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Elec onic Cus ome Rela ionship Managemen :
Oppo uni ies and Challenges o Digi al Wo ld
Hamid Sadeghi Rad1
Dean o Tax Applied Sciences Uni e si y, Mashhad, I an
Moj aba Gho abi
Depa men o Managemen , Neyshabu B anch, Islamic Azad Uni e si y,
Neyshabu , I an
Mahdi Ra iee
In i ed Lec u e , Tax Applied Sciences Uni e si y, Mashhad, I an
Vahid Sadeghi Rad
Depa men o Islamic Ju isp udence and Law, Mashhad B anch, Islamic
Azad Uni e si y, Mashhad, I an
Abs ac
Managemen in o ma ion sys ems (MIS) conside ably changed business
p ocesses. Acco ding o his, Elec onic cus ome ela ionship managemen
(ECRM) eme ged in conjunc ion wi h e olu ion o adi ional cus ome
ela ionship managemen in e-business con ex s. In an analogy, Elec onic
cus ome ela ionship managemen is simila o a double-edged swo d i.e. i
p o ides some oppo uni ies o he sys em pe o me s, on one side; and
challenges he i ms, on he o he side. In his pape we a e seeking o
ma ke ing oppo uni ies such as be e communica ion and in e ac ions wi h
cus ome s as well as c ea ed choices ega ding any cus ome da a s o age ha
ECRM o e ed as a po en ial sou ce o bene i om i ms’ compe i i e
ad an ages. On he o he hand, i s udies he challenges including on-line
channel managemen as well as in eg a ing da a and issues ela ed o
in o ma ion echnology a chi ec u e i ms encoun e in implemen ing ECRM.
Keywo ds: E-business, Elec onic cus ome ela ionship managemen
(ECRM)
Ci e his a icle: Sadeghi Rad, H., Gho abi, M., Ra iee, M., & Sadeghi Rad, V. (2015).
Elec onic Cus ome Rela ionship Managemen : Oppo uni ies and Challenges o Digi al
Wo ld. In e na ional Jou nal o Managemen , Accoun ing and Economics, 2(6), 609-619.
1 Co esponding au ho ’s email:[email protected]
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610
In oduc ion
All o ganiza ions ope a ing in business- o-business (B2B) and Business o cus ome
(B2C) ac i i ies mus adap agains he new phenomenon o ECRM. Nowadays,
cus ome ela ionship managemen lacking addi ional in e ne -based s uc u es elying
on elec onic business inno a ions a e a ely discussed (O’Reilly and Pape , 2010). As
Romano s a ed elec onic cus ome ela ionship managemen is o economically a ac
and e ain cus ome s and o c ea e alue. ECRM in es iga es de eloping in o ma ion
sys ems and associa ed ields such as compu e science, ma ke ing, and psychology
(Romano and Fje mes ad, 2003).
The e a e wo dimensions de ined o Cus ome ela ionship managemen
philosophy, which he i s is cus ome a i ude (pe spec i e). This pe spec i e no only
conside s ou applica ions o classic ma ke ing namely p oduc , p ice, place (loca ion),
and p omo ion, bu also specially pays a en ion o he quali y o cus ome s’ in e ac ion
o supplie s. Cus ome s look o hose supplie s who unde s and hei equi emen s
capable o esponding o hei eques s; so, hey p e e using in e ac ion channels.
Conside ing in e ac ion channels and unc ions o cus ome ela ionship
managemen , his e m achie ed a widesp ead epu a ion ha consequen ly con inced
i ms o in es on his sys em. O he mos signi ican ad an ages o such sys em o
cus ome s and o ganiza ion include imp o ed e iciency, educed cos , imp o ed
p o i abili y, inc eased sale, and imp o ed pe cei ed alue by cus ome , and inally,
inc eased cus ome sa is ac ion and loyal y.
The second dimension is supplie pe spec i e. I is clea ha all cus ome s ha e no
equal alue o business. Acco ding o hese dimensions, in o ma ion sys ems c ea e
alues conside ing bo h echnical and beha io al aspec s o ECRM along hei business
p ocess, so ha by iden i ying mo e p o i able cus ome s h ough c ea ed p o iles o
any cus ome maximize hei e iciency and p o i abili y. Figu e 1 shows he business
c ea ion alue.
