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International Journal of Business Trends and Technology- volume3Issue1- 2013

A conceptual case study to understand the key performance


indicators for the successful CRM adoption

Arpita Mehta
Research Scholar
Email: mehta0108@gmail.com

Introduction
Relationship Marketing (RM) is a popular concepts in current marketing research and practice. RM has
the potential to increase customer retention by building long-term customer relationships. RM can
increase marketing effectiveness and efficiency by reducing marketing costs, facilitating the targeting of
high-profit customers, reducing price sensitivity, creating opportunities for up-selling and cross-selling,
erecting exit barriers, and facilitating database development (O'Malley and Tynan, 2000). Since
relationships can become an important source of competitive advantage, a marketing paradigm shift from
transactional to relationship marketing has been proposed (Buttle, 1996). Important elements in the
market environment include competition, communication distance, transparency and power distribution.
Competition affects many market conditions, such as the number of actors, available choices, and
product/service commoditization. Under high competition conditions, retailers may be more motivated to
employ consumer relationship strategies to differentiate themselves from competitors, build barriers and
reduce price sensitivity. The shorter the communication distance, the easier it is to build consumer
relationships (Pels, 1999). Transparency refers to how well the transaction parties are informed. It may
consist of vendor transparency, customer transparency and process transparency, and contributes to
relationship success (Egger and Helm, 2000). A common trait of many studies is a focus on measuring
CRMs impact on the end results, such as profits and shareholder value, without studying the relations
among processes and connections among variables (Boulding et al., 2005). Return on investment is
certainly a measure of success, butwithout a profound understanding of how relational processes can
operate effectivelysuccess from CRM initiatives is elusive. Although the specifics will be unique to
each firm, prior research provides a conceptual framework for understanding how relational processes
create value for customers. Specifically, research on the antecedents of service quality, customer
satisfaction, trust, and commitment provide insights for managers (Berger et al., 2002; Rust, Lemon, and
Zeithaml, 2004).

CRM is based on the principles of relationship marketing (RM) which is regarded as one of the key areas
of modern marketing and has generated great research interest (Patron, 2002 cited Mitussis and Malley,
2004). The basics of CRM is highly influenced by the rich conceptual and
ideological basis of RM, its almost exclusive focus on managing relationships with its customers may be
somewhat counterproductive as most of the interaction happens with respect to product or service or both.
With its roots in RM, CRM is a relatively new management discipline. Ryals and Payne (2001) who
propose that RM is concerned with relationships with multiple stakeholders, while the focus of customer
relationship management should be primarily on the customer. In 2003, Zablah, Beuenger and Johnston
observed that CRM was for the most part eglected in the literature and that further exploration of CRM
and its related phenomena was not only warranted, but also desperately needed. This happened at a time
when managers were becoming increasingly sceptical about deploying a CRM system due to its high rate
of failure (Patron,2002 cited Mitussis and Malley,2004)

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Figure: Areas of importance in CRM, Source: Salomann et al (2005)

Companies are increasingly focused on managing customer relationships, the customer asset, or customer
equity. Customer relationship management (CRM) explicitly recognizes the long-run value of potential
and current customers, and seeks to increase revenues, profits, and shareholder value through targeted
marketing activities directed toward developing, maintaining, and enhancing successful company-
customer relationships (Berry, 1983, p. 25; Morgan and Hunt, 1994, p. 22; Gronroos, 1990 p. 138).The
differences in concepts related to RM and different levels of relationships can be analyzed from many
perspectives such as behavioral or attitudinal aspects (Pels, 1999), scope differences (Gronroos, 1996) and
techniques employed. Certain conceptual differences originate from the widespread domain that makes up
the consumer market. Studies (Cahill, 1998; Claycomb and Martin, 2001; De Wulf et al., 2001;
Odekerken-Schroder et al., 2000; Pels, 1999; Sheth and Parvatiyar, 1995, 2000; Too et al., 2000; Yau et
al., 2000) report on different aspects of relationships across various industries, contexts and
environments. While multiple levels of relationships can be built with consumers through various direct
marketing or loyalty programs, the term "relationship" as used in RM may have different meanings. To
accurately compare the research and investigate RM in the consumer market, concept clarification is
necessary.

Table : Characteristic of CRM concept, Source: Gartner research (2003)

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RM was initially conceived as an approach in the business-to-business (B2B) environment. The adoption
of the RM concept to consumer research is relatively new and has gone through stages from obscurity,
discovery, acceptance, to popularity (O'Malley and Tynan, 2000). While RM is powerful in theory, it is
troubled in practice (Fournier et al., 1998). After years of research on RM in the consumer market, it may
seem awkward that the legitimacy of the topic is still under debate. As a popular concept, surprisingly
RM is not clearly defined. Some researchers have noticed this lack of a common conceptual ground for
RM discussion (Harker, 1999; O'Malley and Tynan, 2000). Harker (1999) found 26 distinct definitions in
his examination of the RM concept. The most cited and the "best" (Harker, 1999) is from Gronroos
(1994): RM is to identify and establish, maintain and enhance and when necessary also to terminate
relationships with customers and other stakeholder, at a profit, so that the objectives of all parties are met,
and that this is done by a mutual exchange and fulfillment of promise. This definition covers the seven
elements of RM, including birth, develop, maintain, temporal, interaction, output and emotional content,
which Harker (1999) identifies as commonly agreed upon by researchers through their repeated mention
in literature. However, this definition still does not clearly state the meaning of a relationship in RM.

Researchers agree that RM is a form of customer-centric marketing (Sheth et al., 2000). Much research on
RM is based on broad concepts (Bennett, 1996; Berry, 1995; Palmer and Bejou, 1994; Rowe and Barnes,
1998). Rowe and Barnes (1998) identify what they consider to be four tangible manifestations of RM in
consumer markets as locking in customers, customer retention, database marketing, and close personal
relationships. The first three (Rowe and Barnes, 1998) lack mutuality and special status, such as attitude
and emotion, and are unlikely to result in close long-term relationships, which are essential for RMs
more narrow concepts. Berry (1995) proposed three levels of RM. A first level relies on pricing incentives
to secure customer loyalty. The second level focuses on the social aspects of a relationship, which are
exemplified by regularly communicating with consumers or referring to their names during encounters.
The third level offers structural solutions to customer problems.

