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Industrial Marketing Management

Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation
Marion Steel a,, Chris Dubelaar b,1, Michael T. Ewing c,2
a b c

School of Economics, Finance and Marketing, RMIT University, GPO Box 2476, Melbourne, VIC 3001, Australia School of Business, Bond University, Gold Coast, QLD 4229, Australia Department of Marketing, Monash University, P.O. Box 197, Cauleld East, VIC 3145, Australia

a r t i c l e

i n f o

a b s t r a c t
This research paper investigates the inuence of industry, organisational, and customer context on customer relationship management (CRM) projects. Organisations go through four phases in their CRM projects (assessment, design, implementation, and evaluation), yet the impact of industry norms, organisational contexts, and customer expectations on each phase are rarely examined. A longitudinal case study approach with six cases was used to investigate the potential impact of contextual factors on CRM projects. The cases covered a range of industries, organisational structures, and customer types. We found that current industry conditions and customer expectations inuence the reasons for undertaking CRM and the assessment stage of the project. The organisational context has a noticeable impact on the design and implementation project stages. At the evaluation level, customer responses combined with organisational expectations affect the perceived success of the projects. By understanding the impact of context, customised CRM projects can be developed. 2013 Published by Elsevier Inc.

Article history: Received 15 October 2010 Received in revised form 14 February 2012 Accepted 2 August 2012 Available online xxxx Keywords: Customer relationship management (CRM) Context CRM implementation

1. Introduction Customer relationship management (CRM) offers the promise of increased customer loyalty (Colgate & Danaher, 2000; Dowling, 2002), improved customer satisfaction (Colgate & Danaher, 2000; Mithas, Krishnan, & Fornell, 2005), greater customer retention (Day & Van den Bulte, 2002; Rigby & Ledingham, 2004), and improved revenue (Rigby & Ledingham, 2004; Starkey & Woodcock, 2002) for organisations. However CRM and the results of CRM implementation projects have drawn considerable practitioner dissatisfaction (see for example Ang & Buttle, 2006; Howarth, 2003; Kale, 2004; Trembly, 2002; Vizard, 2002) and dissatisfaction rates of between 52% and 75% with CRM project outcomes have been reported consistently over the last few years (Iriana & Buttle, 2006; McNulty, Leonard, McAfee, Gilway, & Freeland, 2003; Plakoyiannaki & Tzokas, 2002; Zablah, Bellenger, & Johnston, 2004). This dissatisfaction is largely due to the belief that CRM systems fail to live up to expectations, CRM outcomes could not be identied or measured or the CRM project resulted in no measurable changes in relationship strength,
This research was funded by an Australian Research Council grant and supported by Pacic Micromarketing (Experian Australia). We would like to thank to Joel Vincent of Pacic Micromarketing who provided industry feedback on the relevance of the ndings for a range of industry and customer contexts. Corresponding author. Tel.: +61 3 9925 5896; fax: +61 3 9925 5624. E-mail addresses: marion.steel@rmit.edu.au (M. Steel), Chris_Dubelaar@bond.edu.au (C. Dubelaar), Michael.Ewing@monash.edu (M.T. Ewing). 1 Tel.: +61 7 559 51185. 2 Tel.: +61 3 9903 2563. 0019-8501/$ see front matter 2013 Published by Elsevier Inc. http://dx.doi.org/10.1016/j.indmarman.2012.08.009

sales levels, or increases in customer retention and loyalty (Stanton & Rubenstein, 2003). Despite these issues, however, the number of businesses investing in CRM continues to grow (Beasty, 2006). There is still widespread interest in developing or maintaining relationships with customers and CRM capability. Even with the early assessment that relationship marketing and CRM are more suited to service, industrial and business to business settings (Grnroos, 1990; Jackson, 1985), government organisations (Hunter & Shine, 2002), and rms in the nance and insurance (McGregor, 2003, Ryals & Payne, 2001), manufacturing and retail (Reinartz & Kumar, 2002), not-for-prot (Bennett & Barkensjo, 2005) and publishing sectors (Lindgreen, 2004) are still investing in, or reviewing the adoption of CRM. One of the most unusual examples of an organisation implementing CRM was the Australian Taxation Ofce, in an attempt to reduce the number of conicts and problems with small to medium enterprises (McMillan, 2003). One indicator of the importance of this issue is the range of industry specic conferences that focus on CRM including the automotive industry, USA gas industry, nancial businesses, higher education and recruitment and the travel industry. A Google search of 2011 CRM conferences showed nine industry specic conferences covering industries such as retailing, travel, logistics, healthcare and pharmaceuticals, eleven CRM conferences hosted by the major software suppliers and a range of international and regional conferences on CRM hosted by research groups such as Gartner and regional bodies such as CeBIT (business information technology). The question for an organisation considering CRM is how to determine the relevant approach for the type of industry

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

and the organisational structure. Although there has been considerable work on the contribution of marketing to CRM in the form of value and value creation (Bolton, Lemon, & Verhoef, 2004; Day, 2000; Gummesson, 2004; Narver & Slater, 1994) and on the use and application of information technology (Plakoyiannaki & Tzokas, 2002; Zikmund, McLeod, & Gilbert, 2003), research on the impact of the industry context, the organisational form or structure, and customer context on CRM projects has been limited. Given the body of research that now exists on CRM, and the range of models available, why are organisations still frustrated and disappointed with CRM project outcomes? Research into the adoption of CRM suggests that reported failures of CRM projects may be due to aspects of implementation or strategy (Ang & Buttle, 2006; Bohling et al., 2006; Torkzadeh, Chang, & Hansen, 2006). Implementation issues that have been linked to failed CRM projects include lack of an adaptive and learning culture geared for change (Hart, Hogg, & Banerjee, 2004), problems with staff training or loss of customer facing staff (Colgate & Danaher, 2000) and existing processes that are inadequate for the current or desired relationship levels (Kotorov, 2003; McGregor, 2003). Similarly, a misalignment between corporate strategy and CRM strategy (Payne, 2006; Payne & Frow, 2005; Piercy, 1998) or the absence of a clear CRM strategy (Day & Van den Bulte, 2002; Rigby, Reichheld, & Schefter, 2002) are associated with unsuccessful CRM implementation. In addition to these organisational effects on CRM projects, Reinartz and Kumar (2002) found that even successfully designed customer loyalty projects will not achieve the desired outcomes if the industry and customers are not appropriate for long term development of close and protable relationships. More specically, in industries where consumers are inherently distrustful of the companies in the industry or perceive low levels of personal inuence, then relationship activities tend to be less successful (Nijssen, Singh, Sirdeshmukh, & Holzmueller, 2003). Competitive industry conditions have also been linked to increased prevalence of CRM projects in some industries (Kersnar, 2003) and to directly affect the strategic position of companies (O'Cass & Ngo, 2007). The type of business sector has also been suggested as contributing to differences in the goals for adopting CRM and the selected CRM approach (Greenberg, 2004). Organisational context has also emerged as a contributing factor in the successful adoption of CRM software (Iriana & Buttle, 2006; Ko, Kim, Kim, & Woo, 2008), while industry context has been shown to affect the relevance and benets of forming relationships with customers (Nijssen et al., 2003; Reinartz & Kumar, 2002). Wilson, Clark, and Smith (2007) have argued that the justication for CRM projects needs to be specically tailored to context so that a better understanding of how to justify the project in terms of the company and industry can be obtained. If the justication for CRM projects needs to be contextually relevant, then this would suggest that the implementation of CRM should also take context into account. However, context as a key factor in CRM implementation projects has not been specically examined to date. As a result, there are no studies that examine the effects of the different facets of context on CRM simultaneously, holistically or longitudinally. This paper will examine the role of context in the CRM implementation process and propose that implementation strategies need to be customised to suit the customer type as well as the organisational and industry context. Context is dened as the stimuli and phenomena that exist in the environment surrounding an individual or operational unit (Mowday & Sutton, 1993, p. 198, cited in Johns, 2001, p. 32) that has an impact on the individual or unit and can limit or provide opportunities for behaviour and attitudes in an organisational setting (Johnson, Barksdale, & Boles, 2001; Pettigrew, 1990). Research into organisational behaviour has tended to downplay the role of context in determining the causal links between factors for change and the results of change (Johnson et al., 2001; Pettigrew, 1990) and it is possible to see similar approaches in case study research into CRM

implementation where the impact of competitors, customers or organisational structure are not considered (see, for example, Bull, 2003; Lindgreen, 2004; Plakoyiannaki, 2005; Rowley & Haynes, 2005). The current literature on CRM with a contextual focus is reviewed, identifying the current knowledge on industry context, organisational context and customer context. The CRM project components of assessment, design, implementation and evaluation are summarised and the lack of research assessing the impact of context on these factors is highlighted. A qualitative research approach using six longitudinal cases is used to examine the impact of context on the assessment, design and implementation phases of CRM. The paper concludes with implications for future research and management.

