Lamyaa Sbai-Tarqi
Business Management Course
Abstract3
Introduction..4
Models and Trends of CRM5
Social responsibilities and ethics..9
Customer Relationship and Satisfaction.10
Business-to-Customer (B2C) and Business-to-Business (B2B) Relationships..11
Importance of Customer Relationship Management11
Conclusion.12
References.13
Customer Relationship Management
Abstract
This paper seeks to explore the definition of customer relationship management and its impacts on society, and ethics as a social responsibility. It also seeks to explore the different trends in customer relationship management. The introduction is an overview of the key concepts and areas of interest and their relevance. The paper also comprises of a detailed exploration of the different trends and models in customer relationship management and how they affect a business’ social responsibilities. Furthermore, this paper explores the effect of social corporate responsibility and the ethical code of conduct in business. It reviews and compares the different strategies used in the implementation of CRM within many organisations in the process of analysing the benefits of good communication strategies to the investment and returns on a business. The comparative analysis will seek to assess the best fitting approaches for different types of organisations in consideration of the desires of the organisation to implement CRM.
Keywords: CRM, customer, consumer needs, trends in CRM, challenges, satisfaction, B2C, B2B and business social responsibility.
Introduction
Customer relationship management (CRM) is an essential business tool that helps in the identification of consumer needs and the ensuing advance of strategies to ensure satisfaction of customer needs (Verhoef et al, 2010). Industries and/or businesses are able to develop strategic models per the consumer needs and choices through integration into their products or services. Businesses have a responsibility to give back to the society and work as ethical entities that form the basis of decision making (Joseph, 2013). Notably, a business that observes its business ethics attracts scores of investors and customers. In addition, employees that work in such organizations are comfortable and uphold their integrity at all costs. As a matter of fact, many businesses or organizations use customer relationship management for satisfaction and retention of existing customers as opposed to competing for new customers. The principal aim of implementing the Customer Relationship Management should be to increase a business’ social responsibility and follow the ethical code. An organization’s corporate social responsibility and its ethical conduct influence the customer outcomes (Homburg, Stierl & Bornemann, 2013).
Customer relationship management, therefore, refers to the strategic models and technologies developed and implemented by businesses or organizations for efficient monitoring and management of customer relations. Customer relationship management also focuses on improving the ethical conduct and social responsibility. According to Kumar (2010), CRM is defined as the process by which a company ensures interactions with customers (Kumar, 2010).
Business to business (B2B) is the relationship that exists between businesses or enterprises that engage in commercial transactions (WebFinance, 2016). In contrast, business to consumer is the kind of association that exists between an enterprise and consumer directly (WebFinance, 2016). Customer relationship management mainly involves business to customer, i.e. B2C, relations and business to business relations, i.e. B2B, are also included to counter competition and business challenges (Lambert, 2009). Ethics and social responsibilities are very important in B2C and in B2B businesses. According to Homburg et al. (2013), the B2B environment focuses on an organization’s strategy to implement its corporate social responsibility matters and adhere to its ethical code of conduct. Activities targeted at the Corporate Social Responsibility and ethical conduct in a business strengthen the customer base (Homburg et.al, 2013). Fitzgerald and Cormack are of the same opinion, and they state that in this century, the social context in which a business operates is very uncertain and demanding because the ethical principles and CSR affect investors and short-term returns.
Models and Trends of CRM
In the late 20th Century, the market paradigm shifted from mass marketing to the current customer relationship marketing (Xu & Quaddus, 2010). A customer relationship management consists of a database that gathers information about the customers, which has a designed way for the analysis of the information in the database (Verhoef et al, 2010). Effectiveness of the CRM depends on the data analysis techniques. These data collection and analysis techniques should be accurate and effective for easier identification of customer needs, and the development of effective strategies to satisfy these needs through retaining customer relations. There are different types of customer groups, whereby a customer is an individual or group or organization that buys goods or services. The implementation of CRM can occur through different approaches and it becomes essential for an organisation to adopt an approach which best fits within the organisational structure (Lambert, 2009). This will enhance the understanding of the common trends utilised within different organisations in implementing the CRM in accordance to the diverse industrial or business challenges (Lin et al, 2010).
There are traditional and online customers, whereby the online customers use technology and the internet to buy goods and/or services whereas the traditional customers are those who physically present themselves to order or purchase goods and/or services (Verhoef et al, 2010). In both cases, organizations should make sure that they avail adequate online information on their ethical code and CSR for customers who expect to base their transaction decisions on these details. For instance, a company should provide truth worthy information about characteristics and features about goods and services. When a business employs E-commerce website, it is vital to care about customer privacy so the customer can safely input their cards details to make a purchase. Studies indicate that business that engaged in CSR-related activities record high customer loyalty and trust and in the identification of entrepreneurship (Homburg et.al, 2013).
