Defining, Manipulating and Measuring CRM

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Defining, Manipulating and Measuring CRM

• Seth Henoch
• Mona Forsen

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Agenda

• Purpose and Methodology
• Introduction of CRM
• Perspectives of CRM
• CRM and Consumer Behaviour
• Results and Conclusions
• Article Strengths, Weaknesses and Lessons Learned

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Purpose of Research

• How CRM is perceived by different research
  areas/disciplines
• List of CRM attributes and corresponding consumer
  behaviour variables for the banking sector
• Set causal or descriptive research studies
• Managerial implications and future research
  directions

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Research Methodology

• Exploratory research design through qualitative
  empirical survey
• Five in-depth interviews with business experts
  (bank managers) conducted in fall of 2005 in
  Greece
• Objective was to enlarge the list of CRM
  attributes and consumer behaviour variables
  provided by the literature review
• Three main categories of questions (Meaning of
  CRM CRM attributes in use and reason for use of
  CRM)
• Data was verified through literature review

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Introduction of CRM

• Increasing competition
• Looking for new business and marketing models for
  realizing intelligence-driven customer
  transactions and experiences
• Technology evolutions and changes in consumer
  behavioural patterns
• More customer oriented strategy creating and
  maintaining long-term profitable relationships
  according to customer preferences and habits
• Paradigm shift known as CRM

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Perspectives of CRM

• Various definitions of CRM by academics and
  business experts viewed from various
  perspectives
• Management
• Information Systems
• E-Business
• Knowledge Management
• Marketing
• Human Resource Management

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CRM General Definitions

• General consensus that CRM is a low cost and
  effective means of delivering services to and for
  the customer on a 24/7 basis (Feinberg et al,
  2002)
• Core concept is fulfilling the promise to
  accomplish anytime, anywhere and anyhow the
  customer wants in a digital way (Feinberg et al,
  2000)
• CRM involves all marketing activities which are
  given through alternative channels (eg. physical
  store, web, e-mail, mobile, etc.) (Fassot, 2001
  Hamid, 2005)
• E-CRM is the application of the CRM concept
  utilizing information and communication
  technologies (eg. CRM software, internet, call
  centers, etc.)

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CRM in the Banking Sector

• Big banks believe in CRM as a cost-effective way
  to be more competitive however, small banks are
  more skeptical. (Kapoulas et al, 2002)
• Strategy that provides help to every bank towards
  building relationships and communicate with its
  current customers through all the available
  channels. (Khirallah, 2002)

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CRM and Consumer Behaviour

• Variety of findings from literature review
  includes
• CRM attributes influence consumer behaviour
  variables
• Level of customer satisfaction is a measure of
  CRM effectiveness (Kim et al, 2003)
• Not all e-CRM attributes are of equal importance
  in terms of influence on consumer behaviour.
  (Feinberg and Kadam, 2002 Connely and Yoger,
  2001 Anton and Hoeck, 2002)
• Satisfied customers tend to conduct all their
  transactions in the same bank for a long time,
  fewer complaints, etc (Feinberg and Kadam, 2002
  Connely and Yoger, 2001 Anton and Hoeck, 2002)
• Consumer satisfaction is positively influenced by
  one-to-one offerings applied via customer
  centres, ie., CRM attributes leading to loyalty
  and retention (Reincheld and Shefter, 2000)
• Keeping customers satisfied is more important
  than acquiring them. Also, trust is related to
  level of satisfaction. (Crosby et al, 1990)
• No significant influence of loyalty programs on
  customer loyalty (Izquierdo et al, 2005)

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Results

• E-CRM implementation in the banking industry in
  Greece is in its infancy
• Investment in CRM will take place no matter what
  the size of the bank is
• CRM is perceived as a strategic tool helping
  banks to coordinate, manage and monitor marketing
  activities (data collection and processing
  capabilities)
• CRM is user driven, shaped to customers needs,
  focused on clients satisfaction and loyalty
  through technology and software
• Pool of CRM attributes and consumer behaviour
  variables developed for further research
  however, no additional CRM attributes and
  variables were discovered through interviews
• CRM attributes included communication channels
  and service characteristics

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CRM and Consumer Behaviour
Consumer Behaviour Variables Satisfaction Loyalty
Sales Profitability Lifetime Value Retention Trust
Convenience
CRM Attributes Communication Channels Physical
Location ATMs Internet/Web Call Centre Kiosk Help
Desk Telephone/VoIP Email
CRM Attributes Service Characteristics Chat
rooms Customized products and services Personalize
d promotional activities Loyalty programs Email
marketing On-line ordering
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Conclusions

• Research/business area affects how people
  actually perceive CRM
• Further interdisciplinary research should bridge
  this gap
• Additional research should also look to further
  develop the list of attributes and variables
  (ie., focus groups, interviews) and to determine
  the cause-and-effect relationships, if applicable
• Research should be completed in various sectors
  as there will be differences

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Article Strengths

• Comprehensive literature review (66 references)
  of CRM concept
• Clearly illustrated the lack of consensus on the
  definition of CRM
• This supports what we have learned in class
• Provided a list of CRM attributes and consumer
  behaviour variables
• Can serve as a base of dependent (manipulative)
  variables for further research

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Article Weaknesses

• Empirical research did not add anything (Greece
  was not the best location to interview the
  banking sector and the interview sample size of 5
  was too small)
• Appear to be caught up on increasing the size of
  the list for attributes and variables before any
  further research rather than starting to work
  on the cause-and-effect relationships
• Article was filled with information without any
  real conclusions

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Lessons Learned

• Provides different perspectives on the various
  CRM definitions
• Assumption that there is a cause-and-effect
  relationship between CRM attributes and consumer
  behaviour variables
• More research is needed before the evidence is
  conclusive

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Lessons Learned
Consumer Behaviour Variables Satisfaction Loyalty
Sales Profitability Lifetime Value Retention Trust
Convenience
CRM Attributes Communication Channels Physical
Location ATMs Internet/Web Call Centre Kiosk Help
Desk Telephone/VoIP Email
CRM Attributes Service Characteristics Chat
rooms Customized products and services Personalize
d promotional activities Loyalty programs Email
marketing On-line ordering
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Questions