Beruflich Dokumente
Kultur Dokumente
Objectives
After studying this unit, you should be able to:
z Understand the concept of CRM
z Discuss the need and benefits of CRM
z Explain objectives of CRM
z Discuss Transaction vs. Relationship orientation
1.1 Introduction
Customer satisfaction has always been a key element in the pursuit of corporate goals
and objectives. However, the current competitive environment fostered by liberalization
and globalization of the economy, and the rising customer expectations for quality;
service and value have prompted many companies to organize their business around
customers they serve, rather than around product lines or geographic business units.
This is partly because customer contact, care and insight have been rendered
increasingly more practicable and economical through computers, telecom technology
and internet, historically, customer relationship existed even in the pre-industrial era due
to the direct interaction between producers and customers as between farmers and
buyers of agricultural products, or as artisans and craftsmen produced customized
products for each customer. It was when mass production of goods in the industrial era
led to the emergence of middlemen and transaction-oriented marketing, that direct
interaction between producers and customers became less frequent.
Sophisticated analytical techniques are then applied to this customer information to
better understand and predict customer behaviour. CRM can then be used to
strategically implement acquired customer knowledge in every area of the company,
from the highest management level to all employees who come into direct contact with
customers. CRM thus enables an organisation to address its customers’ preferences
and priorities much more effectively and efficiently. CRM is a tool that can help
organisations to profitably meet the lifetime needs of customers better than their
competitors.
Notes
1.2 Evolution of CRM
Customer Relationship Management (CRM) is a model for managing a company’s
interactions with current and future customers. It provides a 360 degree view of
customer data. It involves using technology to organize, automate, and synchronize
sales, marketing, customer service, and technical support.
Customer Relationship Management is a concept that became very popular during
the 1990s. It offered long-term changes and benefits to businesses that chose to use it.
The reason for this is because it allowed companies to interact with their customers on
a whole new level. While CRM is excellent in the long-term, those who are looking for
short term results may not see much progress.
One of the reasons for this is because it was difficult to effectively track customers
and their purchases. It is also important to realize that large companies were
responsible for processing tremendous amounts of data. This data needed to be
updated on a consistent basis.
In the last few years, a number of changes have been made to customer
relationship management that has allowed it to advance.
These capabilities have allowed CRM to become the system that was once
envisioned by those who created it. However, the biggest problem with these newer
systems is the price. A number of personalized Internet tools have been introduced to
the market, and this has driven down the cost of competition. While this may be a bane
for vendors who are selling expensive systems, it is a bonanza for small companies that
would otherwise not be able to afford CRM programs. The foundation for CRM was laid
during the 1980s.
During this time, it was referred to as being database marketing.
The term “database marketing” was used to refer to the procedure of creating
customer focus groups that could be used to speak to some of the customers of the
company. The clients who were extremely valued were pivotal in communicating with
the firm, but the process became quite repetitive, and the information that was collected
via surveys did not give the company a great of information. Even though the company
could collect data through surveys, they did not have efficient methods of processing
and analysing the information. As time went on, companies begin to realize that all they
really needed was basic information. They needed to know what their customer
purchased, how much they spent, and what did they do with the products they
purchased.
The 1990s saw the introduction of a number of advances in this system. It was
during this time that term Customer relationship management was introduced. Unlike
previous customer relationship systems, CRM was a dual system. Instead of merely
gathering information for the purpose of using for their own benefit, companies started
giving back to the customers they deserved. Many companies would begin giving their
customers gifts in the form of discounts, perks, or even money. The companies believed
that doing this would allow them to build a sense of loyalty in those who bought their
products.
Customer relationship management is the system that is responsible for introducing
things such as frequent flyer gifts and credit card points. Before CRM, this was rarely
done. Customers would simply buy from the company, and little was done to maintain
their relationship. Before the introduction of CRM, many companies, especially those
that were in the Fortune 500 category, didn’t feel the need to cater to the company. In
the minds of the executives, they have tremendous resources and could replace
customers whenever it became necessary. While this may have worked prior to the
1980s, the introduction of the Information Age allowed people to make better decisions
Mass marketing or undifferentiated marketing has its origins in the 1920s with the
inception of mass radio use. This gave corporations an opportunity to appeal to a wide
Notes variety of potential customers. Due to this, variety marketing had to be changed in order
to persuade a wide audience with different needs into buying the same thing. It has
developed over the years into a worldwide multi-billion dollar industry. Although sagging
in the Great Depression it regained popularity and continued to expand through the 40s
and 50s. It slowed during the anti-capitalist movements of the 60’s and 70’s before
coming back stronger than before in the 80’s, 90’s and today. These trends are due to
corresponding upswings in mass media, the parent of mass marketing. For most of the
twentieth century, major consumer products companies held fast to mass marketing-
mass producing, mass distributing and mass promoting about the same product in
about the same way to all consumers. Mass marketing creates the largest potential
market, which leads to lowered costs.
