Managing the Customer Relationship: A Framework for E-CRM Analysis

Managing the Customer Relationship: A Framework for E-CRM Analysis

Keith F. Ward (St. Edward’s University, USA), Erik Rolland (University of California, USA) and Raymond A. Patterson (The University of Alberta, Canada)
DOI: 10.4018/978-1-60566-154-4.ch001
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Proponents of Customer Relationship Management (CRM) suggest that a firm can develop a value creation relationship, such that an increase in customer value, leads to an increase in firm value (Mithas et al., 2005). The value for the customers comes from the provision of goods and services that match their needs. However, the research to date on using e-CRM systems to both foster and monitor this value creation process is somewhat mixed. This chapter proposes to cross-functionally integrate organizational assets with customers’ interests via technology. The resulting framework can assist managers in improving services, through the use of e-CRM, to understand what is important to the customer.
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Crm Literature Review

Customer relationship management (CRM) has its roots in relationship marketing which supports the proposition that a firm can boost its profitability by establishing long term relationships with its customers (Boulding, et al., 2005). Proponents of CRM suggest that a firm can develop a value creation relationship such that an increase in customer value leads to an increase in firm value (Mithas et al., 2005). The value for the customers comes from the provision of goods and services that match their needs. The firm derives its value in the form of cost savings since it is less expensive to retain existing customers than to expend time and energy on constantly acquiring new customers. For example, Gupta et al. (2004) found that a 1% improvement in customer retention can increase firm value by 5%.

Despite the potential for this value creation proposition, widespread adoption of CRM languished until it was bolstered by new information technology systems and widespread use of the Internet (Greenberg, 2002) – thus being renamed e-CRM. Elements of e-CRM include email, chat rooms, interactive websites, and e-forums (Lee-Kelley et al., 2003). Today, e-CRM is considered a strategic imperative for firms looking to improve customer retention and an engine for “improved shareholder value” (Payne and Frow, 2005).

An examination of the research evaluating the effectiveness of e-CRM would show the results are quite mixed. The commercial market research studies suggest a lack of performance. In a Forrester Research survey of 260 business and technology executives, Band (2008) noted that a ‘significant’ number reported poor results on 11 different capabilities (e.g. customer service, customer data management, etc.) provided by e-CRM. Earlier, a Gartner Group study (Hagermeyer and Nelson, 2003) found 70% of the firms adopting e-CRM saw a decline or no improvement. This 70% figure matched the CRM project failure rates found by Tafti (2002) in an academic study.

However, there have been CRM studies with positive results. In a (2005) Journal of Marketing edition dedicated solely to CRM, Boulding et al. (2005) noted that eight different authors reported that CRM processes can improve firm performance. One of the eight authors, Ryals (2005), cited a case study where a business unit increased its profits by almost 300% by using specific CRM tools. Mithas et al. (2005) found that, for a cross-section of U.S. firms, the use of CRM applications is positively associated with improved customer satisfaction.

