African Journal of Marketing Management Vol. 2(3) pp. 037-043, March 2010 Available online http://www.academicjournals.org/ajmm ©2010 Academic Journals
Towards a successful customer relationship management: A conceptual framework Benjamin Appiah - Kubi1* and Andrews Kingsley Doku2
Faculty of Engineering, University of Mines and Technology, Tarkwa, Ghana. Office of the Registrar, University of Mines and Technology, Tarkwa, Ghana. Accepted 11 February, 2010
As the world economy becomes globalized, competition has intensified and the differences in products have faded. Consequently, businesses have become fixated on customer relationship management (CRM) as it has become a central orienting point in academia and business environment with organizations increasingly focusing on managing customer relationships as a strategic capability to achieve market leadership and profits. In spite of the commercial significance of the concept, CRM has been demonized by critics as a marketing or managerial fad destined to failure. The purpose of this article is to examine ways to improve the success and effectiveness of CRM through the conceptualization of a framework known as CRM pyramid and to stimulate debate and research on how to improve the success of the concept as its potency to engage customers and improve business performance has not been in doubt. Key words: Customer relationship management, strategy, capability, customer retention, resources, pyramid. INTRODUCTION Marketing from historical antecedent has undergone various shifts in emphasis from production through sales to marketing orientation. However, the various orientations have failed to engage customers in meaningful relationship mutually beneficial to organisations and customers, with all forms of the shift still exhibiting the transactional approach inherit in traditional marketing. However, Coltman (2006) indicates that in strategy and marketing literature, scholars have long suggested that a customer centred strategy is fundamental to competitive advantage and that customer relationship management (CRM) programmes are increasingly being used by organisations to support the type of customer understanding and interdepartmental connectedness required to effectively execute a customer strategy. The work of contemporary researchers and writers such as Gummerson (2002), Woodcock (2000), Groonroos (1997) among others have been significant in establishing the importance of customer relationship management and business performance. According to Prof Payne (2000:6) of the Centre for Relationship Marketing, Cranfield University, consumer relationship management (CRM) has developed into a major element of corporate strategy for many organisations and it is known by other terms as relationship marketing and customer management. CRM AND BUSINESS PERFORMANCE There is an overplus of studies that have linked business performance to CRM competence. Woodcock (2000) found a correlation of 0.80 between how well companies managed their customers and business performance whilst Accenture (2001), a consultancy active in the CRM space, found that a 10% improvement in 21 CRM capabilities boosted profits (pre - tax) by as much as $ 40 - $ 50 million in a $1 billion company (Ang and Buttle 2006). Accenture indicated that this could be improved even further to $120 - 150 million if further improvements were made to CRM capability. Woodcock, Starkey, Stone, Weston and Ozimek (2001) also found that with proper investment and management of CRM, a 4 - fold return on investment could be anticipated over 3 years according to Ang and Buttle (2006). In a study of Asia Pacific companies by IBM Consulting Services in 2004 as part of a global survey of 346 global organization to explore companies experience of CRM, over half of
*Corresponding author. E-mail: email@example.com.
Afr. J. Mark. Manage.
respondents reported that CRM value improve customer experience and...
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Kubi and Doku
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