His o y and signi icance o he p oblem
De elopmen p ocess o cus ome ela ionship managemen di ides in o ou s eps in
e ms o compliance, applying in o ma ion echnology, as well as in eg a ing and
de eloping applied in o ma ion sys ems. The echnologies used in s eps 3 and 4 include
in e ne , a combina ion o elephone and compu e , in addi ion o using cus ome
ela ionship managemen ad anced in o ma ion sys ems ha app op ia ely mobilize all
o ganiza ional le els o do he ask o cus ome s’ pe soni ica ion (Wang, 2007).
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Figu e 1 Business c ea ion alue
Figu e 2: CRM E olu ion
CRM E olu ion
BPR ERP SFA CRM eCRM
Cos Reduc ion S a egy G ow h S a egy
IT LedBusiness Led Ma ke ing Led
1980s 1990s 2000s
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As seen in Figu e 2, cus ome ela ionship managemen appea ed a he la e o sales
o ce au oma ion (SFA) and ea ly 90’s. Be o e his, i ms igno ed in es ing on
in o ma ion echnology as ma ke ing and sale p e equisi e.
Elec onic cus ome ela ionship managemen (ECRM) e e s o cus ome
ela ionship managemen using in e ne echnology in addi ion o a da abase, online
analy ical p ocessing (OLAP), in o ma ion s o age, da a mining, e c (Wang, 2007).
ECRM is impo an as:
1. ECRM c ea es a da abase.
2. Da abase leads o da a collec ion.
3. Da a a e measu able.
4. Measu ing is equi ed o an imp o ed p ocess.
5. Imp o ed p ocess leads o e enue g ow h and p o i .
Acco ding o Fo es e Resea ch, Inc, ex ensi e use o cus ome ela ionship
managemen sys em eaches up o 11 billion dolla s by yea 2010, i.e. wo imes in yea
2003 (O’Reilly and Pape , 2010).
T adi ional cus ome ela ionship managemen
Cus ome ela ionship managemen is a selec ing, main aining, and managing
cus ome s’ s a egy in o de o c ea e he alue in long- e m. Cus ome ela ionship
managemen sys em is a comme cial app oach (s a egy) h ough so wa e and
echnologies connec ed in di ec o indi ec channels o mo e help e ec i e
managemen o cus ome ’s in e ac ions. Cus ome ela ionship managemen uses one-
o-one ma ke ing so ha cus omizing he p oduc s. I emb aces a con inuous da a
collec ion p ocess and hen ans o ming hese da a o knowledge o mo e e ec i ely
communica e wi h cus ome along wi h highe p o i abili y. The key o a i m’s success
in cus ome ela ionship managemen is how o use he da a a he han huge cus ome
da a (Jain, 2003).
Elec onic cus ome ela ionship managemen (ECRM)
ECRM, simply, means accessing o cus ome ela ionship managemen da abase
h ough web. In o he wo ds, i co esponds wi h In ane access o in e nal use s,
ex ane access o business pa ne s and cus ome s, and o cou se, in e ne access o
ma ke in mac o scale.
Elec onic CRM so wa e p o ides he p o iles and his o ies o all o ganiza ion’s
con ac s wi h i s cus ome s. ECRM is an in eg a ion o ha dwa e, so wa e, applica ions,
and managemen commi men s.
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Dyche (2001) indica ed o wo ypes o elec onic cus ome ela ionship
managemen :
1. Ope a ional elec onic cus ome ela ionship managemen
2. Analy ical elec onic cus ome ela ionship managemen
Ope a ional ECRM emb aces cus ome ’s con ac cen e s such as elephone, ax, and
email as well as ma ke ing and sale by pa icula g oups. Analy ical elec onic cus ome
ela ionship managemen equi es echnology o o e la ge da a o cus ome . The aim
o his sec ion is o analyze cus ome da a, pu chase pa e ns, and o he impo an
ac o s causing oppo uni ies in new business. ECRM has se e al di e en o ms
acco ding o o ganiza ion’s objec i es. I does no me ely include so wa e and
echnology a he i also con ains cus ome -o ien ed s a egies-based business p ocesses
suppo ed h ough so wa e and a ious echnologies. Rosen (2001) men ioned he
sys ems ha need o be designed in o de o concen a e on cus ome and i s p ocesses.
