A Strategic Framework for Customer Relationship Management .. and Payne, Adrian F.T. (), “Customer Relationship Management in Financial Services. Adrian Payne & Pennie FrowA Strategic Framework for Customer Relationship Management In this article, the authors develop a conc. A Strategic Framework for Customer Relationship Management Author(s): Adrian Payne and Pennie Frow Source: Journal of Marketing, Vol. 69, No. 4 (Oct.
Participantsat severalacademic roles,includingIT and marketing. Withevolvingversionsof theframework, we combineda Customerstrategy involvesexaminingtheexistingand synthesis of relevant literaturewith field-based interactions potentialcustomer base andidentifying whichformsofseg- the involving groups.
The framework went through a con- mentation are mostappropriate. This involves Thisconceptualframework illustratestheinteractive set decisionsaboutwhether a macro,micro,or one-to-one seg- of strategicprocesses thatcommenceswith a detailed mentation is approach appropriate Rubin The conceptthatcompetitive advan- ties and the fundamental economiccharacteristics of the tage stems from the creation of value forthe customer and Internetcan enable a muchdeeperlevel of segmentation forthe businessand associatedcocreationactivities the thanis affordable in mostotherchannels e.
In summary, thestrategy literature. For largecompanies,CRM activitywill involve processinvolvesa detailedassessment ofbusi- development collectingand intelligently usingcustomerand otherrele- ness strategy and the development of an appropriate cus- vantdata theinformation process to builda consistently tomerstrategy.
This shouldprovide the enterprise with a superiorcustomerexperienceand enduringcustomerrela- clearerplatform to on which develop and implement its tionships themultichannel integration process.
The itera- CRM activities. The circulararrowsin the The value creationprocesstransforms the outputsof the value creationprocessreflectthe cocreationprocess.
We strategydevelopment process into programs that both now examinethe key componentswe identified in each extractand delivervalue. The threekey elementsof the process. As with our prior work, we used the interaction whatvalue the value creationprocessare 1 determining researchmethodin the identification of these process companycan provideto itscustomer; 2 determiningwhat components. Value vision choice granularity and Strategy Process Business Strategy Strategy Customercustomer Development competitive characteristics?
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The valuecreationprocess involvesa processof cocreationor coproduction, maximiz- is a crucialcomponent of CRM becauseit translates busi- ingthelifetimevalue of customer desirable segments. The value the customerreceives fromthe organization drawson theconceptof thebenefitsthatenhancethecus- tomeroffer Levitt;Lovelock However,thereis Multichannel IntegrationProcess now a logic, whichhas evolvedfromearlierthinking in business-to-business and servicesmarketing, thatviewsthe The multichannel processis arguablyone ofthe integration customeras a cocreatorand coproducer Bendapudiand mostimportant processesin CRM becauseit takestheout- putsof thebusinessstrategy and value creationprocesses Leone ; Prahaladand Ramaswamy; Vargoand themintovalue-addingactivitieswithcus- and translates Lusch These benefitscan be integrated in theform tomers.
However,thereis onlya smallamountofpublished of a value proposition e. The multichannel inte- thecustomer's needs,andthetotalcosttothecustomer over on grationprocessfocuses decisions about what the most thecustomer relationship lifecycle Lanningand Michaels appropriatecombinations of channelsto use are; how to Lanning's laterworkon value propositions ensurethatthecustomerexperienceshighlypositiveinter- reflectsthe cocreationperspective.
However, a more actionswithinthosechannels;and whena customerinter- detailedsynthesis of workin thisarea is neededin further actswithmorethanone channel,howto createand present research. To determine whether thevalueproposition is likelyto resultin a superior customer experience, a companyshould to quantifytherelativeimpor- Channel Options undertake a valueassessment tancethatcustomersplace on the variousattributes of a Today,manycompaniesenterthemarketthrough a hybrid product.
Analyticaltools such as conjointanalysiscan be channelmodel Friedmanand Furey; Moriartyand used to identify customers thatsharecommonpreferences Moran thatinvolvesmultiplechannels,suchas field in termsof productattributes.
