The Innovative Approach to Relationships with Customers

By Korsakiene, Renata | Journal of Business Economics and Management, March 2009 | Go to article overview

The Innovative Approach to Relationships with Customers


Korsakiene, Renata, Journal of Business Economics and Management


1. Introduction

The intense competition encourages business companies to seek ways, which would allow them to gain and maintain competitive position in the market. Nowadays customers and customer relationship management are seen as the most important assets of business companies. Therefore, customer relationship management is related to long-term success in the market.

Customer relationship management is oriented toward current customers and allows to attract new customers. The company's goals, i.e. higher performance, quality of services, loyalty of customers, etc. motivate the implementation of customer relationship management (Tvaronaviciene, Tvaronavicius 2006; Tvaronaviciene, Degutis 2007). However, companies, striving to implement customer relationship management, encounter various problems. First of all, country's infrastructure and marketing, institutional development issues impact the implementation of customer relationship management. Hence, uneven growth of countries is one of the most important preconditions impacting CRM implementation (Tvaronavicius, Tvaronaviciene 2008; Tvaronaviciene et al. 2008). On the other hand, company's inertia, little understanding of customer relationship management, poor customer relationship management skills, etc. impact the successful adoption of customer relationship management.

The successful adoption of customer relationship management is seen as the relevant issue for Lithuanian companies, which do not have customer relationship management experience and encounter problems raised by hostile business environment. The aim of this paper is to analyse customer relationship management concept in scientific literature, to reveal infrastructure and institutional issues, to analyse internal issues which restrict implementation of customer relationship management. Presented investigation is based on questioning of real estate companies which encounter the problems of economy slowdown.

2. The definition of CRM concept

The customer relationships raise opportunities for companies that need to be exploited. De Wulf et al. (2001) point out that a key step of relational approaches to marketing has coincided with the development of customer relationship management. Baran et al. (2008) claimed that "as the acronym indicates", the focus of CRM is the customer, particularly existing ones. All scholars almost unanimously agree that Customer Relationship Management (CRM) is a relatively new discipline. Therefore various definitions of CRM were proposed.

According to Paas and Kuijlen (2001) the consensus on the meaning of CRM has not been achieved. The software vendors and business consultants have prompted the vast interest of CRM in the scientific literature. Marketing scholars analyse different aspects of this phenomenon in their works (Plakoyiannaki 2005). Notably, there have been several attempts to propose different forms of CRM. Reinartz et al. (2004) distinguished three different possible levels of CRM: (1) functional, (2) customer facing, and (3) company-wide. Other scholars proposed operational, collaborative and analytical CRM (Iriana, Buttle 2006). Operational CRM is seen as "the business processes and technologies that can help improve the efficiency and accuracy of day-to-day customer-facing operations." Therefore it includes sales, marketing, and service automation. Collaborative CRM is seen as "the components and processes that allow a company to interact and collaborate with customers." Therefore it includes voice technologies, Web storefronts, e-mail, conferencing and face-to-face interactions. Analytical CRM "provides analysis of customer data and behavioural patterns to improve business decisions." This includes the underlying data warehouse architecture, customer profiling/segmentation systems, reporting, and analysis (Iriana, Buttle 2006).

Richards and Jones provided two categories of definitions: strategic and operational (Richards and Jones 2008). …

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