Figure : Priority of processes among businesses, Source: Salomann et al (2005)

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The foundation for the development of CRM is generally considered to be relationship marketing, defined
as marketing activities that attract, maintain, and enhance customer relationships (Berry 1983). Gronroos
(1990, p.138) argues for the importance of relationships in the marketing context. He proposes a
definition for marketing, namely, that marketing is to establish, maintain and enhance relationships with
consumers and other partners, so that the objectives of the parties involved are met. This is achieved by a
mutual exchange and fulfillment of promises. However, although the terms CRM and relationship
marketing are relatively new, the phenomenon is not (Gummesson, 1994, p. 5, 2002, p. 295). Marketers
have always been preoccupied with defensive strategies aimed at increasing customer retention, thereby
increasing revenues and profitability (Fornell and Wernerfelt, 1987). For example, writing in the Harvard
Business Review, Grant and Schlesinger (1995 p. 61) argue that the gap between organizations current
and full-potential profitability is enormous, and suggest that managers ask themselves: How long on
average do your customers remain with the company? [and] What if they remained customers for life?
During the same time period, a growing literature has focused on the service profit chain linking
employee satisfaction, customer satisfaction, loyalty, and profitability (e.g., Heskett, Sasser, and
Schlesinger, 1997; Reichheld, 1993; Liljander, 2000).

Table : Link between business processes and CRM system, Source: Bibiano et al (2007)

Business processes CRM systems


Management processes Analytical CRM
Operational processes Operational effectiveness
Supporting processes Collaborative CRM

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Many elements, which are important in relationship building, may be lacking in a retail context. Pressey
and Mathews (2000) addressed barriers to RM in consumer retailing and concluded that balanced power,
high level of purchase involvement, service provider professionalism, and high levels of personal contact
are pivotal to RM success. In addition to the operational strategies employed by marketers, the propensity
to develop B2C relationships is also dependent on the "relationship friendliness" of the product-market
and consumer relationship proneness (Christy et al., 1996; De Wulf et al,. 2001; Sheth and Parvatiyar,
1995). Loyalty programs can help build certain consumer relationships. Barnes (1994) observes that
tactics such as frequent-buyer schemes, which accumulate points, develop a barrier to exit. However,
loyalty schemes differ from RM since learning is not a key objective (Christy et al., 1996), tangible
rewards are emphasized (O'Malley and Tynan, 2000) and favorable attitudes are not accompanied (Dick
and Basu, 1994). RM is concerned with relationship endurance while direct marketing is concerned with
achieving immediate sales (Copulsky and Wold, 1990) and RM has a wider repertoire of techniques at its
disposal than direct marketing (Stone et al., 1996). While RM requires high consumer involvement, direct
marketing is a transactional customer-centric marketing approach where involvement may be low (Sheth
et al., 2000). One-to-one marketing is product-centric, whereas RM is customer-centric (Sheth et al.,
2000). RM is also differentiated from database marketing. RM is a "bottom up" approach while database
marketing is "top down" (Shani and Chalasani, 1992). Database marketing is categorized as one of the
three approaches of RM in addition to interaction marketing and network marketing (Coviello et al.,
1997). The nature of the offering plays an important role in determining RM applicability. It has been
argued (Christy et al., 1996; Sheth and Parvatiyar, 1995) that B2C relationships only exist in certain
relationship-friendly product market. High consumer involvement exists in product categories
characterized by inelastic demand (O'Malley and Tynan, 2000) and high service components (Gronroos,
1996). The possibility and need of customization and personalization help the formation of relationships.
Professionalism (Pressey and Mathews, 2000) and complexity (Sheth and Parvatiyar, 1995) in decision
making and purchasing contribute to relationship success. In practice, many concepts relating to
consumer relationships and loyalty, such as micromarketing (Winokur, 1994), database marketing (Davis,
1997), one-to-one marketing (Greco, 1995), loyalty marketing, wrap-around marketing (Kotler, 1992),
customer partnering (Magrath and Hardy, 1994), and interactive marketing (Gronroos, 1995), are
discussed under the umbrella of RM in various academic and industrial literature. While these concepts
and marketing techniques contribute to consumer relationship building, they may differ from RM. Some
researchers have noticed the terminology confusion and proposed that RM is conceptually distinct from
these techniques which are tactical concepts, wheras RM focuses on long-term interaction leading to
emotional or social bonds (O'Malley and Tynan, 2000).

Figure : Status of implementation of CRM processes, Salomann et al (2005)

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failures typically arose from a narrow application of CRM principles. For example, Rigby, Reichheld, and
Schefter (2002) identified four situations that independently and together result in failed CRM systems:
(1) implementing CRM without having in place a clear customer strategy, (2) assuming that CRM has to
match organizations current practices, and not enhance them, (3) assuming that CRM technology and not
CRM strategy matters, and (4) using CRM to stalk, not to woo customers. In other words, many so-called
CRM systems used technology (both hardware and software) to optimize the usage of information within
functional silos, without a relational orientation, creating obstacles to organizational learning and the dual
creation of value. Thus, it is not particularly surprising that they identified solutions that were
suboptimaland even unprofitablein the long run.

Consumers' personal characteristics, attitudinal conditions, needs and constraints and market power affect
their willingness and ability to be involved in relationships. Personal characteristics are largely
determined by demographic attributes and the psycho-socio-cultural context. Under certain psycho-socio-
cultural contexts, consumers remain in a relationship to resolve life themes (Fournier, 1998) and maintain
cognitive consistency (Sheth and Parvatiyar, 1995). Attitudinal condition includes consumers
perceptions and knowledge. Higher risk perception and sufficient knowledge about marketers (Webster,
1994) are essential for relationship involvement. Additionally, the tighter the time constraints, the more
consumers value relationships. Relationships help consumers to avoid complexity and achieve efficiency.
Consumers also remain in relationships for convenience. Balanced power of exchange parties are
necessary due to the co-operative nature of relationships (Pressey and Mathews, 2000). Traditional
consumers are typically passive, and thus have imbalanced power in their exchange with retailers. An
active role, including voluntary participation (Christy et al., 1996), high level of involvement, and high
degree of interactivity (Geiger and Martin, 1999; Pels, 1999) is required for relationship building.