ECRM pe o mance
In he p esen wo ld, cus ome s in e ac and communica e wi h o ganiza ions h ough
di e en communica ion channels such as Wo ld Wide Web, elephone cen e s,
ma ke e s, selle s, and pa ne s’ ne wo k. Elec onic cus ome ela ionship managemen
encou ages cus ome s o do business wi h o ganiza ions and p o ides a way in which
he cus ome ecei es any goods, anywhe e, any ime h ough any channels and by any
language. Fu he , he cus ome s eel com o as hey a e uniquely beha ed. ECRM
sys ems c ea e a cen al eposi o y o s o ing and keeping cus ome s’ in o ma ion, i is
placed in s a s’ compu e s easily accessed a any ime. Figu e 3 illus a es he
pe o mance o a mul ichannel CRM.
Figu e 3 pe o mance o a mul ichannel CRM
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Cus ome ela ionship managemen , a i s mos undamen al le el, equi es
in eg a ion o on o ice and back o ice sys ems; mo eo e , cus ome da a
cen aliza ion is also o hese equi emen s. The mos c i ical no ions o CRM may be
cus ome a ac ion, cus ome e aining, and cus ome sa is ac ion o achie e cus ome
loyal y.
P o i s o Elec onic cus ome ela ionship managemen
Keeping he cu en cus ome s sa is ied is much p o i able han a ac ing new
cus ome s. The bes way o sa is y he cu en cus ome s is o alue hei condi ions.
Those i ms owning such echnology could inc ease he i m capi al o 130 billion
dolla s om 1 billion dolla s. Howe e , he p o i o ECRM includes as ollows:
Inc eased cus ome loyal y
An elec onic cus ome ela ionship managemen allows he i m o indi idually and
uniquely in e ac wi h i s cus ome s; hough, se e al di e en communica ion channels
exis . ECRM so wa e makes accessing o cus ome his o y and in o ma ion possible.
The ob ained in o ma ion helps he i m o es ima e he eal cos s o acqui ing and
e aining indi idual cus ome s. Such da a enables he i m o cause cus ome s’ highe
p o i abili y by concen a ing on ime and sou ces. Pe soni ica ion is o he means by
which a i m a ac s cus ome s’ loyal y. Cus ome ’s cus omizing so wa e c ea es ull
ime p o iles o any cus ome o use da a o sou ces including da abase and ansac ion
sys ems. Th ough his ool, he i m ecognizes he cus ome whene e isi ing i m’s
websi e, and acili a es pu chase p ocess acco ding o cus ome ’s p o ile. Such issues
lead o cus ome loyal y.
E ec i e ma ke ing
Acqui ing cus ome in o ma ion h ough ECRM sys em allows he i m o p edic
a ious ypes o p oduc s he cus ome in e es ed o buy. This in o ma ion assis s he
i m o u ilize i s ma ke ing and sale wi h mo e e iciency so ha sa is ying he
cus ome . Cus ome da a analyzed om di e en iews in o de o p o ide p ope
ma ke ing o highe p o i abili y in selling he p oduc s. On he o he hand, so ing he
cus ome s may imp o e ma ke ing p ocess. So ing cus ome s based on common needs
allow he i m o pe sonalize he p oduc s o i s cus ome s.