Total Quality Management: Total Quality Management (TQM), a buzzword phrase
of the 1980’s, has been killed and resurrected on a number of occasions. The concept
and principles, though simple seem to be creeping back into existence by “bits and
pieces” through the evolution of the ISO 9001 Management Quality System standard.
“Total Quality Control” was the key concept of Armand Feigenbaum’s 1951 book,
Quality Control: Principles, Practice, and Administration, in a chapter titled “Total Quality
Control” Feigenbaum grabs on to an idea that sparked many scholars interest in the
following decades, that would later be catapulted from Total Quality Control to Total
Quality Management. W. Edwards Deming, Joseph Juran, Philip B. Crosby, and Kaoru
Ishikawa, known as the big four, also contributed to the body of knowledge now known
as Total Quality Management.
The American Society for Quality says that the term Total Quality Management was
used by the U.S. Naval Air Systems Command “to describe its Japanese-style
management approach to quality improvement.” This is consistent with the story that
the United States Navy Personnel Research and Development Centre began
researching the use of Statistical Process Control (SPC); the work of Juran, Crosby,
and Ishikawa; and the philosophy of W. Edwards Deming to make performance
improvements in 1984. This approach was first tested at the North Island Naval Aviation
Depot. Companies who have implemented TQM include Ford Motor Company, Phillips
Semiconductor, SGL Carbon, Motorola and Toyota Motor Company.
The latest changes coming up for the ISO 9001:2000 standard’s “Process Model”
seem to complete the embodiment. TQM is the concept that quality can be managed
and that it is a process.
Total Quality Management (TQM) is a management strategy aimed at embedding
awareness of quality in all organizational processes. TQM has been widely used in
manufacturing, education, government, and service industries, as well as NASA space
and science programs.
Total = Quality involves everyone and all activities in the company.
Quality = Conformance to Requirements (Meeting Customer Requirements).
Management = Quality can and must be managed.
TQM = A process for managing quality; it must be a continuous way of life; a
philosophy of perpetual improvement in everything we do.
Customer Relationship Management (in 1990): Customer Relationship
Management (CRM) is one of those magnificent concepts that swept the business world
in the 1990’s with the promise of forever changing the way businesses small and large
interacted with their customer bases. In the short term, however, it proved to be an
unwieldy process that was better in theory than in practice for a variety of reasons. First
among these was that it was simply so difficult and expensive to track and keep the
high volume of records needed accurately and constantly update them.
Goals of CRM
The idea of CRM is that it helps businesses use technology and human resources to
gain insight into the behaviour of customers and the value of those customers. With an
effective CRM strategy, a business can increase revenues by:
z Providing services and products that are exactly what your customers want
z Offer better customer services
z Cross selling products more effectively
z Helping sales staff close deals faster
z Retaining existing customers and discovering new ones.
Once this personal and emotional linkage is built, it is very easy for any organization
to identify the actual needs of customer and help them to serve them in a better way. It
Notes is a belief that more the sophisticated strategies involved in implementing the customer
relationship management, the more strong and fruitful is the business. Most of the
organizations have dedicated world class tools for maintaining CRM systems into their
workplace. Some of the efficient tools used in most of the renowned organization are
Batch Book, Sales force, Buzz stream, Sugar CRM etc.
Looking at some broader perspectives given as below we can easily determine why
a CRM System is always important for an organization.
1. A CRM system consists of a historical view and analysis of all the acquired or to be
acquired customers. This helps in reduced searching and correlating customers and
to foresee customer needs effectively and increase business.
2. CRM contains each and every bit of details of a customer, hence it is very easy for
track a customer accordingly and can be used to determine which customer can be
profitable and which not.
3. In CRM system, customers are grouped according to different aspects according to
the type of business they do or according to physical location and are allocated to
different customer managers often called as account managers. This helps in
focusing and concentrating on each and every customer separately.
4. A CRM system is not only used to deal with the existing customers but is also
useful in acquiring new customers. The process first starts with identifying a
customer and maintaining all the corresponding details into the CRM system which
is also called an ‘Opportunity of Business’. The Sales and Field representatives
then try getting business out of these customers by sophistically following up with
them and converting them into a winning deal. All this is very easily and efficiently
done by an integrated CRM system.
5. The strongest aspect of Customer Relationship Management is that it is very cost-
effective. The advantage of decently implemented CRM system is that there is very
less need of paper and manual work which requires lesser staff to manage and
lesser resources to deal with. The technologies used in implementing a CRM
system are also very cheap and smooth as compared to the traditional way of
business.
6. All the details in CRM system is kept centralized which is available anytime on
fingertips. This reduces the process time and increases productivity.
7. Efficiently dealing with all the customers and providing them what they actually
need increases the customer satisfaction. This increases the chance of getting
more business which ultimately enhances turnover and profit.
8. If the customer is satisfied they will always be loyal to you and will remain in
business forever resulting in increasing customer base and ultimately enhancing net
growth of business.
