Key Objectives of Training Employees

Training employees is a critical part of management at most businesses. Even the best qualified or most experienced new hires will need to become accustomed to the practices and expectations of a business. Training is also important for experienced employees to adapt to policy or product changes and improve employee motivation. Understanding some of the objectives of employee training is critical to help develop an effective training program.

Career Development

Among the most important objectives of training employees is the opportunity for career development and personal employee growth. As employees acquire new skills and abilities, they develop the potential to move up within the company and replace employees that may leave or retire. To maximize career development, managers often have to take an active role in the process. According to the University of California, San Francisco's Guide to Managing Human Resources, "since career development is an ongoing, dynamic process, employees may need encouragement and support in reviewing and re-assessing their goals and activities."

Maximizing Productivity

Training is important to ensure business productivity and growth. Highly skilled employees are more likely to have the abilities and experience to efficiently execute projects and deliver value for customers. In some cases, this objective underlies efforts to get employees up to speed with recently developed technology. In addition, training for productivity is often an effective way to prevent and address ongoing performance challenges, without losing the prior investment the business has made in the employee.

Improving Motivation

According to CliffsNotes, "many people incorrectly view motivation as a personal trait—that is, some people have it, and others don't." In reality, motivation is probably only partially innate: it is also quality that can be learned and unlearned. One of the objectives of training is also to foster and retain motivated employees and provide them with the tools to take on new responsibilities. With this in mind, it is also important to remember that motivation cannot be developed by training alone, and some employees may be harder than others to motivate.

Maintaining Safety and Compliance

Employee training is often motivated by workplace regulations. Employees must be kept up to date in the regulatory requirements of their industry. Occupational health and safety regulations mandate that employees receive regular training courses on practices and precautions that prevent accidents or quality control failures. In addition, employees in some fields may be required to receive regular certifications for skills such as cardiopulmonary resuscitation or liquor service practices. Businesses are often held responsible for accidents and failure to meet regulatory training requirements.

SOURCE:

http://www.ehow.com/info_12018400_key-objectives-training-employees.html

Relationship of Employee Satisfaction to Customer Satisfaction

The influence of employee satisfaction on customer satisfaction has received considerable attention in marketing literature and practice in recent years. It has been argued that behaviour of satisfied employees plays an important role in shaping customers' perceptions of business interactions.  This phenomenon may occur as satisfied employees are more apt to be friendly, enthusiastic, attentive, and empathetic toward customers. 

According to the concept of partner effects, a person is in some way, verbally or nonverbally, influenced by the characteristics and behaviours displayed by his or her counterpart.  Additionally, the contagion effect explains how satisfied employees influence others around them to feel good.  Therefore, employee job satisfaction is positively related to customers' perceptions of service.  This notion suggests that employees who have higher levels of job satisfaction also believe they are able to deliver excellent service.  It is also expected that happy or satisfied employees are more inclined to share these positive emotions with customers. 

Compared to the influence of Employee Satisfaction (ES) on Customer Satisfaction (CS), the impact in the opposite direction (from CS to ES) is supported by a few theories such as the social exchange theory, and the psychological contract theory.  Customers satisfied with their counterpart will engage in cooperative behaviour as reciprocation for those who have benefited them.  There are evidences from various researchers who found that customers who developed a bond with the employees also were likely to care about employee wellbeing. If customers like the performance of the employee and express gratitude or satisfaction, in turn, it is also expected to lead to a higher level of employee satisfaction.  In other words, positive reinforcement from customers increases the satisfaction of sales employee.  In addition to this it is argued that customers' inputs make important contributions to enhancement of service quality, leading to employee satisfaction and that employee’s are concerned about customers' feelings and are pleased when customers display appreciation for quality service.

SOURCE:

Jeon, Hoseong and Choi, Beomjoon (2012) “The relationship between employee satisfaction and customer satisfaction”, Journal of Services Marketing, Vol. 26 Iss: 5, pp.332 – 341

CRM and Marketing

In today’s business world, there are different marketing approaches or strategies that fit to different circumstances. Marketing strategy has a range, where relationship marketing is placed at one end of it and transaction marketing is placed at the other end. In the relationship marketing approach the focus is on building relationships with customers, while in transaction marketing the focus is on creating single transactions with customers.

Companies producing consumer packed goods will probably benefit more from using a transaction marketing approach. This is mostly because they usually do not have direct contact with the customers and therefore there is no need for focusing on the customer relationship. In contrast, service companies almost always have close customer contacts and for that reason have to focus on customer interactions.

Relationship marketing is one of today’s most powerful business marketing techniques. It is an extension of 1 to 1 marketing, where you satisfy each individual customer’s needs and wants. You can make more money, save time, and deliver outstanding customer service. You gain a larger share of each customer’s business, and you benefit from their referrals.  Accountants, real estate agents and brokers, financial companies, and other businesses where building strong customer relationships really make a difference are increasingly using CRM techniques. CRM uses today’s powerful, low-cost technology to help you, work smarter.

To survive in the global market, focusing on the customer is becoming a key factor for companies big and small. It is known that it takes up to five times more money to acquire a new customer than to get an existing customer to make a new purchase. A Second aspect of CRM is that knowing the customer and his / her problem allows to acquire new customers more easily and facilitates targeted cross-selling. 