Figure: The broken down architecture of IT tools in CRM system, Source: Salomann et al (2005)

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Consumers, depending on their relational orientation, will differ in the relative importance of their overall
satisfaction or their trust and commitment towards marketers (Garbarino and Johnson, 1999). Based on
extensive field interviews, Payne and Frow (2005) identify five key cross-functional CRM processes: a
strategy development process; a value creation process; a multichannel integration process; an
information management process; and a performance assessment process. They argue that an
organizations strategy development processa precursor for subsequent processesrequires a dual
focus on its business strategy and customer strategy, and that how well the two interrelate will
fundamentally affect the success of its CRM strategy. In particular, organizational information
processesinformation reciprocity, information capture, information integration, information access, and
information userelevant to CRM can play a vital role in enhancing business performance (Jayachandran
et al., 2005). This observation should not be surprising because the primary outcome of the adoption of
CRM technology is the generation of an enormous database describing customer profiles, sales, costs,
operations, and so forth. If intelligently processed and interpreted, these data can provide information
regarding the value of customers and the effectiveness and efficiency of marketing actions (Berger et al.,
2002). Each customer interaction is (or should be) part of an iterative learning process both from the
customer and the company points of view (Ballantyne, 2004). Research shows that for the low relational
customer, overall satisfaction is the primary mediating construct between the component attitudes and
future intentions. For the high relational customer, trust and commitment, rather than satisfaction, are the
mediators between component attitudes and future intention (Garbarino and Johnson, 1999).
Transactional consumers may return to a retailer when they are satisfied with previous experiences.
Repeat consumers return for favorable evaluation and tangible rewards. A favorable evaluation may be
based on the belief or trust that the retailer provides satisfactory offerings. Relational consumers return
because of their commitment. Their relationships can make them overlook the little things that go wrong
(Cahill, 1998).

Figure: An insight into process based CRM, Source: Salomann et al (2005)

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In a recent Harvard Business Review article, Gulati and Oldroyd (2005) observe that the implementation
or CRM systems must serve the purpose of getting closer to customers, and that in order to succeed the
company as a whole has to engage in a learning journeylearning about the customer and about the
business and how its way of doing business can be improved. If this activity is regarded as a departmental
or functional responsibility, CRM efforts will fail. The authors identify four stages in the evolution of a
successful CRM implementation: communal coordination (gathering information); serial coordination
(gaining insight from customers past behavior); symbiotic coordination (learning to predict future
customer behavior) and integral coordination (real time response to customer needs). This evolutionary
and transformational process takes time, resources, and patience, but the implementation of each of the
stages should provide visible end results. Harrahs started this process under Gary Lovemans leadership
in 1998 and, after a constant evolution that took more than seven years and involved all employee levels,
it enjoyed impressive growth compared to competitors. Furthermore, the deep understanding of the
customer provided new levers for future growth (Gulati and Oldroyd, 2005; Gupta and Lehmann, 2005).

Figure : the areas of priority in change management, Source: Salomann et al (2005)

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The Web's facilitation of consumer relationship management mainly stems from its being a low cost
communication/interactive tool. The Web is a unique tool for marketers to build and maintain
relationships with their clients (Geiger and Martin, 1999). Theoretically, Web marketers have greater
ability to identify, target, track and interact with consumers (Berthon, et al., 1996; Burke, 1996). They can
also better collect and manage consumer information. Meanwhile, the Web is a cost efficient tool to
interact with consumers and process information. It allows marketers to respond to various requests from
consumers and create a feedback loop (Pels, 1999). Thus, the Web enhances marketers abilities and
techniques for RM. Retailers have been employing the Web as a relationship building tool to successfully
enhance some aspects of customer relationships such as enhancing services (Walsh, 2000) and bonding
brands with customer (Chiagouris, 2000; McWilliam, 2000). In a narrow sense, RM is a marketing
technique or tactic which develops relational consumers in suitable product/service markets. Markets are
heterogeneous, buyers and sellers are both active, and interaction and relationships are important
(Zeithaml et al., 1983). It includes tasks such as market analysis and identifying relational consumer.
Indicators of RM include: a high level of trust; a high level of commitment; a long time horizon; open
communication channels with information exchanged between both parties; having customers' best
interests at heart; a commitment to quality for both parties; and an attempt to favorably lock-in or retain
the customer (Pressey and Mathews, 2000). Some previous research discussions are based on RM in a
narrow sense (for example, Anderson and Narus, 1991; Pressey and Mathew, 2000; Zeithaml et al.,
1983). Research on CRM is a natural evolution of marketers longstanding interest in understanding how
relationships with individual customers are created, built, and sustained over time (Bhattacharya and
Bolton, 2000). It began with investigations of how customers formed their assessments of products
(goods and services). This research stream is extensive; therefore an extensive discussion of the
antecedents of customer assessments (e.g., perceived service quality and customer satisfaction) as well as
the implicit bonds (e.g., legal, economic, technological, knowledge, social, etc.) (Liljander and Strandvik,
1995) is beyond the scope of this section. Notably, customer satisfaction literature developed around the
idea that satisfaction is influenced by the difference between expectations and experience (Oliver, 1980,
1999). Service quality literature developed along parallel lines (cf., Parasuraman, Zeithaml, and Berry,
1985, 1988). For example, Boulding and colleagues (1993) brought together two streams of service
quality research in showing that both expectations as predictions (expectations about what will happen)

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and normative expectations (expectations about what should happen, often based on communications
from the service provider) are important in determining perceived service quality. This stream of
literature is extremely useful in helping researchers build theory-based models of customer behavior
(Bolton and Lemon, 1999).