In today’s commercial world, practice of dealing with existing customers and thriving
business by getting more customers into loop is predominant and is mere a dilemma.
Installing a CRM system can definitely improve the situation and help in challenging the
new ways of marketing and business in an efficient manner. Hence in the era of
business every organization should be recommended to have a full-fledged CRM
system to cope up with all the business needs.
Customer relationship management currently, a much talked about issue is not a
fad, but is very vital for companies in the present highly competitive scenario. However,
across the organization the attitude towards customer service should be inculcated and
this should be driven from the top most downwards.
z Companies have to increasingly pursue a customer centric competitive
strategy rather than a product centric one: Two trends have brought CRM to the
forefront.
Notes Nowadays more and more organizations are adapting relationship marketing approach.
The big examples in this case are Club Card by Tesco and Nectar Card by Sainsbury
and other partner organization. The points scored are not only tempting to customers
for repeat buying but the data collected also gives the organizations an insight into the
buying habits of their customers. It helps in making a more customised marketing
strategy directed at individual customers and time to time customers are sent
information on promotions and new products. Some organizations go even further and
send gifts and cards on birthdays or other such special occasion of customers.
With time organizations have realized that the cost of attracting new customers is
very high and retaining customer results not only in increased profits but word of mouth
marketing and positive referrals also help in generating more business leads.
Relationship marketing has become the approach for 21st century and soon enough
longevity of relationship with customers will be key in determining success of
businesses in today’s highly competitive environment.
Relationship marketing and transactional marketing are two contrasting marketing
concepts that define marketing in the modern world. These two classes of marketing
are contrasting and somewhat different.
The essence of this discussion is to examine the changing dynamics in marketing in
the modern media. Core marketing theories in modern business communication has
culminated in a conflict between transaction marketing and relationship marketing. The
conflict relates to which of the two is the right model for the development of modern
marketing.
This literature review would include a critical examination of important documents
and secondary sources that describe the elements and structures of modern business
and modern marketing. The research would critique the two methodologies and
approaches to marketing and identify how they interact with each other. It would
continue to identify the gaps in research and provide guidelines and implications for
practise.
Marketing
There are numerous angles through which the concept of 'marketing' can be examined.
Marketing is a common business unit that most businesses maintain. The common
conception of marketing is that it exists to help a business to sell its products to
consumers. However, there are different angles through which the concept of marketing
can be examined.
“Marketing covers the activities that relate the organisation to those parts of the
outside world that use, buy, sell or influence the outputs of products and the benefits
and services it offers” (O'Shaughnessy, 2011: p4). This definition means that marketing
is a unit of a business that links up with external stakeholders who have the obligation
of unleashing and presenting products to consumers with the hope of getting them
interested and happy about the prospects of the product. This suggests that marketing
relates to how the products of a given company can be made available to consumers.
Another definition of marketing provides a very different view of the concept and/or
business function. The definition put forward by Shaw states that “marketing is the
management process responsible for identifying, anticipating and satisfying customer
requirements with the view of attaining profitability” (2009: 1). This second definition of
marketing is very different from the other definition. It purports that the fundamental
essence of marketing is to spend time appraising the expectations and needs of
consumers with the view of meeting customer expectations and also attaining a level of
profitability to the company. This definition suggest that marketing is about finding what
consumers want and producing it for them with the view of charging them an extra
amount in profits. This is in contrast with the idea that marketing is about selling a
company's products to consumers. This creates a division of a consumer-centred
marketing as opposed to an organisation-centred marketing which is interested in
profits only.
marketers had to ensure that they were discharging all those expectations before they
set out to promote or market their products or services.
Notes
Thus, modern marketing is connected with selling the products of a company in a
way and manner that preserves competitive advantage (Cundiff et al, 2011). This is
because it relates to providing a product offering that makes the best use of the
resources of a firm and also provides the best option to consumers in the target market.
Without that, most businesses fail to attract and retain customers. Thus, it is important
and vital for the business to ensure the interrelatedness of products and marketing with
consumers' views of what is ideal.
From this section of the research, it has been established that there are significant
differences about traditional and modern marketing. Traditional marketing involves
producing goods that are in demand by consumers. It involves finding ways of selling
the products and offering the products to the consumers through a set of channels that
the producer deems fit. Thus, traditional marketing is a form of take-it-or-leave-it offering
whereby producers offer products and services without significant attempts to meet the
consumer half-way.
Modern marketing on the other hand requires a degree of congruence between the
producer and consumer. Thus, the essence of marketing in the modern context is to
produce and offer goods through a system that is appropriate and acceptable by
consumers. Modern marketing goes beyond just trying to sell. It involves an effort to
identify consumers' expectations and working hard to meet them in a way and manner
that is best for consumers.
The fundamental difference between modern marketing and traditional marketing
gives rise to two types of marketing: transactional marketing and relationship marketing
(Baker et al, 2009). Whereas transactional marketing draws parallels with traditional
marketing, relationship marketing has to do with modern marketing which requires
some degree of interconnectedness between the company and consumers. The next
section of the paper would examine transactional marketing and relationship marketing.