2. The role of contextual factors in CRM implementation The contextual factors that appear to shape expectations of CRM are the norms of the industry, the organisational perceptions of CRM, and customers' attitudes towards suppliers and customer relationships. These three factors will be discussed in more detail below before a brief review of the components of CRM projects is presented.

2.1. Industry context Industries are characterised by a foundation of shared interests and codes of conduct (Solomon, 1992, p. 26, cited in Morgan & Hunt, 1994, p. 22), which may be a result of collaboration, self-regulation, or the independent adoption of business processes to meet legislative or customer needs. Specic industries also have a pool of potential customers in common. Individual organisations may target only some of the pool and therefore be in competition with a limited number of other organisations in the industry, or target the entire population of potential customers. More recent research has found that buyerseller relationships are formed within the boundaries of industry norms and business contexts, showing that business customer relationships are directly inuenced by cultural norms and the expectations that are consistent across an industry and the institutional networks that affect an industry (Andersen, Christensen, & Damgaard, 2009). The idea that organisations in an industry tend towards a norm is implied rather than explicit in the CRM literature, as shown by the call for organisations to differentiate themselves and to stand out from the competition in ways that are difcult to replicate (Anderson & Narus, 1998; Buttle, 2004; Day & Van den Bulte, 2002; Payne & Frow, 2005; Reicheld, 1993). The identication and creation of value for customers is industryspecic (Buttle, 2004, p. 231; Greenberg, 2004, p. 255; Payne, 2006), yet only the enterprise-wide CRM implementation models of Payne (2006) and Buttle (2004) clearly demonstrate how differences in value creation may impact on the other aspects of CRM implementation. The Payne model shows customer value creation following on from strategy development, clearly linking the CRM strategy with the development of value for both the customer and the organisation. Buttle (2004, p. 32) takes it a step further, arguing that organisations need to understand the industry context in which relationships are developed and practised and that relationship value and expectations differ by industries. Other models either omit customer value creation (see for example Bryant, 2002) or an awareness of industry factors on the implementation (see for example Automotive CRM Summit 2006 to discuss how to develop more industry specic approaches to CRM), yet the industry context does appear to be linked to customer relationships and perceptions. More importantly it does appear to shape the types of outcomes achievable from CRM. The effect of industry context on CRM projects will be one of the components studied in this research.

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

2.2. Organisational context Customer relationship management requires the alignment of business processes with strategies to facilitate ongoing customer interaction, as well as the integration of departments to create and deliver value to customers and the organisation (Conduit & Mavondo, 2001; Ganeshram & Myron, 2002; Ryals & Knox, 2001). Nevertheless, such integration is often absent from the CRM implementation models that focus on software and technology. The lack of integration becomes particularly poignant when the contradictions in the literature are noted. For example, Rigby et al. (2002) contend that organisations should restructure in line with their CRM strategy and then obtain the resources and technology necessary for implementing the strategy. This argument suggests that organisational structure and information technology are the factors necessary for implementation and that organisational restructuring and obtaining the necessary technology are required to support the strategy. An alternative view is provided by Payne and Frow (2005), who argue that organisations need to understand the value proposition from both the organisational and customer perspective and create value for each customer segment, implying the initial need for the creation of knowledge about the customer followed by restructuring to deliver value. Effective CRM implementation also requires an organisational culture that is both adaptive (Hart et al., 2004) and customer-oriented (Iriana & Buttle, 2006). More recently, a study of organisational structure and culture (Ko et al., 2008) showed that organisation-wide perception of the benets arising from CRM directly impacted upon the level of CRM adoption. Ko et al. also found that variation in the perception of CRM benets across organisations could be explained by organisational strategy, the maturity of information technology and systems and product category (2008, p71). Organisational size was also found to be a factor in the sophistication of information systems and the ability to adopt CRM. This supports the work of Zikmund et al. (2003), who argued that the project management techniques used to implement CRM software should vary by the size of the organization and the centralisation of the organization's decision making. Organisational complexity can also affect organisational change projects. Complexity may be described as the number of interlinked activities required for an organisation to achieve specied outcomes (Moldoveanu & Bauer, 2004). These outcomes may include sales, production and service, with each area having its own level of complexity. Complexity increases with the increase in degree of uncertainty in markets and industries that an organisation faces and the tacit attempts to minimise the level of uncertainty associated with each set of activities (Moldoveanu & Bauer, 2004). This is relevant to the eld of CRM as previous theorists and researchers have discussed the use of information and knowledge about customers to reduce uncertainty and increase the likelihood of predicting future purchases (e.g. Kamakura, Wedel, De Rosa, & Mazzon, 2003; Winer, 2001), reducing customer loss (Lemon, White, & Winer, 2002) or increasing customer loyalty (Rauyruen & Miller, 2007; Saparito, Chao, & Sapienza, 2004; Sheth, Sisodia, & Sharma, 2000). There is now a signicant body of work, in both CRM research and organisational change literature, to argue that the organisational context, in terms of size, structure, culture, strategy and maturity of information systems, will directly inuence the outcomes of CRM implementation. 2.3. Customer context There is an emerging view that the adoption and application of CRM differs depending upon whether the organization is engaged in business-to-consumer, business-to-business or not-for-prot environments (Bennett & Barkensjo, 2005; Greenberg, 2004, p. 258; Sashittal & Tankersley, 1997; Srinivasan & Moorman, 2005). In a business-to-consumer environment, for instance, interactions can

vary from transactional- and price-based to long term, loyal relationships and these differences will inuence customers' willingness to form relationships with the organisation (Liljander & Roos, 2002; Reinartz & Kumar, 2000). Even in a single industry, customers can be segmented not only by value but also in terms of their willingness to form a relationship, their level of trust in that relationship and their loyalty to a brand or rm (Day, 2000; Liljander & Roos, 2002; Williams, 2002). As Anderson and Narus (1998) note, relationships may also vary within business-to-business environments. They propose that each business-to-business relationship falls somewhere on the spectrum between transactional relationships and collaborative relationships that are characteristic of the industry. Each supplier in the industry will then adopt a strategy towards their customers that involves either segmenting and focusing on specic customers or interacting with all potential customers equally. Further it is suggested that collaborative relationships may not be the most appropriate approach for all customers in business-to-business environments as the problem solving or joint creation functions of collaboration may not result in the creation of value for both or either party. Business-to-business relationships vary in their needs and expectations and these types of relationships are often characterised by long term interactions, often collaborative and with elements of problem solving (Arnett & Badrinarayanan, 2005; Day, 2000) and the learnings are not readily transferable to business-to-consumer environments. Considering the variation of customers and the relationship types that may face an organization, then each organization would need to look at the types of customers and relationships they are dealing with and which are characteristic of their industry or market before implementing CRM. 3. Overview of CRM implementation Although there are a range of approaches to CRM projects and implementation (see, for example, Buttle, 2004; Payne, 2006; Winer, 2001; Zablah et al., 2004; Zikmund et al., 2003), at the most basic level, CRM projects involve the design, implementation, and evaluation of the strategies, systems and processes associated with customer relationship management (Knox, Maklan, Payne, Peppard, & Ryals, 2003; Lindgreen, 2004; Lindgreen & Crawford, 1999; Payne, 2006; Payne & Frow, 2005). The rst steps for implementing CRM are to develop a strategy based on an assessment of an organization's readiness for change. Crucial elements of this assessment include researching and building knowledge about the customer (Payne, 2006; Payne & Frow, 2005), determining the internal capabilities of the organization (Lindgreen, 2004; Lindgreen & Crawford, 1999) and evaluating the organisation's structures and functions (Buttle, 2004, p. 332; Lindgreen, Palmer, Van Hamme, & Wouters, 2006; Payne, 2006; Payne & Frow, 2005; Rigby et al., 2002). This assessment is followed by assessing and creating value for the customer and the organisation (Payne, 2006; Payne & Frow, 2005), so the design phase should consider organisational and customer context. Organisational change management techniques are a critical aspect of CRM development (Payne, 2006), for the size, structure and culture of an organisation impacts on how that organisation manages changes associated with CRM projects (Iriana & Buttle, 2006; Ko et al., 2008; Zikmund et al., 2003). The implementation of CRM therefore requires functional integration and alignment (Bygstad, 2003; Chen & Popovich, 2003; Piercy, 1998) and appropriate internal processes (Day, 2000; Kotorov, 2003) to manage this change. In addition to this organisational context of CRM projects, a key component of successful CRM implementations are the face-to-face interactions and direct communications that are an integral part of building relationships and trust (Colgate & Danaher, 2000; Gremler, Gwinner, & Brown, 2001), again highlighting the customer context for the design and implementation of CRM projects.