Such tools mayalso reveal sales forces,Internet, directmail, businesspartners, and substantial marketsegments withserviceneedsthatare not telephony. There are a growing number of channels by fullycateredto by the attributes ofexistingoffers. Through an iterativeprocess, we categorizedthe many channel The Value the Organization Receives and Lifetime optionsintosix categoriesbroadlybased on thebalanceof Value physicalor virtualcontact see Figure2.
Theseinclude 1 sales force,includingfieldaccountmanagement, service, Fromthisperspective, customer valueis theoutcomeofthe of the ofimproved and personalrepresentation; 2 outlets,includingretail coproduction value, deployment acquisi- includ- tion and retention and the of effective utilization branches,stores,depots,and kiosks; 3 telephony, strategies, traditional telex, and call center Fundamental to thisconceptof cus- ing telephone, facsimile, channelmanagement.
First,itis necessaryto determinehowexisting and e-commerce, includinge-mail,theInternet, and interactive potential customer varies profitability acrossdifferentcus- tomersand customersegments. Second,theeconomicsof digitaltelevision;and 6 m-commerce, includingmobile telephony,short message serviceand textmessaging, wire- customer acquisitionandcustomer retentionandopportuni- less applicationprotocol,and 3G mobile services.
Some ties for cross-selling,up-selling,and buildingcustomer to maximize channelsare now beingused in combination advocacymustbe understood. How theseelementscon- tributeto increasingcustomerlifetimevalue is integralto commercial exposure and for return; example,thereis col- valuecreation. For example, Reichheld and colintegrates telephony Sasser identify thenetpresent value improve- profit mentof retaining customers, and Rustand Zahorik Integrated Channel Management and Rust,Zahorik,and Keiningham outlineproce- Managingintegrated channelsrelieson theabilityto uphold duresforassessingthe impactof satisfaction and quality thesamehighstandards different acrossmultiple, channels.
More recently, researchhas emphasizedcustomer definesan outstanding customerexperienceforthatchan- and Deighton; Hogan,Lemon, nel, theorganization can thenworkto integrate thechan- equity e. Thisconceptis nowbeingembraced relatively analysis,creditscoring,and cus- campaignmanagement in industry by companiessuch as TNT, Toyota'sLexus, tomerprofiling. Oce, and Guinness Breweries,butithas yettoreceivemuch in theacademicliterature.
However,a uses to supportall thoseactivitiesthatinvolvedirectinter- company'sabilityto executemultichannel suc- integration facewithcustomers, includingSFA andcall centermanage- is cessfully heavilydependent on theorganization's ability ment. Back officeapplicationssupportinternal administra- to gatherand deploycustomerinformation fromall chan- tionactivitiesand supplierrelationships, nelsandto integrate itwithotherrelevant information. A key concern Information ManagementProcess aboutthe frontand back officesystemsofferedby CRM vendorsis thattheyaresufficientlyconnected andcocoordi- The information management processis concernedwiththe natedto improvecustomer and workflow.
The keymate- rial elementsof the information management processare Gartnersegmentsvendorsof CRM applicationsand CRM thedatarepository, whichprovidesa corporate memoryof serviceprovidersinto specificcategories Radcliffeand IT customers; systems, which include the organization's Kirkbyand Greenberg and Jacobsen computerhardware,software,and middleware;analysis provide detailed reviews of CRM vendors'products.
The tools; and frontofficeand back officeapplications, which key segments for CRM applicationsare Integrated CRM the support many activities involvedin interfacing directly and Enterprise ResourcePlanningSuite e. The CRM serviceproviders andconsul- The datarepository tantsthatoffer implementation support specializein thefol- providesa powerful corporatememory of customers,an integratedenterprisewidedatastorethatis lowingareas: In largerorganizations, it maycomprisea datawarehouse Agosta; Swift management, organization design, training, human and relateddata martsand databases.
Thereare twoforms resources, and so forth e. The latterstoresonlytheinformation integration e. The needforcomprehensive and scalableoptions has createdscope formanynew productsfromCRM ven- anyinconsistenciesbetweendatabases.