Transactional Marketing
Ferrel and Hartline state that in transactional marketing “the focus is on acquiring
customers and making the sale, not necessarily in attending to customers' needs and
want” (2010: p23). This is because in transactional marketing, the company does not
have an interest or desire for a relationship with a customer. The primary objective and
desire is to sell the product. It is all about the transaction. The sale is the ultimate end.
Thus, a company only has one aim when they pursue transactional marketing. They just
seek to sell a product or volume of products. They have no vision or desire whatsoever
to stick around and have any kind of longer term relationship with the consumers.
Under transactional marketing, “the marketing process ends when the sale has
occurred, the sale is the objective and the end result of the marketing effort.” (Brendt
and Brink, 2011: p4). This shows the short term orientation of transactional marketing.
Transactional marketing also has a conscious feature inherent in it that excludes
loyalty and long-term relationships. “In transactional marketing, the fact that a customer
has bought a product does not forecast the probability of a new purchase, not even if a
series of purchases are made” (Brendt and Brink, 2011: p4). This means that
transactional marketing seeking repeated purchases from a single customer was out of
the question. The main end is to create a system where stocks are sold Sales are
devoid of forecasts and other customer loyalty and customer relations efforts. Every
single sale is conducted on the assumption that a new set of customers are going to be
served in the new sale. As Brendt and Brink put it, “transactional marketing therefore
has no ambition to climb the loyalty ladder” (2011). Transactional marketing does not
consider the longer-term implication. It is about how to sell a given volume of products
and nothing else.
and they dictate it to the consumer who has no right to contribute to the marketing
process (Blythe, 2011: p11).
Notes
Another view of how transactional marketing operates is that it is static and there is
no room for dynamism (Henning-Thurrau, 2009: p5). This is because it involves the
production team producing and the marketers selling the product. Emergent issues that
can prompt dynamism is not recognized (Lancaster and Massing ham, 2010). It is
eliminated and replaced by the need to make a short-term sale to consumers
(Lancaster and Massing ham, 2010).
Relationship Marketing
Another concept of marketing that has evolved to counter transactional marketing is
relationship marketing. Relationship marketing is meant to “establish, maintain and
enhance relationships with customers and other partners at a profit so that the
objectives of the parties involved are met. This is achieved by mutual exchange and
fulfillment of processes” (Little and Marandi, 2011: p22).
This definition of relationship marketing means that marketing is not just about a
sale or a commercial activity that exchanges goods or services for money. It involves
creating and nurturing a relationship between buyer and seller. This also involves a
situation whereby the producer builds a relationship that seeks to satisfy the consumer
and hence promote a win-win situation between the two parties through optimum
satisfaction of needs and expectations.
Pieczka states that relationship marketing is a “...move from one-off transactions to
develop relationships that are nurtured over time and leads to beneficial relationships”
(2011: p68). This means that relationship marketing goes beyond the normal level of
providing a commerce oriented relationship that has no bearing on building a longer
term relationship.
In a different view, Milne and MacDonald provide a relatively simple definition of
relationship marketing. They say it involves “attracting, maintaining and enhancing
customer relationships” (Milne and MacDonald, 2010: p54). In essence, relationship
how information would be acquired and gathered in order that they would be used to
improve the offering of the company to its consumers.
Notes
The end of customer relations management is to create relationship equity.
Relationship equity is defined by Kotler as “customers' tendency to stick with the brand”
(Schaefer, 2011: p13). Thus, customer relations management aims to create brand
loyalty and help consumers to become closer and more attracted to a given brand or
company.
Stone and Woodcock (2011) state that there are four stages of customer
relationship management. The first stage is to build a strong focus on customers. The
second phase involves the integration of different activities and interactions into
operations by identifying and documenting all what consumers do. The third element is
that the views of consumers are integrated to the supply chain of the company and
used to improve the service offering. Finally, customer relationship management
involves the integration and sensitivity of technology.
Ethics
The fundamental ethic that governs relationship marketing is the fact that consumers'
privacy is important and vital (Baran et al, 2011: p441). This is because consumers
have a right to privacy. However, if this right is not observed and honoured, consumers
can have a recourse to damages if they sue. This is because there are laws and rules
Gaps in Research
Marketing is a fundamental function that links products of a business to the outside
world. However, there are different views on how it must be carried out and how it
relates to a company. One view is that marketing is about providing goods to
consumers and giving consumers what they actually need. Another view of marketing
argues that marketing is about appraising the needs of consumers and providing it.
These two schools of thought define the traditional and the modern schools of
marketing thought. The traditional school of marketing sees the function as a means of
selling and making goods and services available to consumers. The modern system on
the other hand involves identifying customer needs and expectations and discharging
them by influencing internal structures of the company to attain this end.