Imp o ed se ices and cus ome suppo
An ECRM sys em p o ides an indi idual s o age o cus ome s’ in o ma ion. This
enables he i m o apidly and e icien ly commi cus ome needs a all cus ome
se ice cen e s. Elec onic cus ome ela ionship managemen echnologies include
sea ch engines (b owse s), on-line and li e help, email managemen , news con en
managemen , and suppo ing a ious languages. Owning an ECRM, he i m can:
Pe ec ly ecei e, upda e, and implemen he o de s
Reco d o de s’ in o ma ion, cos s, and he ime o he o de s
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Obse e cus ome se ice con ac s
Look o he mos secu e and he bes me hods
Be a membe o p oduc - and so wa e-o ien ed si es
Access o knowledge ools ha a e use ul in comple ing se ice o de s
Inc eased e iciency and less cos s
Da a mining, which is da a analysis known as he ela ion be ween hose da a
sec ions ac ing as aluable sou ces. Collec ing cus ome da a in a uni a y, common
da abase le all in e nal uni s (ma ke ing eam, sale eam, e c) sha e hei in o ma ion
and asks (Howa d e al, 2010)
Elec onic cus ome ela ionship managemen challenges
Implemen ing any sys em in o ganiza ion is challenging; howe e , CRM may ace
highe challenges. Thus, p eceding an o ganiza ion implemen s cus ome ela ionship
managemen i mus be awa e o po en ial and possible p oblems (di icul ies) so ha
dealing wi h as equi ed. A o ganiza ion le el, i is necessa y o ha e e ec i e ela ion
among di e en di isions di ec ly in e ac ing wi h cus ome s and all o he di isions
ela ed o CRM so ha apply hei knowledge a all o ganiza ional le els. The e o e, he
es ablished ela ion wi h cus ome also in luences s a s’ in e nal oles. Fu he , i
inc eases ocusing on pa icipa ion a pa icula di ision a i m, oo. Such s a egic
changes o en opposi ely encoun e ed a ea ly implemen a ion s ages.
A s udy indica ed ha ac ional implemen a ion o cus ome ela ionship
managemen sys em no only elimina es exis ing di icul ies and objec ions, bu also
leads o di ec ing sys em inancial bene i s owa d he o ganiza ion. Howe e , only
some pa o esou ces used in his in es men (Penning on, 2007).
E ec i e ans e ing o cus ome ela ionship managemen equi es skilled and
quali ied labo s. Mo eo e , he i ms need o a ac execu i es’ commi men s and o
con ol and manage esul ing esis ances agains changes.
I is necessa y o o ganiza ions o e ain he bes alen s o sale and se ice di isions,
nu u e alen ed s a s’ indi idual skills, and ewa d hem. In elephone cen e s, o
ins ance, six mon hs needed o change a no ice in o a quali ied pe son; and ano he six
mon hs akes o u n he quali ied one in o a p o essional, skilled indi idual. The e o e,
main aining his is ying o keep he o ganiza ion’s one-yea e o al eady app oached
o ull p oduc i i y s age.
In e nal employees mus be included in discussions ela ed o cus ome s’ needs.
P oduc ion and se ice de elopmen mus conside cus ome eedbacks. Since all
o ganiza ions’ di isions coope a e o sa is y cus ome , a ewa d sys em injec ing
equi ed mo i a ions o such a eas need o be conside ed o c ea ed. Cus ome
ela ionship managemen should no be suppo ed h ough indi idual ewa ds. Fo
ins ance, i a sale manage only ge s ewa d based on sale numbe s and igu es, he may
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no conce n ha i o he di isions mee cus ome s’ needs. On he o he side,
managemen s in consul ing CRM implemen a ion in di e en o ganiza ions always seek
o solu ions o he ollowing issues:
Ini ializing cos
Ini ializing cos is one o CRM challenges. O ganiza ions, maybe, la gely in es on
cus ome managemen applied ools. Since some o hese ools may be speci ically
applied, i is di icul o sha e hem in di e en di isions. The e o e, i would be much
wise o ini ially well a ge ed and well spen in o de o p e en ewo king.
In eg a ed applica ions
O ganiza ions need in eg a ed applica ions based on cus ome li e cycles and
in e ac ions. The o ganiza ions equi ing se e al languages and cu encies o cus ome
in e ac ion managemen , could no implemen CRM h ough adi ional echnologies.
High lexible applica ions capable o being pe sonalized and cus omized o he
o ganiza ion, and use - iendly a e ecommended. Fu he mo e, he sys ems mus be
connec ed o o ganiza ion’s o he sys ems as much as possible.
Two s udies in 2008 showed ha p ope o ganiza ional s uc u e and hie a chy
s ongly co ela ed o in o ma ion ease o use in achie ing o ganiza ion’s objec i es
(Ha -Da idson e al, 2007).
Coope a ion in a ious sec o s
CRM is an in eg a ed app oach equi ing coope a ion o hose business sec o s
p e iously ope a ed au onomous. A s udy e ealed ha only 39% o he execu i es
belie e s a s’ au ho i y in sol ing cus ome s’ p oblems (S a i i y G oup, 2009).