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

The nal step involves an evaluation of the extent of change by applying metrics relevant to the CRM goals (Lindgreen & Crawford, 1999; Winer, 2001). Customer retention and its converse, customer churn or defection, are measures used by charitable organisations to assess their ability to retain donors (Bennett & Barkensjo, 2005) and by for-prot organisations to identify the value of their customer portfolios (Ryals, 2002, 2005). On a less tangible note, shared knowledge and enhanced intellectual capital are two of the possible benets that can arise from the implementation of CRM in business-to-business environments, leading to competitive advantage and therefore protable outcomes (Baxter & Matear, 2004). Organisations involved in the implementation of CRM are looking for a return on their investment in the project through increased revenues, decreased costs to deliver products and services (Allred & Addams, 1999) and increased prots (Reinartz, Krafft, & Hoyer, 2004). Financial metrics that assess changes over time therefore present an additional method for assessing the impact of CRM. Thus, a range of metrics are needed by organisations to address value from the perspective of the customer (e.g., satisfaction and retention measures) and the organisation (e.g., revenue, costs and prot levels). Several authors have also argued that an organisation needs to undertake an assessment phase or CRM capability audit prior to implementation (Lindgreen & Crawford, 1999; Payne, 2006). Organisations need to understand the value proposition from both the organisational and customer perspective and create value for each customer segment, implying the need for the creation of knowledge about the customer before undertaking CRM project design (Knox et al., 2003; Payne, 2006). At the macro level, CRM projects can therefore be represented as four groups of actions: 1. 2. 3. 4. Triggers for action and assessment of CRM; Research and design; Implementation; Evaluation and feedback.

were classied using the Australia and New Zealand government industry classication system. We specically looked for companies that were in the rst twelve months of their CRM projects. The indicators of organisational structure were employee numbers and ownership (see ownership prole in Table 1). The intention was to have a mix of small/medium and large organisations, with different ownership structures if possible, and from different industries. The number of potential participants was limited due to the selection criteria of currently being involved in assessing or implementing CRM. In the rst instance, 24 companies across a range of industries were identied. All companies were contacted and asked whether they were interested in participating in a research study assessing the status of their CRM project. To increase the attractiveness of participating in the study, we explained that the research ndings would be shared among participating organisations. From the screening process, six companies who tted the criteria (i.e., currently involved in assessing or implementing CRM) and were willing to take part in the study were recruited. Each of the recruited companies agreed to participate in the study provided that no direct competitors were also involved in the research. The customer/relationship typology used to prole the organisations (see Table 1) was derived from Coviello, Brodie, and Munro (1997). The participating organisations provided a mix of businessto-business and business-to-consumer foci, a range of sizes and a mix of ownership structures, ensuring case saturation. 4.2. Data collection and analysis One scoping interview was conducted for each organization, followed by one to two interviews with individuals at the senior management level during the early phase of the CRM project. Once the CRM project had reached the implementation phase, a series of semi-structured interviews were conducted with employees at three levels of the organisation: senior management, operational managers and frontline managers. The question content was modied only to incorporate language relevant to the organisation. These interviews were carried out over a six month period. During the implementation phase, a staff survey was also conducted to assess the perceptions of customers, the perceived goals of the CRM project, the way information was communicated, and the level of training and support that had been provided during the implementation of the CRM project. A range of documents and observations specic to each organization were also collected and analysed during this period (see Table 2). No attempt was made to standardise the activities observed or the documents collected as we were specically looking at the impact of context on CRM projects. Across the six organisations, 37 interviews were carried out during the implementation phase, with each interview averaging 1.25 hours, resulting in 20 to 30 pages of transcript and ve pages of mapping observations per interview. Activities were usually observed over a two hour period, resulting in an average of ten pages of observations collected per activity. Following completion of this round of data collection, the completed process maps, analysed ndings, and notes were presented to each company for feedback and checking. This feedback process ensured that there were no misunderstandings or missed content areas that had been overlooked. The option to review a visual representation of the change processes resulted in additional information being recalled and supplied by the participants. Two organisations (BC2-Charity and BBC1-Automotive) also recommended changes to the process maps based on updated information or errors of understanding. At least two people from each organisation were involved in the feedback sessions, although for BC2-Charity, the feedback process involved all customer-serving staff. On average, the time from the initial scoping interview to the feedback sessions was 13 months across the six case studies.

Yet, if context does affect each stage of the CRM project, then the model needs to show the points of customisation that can lead to more effective CRM implementation. 4. Research approach The lack of knowledge about the inuence of context on CRM implementation specically gives rise to three interrelated research questions: 1. What effect does industry context have on CRM projects? 2. What effect does organisational context have on CRM projects? 3. What effect does customer context have on CRM projects? There is a lack of coherent research into the role of context in CRM projects and these research questions are necessarily exploratory in nature. Implementation of CRM projects occurs over time, requiring that this research be longitudinal to gather data over the course of the initial implementation timeframe. Qualitative research methods are suitable for longitudinal exploratory research where the impact of phenomena, as well as the nature and level of these impacts, is unknown (Yin, 2009). Therefore this research will focus specically on discovering the place of context in CRM projects using six longitudinal case studies across a range of industries. The case studies cover medium and large organisations in the business-to-business and business-to-consumer markets, providing insights into the impact of industry, organisational and customer context on CRM implementation. 4.1. Sampling Participating organisations were selected through a multi-stage process. A list of organisations that were currently implementing CRM was developed using industry contacts and these organisations

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

Table 1 Prole of case studies. Codes are based on the customer type: Business to Business (BB); Business to Consumer (BC); Business Customers and Consumers (BBC). Organization Industry Core business Autoparts (BB1) Industrial retail/manufacture The manufacture of automotive components. Industrial retail of the components nationally. Engine & generators (BB2) Industrial retail & service Import and complete manufacture of heavy industrial engines and generators, industrial retail and servicing of the engines Multinational subsidiary, 10,000 customers. $AUS 2650 million Project staff: 8 Internal projectknowledge: extensive Resource rich Business-to-business Relationship marketing Nat. sports (BC1) Sport & recreation National sports organisation covering national, regional and local competition Charity (BC2) Not-for-prot Charity raising and distributing funds and managing projects in overseas locations Automotive (BBC1) Wholesale, franchisor Import cars and automotive parts and complete to local standards. Wholesale to distribution network. Energy (BBC2) Energy supply Produce and retail electricity.

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Organization prole

Local strategic business unit, 20,000 customers. Revenue previous 12 months $AUS 025 million (shown as a range) Project resources Project staff: 1 Internal project knowledge: limited Resource poor Customer and interaction type Business to-business Transaction marketing with aspects of interactive marketing Current relationship prole Long term repeat purchasers. Some contractual relationships. Unknown percentage who are relationship prone Improve customer retention and increase value of existing relationships Increase level of loyal customers

Stand-alone, 120,000 customers. Multinational subsidiary, 30,000 customers. $AUS 101250 million $AUS 025 million Project staff: 2 Internal project knowledge: extensive Resource rich Business-to-consumer Database marketing Project staff: 1 Internal project knowledge: developing Resource poor Businessto-consumer Database marketing

Multinational subsidiary, 70,000 customers. $AUS N 250 million Project staff: 6 Internal project knowledge: extensive Resource rich Business-to-business and business-to-consumer Network marketing with facets of interactive and transaction marketing Mix of price based transactional relationships with end customers and some repeat purchasers and loyal customers Improve the acquisition of customers and increase conversion to retained customers Improve customer experience & preferred supplier

Stand-alone, 550,000 customers. $AUS N 250 million Project staff: 4 Internal project knowledge: developing Resource medium Business-to-business and business-to-consumer Network marketing Long term relationships with a range of interaction needs. Interactions governed by internal processes and poor supplier relationships Improve customer retention

Long term relationships, collaborative, with some price conscious customers

Loyal customers, but processes set up for transactional interaction at each point of contact

Long term relationships with a range of interaction needs. Mass database marketing

Desired relationship outcomes

Review and increase value of existing relationships Increase customer value

CRM focus

Improve customer retention and Improve customer retention reduce churn and increase value of existing relationships Improve customer experience Increase volunteer value

Improve customer experience & preferred supplier

6 Table 2 Data collection. Case study

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Total staff numbers Staff associated Scoping interviews Implement with project interviews Months 12 Months 38 6

Other data collected Months 38 Strategy document, IT requirements, observation of Sales and Marketing meetings, screen dumps, pilot internal data system specications System diagnosis reports, vendor actions Customer research, customer and marketing strategy document Customer communication documents, screen dumps, strategy document and project plan, previous IT project results, IT requirements Consultant research, strategy document and project plan, internal and customer reports, observation of project planning meetings, screen dumps Customer and supplier research report

Feedback sessions Months 1214 3

Autoparts (BB1)

50

30

Engines and generators (BB2) Nat. sports (BC1) Charity (BC2)