Transactional marketing and relationship marketing are two themes in the two
classes of marketing. Transactional marketing is seen by most scholars to be the selling
of the products of the firm with no view or desire to build a long-term relationship with
the customer. Transactional marketing is viewed by most scholars to be a form of
marketing that does not involve forecasting and integrating consumers' views on what
should be done. The producer just dictates what customers might want and produces
goods along those lines.
There are many downsides of transactional marketing. Most scholars base their
argument on the fact that transactional marketing is about giving consumers a limited
offering. This is because it is only focused on giving consumers what the producers
think is important for them. On the other hand, consumers might want other things and if
they find other producers offering that, they would switch to such producers.
Another group of scholars argue that in the long-run, transactional marketing is very
expensive. This is because, in every single transaction, they spend money to attract
customers anew. And research has shown that marketing campaigns that targets fresh
consumers is extremely more expensive than attracting an existing client.
Viewed differently, some academics argue that transactional marketing kills
innovation and product development. This is because the production department is the
only department that is responsible for improving products. What the consumers think is
not very vital. In the long run though, transactional marketing prevents a business from
attaining competitive advantage in their operations.
From the literature review, it is apparent that most scholars identify relationship
marketing as the opposite of transactional marketing. In practice, relationship marketing
Notes evolved as a superior form of marketing in relation to transactional marketing.
Relationship marketing involves building a connection with consumers.
One school of thought identifies that there are three ways that relationship
marketing is built: price advantages, emotional campaigns and structured programmes.
This is steeped in the fact that relationship marketing is built through the giving out of
some form of consideration in return for the relationship. Thus, giving price benefits and
building emotional bridges or using a structured campaign, makes a business build a
relationship with a company.
Other scholars identify that relationship marketing is based on four pillars. The first
is that it is oriented towards consumers. It seeks to get consumers to build a
relationship with the company. Secondly, relationship marketing is connected to an
emergent strategy which is based on integrating consumers' views and opinions into the
operation of a firm. Thirdly, whatever feedback that consumers give to a company in
relationship marketing affects all relevant units of the company. Also, relationship
marketing is steeped in a long-term oriented.
Customer relationship management is a component of relationship marketing.
Customer relationship marketing is defined by some scholars as a structured way of
taking information from consumers and using it to take decisions about how best to
meet the objectives of the company or organisation. Customer relationship
management is alternatively described as a method of collecting information about
consumers and managing the information collection systems and utilizing it for the best
way and manner for the completion of the objectives of the business.
Some academics also view customer relationship management as a tool for
building customer loyalty. It is about a way of getting customers to become loyal and
remain connected to the company in question. Customer relationship management is
an essential element and arm of an emergent strategy for an organisation.
Customer relationship management focuses on consumers and identifies
consumers' views and needs. It integrates consumer views into the supply chain system
and also allows technology to be used to enhance the offerings and services of a
company. Technology is an indispensable element of customer relationship
management. It is a central pillar for the enhanced operation of customer relationships.
Technology helps to gather information about a given consumer. Technology also
allows decision-makers to analyse information about consumers and use it to make
decisions for the company. Technology provides faster and more accurate information
for the attainment of results.
Any company that wants to carry out customer relationship management needs to
obey rules and remain sensitive to the ethics of the area. This is because there have
been issues and incidents with companies that failed to be sensitive to privacy and
other ethics.
Conclusion
Modern marketing has evolved to replace transactional marketing. Transactional
marketing seeks to provide goods and services to consumers according to the views of
producers with no effort to integrate consumer views. Transactional marketing is
focusing on sale and nothing else. However, relationship marketing which is an epitome
of modern marketing provides companies the opportunity to provide services to
customers by integrating their needs.
Relationship marketing relies heavily on consumers’ needs and demands and this is
done through customer relationship management. Customer relationship management
revolves around creating and maintaining a structured system of collecting information
about consumers and using it in decision making.
Personalization
eCRM also has the ability to personalize information that is available to the customer
(Friedlein, 2001). By doing so, the customer has the ability to filter the information
based on his or her preference, giving the customer personalized information at all time
(Fienberg & Kadam, 2001).
Performance Monitoring
Accountability is improved with eCRM. The company has the ability to track against a
variety of metrics; for example page impressions, repeat visits, loyalty, in order to
ensure high performance (Friedlien, 2001).
mCRM
The possibilities that are created by mobile medium have enabled companies and
industries to exploit this medium to promote CRM activities (Sinisalo et. al., 2006). By
using mobile medium, according to Sinisalo et al. (2006), companies wish to advance
activities with customer in the sense of saving time, cost and inconvenience. These
authors define mCRM as “utilizing mobile medium for the purpose of managing
customer relationships and activate customers to start dialogue with company via
mobile medium. The concept of mCRM is argued accordingly to the authors as to be
involved of the following characteristics (Sinisalo et al, 2006):
z Communication, for the purpose of building and maintaining customer relationships
between company and its customer.
z The communication would be about sales, marketing, and customer service
activities conducted through mobile medium between the company and the
customer.
z Communication can be initiated by either the company or the customer.
z Communication thorough SMS (short message service), MMS (multimedia service),
JAVA applications and browsing.
z One of the parties engaged in the communication must be human and, naturally,
communicate through mobile medium.
z Mobile medium is seen as a complementary channel for CRM activities instead of
seeing it as a substitute of traditional ones.
