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Electronic Customer Relationship Management: Critical Analysis

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Introduction

Electronic Customer Relationship Management (E-CRM) is perceived as a major paradigm shift from the traditional customer relationship management approach to the application of internet-based technologies in achieving customer relationship management objectives. The use of E-CRM system enables traditional physical customer proximity to be substituted by digital proximity.

E-CRM has become the latest paradigm in the world of customer relationship management. It is becoming more and more necessary as businesses take to the web. No longer can web-enabled companies rely on the traditional brick-and-mortar strategies that have taken them to where they are today. Such organizations have to evolve with the market instead of behind it. The mantra of customer being the king, although used for a long time, has not been put into action until recent time. Customers were not treated with dignity by most organisations. It has been said, therefore, that only organisations that identify the power of customers and satisfy their needs will move towards sustainability. It is important also to acknowledge the fact that for effective management and growth of an organization in any sector, whether banking, insurance, tourism, engineering, entertainment, etc, there has to be a conscious effort by the management towards making it customer-oriented (Murphy 2000).

E-CRM according to Karimi, Somers & Gupta (2001) is about identifying organizational best customers and enhancing their value by effectively satisfying and keeping them, using internet base approach. As a business philosophy, e-customer relationship management is seen to be firmly rooted in the concept of relationship marketing, which is aimed at improving long-run profitability by shifting from transaction-based marketing to customer retention through effective management of customer relationships. Company relationship with customers can be greatly improved by employing information technology, which can facilitate and enhance customer relationship in various ways but mainly enables companies to attain customization, which is the essence of a customer-centric organization.

Since the internet continues to be more relevant in business life, many organizations see it as an opportunity to lower customer-service costs, hence customer relationship and further personalize marketing messages and mass customization. In line with the development of Sales Force Automation (SFA), where electronic methods were used to gather data and analyze customer information, the trend of the upcoming internet will be taken as the foundation of what we see today as E-CRM. Therefore, E-CRM is an integrated online sales, marketing and service strategy that are used to identify, attract and retain an organization’s customers. It describes improved and increased communication between the organization and its clients by creating and enhancing customer interaction through innovative technology. E-CRM software provides profiles and histories of each interaction the organization has with its customers, making it an important tool for all small and medium businesses. According to Kotler & Keller (2006), business managers of today are living in challenging times. Business targets had never been stiffer, work pressure and managing the complexities of competition is keeping them on their toes all the time. Today, success or failure of a business is dependent on the organization’s ability to be flexible and respond to the external changing environment. Only those who are able to adapt to the changes and those who are able to assimilate and learn from tomorrow’s technology will be able to run the race. Digital technology has changed the rules of business game.

Today, companies have realized that customers are the life blood of the business; business survival is largely depended on the customers. The realization of this fact has made it possible for companies to have a better chance to outperform competition. Customers are therefore, better satisfied through a competitive superior products and services beyond their expectation. Satisfying the customer eventually graduate into a relationship where the company sees the customer as part of the business and business decision-making by continuously seeking customers opinion. Kotler & Keller (2006) opine that marketers must connect with customers, informing, engaging and may be energizing them in the process.

Having every detail of organisation’s customers gave birth to the marketing concept known as Customer Relationship Management (CRM). Customer relationship management as improvement upon the data base marketing of 1980’s, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a company’s customers. The early 2000s was therefore, advances in E-Customer Relationship Management (E-CRM), which also became popular at this period.

The integration of e-marketing in customer relationship management brought about what is contemporarily known as Electronic Customer Relationship Management (E-CRM).

Meaning and Definitions of E-Customer Relationship Management

Electronic Customer Relationship Management (E-CRM) involves the integration of web channels into the overall enterprise CRM strategy with the goal of driving consistency within all channels relative to sales, Customer Service and Support (CSS) and marketing initiatives. E-customer relationship has revolutionized the practice of business. Physical stores are now struggling with on-line start-ups, traditional bricks and mortar organisations now fight for customers with online or virtual companies, airline tickets could now be purchased from the convenience of your home. The explosion in information allowed customers to compare prices and features of goods and services across multiple providers. In this case, customer service is seen as the only differentiating factor for the firms’ survival (Greenberg 2010). The advent of e-CRM application was the first big step toward providing better support to the strategic business customers.

