Impact of implementing CRM systems in establishing customer loyalty - Research Proposal Example

of essay’s assignment is due Summary This paper examines the dissertation proposal on the impact ofimplementing CRM systems in establishing customer loyalty. The research will especially focus on the influences and effects of CRM systems in gaining customer loyalty for organizations. In this dissertation proposal, the background, relevant themes and context of CRM are presented. A partial literature review has been presented as well. The objectives, design and problems have been formulated. The research questions have been stated. The questions given are comprised of benefits, conflicts, challenges, problems and issues the organizations experience once they implement CRM systems in establishing customer loyalty. Furthermore, the significance and rationale of the study have been provided and methodologies and limitations of the study have been likewise discussed. Introduction In the modern business world, finding an edge over other competitors is basically one of the most important and elusive things for any organization. Theories on how to accomplish this objective have practically sprung up focusing on every aspect of the operations. For example, there were theories focusing on quality and efficiency of the output. In the same way, there are models focusing on motivating the employees to build up production and in the long run improvement in the overall performance of the firm. On the other hand, recent theories indicate that focus on the external environment allows the organization to be more flexible. Focusing on the customers in particular is perceived to be a sure way of keeping the firm afloat the market and provides the company the needed competitive edge in the market. This theory is called Customer Relationship Management (CRM). What is CRM? CRM is the efficient communication between customers and a company at every contact point (Raab et al. 74-92). Whether this communication is done by phone, website or e-mail, the important thing is that the customer counts on getting an experience from doing business with the company. CRM systems are there to ensure a good customer experience. It is a vast system of information on a database of customers and their buying habits, e-mail address, residential address, personal information such as birthday and so on. This information is then retrievable by any department that needs it to better the company. Customer Relationship Management is a new innovation in customer service today. CRM helps the customer service staff and management to cope with customer issues and concerns. CRM entails gathering a great deal of data about the customer (Payne and Pennie 167-176). The data is then used in facilitating customer service transactions by availing the information needed to resolve the concern or issue to those dealing with the customers. In the end there are more satisfied customers, more resources available to the support staff and a more profitable business. Top management can use CRM systems in making adjustments to one of the products sold or deciding whether one of the products on the shelves will be scrapped altogether (Peppard 312-327). CRM systems generate reports that are also invaluable to the company’s marketing and advertising planners, as they will be able to identify which ideas work and which do not. CRM and customer loyalty Customer loyalty describes the behavior of repeat customers and those who offer good testimonials, reviews and ratings (Lemon, Tiffany and Russell 1-14). Some customers do to a company a huge service when they offer complimentary word of mouth publicity regarding a product by telling friends and family and thereby adding them to the number of loyal customers (Chen and Karen 672 – 688). The basic goal of customer loyalty programs is ensuring that a company has happy customers who will keep returning to purchase and influence others to use that company’s services and products. This equates to success of the company and happy stakeholders. If a certain customer trusts or is satisfied by a product or service, that customer is loyal and will keep purchasing the product or service. In other words, both big and small businesses depend on the loyalty of their customers. Ensuring the satisfaction of customers is one of the major elements in the ISO9001 standard. ISO is an acronym for International Standardization for Organization. The ISO9001 standard is a benchmark that is used among all business organizations globally. When a company is certified with ISO9001 standard, it portrays an image of a good quality management system. The primary importance of this standard is either to attract customers or to expand the business. It is therefore expected for customer satisfaction to be given a great deal of focus. More customer loyalty results from more satisfied customers (Jayachandran et al. 177-192.). Literature Review Starkey and Woodcock explain that there is a relationship between business performance and customer management (CM) (Starkey and Woodcock 267-275)). The expenses made on CRM in IT systems have increased with time (Verhoef 30-45). Still, many CRM systems do not succeed. The two authors state that the successful integration of a CRM system in a company may not be as easy as it seems. There are several reasons why CRM systems fail in some companies. One reason is that most companies fail to prepare for the CRM systems (Brown 68-92). This means that most companies fail in the process of integrating all the departments that ought to share the information. A CRM system will help a company in expanding its business. CRM systems will significantly help a company in coping with the increased numbers of data and customers because CRM systems are capable of handling vast amounts of data. With an installed and properly utilized CRM system, a company can be sure that all data is optimally made use of and used to ensure that the business will be successful and that customers are more satisfied than before (Verhoef 30-45). Significance of the research It is widely known that an unsatisfied customer will tell several other people just how unhappy he or she is with the product or service. It is therefore very important for a company to know its customer loyalty concepts. In addition, it is just as important for a company to know who its loyal customers are since they will be the company’s building blocks in promoting the business (Boulding et al. 155-166). Loyal customers are any business’s goldmine and