According to Deans (2004), the convergence of mobile internet and wireless
communication technology has promised users the concept “anytime anywhere”, which
implies access to information for work and personal communication. The mobile
medium and wireless technology enable companies’ four reasons to build relationships
with its customers, which are:
z Personalize content and services
z Track customers or users across media and over time.
z Provide content and service at the point of need.
z Provide content with highly engaging characteristics.
The current most interested services for consumers are high mobile values that
meet spontaneous and time critical needs, for example checking stock quotes, driving
directions, and short messages (Deans, 2006).
Other definitions of mCRM are the ability to use handheld devices to manage sales,
sales contacts, and customer service activities (Bitpipe, 2006).
Benefits of mCRM
The new area of mobile medium makes it possible to promote CRM activities, which
were not possible before (Sinisalo et. al., 2006). According to the authors Sinisalo et al.
(2006), consider mobile medium of being a powerful opportunity to reach customers, by
offering different ways for companies to plan and implement more advanced ways to
Mobile Devices
A company that decides to implement a mCRM solution has a variety of options in
terms of hardware. Although there is not much mention of mobile devices in the mCRM
literature, the authors of this thesis have identified some commonly used mobile
devices.
Notebooks
Most mCRM applications are supported for PC use. Although notebooks are vastly
superior in terms of performance and flexibility, due to size, these are not always
suitable (Heinze et. al, 2004).
Handheld Devices
Handheld devices are according to Schierholz, Kolbe and Brenner (2006) the most
commonly used mCRM devices. They offer the user a blend of mobility and flexibility
that the user does not get from a notebook. As there does not exist a universal standard
device for using mCRM applications, the company has to choose appropriate mobile
devices. Schierholz et al. (2006) describes different considerations that companies
ought to take into consideration when choosing a mobile device. Different devices run
Examples of mCRM
According to Sinisalo et al. (2006) mCRM is defined as an application of a CRM system,
which is designed to provide customer with company functions such as sales, marketing
and service through mobile phones. Three examples within each function will be
described.
Marketing
A Finnish restaurant chain exploits the mobile medium in various marketing related
activities, such as sending SMS messages to loyal customers such as invitations and
information to the parties arranged only for loyal customers. Other offerings could be
coupons and free tickets. This restaurant chain as well as sending offers from
themselves, sends offers which are provided by their partners. This could be movie
tickets and product discounts, based on customer preference (Sinisalo & Karialuoto,
2006).
Sales
A Finnish magazine, which is backed up by the internet provides ordering from mobile
mediums. After joining the loyalty program of the company, the customer can order the
products they want, by simply sending a SMS including the product code. This way, the
company can send mobile marketing message to their loyal customers based on their
preferences. When receiving the advertising, the customer can reply to the message
and instantly order the offered product (Sinisalo & Karialuoto, 2006).
Service
The first one to adopt a mobile phone service is Finnair – the national airline of Finland
(Sinisalo et. al. 2006). This particular mobile service enables loyal customers to check-
in in advance for the scheduled international flights. This means that passengers can go
directly to the departure gate without the need of waiting on the check-in line. The
airline sends a check-in proposal before departure and the customer replies to check-in.
The SMS will then works as a confirmation message including the details of a flight.
This will be stored on the mobile phone and are accessible whenever needed; which
implies time saving and being easy to use. (Sinisalo & Karialuoto, 2006).
1.8 Summary
CRM is a comprehensive approach which provides seamless integration of every area
of business that touches the customer – namely marketing; sales, customer service and
field support – through the integration of people, process and technology, taking
advantage of the revolutionary impact of the Internet. CRM creates a mutually beneficial
relationship with your customers. In the rapidly expanding world of e-Commerce, there
is a new generation of empowered customers emerging who demand immediate
service with the personalized touch.
C onsumers often don’t know or can’t describe just why they act as they do. Thus,
motivation researchers use a variety of probing techniques to uncover underlying
emotions and attitudes toward brands and buying situations. These sometimes
bizarre techniques range from free association and inkblot interpretation tests to having
consumers form daydreams and fantasies about brands or buying situations. One writer
offers the following tongue-in-cheek summary of a motivation research session:
“Good morning, ladies and gentlemen. We’ve called you here today for a little consumer
research. Now, lie down on the couch, toss your inhibitions out the window, and let’s try a
little free association. First, think about brands as if they were your friends.
Imagine you could talk to your TV dinner. What would he say? And what would you say to
him? Now, think of your shampoo as an animal. Go on, don’t be shy. Would it be a panda
or a lion? A snake or a wooly worm? For our final exercise, let’s all sit up and pull out our
magic markers. Draw a picture of a typical cake-mix user. Would she wear an apron or a
negligee? A business suit or a can-can dress?
