Title:
An Exploratory Study of Implementation of Customer Relationship Management Strategy
Prepared for:
Dr Mohammad b. Ismail
Prepared by:
Syahida Bt Abd Aziz 2011253056
Group: BMB5Ad
Due date: 3rd December 2012
Bachelor of Business Administration (Hons) Marketing
Faculty of Business Management
Universiti Teknologi MARA Perlis,
02600 Arau, Perlis.
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INTRODUCTION
Building a good relationship with customers is important to a corporation. This is because they need to retain their customers within the organization. In the majority of firms, a large percentage of revenues gained from the sales comes from the existing customers and not from their new customers. Thus, the firm needs to focus more on their existing customers rather than focusing on their production. Around the year 1990, many organizations had shifted their business operation from transaction focus to relationship management focus.
The presence of advanced technology will increase the number of competitors which led to a large effort need by the organization to build a long-term relationship with their suppliers and customers. They need to fully utilize the technology in order to compete with their rivals in order to grab more customers come to their premises.
The mismatch which occurs between what customers expect and what they had experienced is known as the quality gap. This quality gap will lead the customers to change their preferences brand of products or services. It is because the value or benefit which they get from the products or services they purchased is less than what they expected to get. Thus, the customers who do not satisfy the organization will change their brand preferences and try other brands of products or services.
The companies need to take some correction actions in order to retain their customers. Several strategies will be implemented in order to increase the level of loyalty among their existing customers which are by fulfilling their customers’ satisfaction. Satisfaction is the feeling of a person whether they delight or disappoint to the performance of the product they perceived which in relation to their expectation toward the product (Kotler et al., 2009).
INTRODUCTION IN JOURNAL
This journal shows the exploratory study of the implementation of a customer relationship management strategy. Researchers are distributing a questionnaire in order to get information regarding the problem face by SOS Alarm bank. Many organizations fail in implementing the strategy to build the relationship with customers (Osarenkhoe and Bennani, 2007).
In this journal, it states that customer retentionise more worth and cost-saving rather than getting new customers. There are three levels of relationship marketing which stated in this journal which is tactical, strategic and philosophical. At a tactical level, relationship marketing is used only as a sales promotion tool by the organization. At a strategic level, it the process by where suppliers have a connection with their customers through legal, economic, technological and time bonds. And at the philosophical level, the focus on marketing strategy is away from products and their life cycle towards customer relationship life cycles is being shifted by relationship marketing.
In this journal, it also mentions that there are six different philosophies in which the employees can be guided to the exchange outcomes with their target markets. The six orientations are production concept, product concept, selling the concept, deliver market’s needs and want, societal marketing concept and customer-centric philosophy.
A framework will be introduced by researchers to improve the performance and solve the actual problems of SOS Alarm bank by using several strategies which will be discussed further in this study.
ANALYSIS OF ARTICLE
This journal provides important explanations of the core components of customer relationship management (CRM) and its’ implementation in the global business world. The core component of CRM is consists of six mutually dependent criteria which are; emphasis on quality, measure customer satisfaction but manage customer service, invest in people, maintain communication with customers, setting realistic targets and assessing the performance of the organization and lastly relationship-based interfaces (Osarenkhoe & Bennani, 2007).
Emphasis on quality
In term of the quality of SOS Alarm bank, the implementation of ISO 9000 penetrated the whole organization of this bank. After providing some training on their employees, this bank finally gets ISO 9000 certificate.
Measure customer satisfaction but manage customer service
In this term, various benefits that a prospect expects prior to purchase and the gap between expectations and performance after the purchase process is being measured.
Invest in people
The implementation on CRM can only be done by the people in an organization who understand their organizations’ objectives set and their standard requirement well.
Maintain dialogue with customers
Companies can retain their customers and make them loyal to the companies by listening and adapting the individual’s preferences.
Setting realistic targets and assessing performance
Organizations must understand their customers’ perception thoroughly so that that they can provide various elements in the offering and elements which important to their customers.