1000 80 23

150 5 23

2 1 2

8 1 6

3 1 8

Automotive (BBC1)

Not available

Energy (BBC2) Total

2300

1 9

3 28

1 12

The questions developed from the literature covered culture (Piercy, 1998), communication ows (Baumeister, Zhang, & Vohs, 2004; Brown, 1998; Conduit & Mavondo, 2001; Ryals & Knox, 2001), knowledge of the CRM project, understanding of CRM, the perception of the reasons for change (Buttle, 2004; Payne, 2006; Piercy, 1998; Winer, 2001; Zikmund et al., 2003), existing use of databases (Winer, 2001; Zikmund et al., 2003), methods of communicating with the customer (Conduit & Mavondo, 2001), structure of the relationship with customers, and personal experiences of the change project (Kotorov, 2003; Lindgreen, 2004; Piercy, 1998; Vizard, 2002). Additional questions around the connections with other departments, time frames of meetings, communication and transfer of and access to customer data were also developed using a framework on process mapping for organisational change (Bendoly & Schoenherr, 2005; Biazzo, 2000). Research into enterprise resource planning (ERP) identied that there were a number of implementation strategies that could be selected by an organization, but not all strategies would be equally successful for all organisations (Okrent & Vokurka, 2004). One method of capturing data on the implementation programmes for enterprise resource planning (ERP) and the contexts in which it occurs is process mapping (Biazzo, 2000; Okrent & Vokurka, 2004). While there have been few examples of process mapping in the investigation of CRM implementation (Zablah et al., 2004), the similarities between the issues found in ERP implementations and CRM implementations suggest that process mapping would be a useful technique. Process mapping involves the construction of a model showing the relationships between people, processes, information, and production tools. This technique is useful in offering visual representations of processes, system changes, or more recently the implementation of specic programmes (Biazzo, 2002). This technique has also traditionally been used in the analysis of complex systems to identify areas for improvement or to implement new processes (Hunt, 1996). A software program, NVivo, was used to analyse the interviews and documents for themes and links, to identify differences between organisations, and to develop explanations for why such differences might exist. Once the interviews, observations, and documents had been analysed for themes, they were analysed again for content specically related to interactions, cross functional contacts, data ows, timing of actions, and decision making. The results of this second round of analysis were then mapped using standard process mapping symbols and layouts (Biazzo, 2000; Hunt, 1996) using Visio. The themes were then pattern matched to the literature, with specic emphasis placed on identifying contextual effects. The process maps for each company were then compared to ascertain similarities and differences across all

the CRM implementation projects. The surveys were analysed using descriptive statistical analysis for frequency, mode and means.

5. Findings CRM projects commence with an assessment of need, followed by design, implementation, and evaluation stages. We examined the role and effect of context at each stage of the CRM projects. This macro level model of CRM projects will be used to discuss the ndings. In the discussion and management implications, we consider how awareness of context could contribute to improved outcomes.

5.1. Assessment To understand the level and type of assessment by each case study, organisations were asked why they undertook a change project like CRM implementation, particularly given the negative publicity surrounding the problems associated with the implementation of these projects. The responses indicated that industry conditions and changing customer expectations had as much inuence on the decision to implement CRM as internal perceptions of the benets of CRM systems. When respondents were asked about prevailing industry conditions or the existing industry environment, the complex interaction between internal and external drivers for implementing CRM became more apparent. For example: a 20% churn rate in club membership, but over the last couple of years as we have started to understand more about our nonmember clients, we've realized we don't actually know a whole lot about them. (BC1-Nat Sports: Scoping interview)

You're dealing with large companiesand that this is getting really complex in terms of trying to manage our relationship with customers and especially as companies get bigger and in the last 10 years, there's been a lot of aggregation of customers. (BB2 Engines and Generators: Scoping interview) On the basis of existing research, it was expected that the initial stage of CRM projects would be an assessment of CRM requirements, but we found that external conditions from either industry competition or changing customer expectations acted as a trigger for the assessment of CRM (see Fig. 1).

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

BB1

Increased competition

Price Competition Customer retention

Decide On CRM

Identify lack of knowledge about customers

BB2

Changing customer needs

Need to meet current & future customer expectations

Decide On CRM

Current processes do not support national customers

BC1

Changing customer base

Customer churn

Decide On CRM

Identify lack of knowledge about customers

BC2

Increased competition

Government Funding Competition Customer churn

Decide On CRM

Identify lack of knowledge about customers

BBC1

Changing customer needs

Need to meet current & future customer expectations

Decide On CRM

Current processes do not support customer acquisition & retention

BBC2

Poor customer responses

Need to meet current & future customer expectations

Current processes and supplier networks support customer acquisition & retention

Decide On CRM

Fig. 1. Initial decision chain external drivers.

Competition is very ercethe big chains, small independent operatorsand we get a lot of drift from other product areas (BB1-Autoparts: scoping interview)

We compete for the same customers and if we can retain another 20% to 30% of purchasers we can increase sales by 10%and maintain our margins. (BBC1-Automotive: scoping interview)

2006 or Ryals, 2005) but the six case studies investigated in this paper all show that the CRM decision was driven by a need to react to changing external conditions in the industry or in customers. This reactive response was then developed into a CRM strategy. The quality of the resultant CRM strategy was affected by the organisational culture and resources. Three organisations identied a lack of customer knowledge, one organisation identied a lack of internal knowledge, and two found that they had internal process problems. We had been through a phase of looking at a CRMbut (we) went back to basics with the original team, basically we sell business-to-business, we therefore have complex relationships with customers so very few of our customers are a one man operation and we deal with multiple levels.(BB2-Engines and Generators: Scoping interview)

The company is very risk averse and are pushing the risk onto (other supply chain members). The culture is unbelievable. In the past we had a risk sharing arrangement, but now no one wants to make a decision. That is hardly the way to run a customer focused business. (BBC2-Energy scoping interview) Two themes that emerged from the scoping interviews were that the drivers for change were external and contextual. The industry context drivers for change arose from changes in the competitive environment and the performance of competitors in the industry. The customer context drivers arose from changes in customers' expectations, knowledge or prole. For business customers, this can include changes in organisational size and structure. The initial process for each organization was to recognise a change in the environment, determine a need to respond to the change, and decide on the response (i.e., undertake CRM) (Fig. 2). This is, however, a macro consideration for the initial process, which does not capture the variation in the change decision response chain. In the existing research, CRM projects are presented as a proactive response to internally derived goals for differentiation, competitive advantage or improved share of customer wallet (see for example Payne,

At senior level, management does not support relationships because that suggest a friendship that is not toleratedThey have a silo mentality and it can be quite a political environment. (BBC2Energy) In researching the nature of CRM and determining the initial CRM actions used in the six case studies, we found a clear link between the size and type of business and the formality of the research and assessment process (See Table 4 in the Appendices for the scoping actions undertaken by each organisation). The business-to-business organisations (BB1-Autoparts and BB2-Engines and Generators in Table 1) relied on anecdotal data from internal staff combined with existing, internal information on the size and purchase levels of

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Management support Develop strategy


Decide On CRM Identify information issues Identify software needs

BB1

Mkt Mgr

Recognise issues

Communication strategy

Management support

Identify software needs

BB2

Recognise issues

Decide On CRM

Mkt Mgr

Develop strategy

Appoint project leaders

Communication strategy

Current processes do not support national customers

Assess parent program

BC1

Mkt Mgr

Recognise issues
Identify lack of knowledge about customers

Decide On CRM

Management support

Develop strategy Review Software approach


Assess parent program Identify process & information issues

BC2

Mkt Mgr

Recognise issues Environmental assessment Management support

Develop strategy

Management support

Decide On CRM

External consult
External Consultants Assess market

BBC1

Recognise issues

Appoint project leaders

Decide On CRM

Develop strategy

Redevelop strategy

Mkt Mgr

Process Issues

Management support Recognise issues

Decide On CRM

Mkt/ Supply Mgr


Current processes do not support customers Appoint External consultants Conduct research

BBC2

Identify lack of knowledge about customers Identify lack of knowledge about suppliers

Fig. 2. Initial project actions.

different market segments to develop their customer assessment. Conversely, the two not-for-prot organisations operating in a consumer market used commissioned research combined with internal data to develop their knowledge of customer needs. The automotive wholesaler was operating in a business-to-business environment but focusing on their relationship with retail customers, so they used commissioned formal research to investigate the current and desired relationship requirements. The energy company also used commissioned research to examine the nature and strength of the customers' perceptions of relationships with the company. The scale and formality of the assessment and research phase is linked to the type of customer and the type of industry (Fig. 3). The organisations who dealt with consumers were more likely to design formal research looking at customers' needs and included items such as

contact preferences, preferred level of engagement, product use, and service expectations. We suggest that the decisions by consumer facing organisations to use a more formal based approach to customer research is based on the extensive knowledge associated with collecting and analysing data in consumer markets (see for example Lemon et al., 2002; Ryals, 2005). We also noted that the organisations with business customers reported extensive knowledge of customers held anecdotally by staff but did not conduct any formal research, leading to problems with the accuracy and integrity of databases and analysis. The approach to research and project scoping was also affected by the organisational resources and knowledge, and limited resources and knowledge was associated with less formal research, covering limited aspects of customer interaction. For example, BB1 (Autoparts) conducted a second scoping phase, when it is found that rst round of project scoping had resulted in key customer interaction points being