However,despitetheirclaim to be "completeCRM IT Systems solutionproviders," fewsoftware vendorscan providethe fullrangeof functionality thata completeCRM business Information technology systemsreferto thecomputer hard- strategyrequires. Often,technologyintegrationis required ofsharingrelevant customer andotherinformation beforedatabasescan be integrated intoa data warehouse through- out the enterprise and "replicating the mindof the cus- and useraccess can be providedacrossthecompany.
The organization's capacityto scale forfunctional or product-centered departments and activi- existingsystemsor to plan forthemigration to largersys- ties. Furthermore, data analysistoolsshouldmeasurebusi- temswithout disruptingbusiness is operations critical. This kindof analysisprovidesthebasis for theperformance assessment process. Analytical Tools The analyticaltools thatenable effective use of the data warehousecan be foundin generaldata-mining packages Performance AssessmentProcess and in specificsoftware applicationpackages.
Data mining The performance assessmentprocesscoversthe essential enablestheanalysisof largequantitiesof data to discover task of ensuringthatthe organization's strategicaims in meaningful patternsand relationships e. More specificsoftwareapplicationpack- acceptable standardand thata basis forfuture improvement ages includeanalyticaltools thatfocus on such tasks as is established.
Our mance, and performance monitoring, whichprovidesa researchwas based on largeindustrial companiesbecause moredetailed,microviewof metricsand keyperformance thesize and complexity of suchenterprises is likelyto pre- indicators.
We did not examine issues relatedto small or medium-sizedcompaniesand Shareholder Results in thiswork. First,ourworkextendsa managerialperspective build employeevalue, customervalue, and shareholder thatstressestheimportance ofcross-functional processesin valueandhowto reducecosts.
Recentresearchon relation- CRM strategyand contributes to the positioningof the shipsamongemployees,customers, and shareholders has poorlydefinedCRM conceptwithinthe marketing litera- emphasized the need to adopt a more informed and inte- ture. Second,itprovidesa process-based conceptual frame- gratedapproachto exploiting thelinkagesamongthem. The workforstrategic CRM and identifies keyelementswithin serviceprofitchainmodeland relatedresearchfocuseson each process.
Third,it makesa contribution to thelimited establishing therelationshipsamongemployeesatisfaction, literatureon interactionresearch. Finally,theresearchrep- customerloyalty, and shareholder profitability, value e. Organizations also intothedevelopment and implementation of CRM strate- needtofocuson costreduction Two opportunities. To date,this framework has been used by companies costreduction are especiallyrelevantto CRM: The development ofmodels receivepriority,creatinga platform forchange,and bench- such as the serviceprofitchain has been important in marking othercompanies'CRM activities.
Sheth notesthatfor an emerging management discipline,itis important to have Performance Monitoring an acceptabledefinition thatencompassesall facetsto focus Despitea growingcall forcompaniesto be morecustomer understanding and growthof knowledgein thediscipline.
Even whenthesemet- taskof delimiting thedomain,agreeingon a definition for ricsreachtheboardlevel,itis notclearhowdeeplytheyare CRM, and building a research agenda will be an evolving understood and how muchtimeis spenton them. We do notattempt tobuildsuch tionalperformance measurement systems, whichtendto be a researchagendain thecurrent work;however, we empha- functionallydriven,may be inappropriatefor cross- size the importance of CRM implementation and related functionalCRM.Martha Rogers: Customer Relationship Management (CRM) Strategy Expert and Keynote Speaker
Initial work by Ebner and colleagues suchas thebalancedscorecard Kaplan and Norton, Gummesson b, cHennebergPettit are a usefuladvance. The format of thebalancedscorecardandRigby,Reichheld, andSchefter provides enablesa widerangeofmetricsdesigns.