Complete Chapter List

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International Advisory Board
Table of Contents
In Lee
Chapter 1
Keith F. Ward, Erik Rolland, Raymond A. Patterson
Proponents of Customer Relationship Management (CRM) suggest that a firm can develop a value creation relationship, such that an increase in... Sample PDF
Managing the Customer Relationship: A Framework for E-CRM Analysis
Chapter 2
Soumaya Ben Letaifa
This chapter examines how e-CRM has affected both organizational and individual behavior in a leading Canadian bank. The innovative and... Sample PDF
A New Conceptual Framework for Greater Success with Integration of E-CRM
Chapter 3
Tim Coltman
Most sectors of industry, commerce, and government have reported variation in the performance payoff from electronic customer relationship... Sample PDF
Managerial Discretion and E-CRM Performance
Chapter 4
Patricia T. Warrington, Elizabeth Gangstad, Richard Feinberg, Ko de Ruyter
Multi-channel retailers that utilize an e-CRM approach stand to benefit in multiple arenas by providing targeted customer service as well as gaining... Sample PDF
Multi-Channel Retailing and Customer Satisfaction: Implications for E-CRM
Chapter 5
Veronica Liljander, Pia Polsa, Kim Forsberg
Not until very recently has mobile phone technology become sophisticated enough to allow more complex customized programs, which enable companies to... Sample PDF
Do Mobile CRM Services Appeal to Loyalty Program Customers?
Chapter 6
Michael Shumanov
While the managerial rationale for adopting customer relationship management (CRM) has been fairly well articulated in the literature, research on... Sample PDF
Developing a Global CRM Strategy
Chapter 7
John Gallaugher
This article synthesizes and leverages two strategic frameworks when analyzing the true nature of strategy and the Internet: (1) the concept of... Sample PDF
Strategic Positioning and Resource-Based Thinking: Cutting Through the Haze of Punditry to Understand Factors Behind Sustainable, Successful Internet Businesses
Chapter 8
Savvas Papagiannidis
This chapter covers the concept of e-business models and how they relate to the music video and television environments. After identifying the value... Sample PDF
A Tale of E-Business Models: From the Music to the Television Industry
Chapter 9
Kirill M. Yurov
Healthcare technology markets have been recently identified as potential investment targets. Having survived a major environmental shock, the... Sample PDF
Strategic Maneuvering in Healthcare Technology Markets: The Case of Emdeon Corporation
Chapter 10
Olli Kuivalainen
The aim of this chapter is to provide a holistic exploration of the development of the business model of a magazine Web site, and of the factors... Sample PDF
Complementary Role of Website in Business Model Development
Chapter 11
Tobias Kollmann is a German B2C platform for different kinds of service and handcraft orders. Based on the concept of reverse auctions, demanders... Sample PDF
A Reverse Auction-Based E-Business Model for B2C Service Markets
Chapter 12
Denis Caro
The 21st century continues to witness the transformation of organizational systems globally through the deployment of Information and Communication... Sample PDF
Evolving E-Health Systems: Symbiotic Constructs Between Corporate and E-Healthcare Worlds in International Space
Chapter 13
Karl Knapp, Sushil K. Sharma, Kevin King
Offshore information technology (IT) outsourcing has been becoming mainstream alternative to inhouse operations. While offshore development is a... Sample PDF
Socio-Economic Impacts of Offshore Outsourcing of Information Technology
Chapter 14
Indrit Troshani
The eXtensible Business Reporting Language (XBRL) is an emerging XML-based standard which has the potential to significantly improve the efficiency... Sample PDF
Towards Theory Development for Emergent E-Business Innovations: Using Convergent Interviewing to Explore the Adoption of XBRL in Australia
Chapter 15
Bill Vassiliadis
Copyright protection is becoming an important issue for organizations that create, use, and distribute digital content through e-commerce channels.... Sample PDF
An Introduction to the Management and Protection of Intellectual Property Rights
Chapter 16
Tagelsir Mohamed Gasmelseid
The unprecedented advancements witnessed in the field of information and communication technology over the last couple of years are significantly... Sample PDF
Intelligent Contracting: An E-Supply Chain Management Perspective
Chapter 17
Jaeki Song, Eric A. Walden
In this work, we examined the boundary of the applicability of network effects theory. We theorized that when adoption is cheap, the cognitive... Sample PDF
The Applicability of Network Effect Theory to Low-Cost Adoption Decisions: An Investigation of Peer-to-Peer File Sharing Technologies
Chapter 18
Wen-Jang Jih
Two mutually reinforcing forces currently are at work to propel an upward spiraling in the business arena. As wireless communication technology... Sample PDF
An Empirical Analysis of Cellular Phone Users' Convenience Perception and Its Impact on Shopping Intention in Mobile Commerce
Chapter 19
Fang He
Along with the exponential increase in online business transactions, the online payment system has gained in popularity because vendors and... Sample PDF
The Effects of System Features, Perceived Risk and Benefit, and Customer Characteristics on Online Bill Paying
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