Critical Success Factors in a Six Dimensional Model CRM Strategy

Critical Success Factors in a Six Dimensional Model CRM Strategy

José Duarte Santos (CEOS.PP, Polytechnic of Porto, Portugal), José Pita Castelo (Universidade de Vigo, Spain) and Fernando Almeida (INESC TEC, University of Porto, Portugal & Polytechnic Higher Institute of Gaya, Portugal)
DOI: 10.4018/978-1-7998-3473-1.ch145
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Abstract

Companies of various sizes and structures have progressively adopted specialized CRM software that aims to capture customer data and prospects, streamline business processes and provide greater visibility for the business. The result of these initiatives has been very heterogeneous and strongly dependent of several factors, such as the experience, partnerships and qualification of the human resources that these companies possess. In this sense, it becomes pertinent to identify the critical success factors for the launching of a CRM strategy. The findings establish a six-dimensional model composed of sixty-five critical factors. These factors and their relationship between them are presented and discussed in this chapter.
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Introduction

Organizations are currently embedded in an increasingly unstable and turbulent context, accentuated by globalization that leaves companies exposed to many unpredictable changes in their environment. In this scenario, organizations require trustworthy information and personalized knowledge that are indispensable in decision processes.

Relational marketing is becoming increasingly important. The main objective of relational marketing is to meet the needs of customers and the fulfillment of their wishes, through the design and development of products and services that can fulfill the expectations of customers. Kanagal (2009) mentions the application of relational marketing by companies is a competitive differential factor in leadership development, customer loyalty and rapid acceptance of new products and services in the market.

In addition to the acquisition of new customers, the retention of existing customers is of growing strategic importance, considering that the acquisition costs of a new customer are generally much higher than the retention costs of an existing customer. This vision is confirmed by Orantes-Jiménez, Vázquez-Álvarez, and Tejeida-Padilla (2017), which highlight that customer retention can offer greater profitability to companies. Van Triest, Bun, Van Raaij, and Vernooij (2009) complement this by stating that the customer retention process offers companies the potential to become more competitive than the competition, even in those with lower production costs. However, in the current competitive paradigm of national and international markets, customer loyalty is only possible if customers have a high degree of satisfaction with the products/services offered by the company.

Market orientation is an organizational culture that requires customer satisfaction to be at the center of business transactions. To this end, it is necessary to ensure that the company generates added value for customers and better performance for the organization (Anderson & Narus, 1998). Furthermore, market-oriented behavior facilitates organizational innovation, positively influencing commercial performance and the company's ability to perceive and satisfy customers (Prifti & Alimehmeti, 2017).

Customer Relationship Management (CRM) is a strategic model that aims to facilitate the management of knowledge from customer interaction and, consequently, helps to improve the decision-making process. CRM is not merely software or an activity that focus only in the customer service process, but it should be seen as a holistic process of anticipating and satisfying the expectations of customers. The management of the relationship with the customer (CRM) has been analyzed from diverse perspectives, standing out the information and marketing systems. CRM has implications throughout the organization and studies reveal a concern in analyzing in CRM adoption the relationship between critical success factors across the organization and their performance (Alamgir & Shamsuddoha, 2015; Meyliana, Hidayanto, & Budiardjo, 2016; Sebjan, Bobek, & Tominc, 2014). However, considering all dimensions of CRM, which can be viewed as a strategy, it is pertinent to exhaustively identify the critical success factors.

The objective of this chapter, based on the six dimensions model on the adoption of a CRM strategy, is to present and characterize a total of sixty-five critical factors, which are grouped into six dimensions. These critical success factors are generally cross-cutting regardless of the structure and sector of activity of the company, but the organizational specificities and the context must be taken into account in the establishment of a CRM strategy following the recommendations of Ahmad and Buttle (2002). Initially, the manuscript describes the different dimensions that influence the CRM adoption strategy. Consequently, critical success factors are integrated and discussed in each dimension. The paper concludes with the presentation of recommendations and solutions for its adoption in a business context, looks to the main current research lines in the final and the final conclusions are drawn.

Key Terms in this Chapter

Relational Marketing: Marketing strategy that aims to build customer loyalty.

Best Practice: Method or technique, which efficiently and effectively enables higher-level results compared to other means.

Internet of Things (IoT): Concept that refers to the digital interconnection of everyday objects with the Internet, connecting objects more than people.

Process: Set of structured work activities that produce business results defined for customers and aiming to add value.

Up-Selling: Sales technique used to get a customer to spend more by buying an upgraded or premium version of what’s being purchased.

Metric: Indicator to measure and evaluate performance.

Cross-Selling: Sales technique used to get a customer to spend more by purchasing a product that’s related to what’s being bought already.

Strategy: Planned and sustained way of achieving medium/long-term objectives.

CRM: A customer-oriented strategy with two-dimensional conceptualization (formulation and relational marketing philosophy) and a four-dimensional operation (application of best practices, organizational and human resources, CRM processes, CRM technology).

CRM Dimension: Groups a set of critical success factors that have an affinity with each other in the adoption of the CRM strategy.

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