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Formal assessment

in the retail business. They're a wholesaler and they've imposed a wholesale system on it. (BB2-Engines and Generators) Two of the organisations without access to parent companies (BB1-Autoparts, BC1-Sports) noted that access to the experiences and knowledge of similarly sized companies in related industries would have been useful. This provides the rst clue to the impact of organisational context on the implementation process. Specically, the availability of resources and access to information on other CRM implementation programmes appears to have determined the formality of the organization's assessment of their own internal capabilities. It was also notable that the two local organisations without access to parent companies viewed CRM projects and systems to be primarily about software and information management although the interpretation of CRM and the aims indicated a greater awareness of the realm of CRM operations. This focus resulted in a perception that the next step for each organisation would be to assess software vendors and evaluate their data management needs. These organisations also had limited access to resources and noted that their stafng levels were at the minimum level needed to maintain all current operations. what we mean by CRM, it's not customer database marketing. It may be all about customer analysis, whether that involves direct marketing or database marketing is an entirely different question, so we're trying to sort of work our way through that but the fact of the matter is we've currently got eight databases already that were all established independently of one another, so how do we actually get (to an integrated CRM)? (BC1-'Nat Sports)

Automotive

Energy

Charity

Business to Business

Engine & generators

Nat. Sports

Business to Consumer

Autoparts

Informal assessment
Fig. 3. Contextual impact on assessment and research.

missed. This organisation had the lowest resource level and no access to other implementation projects, and the manager at the time highlighted the resource issues. 5.2. Design The design phase of the protocol involves securing management commitment, developing a CRM strategy, organising project leadership, creating a communications strategy, and planning the required actions in the areas of interaction, operations, and information management. These actions are based on current and projected customers' needs, industry norms, and organisational culture and resources. The four specic actions consistently performed by all organisations during the design phase were: 1. 2. 3. 4. obtain senior management commitment; nominate project leaders; develop a CRM strategy; develop project goals and objectives.

Initially I thought it was just about tracking databut it's really trying to get a formal system in place of how we manage the relationship with the customers(we have now worked out) there's a number of aspects to it. (BB1-Autoparts) Each organization placed a different emphasis on their respective CRM projects, such as acquisition (BBC1-Automotive), retention (BC1-Nat Sports), or retention and enhancement (BC2-Charity). These different emphases resulted in the development of different CRM strategies as well as variations in the amount of attention that was directed to the different aspects of CRM design. The nature of the desired relationship was also specied during strategy development. Why did we start looking at CRM? We started with okay, what do we need? What's happening with this relationship? What are the things that get people to sign up in the rst place, why do they stay and why do they leave and try to build that into the relationship, and the communication cyclewhat we've always understood, but didn't do anything about it, was that the rst 12 months is the most vital part of the relationship. (BC2-Charity)

Although all organisations in this research obtained senior management commitment early in the project, in three cases (BC2-Charity, BB2-Engines and Generators, and BBC1-Automotive), senior management were also involved in the project initiation that resulted in the research and assessment phase. All organisations appointed project leaders, although the organisations with large parent organisations, access to resources, and a culture that included project management and change management developed a two tiered project leadership (BB2-Engines and Generators, BBC1-Automotive). In these two organisations, leadership was headed up by a senior member of staff who managed the strategic vision for the project, while the second tier manager focused on the implementation detail, especially for information management. This (second CRM project management) role was more focused at the micro level looking at the IT implementation and the analytical and data needs of the organization. (BB2-Engines and Generators) These organisations also considered the experiences of the parent organisations when scoping and designing their CRM projects. nobody's happy with the system because it's a system that's being imposed. It's a system that doesn't really suit our needs it's a system that suits the operations of our parent, who is not actually

our competition is every other national sport and leisure option so we need to ensure the value of our customer database for our business partners. (BC1-Nat Sports) Each of these organisations specied targets and performance measurements related to the goals. The two not-for-prot organisations operating in the consumer market and the automotive wholesaler exposed to the retail consumer market produced the most formal strategy documents, specifying relationship goals in terms of numbers, sales targets, or repeat business (Table 3). The energy company (BBC2-Energy) completed a formal review of relationships and customer-value both upstream with suppliers and downstream with business and retail customers. This review

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

10 Table 3 CRM project aims and targets. Case study Autoparts (BB1) Engines and generators (BB2) Nat. sports (BC1)

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Internal conditions Loss of position as market leader. Leverage reputation for quality to avoid price competition Effectively manage all contact points as customers become larger and more sophisticated. Delivery of services into multiple markets and segments, and recognise the involvement of customers in multiple segments. Reduce the overall cost of acquisition by reducing customer churn. Target the acquisition and relationship building process more effectively 70% of customer purchases are transactional with 30% customer retention. Improve the acquisition of retail customers and enhance relationship building skills of business customers. Reputation as bureaucratic and disinterested in improving relationships, with low levels of trust and communication with suppliers and customers. The poor reputation as a customer is affecting the organization's ability to develop the capital works needed to supply a growing customer base.

Aim Build relationships with existing 40% loyal 3rd tier customers and improve preferred supplier status to more than 40%. Enhance B2B relationships and develop processes and metrics to support the enhancement. Reduce churn at the club level. Identify all contact and involvement points. Improve the retention rate and build more effective relationships in the rst 12 months. Enhance existing relationships to create advocates. Improve customer acquisition and increase conversion to retained customers. Build relationships with suppliers in order to create and deliver better value for customers. Aim to become a preferred customer in the supply chain.

Charity (BC2)

Automotive (BBC1)

Energy (BBC2)

resulted in the development of a formal implementation plan that specied changes to interactions, processes, and the exchange and handling of data. The two business-to-business organisations (BB1-Autoparts, BB2-Engines and Generators) had a less formalised strategy for relationships and targets, but developed more detailed approaches to addressing information support requirements (Fig. 4) and information management problems. The wholesale heavy equipment company (BB2-Engines and Generators) drew on parent experience and internal skills and resources to develop a detailed, scoped plan of implementation for information management improvements. The automotive parts manufacturer (BB1-Autoparts) had signicantly less project resources compared to the other case studies, and their planned activities did not match their project aims. However, this organisation did modify their plan on a number of occasions as they developed more knowledge about their own capabilities and limitations. The less formal relationship management strategy in the businessto-business organisations may be linked to the informal approach that these organisations used to assess their business relationships, as well as the dominance of personal contact with business customers. Both organisations noted their previous reliance on staff to initiate, build, and maintain customer relationships, and to build knowledge about the customer over time. In each case, one of the aims of the CRM project was to develop corporate knowledge about customer relationships rather than having to rely on individual knowledge. However it was also notable that neither organisation had developed implementation metrics beyond time limits or performance measurements
Relationship change project design
Automotive Charity Energy Energy Nat. Nat.Sports Sports

during the design phase. The development of metrics occurred once initial implementation actions were underway). The goals of the organisations with a consumer interaction (i.e., BC2-Charity; BC1-Nat Sports; BBC1-Automotive; and BBC2-Energy), indicated a desire to change the way they viewed the customer. Nevertheless, as shown in the goals, only two of these organisations (BC2-Charity; and BBC1-Automotive) and the wholesaler incorporated these desired changes in the project design, notably in the planned actions for interaction and communication. The wholesale heavy equipment company (BB2-Engines and Generators) had identied the need to enhance existing relationships through the application of improvements in information management. The manufacturer (BB1-Autoparts) had identied a desire to change the view of the customer, but this did not translate into the project planning, and existing interaction methods were to be maintained. All organisations specied goals for information management and interaction management, but only the automotive retailer and the charity clearly specied changes to operations. The level of internal assessment undertaken prior to the design phase appears to relate to the ability of the organisation to recognise that customer relationship management involves interactions, operations, and information. Access to resources and external examples affected the level of assessment undertaken, and the subsequent project design. 5.3. Implementation The implementation phase covers the people, processes, and functional integration required to change the organisation and achieve the desired goals. As with the assessment and design phases, there were noticeable differences in the formality of the implementation plan and the actions taken across the case studies (See Tables 5) and 6) in the Appendices for employee perceptions of CRM projects). The availability of information is the rst notable point of variation in the implementation design. The subsidiaries of multinational organisations had access to the CRM implementation experiences of the parent organization and previous system rollouts. This provided a model for comparison and review, as well as providing a contextuallyrelevant example. The charity noted that being able to view the parent organization's system had resulted in the identication of the activities and processes that worked and those aspects of the CRM project not associated with software. I went to head ofce and saw what they were doing, because they've got this CRM software package. The information I got from them about being proactive and some of the things they were doing, which was quite separate from the CRM software package. So the

Business to Business
Autoparts Autoparts

Business to Consumer

Engine Engine & & generators generators

Information support project design


Fig. 4. Project design and context.

