E-CUSTOMER RELATIONSHIP MANAGEMENT

E-Customer relationship management



E-Customer relationship management

Introduction

Customer relationship management (CRM) is a comprehensive business and marketing strategy that integrates technology, process, and all business activities around the customer (Anton, 1996; Anton and Hoeck, 2002). It is mostly defined in terms of the acquisition and retention of customers and the resulting profitability (Menconi, 2000; Nykamp, 2001). Effective CRM is assumed to lead to bottom-line benefits for the organization (Anton and Hoeck, 2002; Connelly and Yoger, 2001; Cusack, 1998; Rust and Zahorik, 1993; Swift, 2001; Tschohl, 2001). According to Bain and Company, profits increase by 25-80 percent when customer retention rates increase by five points. The Internet has provided a platform to deliver CRM functions on the Web (e-CRM), thus as business moves to the Web, e-CRM will move to center stage.

Despite widespread agreement that CRM and e-CRM has direct and indirect impact on customer satisfaction, sales, profit, and loyalty (Anton and Hoeck, 2002; Connelly and Yoger, 2001; Cusack, 1998; Rust and Zahorik, 1993; Sterne, 1996; Swift, 2001; Tschohl, 2001) the significance of e-CRM and the various e-CRM features in influencing customer satisfaction has not been well researched. This study attempted to uncover relationships between e-CRM and customer satisfaction by determining the presence of e-CRM features on retail Web sites for which we have customer satisfaction data and determining if a company's amount of e-CRM is related to customer satisfaction or which, if any of the various features of e-CRM are related to customer satisfaction. Determination of those e-CRM factors that are related to customer satisfaction will allow companies to focus on developing on their Web site only those aspects of e-CRM that are related to customer satisfaction. This could mean reduced costs, since elements that are not relevant need not be included anymore in the e-CRM implementation. This also means (potentially) more customers, more sales, more profit, and more loyalty, as resources are focused on those aspects of e-CRM that work.

CRM is a dominant point of discussion in business (in July 2002, Amazon.com listed 90 current books on CRM). Most/many companies have or will attempt a CRM implementation … at considerable cost (it is estimated that 45 percent of all companies have CRM applications and 37 percent have applications in implementation and planning stages (Leon, 2001)). According to a survey conducted by Infoworld, 77 percent of the business respondents considered CRM critical (Apicella, 2001). The CRM industry is believed to be a ten billion dollar industry growing at a 27 percent annual rate (iBiz STATs, 2001).

There is little empirical evidence that CRM is related to profit, sales, or customer satisfaction (for some of the available evidence, see Rust and Zahorik, 1993; Swift, 2001). Vendors abound with sophisticated and expensive technologies delivering (or promising to deliver) customer relationships (e.g. Siebel (www.siebel.com); Covergys (www.convergys.com); Genesys (www.genesyslab.com); and literally hundreds of others). These systems have a lot of technical attributes/functions that have come to define CRM but, interestingly, they do not have an emphasis on customer satisfaction measurement that must be at the core ...