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Some Definitions

CRM attempts to provide a strategic bridge between information technology and marketing
strategies aimed at building long-term relationships and profitability. This requires information-
intensive strategies (Glazer 1997).
CRM can be viewed as an application of one-to-one marketing and relationship marketing,
responding to an individual customer on the basis of what the customer says and what else is
known about that customer (Peppers, Rogers, and Dorf 1999).
CRM includes numerous aspects, but the basic theme is for the company to become more
customer-centric. Methods are primarily Web-based tools and Internet presence (Gosney and
Boehm 2000).
CRM involves using existing customer information to improve company profitability and
customer service (Couldwell 1999).
CRM is a comprehensive strategy and process of acquiring, retaining, and partnering with
selective customers to create superior value for the company and the customer (Parvitiyar and
Sheth 2001).
CRM is a management approach that enables organizations to identify, attract, and increase
retention of profitable customers by managing relationships with them (Hobby 1999).
CRM is a term for methodologies, technologies, and ecommerce capabilities used by companies
to manage customer relationships (Stone and Woodcock 2001).
CRM is about the development and maintenance of longterm, mutually beneficial relationships
with strategically significant customers (Buttle 2001).
CRM is an e-commerce application (Khanna 2001).
CRM is an enterprise approach to understanding and influencing customer behavior through
meaningful communication to improve customer acquisition, customer retention, customer
loyalty, and customer profitability (Swift 2000).
CRM is an enterprisewide initiative that belongs in all areas of an organization (Singh and
Agrawal 2003).
CRM is data-driven marketing (Kutner and Cripps 1997).

Literature Review

Three different views on RM feasibility in the consumer market can be found in the literature. One view
does not limit the application of RM (for example, Rowe and Barnes, 1998; Berry, 1995), where some
have tended to apply this concept blindly. On the contrary, others have questioned the practicability of
RM in the consumer market from both academia and industry (for example, Cahill, 1998; Hibbard and
Iacobucci, 1998). Reasons for this concern include: the anonymity of consumers; limited interaction; and
the low potential value of individual consumers compared to the high costs of RM programs. It is
suggested that RM in the consumer market is merely a scholarly concept with little limited real-life
applicability. Hibbard and Iacobucci (1998) conducted a meta-theoretical analysis of over ten years of
literature and concluded that there is no empirical evidence to suggest that B2C relationships exist. An
alternate view between these extremes suggests that RM in the consumer market is only suitable for
certain relationship-friendly products (Cahill, 1998) and is dependent on the willingness of consumers to
participate (Christy et al., 1996; Sheth and Parvatiyar, 1995).

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Table: CRM Components

Application Decision on softwares and programs to support CRM depending upon initial business
requirement analysis. Support has to be provided for the defined processes within CRM strategy.
Mendoza Luis.E et al (2006)
Back-office "Refers to systems that do not deal directly with the customer, such as inventory
management and accounts payable" (PCMag.com, 2005, para. 1).
BPM provides a platform which defines the customer centric processes within a specific business and
deploys them with technological help to finally ensure that the processes work up to the potential.
Mashari and Zairi(1999), Light b (2001)
Business process management "Business process management (BPM) is the ability to have end-to-end
visibility and control over all parts of a long-lived, multi-step information request or transaction that
spans multiple applications and people in one or more companies. Business process management means
harnessing and enhancing the value of business processes however large or small, wherever they reside
within the extended enterprise, and whomever they involve" (Bitpipe, 2005, para. 1).
Business specific CRM system design n Monitoring the customization of CRM software as per initial
business process analysis to smoothen the alignment of CRM solution with the business objective.
Bligh(2004)
Campaign management is the core marketing process, which puts the ideas of relationship marketing into
practice. It can be defined as planning, realization and controlling of marketing activities directed at
targeted customers. Salomann et al(2005), Light b (2001)
Change management ". . . the making of changes in a planned and managed or systematic fashion. The
aim is to more effectively implement new methods and systems in an ongoing organization. The changes
to be managed lie within and are controlled by the organization" (Nichols, 2004, para. 5).
Change management Corporate strategy to restructure the organization culture through and after complete
implementation of CRM system Pivotal corporations(2 004)-white paper,Mento et
al (2002),Bull (2003)
Clarifying business needs Finding out the process integration such as supply chain, sales and marketing,
IT etc Mendoza Luis E et al (2006), Light (2001) Establishing key performance metrics and measuring
facility to assess the progress of CRM strategy and its end result. Greenberg(200 4)
Competitive advantage A unique leading factor which is achieved by integrating customer
intimacy, product leadership and operational effectiveness Bligh(2004), Peppers and Roggers(2003)
Complaint management is about receiving, processing and communicating the dissatisfaction articulated
by the customer Salomann et al(2005), Light b (2001)
Contact Management Software (CMS) "Contact management software is the key software offered
directly to an agent or advisor. It can help you conduct marketing campaigns and provide support to
prospects and clients. It coordinates personal, financial and agency data" (Kite, 2000, para. 9).
Core competencies "Core Competencies (CC) are the set of the most strategically significant and value-
creating skills within a discipline, a service, or an organization" (CAPC Manual, 2005, para. 1).
Corporate governance Unmanaged risk can cause severe damage to the future CRM system hence a risk
analysis in terms of finance, IT, people should be at place in advance. Customer communication s group
incorporation (2005),white paper
Creation of stakeholder's team Stakeholder's team is responsible for success or failure of CRM system
initiative. The idea is to have right people from both organizational and functional perspective such as
finance, sales & marketing, supply chain, IT, customer service with a good mix of all the levels of
organizational hierarchy Mento et al(2002),Bligh( 2004)
CRM is a strategy which includes processes, technology and network capabilities that help a company to
organize and manage its relationships with customers Mendoza Luis.E et al (2006),Light (2001),Saloma
nn et al(2005),Bibian o et al(2004)

