Changes in CRM Approach: Refined Functional Blocks for Customer Creative Engagement in Services

Introduction

Marketing has experienced a quantum shift away from the traditional transaction or sales-oriented business strategy toward that of customer attraction and retention (Berry, 1995). Webster (1992) also presented an emphasis on long-term customer relationships and militated for the formation and management of strategic alliances with customers. Even from the end of the 20^th century, firms have been seen concentrating on the creation of a relationship with their customers and other stakeholders (Gummesson, 1997). Grönroos (1994) named this phenomenon relationship marketing, where the focal point is the customer, especially in services.

Nardelli (2015) tried to present the relationship between ICT (information and communication technology) and innovation in services. In this line of reasoning, the implementation of relationship marketing principles has already been implemented in some extent with the help of technology-based CRM (Customer relationship management) applications (Chen and Popovich, 2003). Sin et al. (2005) considered CRM to represent a comprehensive strategy and process that enables an organization to identify, acquire, retain and nurture profitable customers by building and maintaining long-term relationships with them. Unfortunately the full potential of CRM technologies is rarely realized (Reinartz et al., 2004). Chang et al. (2010) argues that only 30% of companies that implemented CRM experienced improved performance. This problem has been enhanced by 2007’s economic crisis, the emergence of Web 2.0, consumer communities and more informed and demanding clients. Customers have begun adopting social media applications to connect with peers and demand the same level of interactivity with companies (Berthon et al., 2012).

Social media is not designed for organizational CRM purposes, but it can facilitate customer relationships due to the fact that we are talking about a platform through which opinions, perceptive insights and media can be shared among customers (Harrigan et al., 2015). Trainor et al., (2012) argue that social media technology needs to be integrated with CRM processes to form a firm-level capability with the final purpose of influencing business performance. Therefore, Greenberg (2010)’s “social customer” gave way to an extended perspective of CRM, namely to social CRM, a business strategy supported by IT and social characteristics, designed to engage customers in a collaborative conversation for mutually beneficial value in a transparent business environment (Harrigan et al., 2015). Social CRM includes the principles of customer engagement, which was missing in the basic CRM model.

With today's intelligent partnership between producers and consumers which has materialized in Prahalad and Ramaswamy (2004)’s co-creation model, the firm-customer interaction changed together with the common view of the customer. CRM changed once again as well. Chesbrough (2003)'s corporate open innovation initiative envisioned the need for external partners in organizational innovative processes. Thus, Humphreys and Grayson (2008)'s prosumers, a new type of consumers who are producing extra value with and for a company have been chosen as the most important external partners in innovative processes. Accordingly, Toffler (1980)’s “prosumer” reemerged, extending the CRM model to a Prosumer-oriented Relationship Management (PoRM) approach (Izvercian and Seran, 2013). Izvercian and Potra (2014) argue that PoRM facilitates consumer creative engagement, unlike basic and social CRM, because prosumers are indeed empowered consumers who entail creative engagement characteristics very useful for corporate objectives.