Crm Lit Review

Crm Lit Review

Literature review

A key principle of CRM is the retention of customers through various means and practices to ensure repeated sales from existing customers. This is carried out by satisfying needs above those of competing companies.

Payne and Frow (2005) discuss business having a lack of understanding of CRM can lead to the failure of CRM strategies. For example a banks viewing CRM as just a technology solution or a fragmented based solution. Technology has an important role in CRM but CRM can fail due to viewing technology as an initiative.

There have been a vast amounts of definitions of what the research think CRM is (shown in the appendix) which reflects Payne and Frows view of having a fragmented view of solutions; such as Find definitions and add to appendix.

To further illustrate the view point the figure below shows The CRM Continuum Model (Payne and Frow, 2005:168).

The model discusses how research definitions, business etc view CRM as a narrow view either as CRM perspective 1 or CRM perspective 2.Perspective 1 is discussed as just technology solution and on the other side of the scale perspective 2 is customer orientated it and internet solution. Perspective 3 is the more strategic and advanced approach to CRM and this is where the banks should position themselves when carrying out a strategic plan or projects to retain and create stronger customer relationships.

Payne and Frow (2005) found five generic processes in order for CRM to achieve its goal. These are (1) the strategy development process, (2) the value creation process, (3) the multichannel integration process, (4)the information management process,(5)the performance assessment process.

Ahmad (2002:150) also discusses similar strategy in the form of six dimensions on how existing customer should be treated in order to keep them happy and ensure the customers devotion towards the business;

1. Product and service design

2. pricing

3. sales

4. advertising

5. direct marketing; and

6. Distribution.

Rajan's model (show in the appendix also, recognised the change strategy need in order for the banks to retain their customers and satisfy their needs. His conclusions may be summarised into four categories:-

1. Changes to Product (Service) Range.

2. Changes to Organisational Structure.

3. Changes to Organisational Culture.

4. Changes to Staff Recruitment and Management Development.

Even though there have been several different views in how to make sure CRM is achieved successfully and making sure the strategy is not a fragmented solution, as all of their point are as important as the other. But Multi channel has been discussed as an important process in Payne and Frow,Rajan and Ahmad research paparers

But they also discuss survival of the business is dependent upon the formation of a new type of employee, the ‘knowledge worker'. For example internet banking