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Cross-selling "A consumer sales promotion technique in which the manufacturer attempts to sell the
consumer products related to a product the consumer already uses or which the marketer has available"
(Marketing Power, 2005, para. 1).
Customer metrics Defining the many possible metrics depending upon the relationship between customer
and supplier. The factors could be partnership, potential index etc. Winer(2001),
Customer communication s group incorporation (2005)-white paper
Customer Relationship Management (CRM) "A business strategy that focuses on optimizing the value
an organization delivers to customers, and, as a result, the value an organization receives from customers.
This strategy requires redirecting business focus, organizational structure, business metrics, customer
interaction, business practices, and technology capabilities, to optimize the customer experience"
(Nykamp, 2001, p. 200).
Data mining "Extracting hidden predictive information from large databases and automatically
detecting trends and associations hidden in data" (Coker, et al., 2000, p. 208).
Database management system The most important technological factor in CRM. Data mining & data
warehousing should be designed keeping the entire CRM architecture in mind Sandoe.K et al.(2001),Schr
oeck,J.M(2001) ,Pivotal corporation (2004),Winer, R.S and Shankar, V.(2006),
Defining change initiative Identifying the need for change, creating a vision of the desired outcome,
deciding what change is feasible, and choosing who should sponsor and defend it Mento et
al(2002),Bull(2 003)
Deploy the right leader/line of executives Irrespective of organizational hierarchy the right leader can
bridge the gap between internal and external members and can act as both planner and user Mento et
al(2002),Bligh( 2004),Bull(200 3)
Developing implementation plan the plan should include specific goals and provide detailed and clear
responsibilities for strategists, implementers and recipients Mento et al(2002)
Functional areas "Most businesses consist of a number of different departments, each of which has a
specific job or task to do - these are called functions" (BizEd, 2005, para. 1).
Implementation Once the testing becomes successful and the business objectives are fulfilled
the comes another challenging aspect which implementation which brings change into technology,
functionality and above all people Mento et al(2002)
Infrastructure (IT) It's essential to evaluate existing IT infrastructure and the required up gradation to
implement new or modified CRM system Pivotal Corporation (2004)-white paper,Winer, R.S and
Shankar, V.(2006),
Key Processes A process in CRM is a sequence of activities performed by people with help of system in
order to satisfy a need or to solve a specific problem Winer(2001),C Salomann et al(2005)
Loyalty management, also known as customer retention management, can be defined as the planning,
realization and controlling of measures, which aim at the optimization of the duration and intensity of
customer relationships. Salomann et al(2005), Light b (2001)
Mission Gives a clear demonstration of a specific business, its functions, customers and current situation.
Greenberg(200 4)
Monitoring system design n Monitoring the customization of CRM software as per initial business
process analysis to smoothen the alignment of CRM solution with the business objectivePivotal
Corporation (2004)-white paper,MicroStr atgey(1999), Kim,H.W(2004 )
Motivations Creating short-term wins as a way to motivate employees is critical during a
long change effort Kotter(1995) cited Mento et al(2002)
Operational effectiveness Maintain acceptable levels of operational effectiveness in all key processes and
activities and add some enduring advantages which together lead to obtain competitive advantage
Bligh(2004)
Organizational approaches that allow for different customer centric business processes to work together
seamlessly in pursuit of optimal customer service Bligh (2004), Light b (2001)

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Performance measure Continuous evaluating on the impact of CRM system on business processes such as
supply chain, marketing etc. It's important to evaluate how these processes create a smooth work flow
management (WFM) under the new environment. Customer communication s group incorporation
(2005)-white paper
Process- Business objective integration Once the business processes are redesigned and networked using
technology, naturally the business objective of building an efficient CRM system is as well achieved
which is the mission statement Mashari and Zairi(1999)
Product leadership Service/Product innovation and personalization aim at creating newest and most
unique service/product helping businesses stay ahead of competitors Bligh(2004), Peppers and
Roggers(2003)
Project management Whilst change management is needed for virtually all CRM initiatives regardless of
the scale of the CRM initiative, project management has increasing relevance as the
size and complexity of CRM initiatives increase. It helps to set a time frame, resources, plan to
implement CRM system in phases. Keeps track of the entire implementation plan in an organized way.
Payen and Frow (2005)
Sales Force Automation "The process of using technology to automate certain functions of sales to
better meet the demands of customers and to build revenue" (BitPipe, 2005, para. 1).
Service management can be referred to as planning, realization and controlling of services offered in the
after-sales phase Salomann et al(2005), Light b (2001)
Technology- Process integration To achieve real implementation of the CRM strategy it is important to
have the right technology for automating and improving the business processes. Role of technology in
CRM system is to enable redesigning and networking the business process for a smooth work flow across
customer centric activities (service, support and management) Mashari and Zairi(1999)
The aims of sales management are to find out the needs of potential or existing customer to provide
possible alternatives for the satisfaction of the identified needs Salomann et al(2005),Bligh (2004),Brewto
n(2002), Light b (2001)
The main focus of market research is the systematic design, collection, analysis and reporting of data and
results relevant Salomann et al(2005), Light b (2001)
Up-selling - "Proactively increasing the size of a customer's purchase by encouraging the purchase of a
more expensive item or the purchase of an accessory. In service industries, up-sell usually translates to an
increase in the rate of usage...over a defined period of time" (Nykamp, 2001, p. 206).
Vendor - "The seller of software products. Vendors are typically value-added resellers of products that
may be bundled with other products and services, such as training. In some cases, the vendor and
developer are one company" (Bergeron, 2002, p. 215).
Vision A set objective based upon mission statement, more inspiration and goal oriented philosophy lie
within organizational behavior Greenberg(200 4)

Table: CRM Initiatives

360-degree multiple-rater process is implemented McGovern and Panaro, 2004


Action plans are developed for each performance Siebel White Paper, 2004
metric (to declare successes, address performance
gaps)
Additional staffing bandwidth is gained via Markstrom, 2002
contracted positions
Adequate staff is employed during implementation Markstrom, 2002
All affected users attend training Kale, 2005, Kros and Molis, 2004
All functional areas within the enterprise are Adidam and Sindhay, 2001, Dyche, 2002,
involved in change process Foreman, 2004, Kale, 2005, Koslowski, 2004,

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Markstrom, 2002, Neville and Mohally, 2004,


