Statement Analysis: Customer Relationship Management
Introduction
Along with the changing business environment, customers or clients also changes and they become more knowledgeable, observant, and demanding. In turn, the management of different organization try to shift their focus on their target market to sustain their competitive advantage. Such changes mean that the companies have to completely transform their traditional aims and purposes from being process-focused to customer-centered or customer-oriented. Restructuring and rethinking the organization on one hand, entails the consideration of various factors which include technology, process, environment, and the human resources aspects ( 2002). Thus, to be able to bring excellent customer services embedded in the operation of the company, the management must be able to employ fine-tuned customer management approach. One of the most important management approach that can be used to ensure good customer relationship is the implementation of customer relationship management (CRM) by the intensive process and approach which can result in having or sustaining competitive advantage (2000).
The context of Customer relationship management is said to be essential to this generation considering that most of the products and services available in the market have certain similarities. Primarily, the goal of this paper is to analyse the statement of (2006) which states that “Successful strategic CRM will be a complex set of activities that together form the basis for a sustainable and hard-to-imitate competitive advantage”, pp 33.
Customer relationship Management
According to (2006), “Successful strategic CRM will be a complex set of activities that together form the basis for a sustainable and hard-to-imitate competitive advantage”. The statement means that if a company would be able to use strategic customer relationship management successfully, they can be able to sustain their competitive advantage and they can have business strategies which is unique and distinctive from their competitors. Perhaps, business strategies is the most important key to successfully have sustainable competitive advantage and the integration of these strategies with the context of customer relationship management can enable an industry to establish unique, distinctive and hard-to-imitate competitive advantage.
In order to do so, company management must realize that, either directly or indirectly, the attainment of its objectives contributes to the much to the target market’s general experience within the industry. The successful integration of the process, technology and people is considered to be the important aspects for successful implementation of the customer relationship management approach (, 2003). The CRM strategy, as based on the statement provided above, the company may set activities which starts with the purposeful and intensive alignment of the processes implemented by the entire management of specific company. These set of activities may include the planning, organizing, directing, and controlling process, which are all catered to provide and satisfy the needs of the target market or the customers (2002; 2003). Hence, customer management relationship, can also be considered as a form customer service management, which adheres more than the attainment of customer satisfaction but the retention of the customers and making them loyal that no other rival companies can outgrow. Aside from this, other set of activities that may lead to a sustainable competitive advantage through the help of the customer relationship management approach is the balance between improved and development company processes and renewed objectives. In this regard, the company should ensure that customers should also feel that the industries and businesses they support or patronize give due value and importance, as well as vitality to their customer relationship operations ( 2005).
In addition, such context should also consider the important of the change management process as a set of activities that geared towards attaining hard-to-imitate competitive advantage. As mentioned in the given statement above, an industry that employed Customer relationship management as part of their business operations was noted to have sustainable competitive advantage than industries that do not adhere to value their customer relationship.
It can be said that customer relationship management is concentrated to the use of information technology which can also be considered as a complex set of activity to aid the company to stay abreast of its client’s needs and concerns and sustain their competitive advantage. The statement of (2006) can also be perceived that customer relationship management also enable the company to appropriately respond in time to the calls of their customers. The statement makes the company realized that customer relationship management is a business approach and process which encompasses various business strategies other than the implementation and application of information technology. The strategy on the customer relationship management also encompasses all other activities of the business processes in which an organization utilizes so as to identify, select, gather, enhance or improve and retain their target market and ensure good rapport and relationship with them, which is also important to sustain competitive advantage.
It can be said that during this time, the customer relationship management is noted as a combination of set of activities business processes, technological solutions and advanced analysis, which makes different industries understand clients from a multifaceted context which in return enable them to have hard-to-imitate competitive advantage. Through the understanding of this statement, companies are able to establish in-depth and more profitable customer relations management approach ( 2004).
Sample Companies that used CRM
To be able to establish hard-to-imitate and sustainable competitive advantage, different companies are able to apply customer relationship management as part of their business strategies. One of the industries that use customer relationship management is the Irish Life and Permanent, which provides broad range of investment products, life insurance and assurances and pension for different individuals and groups or commercial entities to over a million customers across Ireland. The company is considered as the market leader in the Ireland market, and because of this their aim is to merge with TSB Bank to be able to become the largest provider of financial services within the nation (2004). In these two separate industries, there are three customer relationship managements which has been utilized which makes it difficult to determine. Both of these industries attempted to use a single customer relationship management approach to be able to present a united post-merger image and give their sales power the information that it needed to sell joint products. To be able to maximize their sales revenues as well as enhance their customer satisfaction, these companies have use, a software platform which enables them to sustain seamless, quality sales as well as quality through multiple lines of business portfolios, product lines, as well as communication channels. With their combined profile, each of the customer’s business data and history from these merged companies can make it easier to determine and in addition the Irish Life and Permanent are also given the chance to identify determine prospects for a more sustained competitive advantage and more advanced business growth.
