Customer Knowledge Management - Essay Example

Running Head: CRM assigment essay CRM assigment essay [Writer’s Name] Institution’s Name] CRM assigment essay The quality of the knowledge on the customer is much greater because of direct observation. Obtaining that knowledge is only the first step. The basic skill of listening involves competence in sensing, evaluating and responding. A study of 500 new car buyers found customer perceptions of these three dimensions of listening to be strongly linked to trust in the salesperson. (Ramsey 1997) There are also benefits within the firm when the practice of listening to customers is emphasized by senior managers. Senior managers at First Chicago discovered that in emphasizing listening to the customer they found a cultural change within the organization. (Leonard 1997) Customer knowledge gained from firsthand customer contact is very persuasive. Smart CEOs at firms like IBM, Cisco, and EMC intuitively realize this, and their senior managers contact their major customers on a regular basis. These firms also act on that information to improve relationships with those important customers. The benefits of customer knowledge management have concentrated at the individual level. For example, Dreyfus, like other mutual fund firms, keeps track of client activity, claiming that they can predict when a client is going to shift money out of their mutual funds. Clients receive a call from a Dreyfus representative, who wants to know how the client feels about the investment and if his or her goals are being met. If Dreyfus is able to track clients at all stages of the consumption process, then the firm has a better chance of retaining the customer. A number of CRM - and ERP-type software programs allow companies to track processes in the life of a specific sales order from order entry all the way to delivery to customer. Of course, FedEx introducing package tracking is a well-known example from years ago. There are a number of benefits of information technology for firms of any size. Understanding Customer Knowledge Management The marketing research practice has undergone a major transformation in recent years. A primary function of marketing research activities is to collect and analyze customer information. Technology has enabled all phases of the marketing research process ranging from sampling and data collection to analysis and reporting. With newer technologies and faster cycle times, firms conduct research at all stages of the product life cycle and not just at the product development stage or the test marketing stage. This is at the aggregate level, whereas there is another change in research on the customer at the individual level, where technology is enabling customers to interact with the firm in a multitude of different ways not previously possible. These interactions can now occur during all stages of consumption. At every interaction with the customer, a firm has the opportunity to acquire valuable customer information, as well as to process and utilize the information for creating and delivering superior customer value. Once the data is available, the challenge is to provide the user of the information and decision maker with targeted information. Enter rulesbased approaches, which are simply programs that make sense of data using preconceived models. Sadly, the majority of CRM and ERP packages fail the firm not for lack of data, but simply because the firm does not have the appropriate understanding and appreciation of the fundamentals of customer -focused management. The rules for decision-making should be founded on customer -focused management principles. The better the understanding of the customer and the utilization of that knowledge, the more customer focused the rules are. The best technology is only as good as what you tell it to do. CRM and ERP packages are really knowledge management software, tools to manage knowledge of the customer and enable the processes within the firm that are working to meet specific customer needs. To be more effective with these tools, firms need to gather the information, analyze and process it to obtain a good understanding of the customer, and utilize it at every opportunity in the value-creation and delivery process. Therefore, for a thorough understanding on how to manage customer information, it is important to understand the principles of knowledge management, in general. Where and in what form is the information available? To consider all of the sources of customer information we also need to first identify the natural state of the information. Customer information is available as tacit and as explicit knowledge. The explicit knowledge is present in the databases of the firm or as documented information. Customer information files in databases are usually quantitative data. More and more firms are also using qualitative data when the technology is used to accommodate that type of data. Otherwise, most of this rich information remains as hidden knowledge. This information that is not recorded is the tacit knowledge that is usually resident with the employees and managers of the firm. For example, records of customer service interactions capture the actual transaction, complaint, or feedback from the customer. At the same time, employees, based on their prior experience, will unconsciously record and bring to bear their judgments of the situation, which are not necessarily documented. The knowledge that employees have that is not recorded anywhere is deemed the tacit knowledge of the firm. While at the individual level information is available from customer information files in the firm's databases, other types of information at the aggregate level may be gathered during the course of product development activities and other specific projects and reside in research reports. There is information on the customer at several locations within the firm, from sales to customer service, to name the most obvious areas. Besides this explicit knowledge, there is a wealth of information at both the aggregate and the individual levels. Wherever the firm has interfaced with the customer, the "touch-points, " there is information on the customer. It immediately becomes apparent that several product and service delivery contact points within the firm have access to customer information, but not all are part of the customer information management system. CRM software packages enable the firm to capture all of the information gathered at each touch-point into a central database and make it available at any touch point. To determine all of the opportunities for gathering information on the customer, firms can develop a blueprint of the order delivery or customer service processes depicting all of the touch-points from the consumption cycle when the customer interacts with the firm. References Berry L. Leonard and A. Parasuraman, "Listening to the Customer-The Concept of a Service -Quality Information System, " Sloan Management Review, Spring 1997, 65-76. Rosemary P. Ramsey and Ravipreet S. Sohi, "Listening to Your Customers: The Impact of Perceived Salesperson Listening Behavior on Relationship Outcomes, " Journal of the Academy of Marketing Science, 25 (2) (1997), 127-137. Read More