Siebel White Paper, 2004
All individuals affected by the CRM are informed of Adidam and Sindhay, 2001, Atum White Paper,
how their work will change, how the CRM will help 2003, Chen and Popovich, 2003, Kale, 2005, Kros
them and Molis, 2004, Markstrom, 2002, Neville and
Mohally, 2004
An executive is responsible for each major change Kale, 2005, Siebel White Paper, 2004
process
Attention is paid to non-verbal communication Siebel White Paper, 2004
Baseline is established, against which to compare Siebel White Paper, 2004
results
Buy-in from top management is achieved Adidam and Sindhay, 2001, Barnes, 2001, Corner
and Rogers, 2004, Dyche, 2002 Kale, 2004, Kale,
2005, Kros and Molis, 2004, Neville and Mohally,
2004, Pries and Stone, 2004, Riseley, 2004, Siebel
White Paper, 2004
Change agents are identified Brown, 1999, Gordon, 1998, Kale, 2005
Change becomes part of the business plan Neville and Mohally, 2004
Change goals are clear are used as guidelines by Pries and Stone, 2004, Siebel White Paper, 2004
employees and other stakeholders
Change is marketed like a commodity Siebel White Paper, 2004
Change plans are allowed to change, if needed Pries and Stone, 2004
Check points (of change) are established Siebel White Paper, 2004
C-level (CEO, CIO, CFO) sponsorship is gained Atum White Paper, 2003, Brown, 1999, Chen and
Popovich, 2003, Kale, 2004, Siebel White Paper,
2004
Communication between departments is facilitated Adidam and Sindhay, 2001, Chen and Popovich,
2003, Neville and Mohally, 2004, Siebel White
Paper, 2004
Compelling case for change is built and presented Foreman, 2004, Heil, Parker and Stephens, 1999
Competence center is implemented early in the Neville and Mohally, 2004
project
Content experts are identified Kale, 2005
CRM champion is identified Atum White Paper, 2003, Bergeron, 2002, Brown,
1999, Chen and Popovich, 2003, Corner and
Rogers, 2004, Gordon, 1998, Markstrom, 2002,
Neville and Mohally, 2004, Siebel White Paper,
2004
CRM help-desk calls are categorized and trended Markstrom, 2002

CRM implementation is made to be a fun project Markstrom, 2002


CRM is extended to business partners Koslowski, 2004
CRM processes and culture are reevaluated after Adidam and Sindhay, 2001
implementation
CRM project ownership is transferred to every level Adidam and Sindhay, 2001, Atum White Paper,
of the organization 2003, Kale, 2005, Koslowski, 2004, Neville and
Mohally, 2004, Siebel White Paper, 2004
CRM system is designed to be useful to the end-user Bygstad, 2003, Corner and Rogers, 2004, Siebel
White Paper, 2004

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CRM usage patterns are closely monitored Compton, 2004, Dyche, 2002
CRM vision is shared in formal document Corner and Rogers, 2004, Kale, 2005
CRM workflow is designed around the users Atum White Paper, 2003
workflow
Cultural differences between geographical areas are Adidam and Sindhay, 2001
considered
Culture is changed to adapt to CRM Adidam and Sindhay, 2001, Chen and Popovich,
2003, Kale, 2004, Pries and Stone, 2004, Riseley,
2004
Current organizational culture is studied and Adidam and Sindhay, 2001, Bygstad, 2003, Pries
understood and Stone, 2004
Current processes are evaluated Adidam and Sindhay, 2001, Atum White Paper,
2003
Current structures propensity for change is Brown, 1999, Bygstad, 2003
investigated
Customer-centric culture is created Adidam and Sindhay, 2001, Atum White Paper,
2003, Brown, 1999, Chen and Popovich, 2003,
Dyche, 2002, Foreman, 2004, Kale, 2004, Kale,
2005, Mack, Mayo and Khare, 2005, Markstrom,
2002, Pries and Stone, 2004, Siebel White Paper,
2004, Strauss and Seidel2004, Thompson, 2000,
Zoltners, Sinha and Zoltners, 2001
Customer-interaction metrics are promoted Siebel White Paper, 2004
Customer-satisfaction metrics are added to Siebel White Paper, 2004
performance reviews
Decision support tools are used in change Bergeron, 2002
management process
Departure from departmental silos takes place Adidam and Sindhay, 2001, Kale, 2005
e-Learning and CBT are blended with instructor- Compton, 2004
based training
e-Learning and Computer Based Training Bergeron, 2002, Compton, 2004
(CBT) are utilized for flexibility
Employees skills are redefined Siebel White Paper, 2004
End-user (peer) level sponsorship is gained Markstrom, 2002
End-user buy-in is gained Adidam and Sindhay, 2001, Corner and Rogers,
2004, Kale, 2004, Kale, 2005, Markstrom, 2002,
Meltzer, 2004, Neville and Mohally, 2004, Pries
and Stone, 2004, Siebel White Paper, 2004,
Thompson, 2000, Zoltners, Sinha and Zoltners,
2001
End-users are involved in the CRM project from the Neville and Mohally, 2004
start
Existing departmental and geographic structures are Kale, 2005
evaluated
Experienced professional trainers are employed Compton, 2004, Meltzer, 2004
Formal training is put in place, with documented Siebel White Paper, 2004
training collateral
Formal training program is in place Compton, 2004, Kale, 2005, Siebel White Paper,
2004