Businesses that strategize and implement e-CRM solution are able to align their processes around technology to effectively deliver seamless, high quality customer experience across all channels. It can be seen today that customers sometimes prefer to make their purchases online, even when they can do so using the traditional means. These customers are utilizing the advantages inherent in on-line purchases. The organisation having identified this trend, should device means toward ensuring that these customers are satisfactorily attended to if the organisation wishes to remain in business. Every business manager should be able to adjust to any new trend in business. The organisation can only retain these online customers through effective management of the customers. The customers want nothing, but the best from the organisation. These customers could also be retained through provision of high quality products, reasonable prices, effective promotional activities, packaging, effective distribution, among other marketing efforts. As posited by Raphael (2003), an effective E-CRM system tracks a customer’s history through multiple channels in real time, creates and maintains an analytical database, and optimizes a customer’s relation in the three aspects of attraction, expansion and maintenance.

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Also, according to Fairhurst (2012), a typical E-CRM strategy involves collecting customer information, transaction history and product information, click stream and contents information. It then analysis the customer characteristics to give a transactional analysis consisting of the customer’s profile and transactional history, and an activity analysis consisting of exploratory activities showing the customer’s navigation, shopping cart, shopping pattern and more.

We will at this point give selected definitions of E-CRM as offered by the experts

Scullin & Romano (2004), defined E-CRM as activities to manage customer relationship by using the internet, web browsers, or other electronic touch points. The challenge here is to offer communication and information on the right topic, in the right amount and at the right time that fits the customer’s specific needs.

In the views of Anon (2002), E-CRM includes standard customer relationship management activities that deal with the net environment. It concerns all forms of managing relationship with customers using information technology (IT). Compared to the traditional customer relationship management, the integrated information for e-customer relationship management intra organisational collaboration can be more efficient to communicate with customers.

Romano (2001), sees E-CRM as concerned with attracting and keeping economically valuable customers and eliminating less profitable ones. Chen (2003), define E-CRM as the integration of information technological based facilities and platforms to identify a company’s best customers and maximizing the value from them by satisfying and retaining them. According to Lee-Kelly (2003), E-CRM is referred to as the marketing activities, tools and techniques through the internet, which are capable to build and enhance relationship between organization and customers. It is the unification of traditional CRM with e-business market place applications.

In our own view, we see E-CRM as the efforts to utilize the managerial functions (planning, controlling, organizing, and directing) in securing solution to the needs of the organisation’s on-line client, often designed to identify, satisfy and retain the customer.

Benefits of E-Customer Relationship Management

The benefits of E-Customer Relationship Management as listed by Payne & Ballantyne (2009) include:

  1. Growth in number of customers
  2. Increased business revenue
  3. Matching the customers’ behaviour with suitable offers
  4. Improved customers relations, service, and support
  5. Long term profitability and sustainability
  6. Increased access to a source of market competitor information
  7. Increased customer satisfaction and loyalty
  8. Greater efficiency and cost reduction
  9. Highlighting poor operational processes
  10. Maximization of opportunities

Considerations for the Implementation of E-CRM System

The following considerations should serve as guide:

  1. Define Customer Relationships: Generate a list of key aspects of the customer relationships and the relevance of these relationships to the business.
  2. Get a Plan: Generate a broad relationship management programme that can be customized to smaller customer segments.
  3. Focus on Customers: The focus should be on the customer, not the technology. Any technology should have specific benefits in making customers’ lives easier by improving support, lowering their administrative costs, or giving them reasons to shift more businesses to the company.
  4. Save Money: Focus on aspects of the business that can add meaning to the bottom line. Whether it is through cutting costs or increasing revenue, every capacity implemented should have a direct measurable impact on the bottom line.
  5. Service and Support: By tracking and measuring the dimensions of the relationship, organizations can identify their strengths and weaknesses in the relationship management programme and continually fine tune them, based on ongoing feedback from customers.

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Electronic Customer Relationship Management: Critical Analysis. (2022, September 27). Edubirdie. Retrieved February 8, 2023, from https://edubirdie.com/examples/electronic-customer-relationship-management-critical-analysis/
“Electronic Customer Relationship Management: Critical Analysis.” Edubirdie, 27 Sept. 2022, edubirdie.com/examples/electronic-customer-relationship-management-critical-analysis/
Electronic Customer Relationship Management: Critical Analysis. [online]. Available at: <https://edubirdie.com/examples/electronic-customer-relationship-management-critical-analysis/> [Accessed 8 Feb. 2023].
Electronic Customer Relationship Management: Critical Analysis [Internet]. Edubirdie. 2022 Sept 27 [cited 2023 Feb 8]. Available from: https://edubirdie.com/examples/electronic-customer-relationship-management-critical-analysis/
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