On the other hand, the organization is able to recognize and relate to each customer, in addition to understanding and satisfying their needs. The bottom-line is that CRM helps in addition of value to the business through the use of customers as organizational assets (Rainer, Turban & Potter, 2007).
CRM helps in identifying the loyal customers and potential customers through the creation of business-customer relations platforms and avenues for retaining existing customers and creation of new customer relations (Verhoef et al, 2010). Good CRM strategies also serve to promote customer trust and loyalty on the basis of a business’ good corporate responsibility and ethical conduct. Any company should wisely use the information gained from their customers and do not trespass it and do not transmit to the third parties.
On the other hand, the organization is able to review the current or prevalent customer challenges and situations and evaluation of their potential (Lin et al, 2010). Customer relationship management helps in adding business value through the analysis and compilation of customer data, thereby creating a subsequent platform for the identification of the best customers, potential customers, best products and required product improvement, in addition to the maximization of existing business opportunities and a creation of new business opportunities. This can be effectively achieved through implementation of complementary CRM principles, which is guided by the anticipation of existing customer needs (Ngai, Xiu, & Chau, 2009).
Business managers should understand the primary goal of their businesses in relation to customers’ trust and nurture the Business-to-Customer relationship. In either case, corporations should have CSR projects and contextual ethical codes. For instance, a business that exports and sells raw beans should select beans from the best areas; for instance, where it does not disrupt local life and promote deforestation. On the other hand, a business should care about the environment in the place of its production and think about the reduction of waste.
Additionally, the provision of communication forums and CRM models will help in the identification of frequent and loyal customers for a reward through offering incentives and discounts (Xu & Quaddus, 2010). Research has proven that a creation of value for the customers is likely to increase their confidence in loyalty to the organization (Verhoef et al, 2010). CRM, therefore, becomes a relatively important element within any business, as understanding company customers is critical in ensuring they are satisfied with the services offered by the company (Buttle, 2009).
Other CRM trends include the creation of blogs for the customers, where they can interact with the customers and amongst themselves and publicise their CSR projects. This will eventually help in the identification of customer needs and feedback. It is easy for customers to challenge companies and make judgments based on commentary bloggers (Fitzgerald & Cormack, n.d). Markedly, negative judgements by customers affect a business’ returns and investments. The CRM trends also aid an organization in the continuous engagement of social responsibility activities and communication of their efforts. A company should respond to negative comments as long as they are important. Moreover, the business should adhere to ethical code and be trim with what to say publicly.
Therefore, the development and implementation of CRM strategies, proper ethical code of conducts, and CSR programs serve as a long-term solution for a business or organization. The implementation of CSR and ethical code within many companies is critical in these modern times due to the associated fundamental benefits. The direct implication is the understanding of customers. However, there are indirect benefits that enable the company to make informed decisions regarding strategies to adopt within the market place for improvement of services and goods provided.
Social responsibilities and ethics
There has been a great evolution in the global business market due to subsequent evolution in the technology sector (Lambert, 2009). Many organizations have implemented a technological milestone through the introduction of CRM software that automates customer databases and the entire sales process, and hence, business transactions have become fast and convenient. There is a rising popularity of social media and the mobile CRM, which has led to the shift in advertising of products and declaration of a business’ social responsibility to society and its ethical conduct that benefits the majority. Social networking and the mobile CRM are excellent avenues for the business to customer relationship to prosper and for companies to innovate and manufacture environmentally-friendly products. The growth in social networking necessitates changes in the efficient use of resources by businesses and creates the value of products that are socially accepted by the customers. This requires organizations to develop and implement social networking platforms to market their Corporate Social Responsibilities and ethics (Fitzgerald & Cormack, n.d).
Customer experience is vital in retaining and effectively monitoring customer relations. Changes and growth in technology such as the popularity of social media, promote transparency in a business. Corporations also have an opportunity to account for their actions online especially if they contradict their ethical code of conduct, and are not meant to promote social responsibility in a community. For instance, nowadays, Google setting allows tracking customer’s search in the Internet, and then to employ the search results to choose the advertisement that would be interested for the client. Moreover, Google remembers the inquiries in a search line and learns customer’s preferences to create the most suitable offers in the future. Of course, Google company asks user’s permission to employ data from email, photo etc. If a company does not consider these issues, CRM activities may potentially cross the line of customer’s privacy and what the costumer considers fair. As a result, this may diminish trust in business activities of a company and cause discontent and loss of potential key advantages.