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Future culture is defined Adidam and Sindhay, 2001, Pries and Stone, 2004
Help-desk Service Level Agreements (SLAs) are set Markstrom, 2002
Horizontal linking mechanisms are put in place to Kale, 2005
improve organizational coordination
Human Resources is involved in training Kale, 2005
Incentive systems (including evaluation, Bygstad, 2003, Chen and Popovich, 2003, Kale,
compensation, rewards) are changed to align to CRM 2005, Mack, Mayo and Khare, 2005, McGovern
culture and Panaro, 2004, Siebel White Paper, 2004,
Strauss and Seidel2004
Internal marketing program is in place Kale, 2005, Siebel White Paper, 2004
Investment in training is substantial Chen and Popovich, 2003, Kale, 2005, Mack,
Mayo and Khare, 2005, Markstrom, 2002, Zoltners,
Sinha and Zoltners, 2001
Key players in CRM project are identified Foreman, 2004, Kale, 2005, Pries and Stone, 2004,
Siebel White Paper, 2004
Key players roles are defined Atum White Paper, 2003, Chen and Popovich,
2003, Kale, 2005, Meltzer, 2004, Neville and
Mohally, 2004
Management actions are consistent with promoted Barnes, 2001, Curry and Curry, 2000, Markstrom,
change Walk the talk 2002, Siebel White Paper, 2004
Management empowers end-users in decision- Barnes, 2001, Brown, 1999, Dyche, 2002, Heil,
making Parker and Stephens, 1999, Zoltners, Sinha and
Zoltners, 2001
Management is trained in CRM knowledge Curry and Curry, 2000, Meltzer, 2004
management
Management personally communicates change to Brown, 1999, Strauss and Seidel2004
end-users
Managements behavior influences perceptions, adds Markstrom, 2002, Neville and Mohally, 2004,
credibility to project Siebel White Paper, 2004
Mentor programs are put in place Siebel White Paper, 2004
Metrics are established at the outset of CRM project Siebel White Paper, 2004
Mind-set training is part of curriculum Chen and Popovich, 2003, Compton, 2004, Kale,
2005, Kros and Molis, 2004, McGovern and
Panaro, 2004, Meltzer, 2004, Siebel White Paper,
2004
Modest, low-profile changes are attempted Bygstad, 2003, Corner and Rogers, 2004, Dyche,
2002, Riseley, 2004, Siebel White Paper, 2004
Momentum and pace of change are measured during Siebel White Paper, 2004
all stages of change
Need for change is created negative consequences Neville and Mohally, 2004, Siebel White Paper,
of not changing are articulated 2004, Thompson, 2000
New hires are continually brought up to speed Compton, 2004
Organizational changes to take place are defined Atum White Paper, 2003, Bygstad, 2003,
McGovern and Panaro, 2004, Neville and Mohally,
2004, Pries and Stone, 2004, Siebel White Paper,
2004
Organizational structure is realigned to foster Chen and Popovich, 2003, Kale, 2005, Siebel
communication White Paper, 2004
Owner is assigned to each performance Siebel White Paper, 2004

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metric
Performance metrics are aligned with CRM goals Siebel White Paper, 2004
Performance metrics for affected positions are McGovern and Panaro, 2004, Siebel White Paper,
modified 2004
Personnel changes during implementation are Pries and Stone, 2004, Zoltners, Sinha and
promptly dealt with Zoltners, 2001
Policies and processes are changed aligned with Siebel White Paper, 2004
CRM
Post-training knowledge is evaluated Markstrom, 2002
Power users do not replace, but rather supplement Compton, 2004
training
Process change takes place before technology change Adidam and Sindhay, 2001, Compton, 2004,
Riseley, 2004
Processes are redesigned to facilitate change Bygstad, 2003
Project managers are identified Kale, 2005
Quantifiable metrics in CRM areas (such as Sales, Siebel White Paper, 2004
Service, marketing) are put in place
Resistance efforts are identified and taken into Brown, 1999, Heil, Parker and Stephens, 1999,
consideration Pries and Stone, 2004
Roles of change agents are identified Kale, 2005, Markstrom, 2002, Siebel White Paper,
2004
Shared cross-functional goals are established Corner and Rogers, 2004, Foreman, 2004, Kale,
2005, Neville and Mohally, 2004, Siebel White
Paper, 2004
Shift from individual to team-based awards Kale, 2005
Sponsor group defines approaches and tools for Kale, 2005
driving change
Sponsor group is developed Dyche, 2002, Gordon, 1998, Kale, 2005, Mack,
Markstrom, 2002, Mayo and Khare, 2005, Neville
and Mohally, 2004, Siebel White Paper, 2004
Stakeholders are managed, especially those that are Siebel White Paper, 2004
resisting change the most
Steering committee is identified Bergeron, 2002, Brown, 1999, Dyche, 2002, Kale,
2005, Siebel White Paper, 2004
Strategic importance of CRM to the enterprise is Markstrom, 2002, Meltzer, 2004, Neville and
articulated Mohally, 2004, Siebel White Paper, 2004
Strategy and outcome are defined at the beginning of Adidam and Sindhay, 2001, Pries and Stone, 2004,
the project Riseley, 2004, Siebel White Paper, 2004
Structure is visibly changed to promote change Siebel White Paper, 2004
Success criteria for individual positions are modified McGovern and Panaro, 2004
Team leader role is defined Kale, 2005, Siebel White Paper, 2004
Third party consultants may be hired to manage Bergeron, 2002
change
Top management takes lead in organizational change Chen and Popovich, 2003, Corner and Rogers,
2004, Dyche, 2002, Kale, 2005, Neville and
Mohally, 2004, Pries and Stone, 2004, Siebel
White Paper, 2004
Training commences before launch of CRM project Compton, 2004, Kale, 2005, Neville and Mohally,
2004, Siebel White Paper, 2004
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Training incentives are provided Kale, 2005, Zoltners, Sinha and Zoltners, 2001
Training is designed with the customer in mind Compton, 2004, Kale, 2005, Mack, Mayo and
Khare, 2005
Training is focused on business processes Markstrom, 2002
Training is kept simple Markstrom, 2002
Training is ongoing Bergeron, 2002, Brown, 1999, Compton, 2004,
Kale, 2005, Markstrom, 2002, Meltzer, 2004,
Neville and Mohally, 2004, Pries and Stone, 2004,
Siebel White Paper, 2004, Strauss and Seidel2004
Training logistics are calculated at the beginning of Markstrom, 2002
the project
Training objectives are defined Compton, 2004, Kale, 2005, Markstrom, 2002,
Pries and Stone, 2004, Siebel White
Paper, 2004
Training of project team takes place in advance Neville and Mohally, 2004
Training plan looks years into the future Compton, 2004
Training schedules and CRM implementation are Compton, 2004
loosely linked
Training style/method may vary based on each user Compton, 2004
community
Two-way communication between teams takes place Neville and Mohally, 2004, Siebel White Paper,
2004
Upper management visibly supports middle Curry and Curry, 2000
management through change
User fears are addressed Atum White Paper, 2003, Bergeron, 2002, Corner
and Rogers, 2004, Markstrom, 2002, Pries and
Stone, 2004, Zoltners, Sinha and Zoltners, 2001
User influence on the system is selfevident Corner and Rogers, 2004
User input is requested Atum White Paper, 2003, Corner and Rogers,
2004, Kale, 2004, Kale, 2005, Mack, Mayo and
Khare, 2005, Neville and Mohally, 2004
User performance on CRM system is constantly Compton, 2004
monitored
Users are convinced that CRM system makes sense Bygstad, 2003, Chen and Popovich, 2003, Neville
and Mohally, 2004, Siebel White Paper, 2004
Users are shown how to use CRM within their Markstrom, 2002
regular business processes
Users have input into the type of training that is Compton, 2004
delivered
Users learn not only how system is used, but why it Compton, 2004, Corner and Rogers, 2004,
is used Foreman, 2004, Kale, 2005, Kros and Molis, 2004,
Markstrom, 2002, Meltzer, 2004, Neville and
Mohally, 2004, Siebel White Paper, 2004
Variety of communication methods are employed at Siebel White Paper, 2004, Zoltners, Sinha and
all times (email, portals, voice mail broadcasts, Zoltners, 2001
memos, etc)
Well thought-out communication plan is in place Adidam and Sindhay, 2001, Brown, 1999, Chen
and Popovich, 2003, Corner and Rogers, 2004,