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

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CRM software package enabled them to collect statistics and so on. It actually enabled them to individualise letters, so from their surveys and information that they were gathering from their supporters they were able to individualise their letters to their supporters. (BC2- Charity)

I mean I was involved in the implementation of our new business system some years back, just as a user and that had a lot of frustrations about it and one of the things that we did say in the implementation of the CRM System we didn't really want to have another roll out like that. (BB2-Engines and Generators) The companies without access to other CRM projects through either a parent organisation or a channel partner relied on information from vendors and public sources. The three companies (BB1-Autoparts, BC1-Nat Sports, and BBC2-Energy) that did not have access to the experiences of other organisations commented that it was difcult to identify the order in which actions should occur or the aspects of CRM that should receive priority. As a result, the CRM projects developed by these companies took longer to implement, resulted in lower levels of internal satisfaction, and generated more problems compared to organisations with access to other experiences and projects. I used this checklist from (vendor) as a guide. There are 19 items on here, but I cannot see which ones have the priority Companies are led astray by technology vendors offering total solutions or white box approaches. (BB1-Autoparts) In terms of the planned process and operations changes, the charity (BC2-Charity), the automotive wholesaler (BBC1-Automotive), and the energy organization (BBC2-Energy) assessed and planned changes to internal processes and operations in order to achieve their interaction management goals. In addition, the charity organization (BC2-Charity) planned changes to their information management system to support the relationship changes, but these were seen as longer-term goals. The sports and recreation organization (BC1-Nat Sports) planned changes to interaction management and information management, having identied that existing systems did not support desired levels of customer knowledge, or the desired opportunities to interact. The two business-to-business organisations planned changes to information management but experienced process and operations issues during implementation. It is likely that the less formal approach to assessment and research that was apparent in the business-to-business organisations results in a focus on areas directly related to the identied issues (information collection, analysis and application) but also leads to aspects such as operations and processes being overlooked during design and implementation. For both the Autoparts (BB1-Autoparts) and Engines and Generator (BB2-Engines and Generators) cases, the organisational structure and operations management were not considered during planning, and both organisations consequently developed an implementation approach for only the customer facing sections of the organisation. This resulted in issues with the development of the database, particularly in the areas of data integrity, accuracy and currency. I haven't seen a lot of information put in there by anybody else, other than the two customer support representatives. The information that's been entered into that systema lot of that is not accurate and not updated. (BB2-Engine and Generator) For the two business-to-business organisations, areas of the organization in support roles were either not involved or only minimally involved in the project. In the case of BB1-Autoparts, this was

emphasised by the lack of involvement of functions external to sales and marketing during the scoping stage of project design. As a result, the organisation subsequently redesigned the project to include the assessment of internal requirements for data and the application of data by different business units. The organisation also experienced issues with project scoping, as demonstrated by the problems that were encountered in terms of assessing internal database needs, planning for the selection and purchase of software, and selecting a support vendor. Although the project leader had originally identied the need for integration between relevant departments, integrated databases, and improvements in information access for eld staff, only vendor selection and software installation had been planned for in the original project design. As the organisation experienced a range of issues such as the lack of links between databases, identifying the specic eld needs for information and information access, and variable knowledge about the CRM project across the organisation, additional aspects of the CRM implementation project had to be developed in situ (see Fig. 5). In the two business-to-business cases, the prevalence of strong, direct contact relationships with business customers and informal information collection to understand business customers' needs led to an implementation approach that was focused only on information management and contact technology for customer-facing functions. Both organisations also experienced problems associated with data integrity, data analysis, information application, and a lack of metrics, although the extent of these problems and the ability to overcome them in the nominated timeframes is related to the size of the organisation and the availability of resources. The strength and quality of relationships with customers was highlighted in all interviews for both companies, indicating that the people and processes for interaction management were effective, but the links to other change activities were not readily recognised by either company. In the case of the engine and generator company (BB2), this led to project problems associated with information duplication by staff on the existing email system, and a resistance to change associated with data collection and process issues. 6. Discussion Based on these ndings, we would expect that the drivers for change are more likely to be external than internal, with industry or customer-based changes triggering an assessment of the need for CRM. As such, the approach taken to research, design and implement CRM will be informed by the unique interaction of customer type, industry norms, and organisational size, structure, and capabilities. This is represented in Fig. 6, showing that the implementation stage of CRM projects is strongly inuenced by context. The ndings show that business-to-business organisations that had strong relationships with their customers at the start of the project were more likely to have been subject to signicant changes within their industry and customer contexts. Nevertheless, these organisations developed the most informal plans for the assessment, design, and implementation of CRM, and were more likely to focus on IT-led implementation plans that resolved issues associated with data and information management. In contrast, organisations with a consumer focus were much stronger in developing formalised project designs and plans, and often created extensive database and information management implementation plans. This could be at odds with the interaction-focused goals professed by consumer-facing organisations. The analysis shows that although there were points of similarity in the overall actions undertaken across the six case studies, the CRM programmes instituted by each participating organisation were designed to t their knowledge of CRM, the availability of resources, their access to external information sources, and their specic needs and goals to interact more effectively with customers. Within the programmes the perceptions of the customer were

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

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M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Management Support

Source Vendor CRM information

Project Leader

Problem Lack of information

CRM Decision

CRM Strategy Development

CRM Plan Development

Pilot data System with staff

Determine Internal Needs

Problems

Information issues

Scope project

Develop Customer profile

Project leadership

Issue(s) Identification

Management Support

CRM Strategy

Research & access to other programs

Assess Internal capabilities

Fig. 5. Example of changes to CRM implementation (BB1-Autoparts).

consistent with industry norms. Of greater interest to this research was a perception that the existing relationship needed to undergo some form of change in order to meet the future needs of customers and the organization. The ve key points emerging from this context analysis of CRM are: 1. The project will involve some form of assessment of internal capabilities, and that this assessment is limited by access to resources and examples of other implementation programmes. 2. The project will tend to focus on the areas perceived as decient as identied through the initial assessment. 3. Organisations require customised programmes that can address their specic areas of deciency. 4. Areas of deciency can be in the interaction with customers, information management, or the processes and operations that support interaction and provide access to information. 5. The combination of interaction management, process and operations management, and information management will be specic to an organisation. Our analysis shows that contextual effects are strong determinants of the manner in which CRM is both justied and implemented. Specically, the cases investigated exhibited different context parameters and provided different justications for implementing CRM. These contextual factors can arise from the industry, the organisation, and the customer type and relationship. Thus, variations in any of these contexts will require different decisions along the justication and implementation pathway.

This research also shows that the direction of CRM change project was affected by the nature and norms of the industry. Businessto-business organisations were more likely to focus on a technologydriven project to support strong, existing interaction management, while organisations in a business-to-consumer setting were more likely to engage in projects that focused on improving interactions. However, the question of whether the industry affects the successful outcome of CRM is more difcult to answer. The wholesale heavy equipment company (BB2-Engine and Generators), for instance, operates in an industry that expects ongoing or long-term contracts, one-to-one service, and the provision of customised products and solutions. As such, this business-to-business setting meets the criteria of an ongoing contractual and complex involvement (Reicheld, 1993; Reichheld & Teal, 1996), with additional benets arising from customer interaction (Dowling & Uncles, 1997). Organisations may therefore be more motivated to develop and implement successful CRM projects when the industry type and industry norms both support relationship development. On the other hand, the manufacturing company (BB1-Autoparts) perceived that its reputation was built on product quality and customer loyalty. It was noted in all interviews with employees from this organisation that the industry was perceived as being increasingly price driven and saturated as new competitors entered the market. This organisation also experienced the greatest difculty with the CRM project, particularly in terms of meeting their objectives and deadlines. Indeed, this organisation did not meet any of their goals within the 13 month data collection period, suggesting that their CRM project could be described as having been a failure.

Organisational context

Desired Organisational outcomes Drivers for CRM change CRM Transformation Process Desired Customer mix Desired Relationship Exchange

Customer context

Relationship Exchange

Industry context

Fig. 6. Contextual model. (Red arrows highlight major contextual impact points). (For interpretation of the references to colour in this gure legend, the reader is referred to the web version of this article.).

