Authors: Plakoyiannaki, Emmanuella
Subject: Marketing & CRM
Publish: 2005
Status: full text
Source: Journal of Marketing Management; Apr2005, Vol. 21 Issue 3/4, p363-392
Preparation: Scientific Database Management Journal Articles www.SYSTEM.parsiblog.com
Abstract: The purpose of this study is to explore how organisational members perceive Customer Relationship Management (CRM) as this process unfolds in the firm. CRM has been an emerging research theme in the marketing literature, yet how it has been received and viewed by organisational members has been essentially unexplored, and forms the key contribution in this paper. Drawn from a case study in the U.K. automotive services sector, the findings illustrate the formation of collective perceptions of CRM, which involves information seeking, meaning aion and action based on the perceptions shaped at different phases of the CRM process: adoption, development and use. Specifically, in each of the three phases organisational members in the investigated firm approach CRM as a strategic decision; view it with concern; and consider it as a customer value driver. The paper concludes with research recommendations and implications for marketing theory and practice.    --Download Article

Introduction: The term Customer Relationship Management (CRM) has received increasing attention in the last few years in the marketing literature. Specifically, academics, software vendors, consultants and business
practitioners have embraced and developed the concept of CRM, which aligns the efforts of the firm to superior generation and delivery of customer value (Stone and Foss 2001). CRM deals to a large extent with the development and retention of relationships in business-to-consumer markets and leaming about customers" desires through ongoing transactions with the firm.
Yet, despite the increasing prominence of CRM in marketing literature. there appears to exist a lack of evidence on how organisations perceive this notion. CRM has mainly been developed through vendors of CRM software and seemingly lacks systematic attention and examination by academic researchers. Until recently, relevant research has been based on anecdotal data from CRM vendors and consultants, and has been devoid of efforts that systematically explore the perceptions of organisational participants
regarding CRM. For instance. Hart et al. (2002) argue that given the amount of interest in CRM, there is little empirical evidence that captures the participants of the firm perspective on that notion. Similarly, Srivastava et al. (1999, p. 170) suggest that researchers carvnot study the CRM process without also discussing human agency: "processes are meaningless when viewed in isolation of those people charged with implementing them".
It is important to understand how organisational members perceive strategic initiatives such as CRM since their perceptions play a key role in shaping an organisation"s behavioural activities towards customers (Day 2002) and in providing an environment that is either conducive or inhibitory to the CRM process (cf. Gioia and Chittipeddi 1991; Gioia and Thomas 1996).
Overall, collective perceptions may influence: 1) the success of CRM practice in the organisation (cf. Pettigrew 1997); 2) the amount of resources committed to this practice (cf. Thomas and McDaniel 1990); and 3) the steps made towards the adoption and implementation of this initiative in the firm
(cf. Dutton and Duncan 1987). Such an understanding may enable firms to comprehend and manage the link between human agency, CRM and corporate performance and therefore to adopt, and implement CRM initiatives more efficiently. In doing so, organisations may enhance their performance in the marketplace since CRM practice enables firms to acquire and develop a unique set of relational resources and knowledge assets that could constitute a basis for the development of sustainable competitive advantage in the market (Hunt and Morgan 1995). The present study attempts to provide insights towards the adoption and implementation of CRM initiatives by exploring how organisational members perceive CRM as this process unfolds in the organisation.
In order to meet the purpose of this research, the author conducted a case study in a U.K. firm in the automotive services sector. According to the findings, organisational participants in the case study firm perceive CRM differently at various stages of the process. To elaborate, as the practice of CRM evolved in the investigated firm, organisational members approach CRM as a strategic decision; view it with concern; and consider it as a customer value driver. The findings also demonstrate that management need to emphasise different aspects of CRM practice (e.g. CRM ives, CRM
drivers and CRM benefits) at different phases of the process and cultivate a
customer-relating capabiUty (cf. Day 2000; 2002) for erisuring CRM success. This study is useful for two reasons. First, it represents a first step in putting
forward the firm"s understanding on CRM practice. Given the fact that CRM
literature has primarily captured the views of softwcire vendors and
consultants on CRM practice, the current study provides a missing
perspective towards the conceptualisation of CRM, namely that of the
organisation. Particularly, this study discusses collective perceptions of CRM,
which are embedded in and shaped by the interpretations of orgcinisational
members participating in this process. Second, it puts forward key issues that
can explicitly determine the success of CRM initiatives in the firm. According
to the case study evidence, these issues relate to the development of CRM
strategy and a customer-relating capability, the management of human
resources and the performance evaluation of the CRM process. Firms
corvsidering to embark on CRM may gain valuable insights from the
successes and failures of the case study firm discussed in this paper.
This paper is organised as follows. The first section provides a brief
literature review on the key themes of this research, namely CRM and the
formation of perceptions. The second section offers insights into the
methodology followed in this research. The third section presents and
discusses the case study evidence. The paper concludes with implications for
theory and practice as well as directions for future research.