Organizations or businesses must, therefore, establish and implement strategies to improve customer relations and sustain the environment as an ethical responsibility of a business. Software as a Service solution is also becoming a popular CRM trend, especially due to the elimination of both hardware and software requirements. This has led to easier customization of the CRM solutions, cost effectiveness, time efficiency, portability and agility, and an overall improvement in business to customer (B2C) relationships. In addition, SaaS solutions affect the manner in which businesses approach ethical challenges and their responsibility to the society. Joseph (2013) is of the view that a business’ social responsibility does not just lie in having a positive impact on the environment and people. According to him, businesses should dedicate a portion of their returns to investing in community programs that ensure access to basic wants. In addition, they should push for political changes and encourage employees to use their expertise to improve community welfare (Joseph, 2013).
Customer Relationship and Satisfaction
According to Fitzgerald and Cormack (n.d), an organization’s global expectations in relation to its social responsibility are on the increase, especially owing to the impacts of climate change (those that several businesses are to account for but are not). The universal bar of business demeanour encompasses the ethical code of conduct as well as social and environmental impacts. What is more, the satisfaction and relation of customers depend on the reputation that a company has built and measurement of its ability to state its ethical, social, and environmental values. For instance, there are some businesses in cosmetic industry, which do not conduct vivisection because of their ethical principles and a particular part of consumers prefer their products against others only because of their principles. If the company violates its principles, it breaches their maxim and ethics.
Organizations should be able to set clear customer experience strategies through understanding the overall organizational mission and objectives and the customer service and value. A comprehensive communication platform/channel shares customer experiences, promotes trust among customers, becomes the foundation for good corporate responsibility, and builds Business-to-Customer relations (Fitzgerald & Cormack, n.d).
Globally, organisations should respond to the social and health concerns around the world. What is more, they should support global agencies in the elimination of pandemics such as HIV/AIDS and other infectious viruses such as polio and influenza. The organizations should also offer emergency and relief services to people and contribute to improving education and health care. These are some social practices that organizations can utilise to increase their global reach. However, according to Fitzgerald & Cormack (n.d), these strategies are not substitutes to the response of managers on ethical concerns and the impact of business activities on the environment.
The basic strategy of improving customer relations and developing customer loyalty is the opening up of organizational communication channels, which declare the social responsibility of businesses and their ethical conduct (Rainer, Turban & Potter, 2007). This can be ensured through the implementation of peer-to-peer communication channels between the organization and its respective or potential customers, the provision or development of effective customer feedback form or electronic newsletters, direct and fast response to consumer feedback, effective employee training, and customer rewarding (Ngai, Xiu, & Chau, 2009). These strategies should be developed with the customer interests and needs as the key components since the greater the customer fulfilment, the better the sales and profit margins (Lambert, 2009). Consumer satisfaction leads to consumer loyalty and increased sales, and hence, there will be high product growth and development, and an overall organizational growth. Effective customer relationship management within a company remains essential in enabling the business to understand the requirements of customers and work towards ensuring the customers are satisfied.
Importance of Customer Relationship Management
Customer relationship management helps in the maintenance of customer loyalty and promoting good understanding of a business’ social responsibility and ethics. Additionally, Customer relationship management makes it easier to monitor customer interactions and to get first-hand feedback from customers on their experiences with products. Feedback helps the business or firm to implement respective strategies to ensure customer satisfaction and strategize on the best practices that warrant good social conduct and environmental impacts. On the other hand, customer relationship management acts as a marketing strategy and development platform for the organization or firm.
Customer relationship management helps in retaining the existing customers in addition to marketing a business’ social and ethical responsibilities. The CRM system helps track customer relations and feedback concerning the social and environmental effects of their business; hence, it acts as a marketing opportunity.
Conclusion
Customer relationship management is a relatively important element in any business. It is crucial in retaining and monitoring customer relations, and communicating a business’ social and ethical practices. Notably, a business’ social responsibility and ethical conduct have an impact on the returns and investments. One cannot overlook the role of the internet as it is a vital platform for a business to maximize its customer relations by communicating its responsibilities and ethical concerns to society. Notably, the consumer is the sole determiner of a business’ success; therefore, all activities should be geared towards improving their experiences. To say the least, corporate reputations are built on a business’ actions. With the advent of the internet, it is easy for a business to build or destroy its corporate reputation. That said, the leadership of any business has a fundamental role to play in setting the right objectives that ensure sustainability of the environment and proper ethical practices.
References
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