Customer Relationship Management (CRM), primarily a concept of the private sector for its multi-benefit approach, is catching up fast in public sector, with constituents worldwide demanding better and more customized services built around their needs and to be treated as customers. This has compelled public sector to act like the private in certain ways and to embrace CRM to ensure better planning and resource allocation leading towards constituents’ satisfaction and better quality of life. This chapter identifies the critical aspect of relationship management and provides a conceptual framework for CRM in e-government.
Crm And E-Government
Customer Relationship Management is defined as the strategies, processes, people and technologies used by companies to successfully attract and retain customers for maximum corporate growth and profit (ATA). It is about identifying, establishing, maintaining and enhancing relationships with the customers so that the objectives of both parties are met (Rashid 2003). The notion of forging intimate connections with consumers to understand the needs, references and potential of distinct market segments has also been a crucial driving force behind organizations’ mounting emphasis on customer relationship management (CRM). Corporations look upon CRM as the means to identify profitable patrons, convert prospective clients and establish lasting strategic partnerships with beneficial business partners (Dyche 2001, Rust et al 2004, Zeithaml et al 2001). For the firm it is said that customer retention can enhance profitability through benefits of lowered sales costs and increased revenue (Evans & Laskin, 1994). In-fact CRM has been identified as a critical carrier of revenue growth.
There is considerable interest in how customer relationships can be managed more effectively since they are now regarded as one of the firm’s primary assets (Gupta, Lehman, & Stuart, 2004; Hunt, 1997; Kutner & Cripps, 1997; Srivastava, Shervani, & Fahey, 1998). However, there is no generally agreed approach to CRM; different scholars have recommended different approaches to CRM. For example, according to Payne and Frow (2005), CRM unites the potential of new technologies and new marketing thinking to deliver profitable long-term relationships. Hamilton (2001) defines CRM as the process of storing and analyzing the vast amounts of data produced by sales calls, customer-service centers and actual purchases, supposedly yielding greater insight into customer behavior. The essence of customer relationship management is to understand the customer needs and leveraging that knowledge to improve company’s long term profitability by customizing its offering on one-to-one basis. According to Swift (2001), CRM is an enterprise approach to understanding and influencing customer behavior through meaningful communications, in order to improve customer acquisition, retention, loyalty, and customer profitability. Therefore, from all these definitions, it is evident that the objective of CRM is to acquire and retain the customers by leveraging customer knowledge to offer better services and through influencing their behavior in meaningful manner.