Da a collec ed in one di ision mus sha e in all o he sec o s. Some di isions may be
eluc an o da a sha ing. He e, es ablishing ecipien o ganiza ion, applying i s and
second-gene a ion knowledge managemen ools (such as o ganiza ional WIKI), as well
as employees’ aining a e ecommended, as highe in es men on such di isions, mo e
achie emen s.
Sa e y and secu i y
Designing and de eloping echnology o acili a e using cu en sys em and
simul aneously c ea e a p ope secu i y space (dis ance) so ha minimizing he isks o
pe sonal in o ma ion exposu e we e equen ly demons a ed and p o ed in se e al
s udies (Cieslak and Gaby, 2006; Whi emo e, 2008).
On he o he hand, s udies show ha howe e ease o use and CRM secu i y a e bo h
c i ical, in cases o mo al (e hical) dilemmas o cus ome s, sys em secu i y is
p io i ized (Yee, 2002).
Failu e ac o s o CRM p ojec s
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Se e al ac o s con ibu e in ailing cus ome ela ionship managemen p ojec s, he
mos impo an o which is he absence o e ec i e ela ion among indi iduals in
cus ome ela ionship chain ha may lead o a pa ial image o he cus ome .
The o ganiza ion may succeed implemen ing ha dwa e applica ion in o ganiza ion;
howe e , i would no be e icien wi hou e ec i e ela ionships. Un o una ely, i is a
equen issue o mos I anian i ms.
A su ey conduc ed in 2007 showed ha ou - i h o manage s encoun e challenges
in implemen ing CRM and s a s’ accep ance. Mo eo e , 43% o he au ho i ies s a ed
ha hey maximally u ilize sys em capaci y; and 67% exp essed ha he majo p oblem
is he equi ed ime o sys em e alua ion. Rega ding he cos s inc ease up o 11 billion
dolla s by 2010, businesses equi e comp ehensi e p og ams dealing wi h hese
challenges (Sims, 2007).
In e es ing s a is ics ob ained in his pa o U.S. 500 op p emie Ame ican
companies ied CRM ( e)implemen a ion o ou imes due o sale pe sonnel esis ance
agains p e ious e o s o sha ing cus ome da a. The o he impo an ac o is
conside ing all indi iduals’ in e es in he o ganiza ion. Fo ins ance, i sale pe sonnel
in e es s a e no o ally consis en wi h sys em, hey may no eco d in o ma ion o a
pa icula popula ion leading sys em achie emen and o igno ing supplie s’ in e es s
discou aging hem o p oducing he p oduc s consis en wi h cus ome needs o be
p o ided by sale depa men .
The u u e o elec onic cus ome ela ionship managemen (ECRM)
Once economic condi ions cause p ecisely in es iga ion o in o ma ion echnology
budge s, CRM s ill sus ains as a p io i y o i ms. A s udy o e ail i ms showed ha
52% o such i ms ega d CRM as hei business main p io i ies. Elec onic cus ome
ela ionship managemen ma ke is s ill young. Ye g owing and ma u ing applica ions
and echnologies, as well as selle s s eng hening hei ac i i ies on such echnologies
lead i ms deli e high-quali y mul ichannel se ices o cus ome s, he cus ome s ha
make ECRM selle s o e be e , and mo e p oduc i e solu ions (Howa d e al, 2010).
Conclusion
En e ing in o ma ion echnology in o o ganiza ions unde cus ome ela ionship
managemen umb ella di ec s o ganiza ions owa d sma and knowledge-o ien ed
o ganiza ions so ha educe in o ma ion-p ocessing cos s h ough applying CRM
so wa e, apidly in e ac wi h cus ome s in less ime he inal esul o which is
inc easing o ganiza ion’s compe i i e powe in oday’s dynamic en i onmen . P ope ly
and success ully implemen a ion o cus ome ela ionship managemen causes changing
o all di isions and sec o s in a i m o o ganiza ion di ec ly ela es wi h cus ome ; and
ul ima ely, leads o a undamen al e olu ion in he o ganiza ion o i m’s u u e.
I is also wo h no i ying ha success ul implemen a ion o elec onic cus ome
ela ionship managemen (ECRM) equi es o ganiza ions’ senio suppo as well as
labo ully commi men and all indi iduals in ol ing in he alue chain.