it is imperative for the company to treat its customers well (Ryals and Knox 534-542). By conducting a customer loyalty research, the company can create customer loyalty solutions that will drive the designing of the company’s products and/or services, the sales and marketing strategies and the kind of training the company needs to give its staff (Payne and Pennie 167-176). Therefore, the company’s customer loyalty solutions are fuelled by the feedback given by customers. This will subsequently help the company to resolve its customer’s concerns and issues and will encourage them to buy more from the company. The most important result from a customer loyalty research is that the customer loyalty solutions will encourage trust to be built between the company and the customers. Design The data gathered shall be analyzed from both the qualitative and quantitative approaches. Within the context of social science research, both approaches must be used in order to arrive at both an objective, measurable understanding of the phenomenon and a humanistic comprehension of its socio-environmental dimensions (Baran, Roger and Daniel 56-72). While records on the customers under observation shall be qualitatively analyzed, the variables which influence customer loyalty shall be qualitatively analyzed as a strategy for uncovering the socio-environmental factors influencing these rates. Research Problems            In essence, CRM technology is a new application. There are many issues to improve on especially when it comes to establishing customer loyalty. Generally, the problem that will be addressed in the study is how effective CRM systems are on establishing customer loyalty for an organization. These includes campaigns response tracking, campaign reporting analysis, direct mail to customers from organizations, electronic mail marketing, telemarketing, e-marketing, event marketing, trade and revenue tracking and trade promotions (Newell 86-104). Research Questions 1. Do CRM systems accurately reflect the customers’ buying behavior? 2. What are the latest CRM systems available for establishing customer loyalty? 3. How important is implementing CRM systems in gaining the loyalty of an organization’s customers? 4. What are the advantages and limitations of CRM systems in establishing customer loyalty? 5. How will implementing CRM systems affect the general performance of an organization? 6. Will implementing CRM systems improve the current position of an organization? 7. What are the strategic planning activities that the CRM systems will give to an organization? Limitations of the Proposal Time and level of study restraints played an important role when considering the scope of the research. These were two factors of particular importance when setting the parameters in regards to the breadth and depth of the work to be presented. For that reason, this study did not attempt to present all the researched material in detail, but rather to provide a concise, yet thorough, overview of the chosen material. The analysis of practical considerations, such as economics or logistics, or the discussion of opposing points of view was not taken up in this study. Methodologies Research methodology references the procedural rules for the evaluation of research claims and the validation of the knowledge gathered, while research design functions as the research blueprint. The determination of the research methodology is one of the more important challenges which confront researchers (Silverman 24-46). Accordingly, given the importance of research methodology, this part of the paper shall both outline and justify the current research’s selected methodological design (Reinartz, Manfred and Wayne 293-305). For the purposes of this research and given that both primary and secondary data are needed, three data collection methods will be used. Apart from the desk-based data collection method traditionally associated with secondary data collection, primary data will be collected through the archival records, interviews with sales representatives, a survey of the organizations’ opinions, and the researcher’s own observations. Works Cited Baran, Joseph, Roger Galka, and Daniel Strunk. Principles of Customer Relationship Management. Cengage Learning, 2007. Boulding, William, Richard Staelin, Michael Ehret, and Wesley Johnston. “A Customer Relationship Management Roadmap: What Is Known, Potential Pitfalls, And Where To Go.” The Journal of Marketing. 69.4 (2005): 155-166. Brown, Stanley. Customer Relationship Management: A Strategic Imperative in the World of E-Business. John Wiley & Sons Inc, 2006 Chen, Injazz, and Karen Popovich. “Understanding Customer Relationship Management (CRM): People, Process and Technology.” Business Process Management Journal. 9.5 (2005): 672 – 688. Jayachandran, Satish, Subhash Sharma, Peter Kaufman, and Pushkala Raman. “The Role of Relational Information Processes and Technology Use in Customer Relationship Management.” Journal of Marketing. 69.4 (2005): 177-192. Lemon, Katherine, Tiffany Barnett White, and Russell Winer. “Dynamic Customer Relationship Management: Incorporating Future Considerations into the Service Retention Decision.” The Journal of Marketing .66 (2002): 1-14. Newell, Frederick. Customer Relationship Management in the New Era of Internet Marketing. McGraw-Hill Inc, 2009. Payne, Adrian, and Pennie Frow. “A Strategic Framework for Customer Relationship Management.” Journal of Marketing. 69.4 (2005): 167-176. Peppard, Joe. “Customer Relationship Management (CRM) In Financial Services.” European Management Journal. 18.3 (2007): 312-327. Raab, Gerhard, Riad Ajami, Jason Goddard, and Vidyaranya Gargeya. Customer Relationship Management: A Global Perspective. Gower Publishing Ltd, 2008. Reinartz, Werner, Manfred Krafft, and Wayne Hoyer. “The Customer Relationship Management Process: Its Measurement and Impact on Performance.” Journal of Marketing Research. 41.3 (2005) 293-305. Ryals, Lynette, and Simon Knox. “Cross-Functional Issues in the Implementation of Relationship Marketing Through Customer Relationship Management.” European Management Journal. 19.5 (2006): 534-542. Silverman, David. Doing Qualitative Research. 3rd ed. SAGE Publications Ltd, 2009. Starkey, Mark and Woodcock, Nelson. “CRM Systems: Necessary, But Not Sufficient. REAP the Benefits of Customer Management.” Journal of Database Marketing. 9.3 (2001): 267-275. Verhoef, Peter. “Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development.” The Journal of Marketing. 67.4 (2005): 30-45. Read More