Literature Review
The Concept of Customer Relationship Management (CRM)
Increasingly companies realise that consumers are their most important
asset and view customer relationships as mutual beneficial exchanges and as
opportunities that need to be managed (Bowman and Narayandas 2001). A
key step in the implementation of relational approaches to marketing has
coincided with the development of CRM practice - one of the fastest growing
business phenomenon in the last decade (De Wulf et al. 2001). According to
Zeithaml et al. (2001), CRM offers the implementation of relationship
marketing throughout the organisation and delivers the benefits of relational
strategies to firms (e.g. increased customer retention and loyalty) and their
customers (e.g. superior customer value and convenience in their interaction
with the firm). Recently, a growing number of organisations have
successfully invested in CRM and begun to realise its contribution to
ervhanced corporate performance (Knox et al. 2003).
Despite the popularity of the term CRM, consensus on its meaning has not
been achieved (Paas and Kuijlen 2001; Winer 2001; Woodcock and Starkey
2001; Zeithaml et al. 2001). This lack of corvservsus on what CRM means is
often evidenced in the different types of initiatives that organisations pursue
under the label "CRM", such as the launch of customer databases, a new contact centre, sales force automation and e-commerce (Lemon et al. 2002;
Reinartz and Kumar 2000).
The Uterature on CRM incorporates a variety of perspectives stemming
from software vendors, consulting practice and marketing scholars that
discuss different aspects of this phenomenon. To elaborate, consulting
practice has primarily approached CRM in terms of a business philosophy
that aims at understanding, anticipating and managing customer needs
(Emst and Young 2001; Key Note 2003). Key Note (2003) suggests that the
concept of CRM is integrated to the development of a customer-centric
enterprise that continuously meets customer needs and preferences. From
another viewpoint, CRM vendors have focussed largely on the technical
elements of this notion rather than understanding the implications of
technology within the overall organisational context that embraces the CRM
process (Emst and Young 2001; Financial Times 2000; Key Note 2003). For
instance. Swift (2001) concentrates on the technological aspects of CRM and
defines the term as an enterprise-wide set of practices that enable firms to
generate customer intelligence by the launch and use of customer databases.
From an academic perspective, the interest in CRM may start to surge as
this topic has recently been designated a research priority by the Marketing
Science Institute (MSI 2000). An increasing number of publications have
discussed specific elements of CRM investments such as customer retention
(Lemon et al. 2002; Verhoef 2003), customer targeting (Zeithaml et al. 2001)
and customer profitability (Reinartz and Kumar 2000; 2003) without however
providing a holistic view of the constituents of CRM practice in the
organisation. Indeed, limited literature has considered an integrated view of
CRM as an organisational phenomenon (cf. Day 2002; Knox et al. 2003;
Srivastava et al. 1999) and the activities included in this business process.
To elaborate. Day (2002) suggests that CRM is an organisational
phenomenon whose implementation is supported by a set of capabilities
relevant to the orientation of the organisation towards customer relationships
and retention, the openness of the firm to customer information sharing, and
the availability of structures and processes to facilitate CRM. Similarly, Knox
et al. (2003) define CRM as a cross-functional process that aims at enhancing
customer value by integrating information technology and relationship
marketing strategies. Srivastava et al. (1999) define CRM as an organisational
process that places the customer at the heart of the planiving and operations
of the firm. According to this approach, CRM addresses aspects of
identifying customers, creating customer value, increasing customer
retention and cultivating customer-firm dialogue (Srivastava et al. 1999).
Based on the above approaches, two key concepts appear to be related to
the view of CRM as an orgarvisational process, namely (a) customer value,
and (b) customer retention (Reinartz et al. 2004). The first concept, customer value, is seen as a combination of two elements, notably product (or service)
value and relationship value (Ravald and Gronroos 1996). Product value
refers to a trade-off between perceived benefits and sacrifices by a customer
regarding a supplier"s offer. Relationship value pertains to social benefits and
the relational interaction that customers and firms experience as part of the
relationship process. The second concept, customer retention describes the
establishment and maintenance of long-lasting relationships between the
firm and customers (Bowman and Naraynadas 2001). A recent CRM report
pubUshed by Financial Times (2000) mentioned that customer value and
retention constitute the most frequently discussed ives of CRM
practice.
The current study builds upon the view of CRM proposed by Srivastava
et al. (1999), as the authors suggest that CRM practice is largely shaped by
the interpretations and actions of organisational members involved in the
process. Particularly, Srivastava et al. (1999) propose that in order to
understand CRM practice at the organisational level, it is necessary to engage
in a meaningful dialogue with key actors involved in the process and
comprehend their perceptions of CRM. The frames of reference through
which organisational members view CRM may drive their actions and, in
turn, determine the success of CRM initiatives. As Day (2002) indicates if
organisatiorvs are to implement CRM effectively, and realise its considerable
benefits, management is required to focus on the human dimension of CRM
practices, i.e. the development of coUective mindset that supports this
process throughout the firm.
However, an examination of the relevant literature (Hart et al. 2002; Knox
et al. 2003; Reinartz et al. 2004) reveals a lack of studies discussing the
perceptions of orgarvisational members of CRM. Therefore, the starting point
of this research is to identify the perceptions of organisational members of
CRM and understand how these perceptions are shaped. The following
section of the paper elaborates on the concept of perceptions, which is of
importance to this study.