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

13

Based on these results, the industry norms that support long term relationships with aspects of collaboration can act as a motivator for success, while industry norms that tend towards interactions that are transactional in nature are more likely to experience problems with their CRM projects. Therefore, appropriate industry norms are needed to support a customer relationship focus in order to increase the likelihood of project success. The reported industry norms associated with the more successful CRM projects in this study include knowledgeable and changing customers, customer expectations of suppliers for improved levels of customisation and responsiveness, and more complex product/service offerings. This supports the original work by Jackson (1985) that relationship building is more suited to heavy industry or service contexts, and that relationship building or loyalty programmes in industries characterised by transactional interactions may not lead to effective returns on investment (Reinartz & Kumar, 2002). Another indicator for success is the organisational context and the presence of a CRM champion team. Organisations can create successful CRM projects, but they need to clearly nd the level at which to develop relationship management programmes. It was also expected that the structure and resource level of each organisation would present contextual variations, and although specic size in terms of stafng did not appear to be a critical issue, an organisational structure that provided access to external resources and experiences with CRM components appeared to directly inuence the design and implementation of CRM. Indeed, parent organisations that had experience with CRM projects were a signicant source of expertise and experience for the relevant participating organisations. The experiences of the parent organisation were therefore used by the participant organisations to determine potential issues and to develop project designs that were more focused on achieving their specied outcomes. In contrast, participating organisations that did not have this access designed projects based on advice received from vendors and consultants. Each multinational subsidiary in this study used the experience of their parent organisations as a resource for project scoping, and overall achieved their CRM project aims more effectively than the other participants so knowledge dispersion also appears to be a factor that inuences CRM implementation. However these organisations also acted with autonomy in developing their projects, citing the need to meet local market conditions and expectations. The automotive company (BBC1) noted that an original plan to use a CRM system from another overseas division was not approved at the local level when it was found that market and customer expectations differed signicantly in the two countries, showing that industry and customer contexts were very important in scoping and designing the project. The level of autonomy and local authority affects the ability of an organisation to customise the project or the project elements to meet local or regional needs. Large organisations with dispersed authority from a parent organization exhibited greater knowledge of their desired outcomes from CRM and a greater knowledge of the problems associated with CRM change. In contrast, those organisations that did not have access to an external CRM project experienced more delays and problems. They relied on information from vendors and potential vendors during the early stages of the project development. The types of problems experienced by these companies included delays, re-scoping of projects, redesign of projects and lack of alignment between corporate strategy and CRM strategy. Specically, the initial project was perceived as a database development project, and although this remained a central goal of the CRM project, internal scoping identied a much greater need for linking and applying data, and analysing the existing data to understand customer behaviour and needs compared to the original goals of creating a database and purchasing software. To emphasise the role of structure and dispersion, organization BBC1-Automotive (wholesale) initially followed the design of the parent organisation and brought in external consultants who recommended a database and contact approach. Nevertheless, an industry

report suggested that the organisation's customer retention problems occurred at the direct contact point (face-to-face sales). This information led to a redevelopment of the project that was more focused on improving interaction rather than on the initial recommendation to improve the technology. A nal component of CRM project success that emerged from the organisational context was the appointment of a CRM project leader or champion. The two organisations that achieved all specied goals within the time frame (BB2-Engine and Generators and BBC2-Automotive) appointed a CRM project team that included a CRM champion and a second-tier leader. The CRM champion drove the vision and concept of CRM for the organization, and had the authority to make decisions to drive the project forward. The second-tier leader, in contrast, managed the communications and the interaction with other functions within the organisation, and was responsible for the analysis or technology aspects of the project to ensure that all goals were achieved. This arrangement signalled the importance of the project to the organisation and ensured strong internal communications. In contrast, the lack of access to knowledge also affected the composition of the project teams, and organisations without the resources or deep knowledge of CRM projects typically appointed a single project manager. These organisations experienced more delays and problems with implementation. Typical problems included the need for additional research that emerged during the companies' scoping phase and lack of resources to manage the multi-faceted nature of CRM projects (BC1-Nat Sports and BB1 Autoparts). 6.1. Conclusion We started by asking why there was still a signicant percentage of organisations who were dissatised with the outcomes of their CRM projects and whether this dissatisfaction was related to a lack of context-specic knowledge around CRM implementation. This research considered both the similarities and difference in projects and found that there were a number of key differences and points of customisation that organisations needed to consider in the project planning and management. Context, dened in this research as organisational structure and culture, industry norms, customer type, and the relationship expectations of customers, were identied as having a clear impact on the research, assessment, design, and implementation of CRM. In this study, organisations with business customers and complex product/service offerings had strong enduring relationships with customers (BB2-Engines and Generators), and the drivers for change emerged from changes in customer needs. Organisations with retail customers and high levels of competition identied that they had a percentage of customers who were loyal or potentially loyal but that existing interaction procedures did not support segmentation or interaction based on this knowledge. This clearly suggests that organisations that design CRM projects that do not take industry norms, customer expectations, and desired relationships into account are more likely to design and implement CRM projects that do not deliver the desired benets. From the organisational context, this research established that exposure to other CRM projects provides access to information that can be used to develop customised CRM projects. Further, organisations with knowledge of other projects and a culture of learning appointed a two-tier CRM champion team, which helped these organisations to achieve their specied goals in an acceptable timeframe. Organisations that did not have access to other projects or commenced projects without formal customer research experienced more problems and delays. Indeed, the absence of formal customer research, and the resultant inability to dene current and desired relationship types that were relevant to customers' needs and industry norms, resulted in confused goals and targets and signicant project redesign. As such, CRM implementation needs to be customised to take into account industry norms, customer expectations, and the

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

14

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

desired relationship types. A model for evaluating CRM conditions was therefore developed to show that CRM project design and implementation need to be grounded in context-relevant research and a clear knowledge of internal resources (see Fig. 6). The rst point of context is the drivers for change, and these drivers should inuence the way in which the CRM project is customised and designed. For instance, the ndings from this research indicate that organisations that have strong existing relationships and few competitors, such as those that exist in many business to business markets, must react more quickly and effectively to changes in customers' structure, type and expectations. Moreover, prevailing industry conditions, such as high rates of growth or mergers and acquisitions, will increase the need for strong and effective relationships and relationship and information management in order to retain customers. Organisations exposed to these contextual factors should consider more formalised approaches for implementing CRM, such as a formal research and analysis process to identify current and future customer needs, industry changes and internal resources. Organisations experiencing low levels of customer retention and high levels of customer churn were found to have effective information management but poor process and interaction management. The issues experienced by these organisations reect a need for CRM implementation to focus on processes, interaction, and direct contact with customers. The level and type of industry competition also affected the project design, with organisations looking at competitors and parent companies to gain an understanding of CRM projects. This combination of weaker existing relationships, customer type, and industry approaches to CRM had a noticeable impact on CRM projects in these organisations, inuencing both project design and implementation. The type of impact could be seen initially in the drivers for CRM and the goals for the CRM projects, where retention issues resulted in goals that focused on greater understanding of the reasons why customers moved to competitors, how to improve interaction and the types of contact desired by customers. Unlike the more common approach to CRM of managing data to improve targeted communications, organisations aiming to improve retention had to focus directly on the components of the relationship and how to interact more effectively. While industry and customer factors inuenced both the drivers for change and the development of CRM project goals, the greatest effect on project design and implementation arose from differences in organisational context. The key components of organisational context that emerged from the case studies were organisational structure and capabilities, resource availability, and the ability to gain access to external projects for knowledge development. Organisations with limited access to resources, low levels of internal evaluation on current relationships, and limited knowledge of other CRM projects experienced greater difculty in designing and implementing CRM compared to other cases in this research. In summary, context clearly inuences the motivation for instituting CRM, the development of goals, the way in which the CRM project is scoped, and the eventual design and implementation of CRM projects. Companies that are considering developing or improving their current CRM practices should therefore examine both internal and external conditions before planning such changes. Knowledge of how customers are changing, industry norms, and how projects are managed in a variety of contexts can result in the implementation of projects that are based on context-relevant goals and expectations. 6.2. Limitations and future research This research has been exploratory in nature to determine if context affected the design and implementation of CRM projects and what were the components of context. Although the research is based on six longitudinal case studies, each case study is contextual and the results may not apply to other industries and organisational structures. However this research does reinforce the work by

Reinartz and Kumar (2000, 2002) who demonstrated that CRM does not produce equivalent outcomes in different contexts. Ko et al. (2008) showed that organisational structure, size and product direction do have an impact on the adoption and perceptions of CRM, while the impact of organisational culture has been shown to have an impact on successful CRM technology implementations (Iriana & Buttle, 2006), and enterprise wide learning and adaption for CRM (Hart et al., 2004). This research extends on these prior ndings by demonstrating that context (i.e., industry, customer, and organization) has a major inuence on CRM project assessment, design and implementation, particularly with respect to perceptions, expectations, and capabilities regarding CRM. Future research could therefore consider whether contextual factors also have an impact upon the long term successful management of CRM systems. The current ndings could also be extended to examine how the project focus of CRM implementations varies by context. Business to business organisations with an industrial focus, for instance, were looking to develop technology and databases to support interaction, while companies with a mixed focus were more concerned with developing interaction components of CRM. This research identied that the focus and goals of CRM projects varied across the organisations that participated supporting the argument that CRM implementation needs to be contextual but this should be extended and tested in a greater range of contexts to develop a more comprehensive picture of CRM outcomes (based on Reinartz & Kumar, 2000, 2002) and CRM implementation outcomes linked to different contexts.