Indicators thatcan a usefulplatformfromwhichto develop this important revealfuturefinancialresults,not just historicalresults, researcharea. Standards, metrics,and key performance indicatorsforCRM should Appendix reflecttheperformance standards necessaryacrossthefive Some Definitions and Descriptions majorprocesses to ensure and practicedeffectively thatCRM activitiesare planned and thata feedbackloop existsto ofCRM.
CRMis ane-commerce Khanna application CRM is a termformethodologies, technologies,and e- learning. A considerationof "returnon relationships" commerce capabilities by companies managecus- used to Gummesson willassistin identifying further metrics tomer StoneandWoodcock CRM is anenterprisewide SinghandAgrawal ofanorganization CRM is a comprehensive andpartnering retaining, strategy withselectivecustomers to create In thisarticle,we developa cross-functional, process-based valueforthecompany superior andthecustomer Parvitiyar CRM strategy framework thataimstohelpcompaniesavoid andSheth October ofMarketing, Journal This content downloaded from CRM is aboutthedevelopment and maintenance of long.
CRM involvesusingexistingcustomerinformation to term,mutuallybeneficial withstrategically relationships sig- improve company andcustomer profitability service Could- nificantcustomers CRM includes numerous aspects,butthebasictheme is for.
CRMattempts toprovide a strategic bridgebetweeninforma- thecompany tobecomemorecustomer-centric. Methods are tiontechnology andmarketing aimedat building strategies primarilyWeb-basedtoolsandInternet presence Gosney and long-term and profitability. CRMcanbe viewedas anapplication ofone-to-one market.
CRMis data-driven marketing KutnerandCripps CRM is an enterprise to approach understanding andinflu- customer on thebasisofwhatthecustomer saysandwhat encingcustomer behaviorthrough meaningfulcommunica- elseis knownaboutthatcustomer Rogers, Peppers, andDorf tionto improve customer customer acquisition, retention, CRMis a management approachthatenablesorganizations to identify, and increaseretention attract, of profitablecus- tomers bymanaging withthem relationships Hobby Ambler, Tim ,Marketing andtheBottom Line,2ded.
Leone ,"Psychological tage. JournalofRelationship Marketing, 1 1NalebuffCo- c ,TotalRelationship 2d ed. Six work- many CRM initiatives. This view was supported both by the shops were held in each company.
Our next challenges were to identify key generic CRM processes using the previously Process Identification and the CRM Framework described selection criteria and to develop them into a con- We began by identifying possible generic CRM processes ceptual framework for CRM strategy development.
We then dis- Our literature review found that few CRM frameworks cussed these tentative processes interactively with the exist; those that did were not based on a process-oriented groups of executives. How well the CRM processes that they considered important and to agree two interrelate fundamentally affects the success of its on those that were the most relevant and generic. After an CRM strategy. The data were fed back to this group, and a The business strategy must be considered first to determine detailed discussion followed to help confirm our under- how the customer strategy should be developed and how it standing of the process categories.
Next, the industry and competitive environment were agreed on as important generic processes by more should be reviewed. Traditional industry analysis e. Subse- Porter should be augmented by more contemporary quently, we received strong confirmation of these as key approaches e.
The resultant five generic processes were 1 the networks and deeper environmental analysis Achrolstrategy development process, 2 the value creation and the impact of disruptive technologies Christensen and process, 3 the multichannel integration process, 4 the Overdorf Customer Strategy We then incorporated these five key generic CRM pro- cesses into a preliminary conceptual framework.
This initial Whereas business strategy is usually the responsibility of framework and the development of subsequent versions the chief executive officer, the board, and the strategy direc- were both informed by and further refined by our interac- tor, customer strategy is typically the responsibility of the tions with two primary executive groups: Although CRM requires a cross- previously noted companies and executives from three functional approach, it is often vested in functionally based CRM consulting firms.
Participants at several academic roles, including IT and marketing. When different depart- conferences on CRM and relationship marketing also ments are involved in the two areas of strategy develop- ment, special emphasis should be placed on the alignment assisted with comments and criticisms of previous versions. With evolving versions of the framework, we combined a Customer strategy involves examining the existing and synthesis of relevant literature with field-based interactions potential customer base and identifying which forms of seg- involving the groups.