Many scholars of organisation theory suggest that the formation of

perceptions is an irvherent function of organisational life (Ong 1998; Walsh

and Ungson 1991; Weick 2001). For instance, Walsh and Ungson (1991, p. 60)

define an organisation as "a network of intersubjectively shared meanings

that are sustained though the development and use of a common language

and everyday social interaction". Orgarvisational members shape perceptions

because of changes they experience in their daily reaUty in the orgarvisation.

Among the most challenging events to which organisational members must

respond is the introduction of new processes, such as CRM, that may become the context for substantial change and adaptation in the firm (Rigby et al.

2002). Understanding how organisational members perceive this initiative in

the organisation may enable management to identify and address

fundamental issues (e.g. training and development of employees) linked to

successful CRM practice.

Researchers have proposed a number of models to describe the way

organisations develop cognitive structures such as perceptions (e.g. Daft and

Weick 1984; Dutton and Duncan 1987; Keisler and SprouU 1982; Meyer 1982).

The model of the interpretation process developed by Daft and Weick (1984)

is used as a basis for the presentation and discussion of empirical findings in

the current study. This model is adopted in the current resecirch because it

has been used widely in organisation theory literature to discuss evolving

perceptions of organisational participants regarding organisational

interventions, especially the introduction of new business processes and

technologies (cf. Ong 1998). The framework depicted in figure 1 consists of

three closely related activities, namely scanning, interpretation and leaming

(Daft and Weick 1984)…

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