Relationship-based interfaces
This means the companies and their customers must be in touch responsively and flexible. Thus, there will be a gap between what firms do and what they should do.
Most of the service organizations, especially in the banking sector, are facing some problems that involved with their customers. Due to the intangibility of services product, customers tend to seek for other alternatives if they faced any difficulties with the current service provider. Besides, due to the lower of the switching-cost option, customers are likely to opt for other service providers that fulfilled their needs and wants, in a responsive and timely manner.
Banks faced a loss because many of their customers run away and change their brand preferences. The bank in this journal which faces this problem is SOS Alarm. The customers are making a complaint in the poor service such as in term of a slow process in queuing. They need to wait longer even though the counters in the banks are empty and the people who supposed to be entertained at the counters are still not there.
These customers will change to other banks if they always face and experience with this poor service which being provided by the bank. When researchers first distribute a questionnaire to the bank’s customers, they get to know the real and actual problems face by the bank. The method used by the researchers to get this information is by open-ended, face-to-face and telephone interviews with the bank’s employee.
The problems that the researchers get from the interviews are the dissatisfaction of customers toward the service provided by the bank, the bad relationships between the bank’s staff and customers, and the availability of entertainment provide by the bank such as providing a television in the waiting areas.
Thus, the researchers implemented the 5-S framework into the bank management system which is necessary for the implementation of the CRM strategy. It consists of technology and managerial aspects of the bank. The implementation of this relationship focused strategy in SOS Alarm is to understand who their customers are, what their customers do and what their customers are like.
This 5-S framework which had each role in managing the daily business operation is consists of structure, staff, style, systems and schemes.
Structure
In the dimension of the structure, the employees should be provided time to take care of their customers. The SOS Alarm bank needs to hire a large number of employees in order to have better and deeper coordination with their customers.
Staff
In the dimension of staff, the bank needs to teach their employees to be more focus on customers rather than focusing on their products. This bank needs to focus on offering customers individually.
Style
In the dimension of style, the content of the bank’s management action should focus on the customer rather than the transaction. The CRM Strategy should be communicated throughout the organization in order to overcome the lack of understanding in the working place. For example, the employees of SOS Alarm bank wearing similar type and colour of clothes such as they are all in orange give positive perception and image of the company towards the customers.
Systems
In the dimension of systems, time spent by customers to deal with the bank can be lessening. The bank needs to provide an online system in which customers can do a transaction or alter their information online rather than going to the service centres. Their time can be saved if all the dealing can be done through online. In addition, this online information such as general statistic and contract information which the customers frequently access will be sent through their mobile phones.
Schemes
In the dimension of schemes, the SOS Alarm bank should provide a training programme to their employees in order to communicate the benefits of their systems. The postponement of training may occur because of lack in term of their employees’ time. It will not bring advantage to the bank if it being implemented in the long run when the pressure of work on employees is taken into consideration.
After the implementation of this 5-S into the management of SOS Alarm bank, the researchers are distributing the similar questionnaire to the customers for the second time. Surprisingly, the results show that the customers in this bank are fully satisfy with the changes happen in this bank and the customers will continue choosing this bank when they want to do a transaction of money in present and future. Thus, this framework can be used to be implemented in other organization who wants to build a long-term relationship with their customers.
As a conclusion, CRM is important in implementing a customer-driven strategy. This study is able to show a link between components of the strategy and its implementation. The implementation will be a success if they get full support from their top management and have clear and accurate knowledge about management capabilities which is supported by technology infrastructure.
REFERENCES
Kotler, P., Keller, K. L., Ang, S. H., Leong, S. M., & Tan, C. T. (2009). Marketing Management An Asian Perspective. Singapore: Pearson Education South Asia Pte Ltd.
Osarenkhoe, A., & Bennani, A.-E. (2007). An exploratory study of implementation of customer relationship management strategy. Business Process Management Journal, 139-164.