6.3. Managerial implications For managers and practitioners working in the area of CRM, this research provides direction for the design and implementation of context-specic CRM projects. For example, organisations that are predominately consumer-focused are more likely to nd information technology and software packages to suit their organisations but may need help to develop the organisational processes, skills, and knowledge necessary to effectively apply customer data to create effective interaction or communication points. Indeed, organisations that were predominately consumer-focused were confronted with problems of how to analyse their database and apply analyses to obtain relevant results. Typical expectations were the opportunity to up-sell or cross sell yet effective actions by these companies that led to improved revenue centred around how and when to contact consumers, recognising that their consumer expectations were specic to their industry. Conversely, the business-to-business companies needed to focus on the management of information to support highly customised interactions, and off-the-shelf software was less effective at providing the level of exibility that they required. As a result, the business-to-business organisations all needed to conduct signicant in-house development of their software packages post-purchase. This research has shown that the CRM implementation success depends on organisational capabilities, customer expectations of relationships and norms and competitive conditions within industries. We suggest that companies looking at CRM should assess whether CRM is suitable for their context. Companies can assess the relevance of CRM for their context and then assess the type of CRM and the implementation approach in order to improve the likelihood of CRM project success. Managers responsible for designing and implementing CRM projects would also be advised to seek access to CRM systems that have been successfully implemented in similar organisational contexts. Access to such systems increases the likelihood that desired outcomes will be achieved within a reasonable timeframe. Indeed, organisations that rely on vendors for information about CRM implementation are more likely to require subsequent project redevelopment and to take longer to achieve their desired outcomes. Networking with other organisations and using a range of expert opinions to inform the design of CRM

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

15

projects therefore enhance the likelihood that comprehensive and relevant CRM projects will be developed. Organisations planning to adopt a CRM framework or enhance their CRM functionality need to expand their project scope to consider their internal organisational capabilities as well as seek access to other CRM projects in similar elds. This research indicates that placing a greater focus on understanding CRM capabilities and evaluating other projects may lead to fewer delays and lower costs due to the encountering of unexpected problems. The nature of the customers and their desire for relationships must also be considered when planning CRM projects. If the organization's customer base is made up of businesses with high levels of service and relationship expectations, then software-led implementations are less likely to meet the organization's interaction goals. Organisations with strong customer relationships are also more likely to be affected by changes in the customers' structure and expectations or the industry norms compared to more transactional type markets. Based on these ndings, we suggest that managers of these types of organisations should regularly engage in formal market scanning and take a more proactive approach to the planning and design of CRM projects. This is particularly important given that industries with strong customer relationships, such as those found in business-to-business environments, were more likely to take an informal approach to the scoping and analysis of CRM projects. The results of this study showed that a more formal approach to the evaluation and design of CRM projects may limit the scale of problems encountered. However, if current relationships are meeting the needs of both the organization and the customers, then greater focus should be placed on processes and information management. Finally, organisations must match industry norms for relationships and interaction levels in highly competitive and transactional industries, but should aim to exceed industry norms where customer expectations are high, the rate of change in customer operations and structure is high, and the opportunity for product/service customisation is high. Appendix 1. Interview Questions Phase 2 1. What does your organisation do? (Organisational culture) (Payne, 2006; Piercy, 1998) 2. Could you describe the induction process for new employees? Are there other ways in which new staff learn about the organisation? (Organisational culture) (Piercy, 1998) 3. How are employees informed about new activities in the organisation? (Internal communication and internal orientation (Conduit & Mavondo, 2001) 4. Are there any new strategies or activities that you have recently heard about? (Formal versus informal communication) (Ryals & Knox, 2001) 5. How were you rst told about this strategy? (Internal communication and internal orientation (Conduit & Mavondo, 2001); (Ryals & Knox, 2001) (Information dissemination; org. change strategies; gossip) (Baumeister et al., 2004; Brown, 1998)

Table 5 Survey data on customer strategy and training. Frequency counts. BB1 Current customer strategy Market share Not possible to satisfy everyone Build long term relationships We aim to understand our customers Training CRM Customer service 28% 0% 0% 46% BB2 8% 6% 3% 81% BC1 62% 5% 18% 15% BC2 50% 0% 14% 36% BBC1 16% 14% 14% 56% BBC2 90% 0% 4% 0%

0% 0%

72% 36%

0% 3%

0% 43%

5% 75%

0% 0%

Note: Internal survey data frequency count on current customer strategy and training. Percentages are rounded for reporting. Totals do not add to 100% as other items not shown here.

6. (If not CRM) How did the organisation put this [Name of strategy] strategy in place? 7. Could you describe how the organisation stays in contact with customers? (Market orientation)(Narver & Slater, 1994) 8. How does the organisation nd out about customer needs? 9. How are you informed about customer needs? (If they are informed) In what way does this help your job? (Intelligence dissemination & internal orientation)(Conduit & Mavondo, 2001) 10. Have you heard about customer relationship management? (If not already mentioned) 11. What do think CRM is about? Do you think CRM is applicable to your organisation? Why do you think CRM is relevant/not relevant? 12. Is your company considering or implementing a CRM programme? (If yes continue with 13) (If no, terminate interview). 13. Could you describe the implementation programme for the CRM strategy? (Buttle, 2004; Piercy, 1998; Rigby & Ledingham, 2004; Winer, 2001; Zikmund et al., 2003) 14. Is the programme being managed by external consultants or by an internal project team? Do you know how the consultants or the team members were selected? (Leadership and implementation teams) (Kotorov, 2003; Lindgreen, 2004; Piercy, 1998; Vizard, 2002) 15. How will you be informed of the progress of the implementation? 16. Is the organisation setting any achievement measurements to monitor progress? (Metrics) (Grabner-Kraeuter & Moedritscher, 2002) 17. What impact do you think it will have on the organisation? (Perception) 18. What problems do you think might occur during the implementation? (Barriers to implementation) (Piercy, 1998) 19. What benet do you think the organisation will obtain from the CRM strategy? Do you think there may be disadvantages in implementing CRM? What would be the disadvantages? (Benets and expectations of CRM) (Day, 2000; Day & Van den Bulte, 2002; Gummesson, 2004) 20. What benets do you think the customers will receive from this process?

Table 4 Project scoping actions. Autoparts (BB1) Project scoping Project scoping Documents Allocated project Not developed Engines & generators (BB2) Appointed 2 project managers Internal Six Sigma assessment; no formal customer analysis Plan presentation software assessment Newsletters Nat. Sports (BC1) Appointed project manager Customer and marketing strategy document Not developed Charity (BC2) Appointed project manager Strategic development report Automotive (BBC1) Appointed 2 project managers Strategy document; internal and commissioned customer reports Project plan manual Energy (BBC2) Appointed project manager Formal scoping project and commissioned research Project plan manual

Planning documents

Strategy document; IT requirements

Strategy document; IT requirements

Note: Content analysis of scoping interviews using N.Vivo and content analysis of scoping and planning documents where available.

Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009

16 Table 6 CRM goals survey.

M. Steel et al. / Industrial Marketing Management xxx (2013) xxxxxx

Autoparts (BB1) Engines & Generators (BB2) Nat. Sports (BC1) Charity (BC2) Automotive (BBC1) Energy (BBC2) What are the main aims of your organisations' CRM strategy?a Improve awareness or market share 55% Database management to target our most important 91% customers Database management to improve contact 72% with customers Understand our customers better and deliver more 45% relevant products/services Key CRM strategy goalb Manage the information about customers to create a X corporate memory Change the nature of the relationships
a b

22% 41% 63% 25%

41% 35% 41%% 61%

14.5% 7% 7% 79%

4% 50% 50% 100%

2% 23% 50% 80%

X X X X X

Internal survey data. Frequency count. Percentages are rounded for reporting. Totals do not add to 100% as respondents could choose multiple answers. Based on content analysis from scoping interviews.

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Please cite this article as: Steel, M., et al., Developing customised CRM projects: The role of industry norms, organisational context and customer expectations on CRM implementation, Industrial Marketing Management (2013), http://dx.doi.org/10.1016/j.indmarman.2012.08.009