The framework went through a con- mentation are most appropriate. As part of this process, the siderable number of major iterations and minor revisions; organization needs to consider the level of subdivision for the final version appears in Figure 2. This involves This conceptual framework illustrates the interactive set decisions about whether a macro, micro, or one-to-one seg- of strategic processes that commences with a detailed mentation approach is appropriate Rubin Exploiting e-commerce opportuni- assessment process.
The concept that competitive advan- ties and the fundamental economic characteristics of the tage stems from the creation of value for the customer and Internet can enable a much deeper level of segmentation for the business and associated cocreation activities the granularity than is affordable in most other channels e. In summary, the strategy literature.
For large companies, CRM activity will involve development process involves a detailed assessment of busi- collecting and intelligently using customer and other rele- ness strategy and the development of an appropriate cus- vant data the information process to build a consistently tomer strategy. This should provide the enterprise with a superior customer experience and enduring customer rela- clearer platform on which to develop and implement its tionships the multichannel integration process.
The itera- CRM activities. The circular arrows in the The value creation process transforms the outputs of the value creation process reflect the cocreation process. We strategy development process into programs that both now examine the key components we identified in each extract and deliver value. The three key elements of the process. As with our prior work, we used the interaction value creation process are 1 determining what value the research method in the identification of these process company can provide to its customer; 2 determining what components.
The value creation process involves a process of cocreation or coproduction, maximiz- is a crucial component of CRM because it translates busi- ing the lifetime value of desirable customer segments. However, there is Multichannel Integration Process now a logic, which has evolved from earlier thinking in business-to-business and services marketing, that views the The multichannel integration process is arguably one of the customer as a cocreator and coproducer Bendapudi and most important processes in CRM because it takes the out- Leone ; Prahalad and Ramaswamy ; Vargo and puts of the business strategy and value creation processes Lusch These benefits can be integrated in the form and translates them into value-adding activities with cus- of a value proposition e.
However, there is only a small amount of published Lanning and Phillips that explains the relationship work on the multichannel integration in CRM e.
A Strategic Framework for Customer Relationship Management | Pennie Frow - catchsomeair.us
The multichannel inte- the customer relationship life cycle Lanning and Michaels gration process focuses on decisions about what the most However, a more ensure that the customer experiences highly positive inter- detailed synthesis of work in this area is needed in further actions within those channels; and when a customer inter- research. Analytical tools such as conjoint analysis can be channel model Friedman and Furey ; Moriarty and used to identify customers that share common preferences Moran that involves multiple channels, such as field in terms of product attributes.
Such tools may also reveal sales forces, Internet, direct mail, business partners, and substantial market segments with service needs that are not telephony. There are a growing number of channels by fully catered to by the attributes of existing offers. Through an iterative process, we categorized the many channel The Value the Organization Receives and Lifetime options into six categories broadly based on the balance of Value physical or virtual contact see Figure 2.
These include 1 From this perspective, customer value is the outcome of the sales force, including field account management, service, coproduction of value, the deployment of improved acquisi- and personal representation; 2 outlets, including retail tion and retention strategies, and the utilization of effective branches, stores, depots, and kiosks; 3 telephony, includ- channel management.
Fundamental to this concept of cus- ing traditional telephone, facsimile, telex, and call center tomer value are two key elements that require further contact; 4 direct marketing, including direct mail, radio, research.
First, it is necessary to determine how existing and and traditional television but excluding e-commerce ; 5 potential customer profitability varies across different cus- e-commerce, including e-mail, the Internet, and interactive tomers and customer segments.
Second, the economics of digital television; and 6 m-commerce, including mobile customer acquisition and customer retention and opportuni- telephony, short message service and text messaging, wire- ties for cross-selling, up-selling, and building customer less application protocol, and 3G mobile services.