Such projective techniques seem pretty goofy. But more and more, marketers are using
such touchy-feely approaches to dig deeply into consumer psyches and develop better
marketing strategies. For example, Shell Oil used motivation research in an attempt to
uncover the real reasons behind a decade-long sales slump.
The manager of corporate advertising for Shell oil, Sixtus Oeschle, was at his wits’ end.
For months, he and his team of researchers had pumped the consumer psyche. For
months, they’d come up empty. “We tried psychographic memory triggers,” he recalls. “We
tried dream therapy.” All to no avail. At one point, respondents were even given mounds of
wet clay and urged to mould figures that expressed their inner feelings about Shell.
It was time, Oeschle decided, to try something radical. To craft a more potent appeal for its
brand of gasoline, Shell would have to go deeper – much deeper. Oeschle called in a
consumer researcher who specializes in focus groups conducted under hypnosis. The
results, Oeschle says, wowed even the sceptics. “I’ve got to tell you, it was fascinating,
fascinating stuff,” he says. After dimming the lights, the researcher took respondents back,
back-back all the way to their infancy. “He just kept taking them back and back,” Oeschle
says, “until … he’s saying, ‘Tell me about your first experience in a gas station.’ And
people were actually having memory flashbacks. I mean, they were going there. They
were saying, ‘I was three and a half years old. I was in the back of my dad’s brand new
Chevy’. It was like it was yesterday to them. I was stunned.”
The real breakthrough, however, came after the respondents awoke out of their trance.
“When he brought them all back out, he asked them who’d they prefer as a gasoline
purveyor,” Oeschle says. “What staggered me was that, to a person, it was always linked
to that experience in their youth.” One woman volunteered that she always made a point of
filling up at Texaco. “We asked her why”, Oeschle recalls. “And she said, ‘I don’t know, I
guess I just feel good about Texaco.’ Well, this was the little three-and-a half- year-old in
the back of her daddy’s car speaking.
Shell is now designing new marketing approaches base on the insights gleaned from the
groups of mesmerized motorists. Where Shell had gone wrong, it seems, was in reasoning
that, since people don’t start buying gas until at least age 16, there was no need to target
the tiniest consumers, “They weren’t even on Shell’s radar,” Oeschle laments. “It dawned
on us…that we’d better figure out how to favourably impact people from an early age.”
Similarly, Daimler Chrysler used a dose of deep motivation research to create a successful
new concept car.
A few years back, Daimler Chrysler set out to find the next, “wow car,” the “segment
buster” that would reach across age and income lines, into the subconscious. That meant
doing more than the usual focus group research. So Daimler Chrysler hired psychologist
Clothaire Rapaille to probe consumers’ innermost feelings. The underlying premise: The
products we buy mean something; they form part of a greater whole. “The more we learn
about American culture, the more we see how our vehicles fit into our psyche – the more
we see how it is that we fit into the overall scheme of living,” says David Bostwick, director
of market research at Daimler Chrysler.
Contd…
Rather than convening traditional focus groups, Rapaille used a method known as
“archetype research”. He had participants lie on soft mats, listen to mood music, and free- Notes
associate in the dark.
According to Bostwick, this re-creates the same brain activity you have when you first
wake up from a dream. “It’s a very special brain activity”, he says. “It allows us to actually
access some of those unconscious thoughts.”
When the lights came back up, Rapaille had learned that Americans are entrepreneurial,
individualistic, freedom loving, and inventive – but also juvenile and self-indulgent. More
important, he discovered that many suffered nostalgia pangs. In these complex and often
unsettling times, car buyers yearned for the good old days – for a time when things
seemed simpler and more secure, and when people felt good about themselves. “What
that said to us is that people are looking for something that offers protection on the
outside, and comfort on the inside,” says Bostwick. “We communicated that to our design
team.”
The result: The PT Cruiser, Daimler Chrysler’s phenomenally successful retro-style car.
Described by the Wall Street Journal as “part 1920s gangster car, part 1950s hot rod, and
part London taxicab,” the PT Cruiser is what one analyst calls “a focus group on wheels –
an actual chrome-and-sheet-metal incarnation of the popular will.” Its nostalgic look and
protective exterior, combined with a well-appointed and highly functional interior, inspires
an emotional reaction from almost everyone. In just two years following its introduction,
U.S. consumers snapped up more than 225,000 PT Cruisers. “We didn’t set out to create
a market,” Bostwick says earnestly. “We just tapped into what people had in their heads in
the first place…. The vehicle takes you back, but not to a particular time in the century. It
just takes you back to a time you felt cool.”
