Customer Relationship Management (CRM) is the integration of people, processes and technology and defined as
The core business strategy that integrates internal processes and functions, and external networks to create and deliver value to targeted customers at a profit.
(Iriana, Buttle, & Ang, 2013, p. 468)
Although processes and technology are important components of CRM, the nucleus of CRM is the people which includes the employee as well as the customer. In order for CRM to be effectively developed, it is imperative that a culture exists to prepare and support employees. Their understanding and acceptance of, and their willingness to adopt CRM practices will be directly affected by the leadership, orientation, environment and strategical focus of the firm.
To further define the critical role corporate culture plays in the development of CRM, research by Chung et al. (2012) confirmed that a culture focusing on the consumer, with employee participation and teamwork will enhance CRM while an “appropriate organizational culture [will] reduce obstacles to the implementation of CRM activities” (p. 5). Interestingly, they found that no one type of corporate culture alone is best fit to support the implementation of CRM, but a combination of elements from all four types of culture was most advantageous.
CRM proves to be a very challenging strategy for a firm to implement. Iriana et al. (2013) stated that attempts to implement CRM technology fail as often as 71% of the time, and failure is still reported when CRM is treated as a corporate strategy as opposed to a technology process (p. 467). However, firms are increasingly implementing the strategy. In 2013, AdvertisingAge and MarketsandMarkets reported that the CRM industry in the United States will see a 5-year increase in revenue of nearly 40% to an estimated $24.2 billion by 2018.
Deshpande et al. (1993) found that responsive, customer-oriented cultures as seen in the Market type, and cultures that exhibit flexibility and innovation from the Adhocracy culture will reach higher business performance than the Clan and Hierarchical cultures. According to Milisavljevic et al. (2013), the collective values of all the individuals of a firm are the bases of the firm’s corporate culture. If the values of employees compliment the values of customers, the opportunity of CRM success improves. Maintaining a customer-centric corporate culture that can be flexible and harmonize with the values of valued customers will allow a firm to enhance relationships with customers with similar values.
However, the key to remember is that CRM is more than a technology process, but a corporate strategy influenced by the culture. Below are eight critical elements of corporate culture that impacts the success of CRM include….
- Create a customer-centric vision and implement it
- Be ready and able to make the changes
- Make the changes prior to implementing a CRM plan
- Communicate management’s intention to employees so they understand the benefits
- Support must come from the top
- Put together a team to ensure implementation
- Training staff so they are comfortable with technology and processes
- Be committed to the change, even through the tough times
Does your company want to build better relationships with your customers? Review and assess your corporate culture… it is the foundation of successful CRM strategies. Using these eight steps will get your moving in the right direction.
Class dismissed… pc
For more information on corporate culture and CRM, check out my sources..... Chung, Y., Hsu, Y., Tsai, S., Huang, H., & Tsai, C. (2012, July). The correlations between business strategy, information technology, organisational culture, implementation of CRM, and business performance in a high-tech industry. South African Journal of Industrial Engineering, 23(2), 1-15. Deshpande, R., Farley, J. U., & Webster, F. E. (1993). Corporate culture, customer orientation, and innovativeness in Japanese firms: A quadrad analysis. Journal of Marketing, 57, 23-27. Frygell, L., Carlsson, S., & Hedman, J. (2011). CRM system implementation: How great expectations in Sweden are dashed in China. Journal of Information Technology Case and Application Research, 13(3), 7-20. Iriana, R., Buttle, F., & Ang, L. (2013). Does organisational culture influence CRM's financial outcomes? Journal of Marketing Management, 29(3-4), 467-493. doi:10.1080/0267257X.2012.732598 Milisavljevic, S., Mitrovic, S., Nesic, L., Simunovic, G., Kozak, D., & Antic, A. (2013). The level of correlation between cultural values and system of customer relationship management. Technical Gazette, 20(6), 1037-1042. photo credit: pennstatenews marketing graphic via photopin (license)