Some advocacy must be understood. How these elements con- channels are now being used in combination to maximize tribute to increasing customer lifetime value is integral to commercial exposure and return; for example, there is col- value creation. For example, Reichheld and colwhich integrates both telephony and the Internet. Sasser identify the net present value profit improve- ment of retaining customers, and Rust and Zahorik Integrated Channel Management and Rust, Zahorik, and Keiningham outline proce- Managing integrated channels relies on the ability to uphold dures for assessing the impact of satisfaction and quality the same high standards across multiple, different channels.
More recently, research has emphasized customer defines an outstanding customer experience for that chan- equity e. Oce, and Guinness Breweries, but it has yet to receive much attention in the academic literature. Therefore, multichannel Front Office and Back Office Applications integration is a critical process in CRM because it repre- Front office applications are the technologies a company sents the point of cocreation of customer value.
Back office applications support internal administra- to gather and deploy customer information from all chan- tion activities and supplier relationships, including human nels and to integrate it with other relevant information. A key concern Information Management Process about the front and back office systems offered by CRM vendors is that they are sufficiently connected and cocoordi- The information management process is concerned with the nated to improve customer relationships and workflow.
The tools; and front office and back office applications, which key segments for CRM applications are Integrated CRM support the many activities involved in interfacing directly and Enterprise Resource Planning Suite e. The CRM service providers and consul- The data repository provides a powerful corporate memory tants that offer implementation support specialize in the fol- of customers, an integrated enterprisewide data store that is lowing areas: In larger organizations, it CRM strategy e.
There are two forms resources, and so forth e. The latter stores only the information integration e. The need for comprehensive and scalable options any inconsistencies between databases. Furthermore, data analysis tools should measure busi- tems without disrupting business operations is critical. This kind of analysis provides the basis for the performance assessment process. Analytical Tools The analytical tools that enable effective use of the data warehouse can be found in general data-mining packages Performance Assessment Process and in specific software application packages.
More specific software application pack- acceptable standard and that a basis for future improvement ages include analytical tools that focus on such tasks as is established. Our mance, and performance monitoring, which provides a research was based on large industrial companies because more detailed, micro view of metrics and key performance the size and complexity of such enterprises is likely to pre- indicators.
We did not examine issues related to small or medium-sized companies and Shareholder Results nonprofit organizations in this work. To achieve the ultimate objective of CRM, the delivery of This study contributes to the marketing literature in sev- shareholder results, the organization should consider how to eral ways.
First, our work extends a managerial perspective build employee value, customer value, and shareholder that stresses the importance of cross-functional processes in value and how to reduce costs. Recent research on relation- CRM strategy and contributes to the positioning of the ships among employees, customers, and shareholders has poorly defined CRM concept within the marketing litera- emphasized the need to adopt a more informed and inte- ture.
Second, it provides a process-based conceptual frame- grated approach to exploiting the linkages among them. The work for strategic CRM and identifies key elements within service profit chain model and related research focuses on each process.
Third, it makes a contribution to the limited establishing the relationships among employee satisfaction, literature on interaction research. Finally, the research rep- customer loyalty, profitability, and shareholder value e. Organizations also into the development and implementation of CRM strate- need to focus on cost reduction opportunities.
A strategic framework for customer relationship management - Adrian Payne - Google Книги
Two means of gies. To date, this framework has been used by companies cost reduction are especially relevant to CRM: Sheth notes that for an emerging management discipline, it is important to have Performance Monitoring an acceptable definition that encompasses all facets to focus Despite a growing call for companies to be more customer understanding and growth of knowledge in the discipline.
Even when these met- task of delimiting the domain, agreeing on a definition for rics reach the board level, it is not clear how deeply they are CRM, and building a research agenda will be an evolving understood and how much time is spent on them. Tradi- process in this nascent area. We do not attempt to build such tional performance measurement systems, which tend to be a research agenda in the current work; however, we empha- functionally driven, may be inappropriate for cross- size the importance of CRM implementation and related functional CRM.
Initial work by Ebner and colleagues such as the balanced scorecard Kaplan and Norton, Gummesson b, cHennebergPettit are a useful advance.
The format of the balanced scorecardand Rigby, Reichheld, and Schefter provides enables a wide range of metrics designs.