Noor - 2015 - Payne's Five Forces Model

For the course
Customer Relationship
Management
Introduction
❖ CRM is the philosophy, policy and coordinating strategy
mediated by a set of information technologies, which
focuses on creating two way communications with
customers so that firms have an intimate knowledge of
their needs, wants, and buying patterns. (Z. Lun, L.Jinlin,
and W. Yingying-SOLI2008)
❖ Purpose of CRM is to efficiently and effectively increase the

acquisition and retention of profitable customers by
selectively initiating, building and maintaining appropriate
relationship with them.
Introduction
❖ Increasing powerful computer hardware, software
and E service help companies to target their most
promising customer opportunities more
effectively.
❖ Success can not be achieved only by purchasing of
CRM software solution, an integrated approach is
needed because traditional organization is usually
unwilling to change behavior in the context of too
many technological choices.
The Origins and Role of CRM
 CRM is based on the principles of relationship marketing
which is a modern marketing concept.
 Relationship theory appeared in the 1970s and earlier
 In 1983, Berry’s paper first launch the term relationship as
attracting, maintaining and enhancing customer
relationship.
 At the time 1990s. Relationship managements interest has
increased due to put emphasise on one to one marketing
concept.
Adrian Payne and Pennie Frow’s Customer
Relationship Management: from Strategy to
Implementation article
focus on the concept that CRM focus primarily
on the customer and effective CRM process requires
cross functional approaches.
CRM strategy and Cross Functional
Process
 CRM strategy can be successfully implemented when
strategy is build under a small number of cross
functional(horizontal) process instead of traditional
large process.
 Developing a cross functional approach to CRM
requires identifying its key processes and their major
components.
 Process should be driven by key performance objective
based on customer needs
CRM Strategy and Implementation
Model
 This article highlights that the effective management of
customer relationships involves many different and
interlinked aspects.
 Though many literatures on CRM does not emphasise its
cross functional nature, it is a critical component of CRM
that should form the basis of any CRM implementation
model.
 The authors of this article developed a model using an
interaction research approach.
The model has two main
components
Key CRM Implementation Core cross functional CRM
elements processes
 CRM Readiness assessment  Process 1: Strategy
 CRM Change Management
Development
 Process 2: value Creation
 CRM Project Management
 Process 3: Multichannel
 Employee Management integration
 Process 4: Information
Management
 Process 5: performance
Assessment
Process 1:The strategy development process
Business Custome
strategy r strategy Determining the
Requires little appropriate level of
commentary segmentation
granularity
Identifying key
Examination of customer segments
industry and and building
competitive strategies to
characteristics address these
customers
Process 2:The value creation process
Taking the output Building a
of the strategy program that
development extracts and
process delivers value
Target specific
customer
Value the
customer
receives Develop value
proposition
65% talk about this
Only 5% has the basic
structure
Value the
company
receives Integrated program
Customer acquisition
Customer retention
Cross selling
Up selling
Process 3: The multi channel integration process Best
combination
of channels
Managing the
Ensure
Create & complexity of customer
present the
single view of channels in experiences
within
customers profitable and channel
integrated manner
Customer
interactions
with multiple
channels
 Interaction channels: Sales force, outlet, telephony, direct marketing, e

commerce and m commerce
Process 4: The information management
Data process
repository
Combinatio Info
n of
relevant managemen IT systems
data t process
The collection
& collation of
all
information
Process 5: The performance assessment process
Macr
Micro Performance
o monitoring 1.How can
Shareholder’s result View we create increased
view 1.Employee value
profits?
2.How should we set
2.Customer value
standards, develop
3. Shareholder value metrics, measure our
results and improve our
performance?
Key CRM implementation elements
 CRM readiness assessment: A CRM readiness assessment can help
managers assess the overall position in terms of readiness to progress
with CRM implementation and to identify how well developed their
organization is relative to other companies.
 CRM change management: To implement a large-scale and complex
CRM initiative, companies will typically have to undergo substantial
organizational and cultural change.
 CRM project management: CRM project management has increasing
importance as the size and complexity of CRM initiatives increase.
 Employee engagement: Employees have a crucial role to play within the
CRM processes and implementation activities outlined and an
organization cannot develop and operate appropriately customer-
focused systems and processes without motivated and trained
employees.
Research Limitations
❑ Research results are not applicable for small or medium
sized companies
❑ The research does not explore application of CRM strategy

in non business areas such as the government and not-for-
profit sectors
❑ Thirdly, The research is not customized for any specific

sector
❑ Emphasizes on relational aspect more than transactional

aspect
Future Research
❑ Particular aspects of the strategy development process in the
model would benefit from research. Such as: Identified problems
regarding CRM strategy implication, Viewing CRM as a
technology initiative…
❑ The value creation process represents opportunities for further

work
❑ Work is needed to identify the relative costs and economics of

different channels in a CRM environment, including migration
patterns between channels
❑ Within the information management process, more systematic

studies of IT implementations of CRM solutions are proposed.
Future Research
❑ More work is needed on the application of tools such as the
service profit chain and in extension of the balanced
scorecard concept
❑ More work is needed in the development of a
comprehensive audit tool
❑ Empirical investigation of CRM change management is
warranted within and across sectors
❑ Work raises many issues worthy of examination and in
particular the value of studying CRM project successes and
failures
❑ Employee engagement and people related issues are area
for future research.
Managerial Applications
❑To help in surfacing problematic issues.
❑To plan the key components of a CRM strategy and to
identify which process components of CRM should be
receive priority.
❑To undertake a range of benchmarking activities.
❑To create a platform for change in a company.

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For the course

❖ Purpose of CRM is to efficiently and effectively increase the

 Interaction channels: Sales force, outlet, telephony, direct marketing, e

❑ The research does not explore application of CRM strategy

❑ Thirdly, The research is not customized for any specific

❑ Emphasizes on relational aspect more than transactional

❑ The value creation process represents opportunities for further

❑ Work is needed to identify the relative costs and economics of

❑ Within the information management process, more systematic

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