Some marketers dismiss such motivation research as mumbo jumbo. However, like Shell
and Daimler Chrysler, many companies are now delving into the murky depths of the
consumer unconscious. “Such tactics have been worshipfully embraced by even the no-
nonsense, jut-jawed captains of industry,” claims an analyst. “At companies like Kraft,
Coca-cola, Proctor & Gamble, and Daimler Chrysler, the most sought- after consultants
hail not from (traditional consulting firms like McKinsey.) They come from brand
consultancies with names like Archetype discoveries, Psychologies and Semiotic
solutions.”
Questions
1. Analyse the case and interpret it.
2. Write down the case facts.
3. Which projective techniques seem pretty goofy?
4. Define archetype research method.
Source: http://www.adb.org/Documents/Conference/Simplifications_of_Customs/part3.pdf
S
teljes is a distributor of technology products in the corporate and education markets,
offering a range of products from a growing list of vendors.
It is a privately owned, independent business employing approx. 170 people.
Steljes sell through an established network of reseller partners. While Steljes activate end-
user marketing campaigns they are naturally reliant on resellers being pro-active in
creating their own leads and driving sales. Resellers are equally reliant on Steljes to give
them the tools to achieve this.
Like many technology distributors, Steljes had largely been reactive to requests from
resellers for marketing material. This demand was handled by the Steljes marketing team,
aided by one inhouse artworker, who between them didn't have sufficient capacity as the
business grew. The lack of pro-active channel support was impacting on both the
bandwidth of the marketing team and the service provided to reseller partners. A different
solution was sought.
The wish list was ambitious:
z increase the level of support in the form of marketing collateral offered to resellers
z get marketing campaigns and supporting material into the channel more quickly
z allow materials to be personalized
z retain brand control over personalised collateral
z reduce the time burden on Steljes marketing team
z use the solution as a driver for reseller recruitment, retention and loyalty
z minimise the financial investment required
This change was part of a wider business growth programme that included greater
channel resourcing, new channel and reseller training, customer satisfaction research and
the restructuring of channel co-funding to target new and growing markets.
Outsourced resource
The solution came via a marketing services agency, Oliver Marketing, who created a
bespoke service package.
The Steljes in-house artworker was transferred across and another designer recruited to
create a permanent, outsourced, on-site studio. Their work includes all Steljes artwork and
a significant percentage of end user and channel based design requirements.
A print buying resource was brought on board plus dedicated procurement, work flow and
templating software deployed.
Welcome to Steljes CommsCentre!
The vision for the project was making 'our team, your team', giving partners access and
freedom to put their own stamp on marketing collateral.
This approach dramatically improves the value Steljes add by helping partners to take
products to market faster and more cost effectively in a way that is unique to them.
How it works
The CommsCentre solution includes the deployment of a user friendly, web-based
marketing and print tool.
The in-house team design material with reseller partners in mind. A template is then built
that allows controlled customisation. This can be as simple as adding contact details or as
complicated as changing colours, choosing images and products and free text entry.
Crucially, it does this without the need for any design experience and without
compromising the design or key messaging to guarantee brand consistency and control.
This way, material delivered to the end user as unique to the reseller, empowering
businesses that haven't previously undertaken marketing activity before.
Steljes CommsCentre provides instant access to a complete toolkit of static and
rebrandable marketing collateral.
z no specialist software or training required
Contd…
z access the complete product image, lifestyle image and logo library
z use the pre-created bank of product marketing copy and web content
Notes
z create personalised marketing materials using ready-made templates
z DM including postcards, letters, emails, special offer fliers, etc.
z product brochures and factsheets
z adverts and posters
z portfolio mini-catalogues
z build-your-own fliers and adverts
valid for the UK and Eurozone with a simple drop down choice between Sterling or Euro
The output varies:
z unlimited, free of charge PDF downloads
z subsidised print-on-demand (through a combination of Steljes subsidy and Oliver
Marketing's buying power)
z DM fulfillment, including data upload, through a registered third party mailing house,
also at subsidised rates.
z As a web based system, users have access 24/7.
The whole process, from logging on to downloading the output or ordering print, takes just
minutes to complete.
A growing band of evangelists
From April 09 and April 10 the system has grown through more aggressive and consistent
promotion to the channel.
Over 12 month period, Steljes traded with 1200 reseller partners with a core trading group
of 300.
Contd…
A Sample Campaign
Notes New Year in Education - 20pp product catalogue template targeting educational
establishments preparing for a new school year.
Seven resellers personalised the template and sent it to 500 contacts through SCC =
7,500 contacts not known by Steljes
Cost to print & fulfill £4,792
Over £42,000 uplift in orders tracked in the following three months.
ROI = 776 per cent
Conclusion
Steljes CommsCentre has revolutionised the level of marketing support provided to
reseller partners.
By communicating to, and communicating through resellers, Steljes has pushed its reach
far deeper into organisations.
Cost neutral, CommsCentre achieved all the original objectives and now forms the
cornerstone of an umbrella framework of reseller support that focuses on stimulating
demand in established, new and emerging markets.
Resellers have responded by putting more business through Steljes, by value and
frequency.