covering both existing and potential consumers. The aim of this should be to assess the consumer's perception of concern in relation to the potential relationship with the company so that these can be addressed and incorporated into a revised CRM and marketing strategy.
6.3.2. Future research
It is recommended that further research in this market sector, using other competitor's for case study purposes would add value to the results of this dissertation. In the first place it will identify whether there are specific issues related to CRM success which occur in a saturated market sector if so, how these manifest themselves.
It is further recommended that similar research should be conducted with other industries and their sectors. The purpose of this is to ascertain to what extent, if any, the CRM approach to the Mobile phone sector warrants a more focused approach to CRM practices that is the case in other sectors.
It could be considered that the size of sampling used within the primary research for this dissertation is low and therefore might not be representative of the wider market. However, it is considered that the support provided for these findings from external statistical analysis of the market serves to confirm these findings. It is therefore concluded that the findings add value to the discussion relating to the effectiveness of CRM and also serves to highlight the issues that arise if the CRM practices are not implemented and managed in a robust and efficient manner.
Arnold D (1992). The Handbook of Brand Management. London: Century Business
Bagozzi, Richard P. Gurhan-Canli, Zeynep and Priester, Joseph R (2002). The Social Pyschology of Consumer Behaviour. Buckingham: Open University Press
Bailey, Craig (2005). Unlocking the Value of Your Customer Satisfaction Surveys. CRM Today, May 2005.
Bruhn, Manfred (2006). Service Marketing: Managing the Service Value Chain. Harlow: Pearson Education
Buttle, Francis (2004). Customer Relationship Managements. Oxford: Elsevier Butterworth-Heinemann
Cellnet (2010), The History of T-Mobile, Available from: http://www.celtnet.org.uk/telecos/T-mobile.php [Accessed 1 November 2010]
Denscombe, M (2008). The Good Research Guide: For Small-scale Research Projects. Buckingham: Open University Press
Durgee, J.F. (1999). Deep soulful satisfaction. Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behaviour, 12, 53 – 63.
Evans, Martin. Jamal, Ahmed and Foxall, Gordon (2006). Consumer Behaviour. Chichester: John Wiley & Sons Ltd
Fournier, S. (1998). Consumers and their brands: developing relationship theory in consumer research. Journal of Consumer Research. Vol. 24. pp.343 – 373.
Gilligan, Colin and Wilson, Richard M. S (2004). Strategic Marketing Management: Planning, Implementation and Control. Oxford: Butterworth-Heinemann
Grant. Robert M (2005). Contemporary Strategy Analysis. 5th edition, Oxford: Blackwell Publishing
Greenberg, Paul (2009), CRM at the speed of Light, 4th Ed. New York: McGraw Hill
Gurau, C., Ranchhod, A and Hackney, H (2003), Customer Centric strategic planning: Integrating CRM in online business systems. Information Technology and Management, Vol.4, pp.199-214
Harvard Business Review (2001) Harvard Business Review on Customer Relationship Management, Boston: Harvard Business Review
Johnson, Gerry., Scholes, Kevan and Whittington, Richard (2007). Exploring Corporate Strategy. London: FT Prentice Hall
Kelly, Sean. (2005). Customer intelligence From Data to Dialogue. Chichester: John Wiley & Sons Ltd
Kolter, Philip. Wong, Veronica., Saunders John A and Armstrong, Gary (2004). Principles of Marketing. 4th European edition, London: Pearson Education Ltd
Kolter, Phillip (2002). Marketing Management. 11th edition. London: FT Prentice Hall
Kracklauer, Alexander H., Mills, Daniel, Q and Seifert (2003). Collaborative Customer Relationship Management: Taking CRM to the Next Level. New York: Springer-Verlag Berlin Heidelberg
Lancaster, Geoffrey and Massingham (2001). MarketingManagement. Berkshire: McGraw-Hill
Nguyen, T.H., Sherif, J.S and Newbym M (2007), Strategies for successful CRM implementation, Vol/15, No.2, pp.102-115
OFCOM (2010), The communications market 2010, Available from: http://stakeholders.ofcom.org.uk/market-data-research/market-data/communications-market-reports/cmr10/ [Accessed 6 November 2010]
Oliver, R.L. (1999). Whence consumer loyalty? Journal of Marketing, 63 (Special Issue), pp.33 – 44.
Oliver, R.L., Rust, R.T., & Varki, S. (1997). Customer delight: foundations, findings, and managerial insight. Journal of Retailing, 73, 311 – 36.
ONS (2010) Consumer durables, Available from: http://www.statistics.gov.uk/cci/nugget.asp?id=868 [Accessed 3 November 2010]
Payne, Adrian (2006), Handbook of CRM, Oxford: Butterworth-Heinemann
Payne, A and Frow, P (2005), A strategic framework for customer relationship management, Journal of Marketing, Vol.69, pp.167-176
Porter, Michael E (2004). Competitive Strategy: Techniques for Analysing Industries and Competitors. New York: Free Press
Reichheld, F. and Sasser, W. (1990) Zero defects: quality comes to services. Harvard Business Review, Sept-Oct, 1990, pp 105-111
Reinartz, W., Krafft, M and Hoyer, W, D (2004), The customer relationship management process: Its measurement and impact on performance, Journal of Marketing Research, Vol.151, pp.293-305
Rigby, D (2004), Management tools survey 2003: Usage up as companies strive to make headway in tough times, Strategy & Leadership, Vol.31, No.5, pp.4-11
Riley, M. Wood, R, C. Clark, M, A. Wilkie, E. Szivas, E. (2000) Researching and Writing Dissertation in Business and Management. Thompson Learning
Saunders, M. Lewis, P. Thornhill, A. (2003) Research Methods for Business Students 3rd ed. Harlow: Pearson Education Limited.
Shimp, T.A., & Madden, T.J. (1988). Consumer-object relations: a conceptual framework based analogously on Stermberg's triangular theory of love. In: Houston M.J. (ed), Advances in consumer research, Provo, UT: Association for Consumer Research, vol. 15 pp. 163 – 168.
Steward, D. W. & Kamins, M. A. (1993), Secondary Research: Information Sources and Methods, 2nd Edition, London: Sage Publications
T Mobile (2010) About T Mobile, Available from: http://www.t-mobile.co.uk/services/about-t-mobile/ [Accessed 3 November 2010]
Thomson, M., McGinnis, D.J., & Park, C.W. (2005). The ties that bind: measuring the strength of consumer's emotional attachment to brands. Journal of Consumer Psychology, 15, 77 – 91.
Verhoef, P.S (2003), Understanding the effect of customer relationship management efforts on customer retention and customer share development, Journal of Marketing, Vol.69, pp.30-45
Zaltman, Jerry (2003) How Customers Think. Essential Insights into the mind of the market. Boston: Harvard Business School Press
Cite This Essay
To export a reference to this article please select a referencing stye below: