The Use of Customer Relationship Management (CRM) by Manufacturing Firms in Different Industries: A Malaysian Survey

Article excerpt

With the development of technology, reaching customers and achieving sales are no longer a difficult task for an organisation. CRM promises to help companies understand their customers better and as a result to know which customers to retain and which can be left. In this way it can help companies to limit their spending. This paper investigates the use of CRM by manufacturing companies across different sectors of the Malaysian economy. A survey of 120 firms from six different industrial codes found that the objectives for CRM and the effort made to implement CRM was not the same in firms from the different sectors. Implications of these findings for managers are discussed.

Introduction

The business environment has changed significantly since the turn of the century, especially with respect to customer-orientated businesses. As competition becomes stronger, companies turn to new and more efficient techniques to help them provide better services to potential as well as existing customers.

The implementation of customer relationship management (CRM) has been viewed as a powerful competitive weapon among organisations. Organisations that have adopted CRM have the potential, inter alias, to increase plant revenue, to reduce engineering lead-time, reduce labour cost, offer better quality products and organise the firm in a much more systematic approach. Management also realises that an improved cost justification approach is required that will allow them not only to evaluate CRM as it impacts the readily quantifiable aspects of their total business, but to view it as a strategic weapon that can be used to attain leadership in the new global economy.

Customer Relationship Management (CRM) is one of the fastest growing trends in ecommerce in recent years. The concept of managing relationships with customers is not new as companies have been interfacing with customers since the beginning of trade. In fact, a good starter definition of CRM is

"the infrastructure that enables the delineation of and increase in customer value, and the correct means by which to motivate valuable customers to remain loyal - indeed to buy again (Dyche, 2002)"

CRM has been defined in a variety of different ways. This diversity of definitions is a result of differences in perspective. The first is based on a business perspective of increasing competition that is driving companies to focus on their customers. The second is based on the relatively new phenomenon of the integration of previously separate applications such as Sales Force Automation and Customer Service Support into Enterprise Applications. The third is a result of software vendors re-positioning their information technology products and services under the CRM umbrella, to take advantage of the fast growth of the CRM market. For the purposes of this paper, we propose the following definition: CRM is a technology-enabled business strategy whereby companies leverage increased customer knowledge to build profitable relationships, based on optimising value delivered to and realized from their customers; and from automating and improving the businesses processes in the areas of sales, marketing, customer service and support.

CRM is about more than simply managing customers and monitoring their behaviour. CRM has the potential to change a customer's relationship with a company and increase revenues in the bargain. The most forward-thinking companies have recognised from past failures that CRM smacks of strategy and that technology alone cannot address high-profile issues such as new-customer acquisition and web-based marketing. To these companies, CRM is much more than a stand alone project accounted for by a single organisation, it is a business philosophy that affects the company at large.

Survey of Literature

CRM is important because of changes occurring in the competitive environment. The use of CRM applications can lead to improved customer responsiveness and to a comprehensive view of the entire Customer Life Cycle. …