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Foreman, 2004, Gordon, 1998, Meltzer, 2004,


Neville and Mohally, 2004, Siebel White Paper,
2004, Strauss and Seidel2004, Thompson, 2000
Zoltners, Sinha and Zoltners, 2001
Whats in it for me question is addressed Atum White Paper, 2003, Corner and Rogers,
2004, Markstrom, 2002, Meltzer, 2004, Siebel
White Paper, 2004
Workshops are instituted to foster change Brown, 1999

Proposed key performance indicators for the successful CRM adoption


360 degree appraisal
accurate accounting
After sale services
Alternatives management
Availability
Back office system
Balance Score card
Be aware of boundaries
Benchmarking
BPR
Brand equity
Brand Orientation
Budget
Business Analysis
Business Intelligence
Business Policy
Change Management
Channel optimization
checkout services
Clear Accountability
clear business goals
clear customer acquisition, development, retention and reactivation Strategy
Clear responsibility
Coaching
Commitment
Community Services
Competency management
Competition intensity
competitive advantage
competitor management
Complaint management
comprehensive database
Conflict Management
Connectivity
Consistency
consumer behavior
consumer psychology

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contact management
Continuous Improvement
Continuous improvement of process
controlling process
Coordination and cooperation
Corporate Culture
Corporate governance
Corporate strategy
corrective measures
cost management strategy
Customer Audit
Customer bonding
Customer Branding
Customer care
customer communications
Customer Effectiveness
Customer efficiency
Customer Engagement
Customer equity
Customer expectations
customer feedback
Customer identification
customer information
customer information management systems
Customer Intelligence
Customer is god
Customer is king
Customer meetings
customer metrics
Customer Orientation
customer perceptions
Customer portfolio
Customer Pyramid
Customer safety & security
customer satisfaction
Customer segmentation
Customer support systems
Customer valuation
customer welfare
Customer-centric performance standards
customers priority
customized offerings
Dedicated employee
Demand management
Desire of customer intimacy
Discount facility
diverse and extensive range of services/products

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Diversity Management
Documentation
easily approachable
emotional bonding/relational bond
Emotional Intelligence
Employee Attitude
Employee bonding
Employee Branding
Employee engagement
Employee Satisfaction
Employee support systems
Employee training/Trained staff
Environment friendly
ERP
Establishing performance measures
Establishing productivity measures
Establishing profitability measures
exchange services
Experience management
fair dealing/ honesty
faster decision-making process
Feedback
Flexibility
Forecasting management
Functional integrations
General awareness
Government support
Help Desk
Home Services
individual attention
Information management
Infrastructure
Innovation
Innovation orientation
Innovative use of technology
integrated internally
Integrated marketing communication
Integrated systems
Integrated view of the customers
Intelligent data mining
key customers knowledge
Key Customers management
Know your customers
knowledge dissemination
knowledge learning
Knowledge Management
Lead management

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leadership
Learning
Learning Organization
lifetime value of each customer
Listening
long-term customer relationships
Loyalty
Manners
Market orientation
Marketing expertise
Marketing research
Mature behavior/Understanding
Measurement
Mentoring
Modernization
Monitoring
Motivation
Negotiation process
Online support systems
Order management
Organization Design
Organization Learning
Organization Structure
Organizational characteristics
Organizational participation
Organizational readiness
Personal Integrity
price sensitivity
privacy
Product design
Personalization
prompt service
Public participation
Publicity
Quality management
Quality of Life
recognition policy
Research and development
resistant to change
Resources
Responsiveness
revenue management strategy
Reward Management
right distribution channels
Right hardware
right positioning
right segmentation

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Right software
Right technology
Sales force automation
Sense of ownership
Sensitization
Service Differentiation
Simplicity
Six sigma
Social gathering
Social responsibility
Social support systems
Specialization
Stakeholders management
Standardization
Strategic application of customer data
Strategic communication
strategic management
Strategic relationship marketing
Supply Management
Team building
Technical Expertise
Termination policy
Time
top management team
Total quality management
Training and Development
transparency
Trouble shooting process
Trust
two-way communication
user friendliness
Value
vision
waste management strategy
well organized
Willingness to communicate
Willingness to invest resources, time etc
Willingness to share
Work life balance

Discussion and conclusion


Customer Relationship Management (CRM) which aims at enabling organizations to realize a customer
focus is believed to be useful and has risen to the agenda of many organizational strategies. It can be seen
as an approach to marketing that has its origins in Relationship Marketing (RM). This study provides a
conceptual framework for CRM adoption and identifies

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key drivers for the adoption and its effect. It makes a contribution to the limited literature on the adoption
of CRM issues which offers practitioners insight into the development and implementation of CRM.CRM
Adoption process According to Kim and Kim (2009):

Customer Acquisition
Customer Retention
Relationship Expansion
Customer Divestment

CRM is gaining interest because of its focus on the customer and thus its potential for increasing revenue.
It enhances the ability of a firm to compete and to retain key customers. The opportunities for future
research for this paper should continue the empirical research to test the proposition with the sample that
can show the related direction of the proposition.

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