With the problems of handling large customer data, the use of customer relationship management approach has been able to solve the issue by using the HP server, which is responsible to become the database server. In this regard, a combined single view of customer information and data are being noted In addition, the customer relationship management also enables the company to have an intensive image of the different financial products and services that they offer. It can be said that the use of the customer relationship management approach at Irish Life and Permanent’s Information technology department under a great deal of pressure and stress to be able to urgently get the solution implemented and in production. Nonetheless, after overcoming such customer relationship management initial challenges, the use of the customer relationship management system has been able to make Irish and Life Permanent have the opportunity to sell its items and products with their TSB clients via the customer information analysis; which also include the automatic generation of recommendations as well as the negotiation of financial models which depends on the client’s distinctive profiles and presentation of such solutions in different eye-catching and attention-catching graphical and text-based styles. In this regard, the customer relationship management system had also enabled Irish Life and Permanent to present personal finance to their respective clients using a highly professional, holistic, and tailored manner. By and large, it can be said that the customer relationship management applied in this company had been able to enhance their competitive advantage and also improved the customer satisfaction and enables the industry to become the best provider of personal financial services in the entire Ireland (2004).
Another company that uses the customer relationship management and to establish competitive advantage is FAW-Volkswagen. The company has been established and founded in 1991 and was regarded for its production of contemporary cars all over China. In addition, this company is also known to be the sole car manufacturing industry in China which was able to manufacture and distribute a medium and luxury class sedan for their target market. FAW-Volkswagen was also considered to be among different industries which have been able to use the context of customer relationship management approach. The FAW-Volkswagen has decided to utilize and apply a customer relationship management approach because of the major business challenges which include slow reaction times, unresponsive customer service, lack of real-time information, deficiency of the incorporation of data and processes and the perceived shortage of IT personnel in the company (2001).
This car manufacturing company has been able to put their products on sale tall throughout the regional dealers. Nonetheless, FAW-Volkswagen has encountered failure in acquiring the direct customer feedback it needed to make sue that they will be able to attain excellent customer service and quality products and obtain market intelligence all over China. Within six month-period, the management of the company has been able to decide to use and implement the context of mySAP Customer Relationship Managementto be able to sustain their competitive advantage and to enhance their customer service and acquire more vital data and information about its client base, to know whether their products adhere to their needs. The car industry perceived that mySAP CRM can help them in reinforcing their good relationship with the clients and customers as well as integrate the entire function of customer service. The main goal of the implementation of the customer relationship management in the company is generally concentrated on three main factors, which include the sales, service, and marketing strategies to have sustained competitive advantage. Through the customer relationship management system, the company’s consumers have been able to access and avail the FAW-Volkswagen through different communication channels such as telephone, fax, e-mail and with their website, they have reached even international clients. The customer relationship management system is tightly integrated, and combined with set of activities of the company to enable the industry to share communication and information with their target market, service representatives and the entire company ( 2001).
According to the management of FAW-Volkswagen, the customer relationship management has enabled them to make real-time information on products, and also their dealers and suppliers which also make their company more accessible for the clients. As a result, the customer relationship management system had been an important strategy in enabling customer service representatives to have the information of their latest product and cars and they are able to attend to customer concerns anytime and anywhere (2000).
Customer relationship management system range from the simplest contact-management systems that gives attention on assisting individual salespeople to most complex enterprise-wide and cross-enterprise systems. The main role of Customer relationship management system for the company is to connect the suppliers and the customers. Customer relationship management system also ensures that customers have a consistent experience across multiple sales channels. An effective implementation of a CRM system meets the needs of the customer, the salesperson and the company by means of utilizing system elements in several, different ways. Such elements and its implementation mirror the success or failure of the marketing design of any organisation as the management-centred functions of CRM system ( 2001). According to and (2000), CRM is concentrated on the use of information technology so as to aid the organization to stay abreast of its customers’ needs and concerns. Customer Relationship Management also helps the organization to respond in time and appropriately to their customers’ concerns.
Another company that uses the concept of customer relationship management system is the Interamerican Group, which is a leading Greek insurance industry. Throughout the years, the industry has been capable of sustaining their competitive position in the life insurance field in Greece. Moreover, the industry is also known to be one of the leaders in property and casualty insurance aspects.. Since 2001, the company has become part of a Dutch Holding industry which is commonly known as Eureko BV, in which approximately owns 98.07% of the insurance company’s share capital in the marketplace ( 2002).
In spite of the progressive growth of the insurance company, competition within the Greek automobile insurance market remains active and strict. For the past ten years, the statistics of the industry have shown alarming results. For instance, a 35% increase on the number of claims has been observed. A 317% increase was observed in the average cost of claims whereas only 226% increase was derived from the average premium (2002). Though these results were not as bad as in the Anti-American case, still the results alone were enough for the company to be alarmed. The use of the customer relationship management system in this company had been able to make them achieve their organizational objective based on revenue growth in order to develop competitive market share without leaving profitability behind (2001). The customer relationship management application within this company has also enable the company to identify customer segments and related exceptions leading to having sustained competitive advantage. In addition, the customer relationship management integration also helped Anti-American Group to create underwriting rules through enhanced understanding and comprehension of the pricing policy as well as its implications to the business. According to the management of the company, the use of customer relationship management approach has also allowed them to pave the way for an effective response to the trends in the marketplace, leading them to s sustain competitive advantage but perhaps the most essential thing is that the use of customer relationship management has taught them w how to understand and serve their various rate groups better and efficient and how they can sustain good customer relationship to their target clients ( 2002).
Conclusion
Based on the analysis and the given samples of companies that used customer relationship management, it can be said that the statement being analyzed is through and correct since the use of customer relationship management enables different companies to use all their resources to gain complex set of activities that would enable them to have sustainable and hard-to-imitate competitive advantage. Hence, it can be argued that, if a an organisation would want to implement CRM as part of their systems or strategies, the management of such company must be able to make a comprehensive and intensive planning and an efficient execution to achieve their organizational objective.
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