CRM is based on the based on the basic marketing belief that an organization that knows its customers like individuals. Its components may include data warehouse that store all a company’s information, customer service system, call centres, e-commerce, web marketing, operations system (that handle order entry, invoicing, payments, point of sale, inventory system, etc.) and sales systems (mobile sales communication, appointment making, routine, etc.). In practices, CRM system range from automated customer-contact system to the company- wide pooling of customer information.  The implementation of CRM needs the close cooperation between suppliers of one of the many CRM system on offer, such as Visual Elk, Avenue and Relationship Organizer, and the user. 

CRM system is capital investments that integrate strategy, marketing and IT. As such, they cut across traditional organizational structures and force the integration of activities. Implementing CRM system is no small task. And one that risks doing harm of done badly. There is no doubt that CRM can be major factor in achieving competitive advantages, according to Malcolm McDonald, but get CRM wrong and customers leave, never to return.

CRM builds especially on the principles of relationship marketing; the formal study of which goes back 20 years. CRM builds on the philosophy of relationship marketing. This emphasis on relationships, as opposed to transactions, is redefining how companies are interacting with their customers. Customer relationships have received considerable attention from both academicians and practitioners. The increasing emphasis of relationship marketing is based on the assumptions that building committed customer relationships results in greater satisfaction, loyalty, positive word of mouth, business referrals, references, and publicity. Intense competition for market share in today’s market requires managers to attend to customer retention and the how’ s or whys of a patron returning and continuing to repurchase.

CRM is a highly fragmented environment and has come to mean different things to different people. As the thought and approach to CRM is in the initial stages and not fully matured, one can find different perspectives and definitions of CRM.  CRM is the values and strategies of relationship marketing - with particular emphasis on customer relationships - turned into practical application.  CRM is an enterprise approach to understanding and influencing customer behaviour through meaningful communications in order to improve customer acquisition, customer retention, customer loyalty, and customer profitability.

From another perspective, CRM is a strategic view of how to handle customer relations from a company perspective. The strategy deals with how to establish, develop and increase customer relations from a profitability perspective. Based upon knowledge about the individual customer’s need and potential, the company develops customized strategies describing how different customers should be treated to become long-term profitable customers. The basic philosophy underlying CRM is that the basis of all marketing and management activities should be the establishment of mutually beneficial partnership relationship with customers and other partners in order to become successful and profitable.

In order to more efficiently manage customer relationships, CRM focuses on effectively turning information into intelligent business knowledge. This information can come from anywhere inside or outside the firm and this requires successful integration of multiple databases and technologies such as the Internet, call centres, sales force automation, and data warehouses.  There is no universal explanation of what CRM is, since the area is fairly new and still is developing. It is therefore important to remember that several attempts of defining CRM exist and that many companies adapt the definition to their own business and their unique needs.

CRM is a customer-centric business model that reorients firm operations around customer needs (as opposed to products, resources, or processes) in order to improve customer satisfaction, loyalty, and retention. CRM is the integration of customer focus in marketing, sales, production, logistics and accounting, i.e. in all parts of the company’s operations and structure.

The activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right product or service, to the right customer, through the right channel, at the right time and the right cost. CRM integrates sales, marketing, service, enterprise resource planning and supply-chain management functions through business process automation, technology solutions, and information resources to maximize each customer contact. CRM facilitates relationships among enterprises, their customers, business partners, suppliers, and employees.

For CRM to be successful, all activities in a company need to be managed in combination to reach success.  It must be clear that CRM is not equal to market planning, since they are founded on two different marketing approaches. However, the authors add that although the information in market research is CRM, it is only a small part of the CRM that is needed in order to create profitable customer relationships.

Market planning is based upon the transactional-based point of view with market segmentation as the emphasis. Moreover, market planning still generalize and segment customers according to specific characteristics, but fail to identify individual wants and need as CRM does, i.e. the knowledge about the individual customers.

The Effect of CRM Applications on Customer Satisfaction

Customer satisfaction has significant implications for the economic performance of firm.  For example, customer satisfaction has been found to have a negative impact on customer complaints and a positive impact on customer loyalty and usage behaviour.  Increased customer loyalty may increase usage levels, secure future revenues, and minimize the likelihood of customer defection.  Customer satisfaction may also reduce costs related to warranties, complaints, defective goods, and field service costs. 

Customer relationship management applications are likely to have an effect on customer satisfaction for at least three reasons. First, CRM applications enable firms to customize their offerings for each customer. By accumulating information across customer interactions and processing this information to discover hidden patterns, CRM applications help firms customize their offerings to suit the individual tastes of their customers. Customized offerings enhance the perceived quality of products and services from a customer's viewpoint. Because perceived quality is a determinant of customer satisfaction, it follows that CRM applications indirectly affect customer satisfaction through their effect on perceived quality. Second, in addition to enhancing the perceived quality of the offering, CRM applications also enable firms to improve the reliability of consumption experiences by facilitating the timely, accurate processing of customer orders and requests and the ongoing management of customer accounts.

Improved ability to customize and a reduced variability of the consumption experience enhance perceived quality, which in turn positively affects customer satisfaction.  CRM applications also help firms manage customer relationships more effectively across the stages of relationship initiation, maintenance, and termination.  In turn, effective management of the customer relationship is the key to managing customer satisfaction and customer loyalty.

SOURCE:

Mithas, Sunil; Krishnan M. S. and Fornell, Claes (2005) “Why Do Customer Relationship Management Applications Affect Customer Satisfaction?”, Journal of Marketing, Vol. 69, No. 4 (Oct., 2005), pp. 201-209

The Effect of CRM Applications on Customer Knowledge

A primary motivation for a firm to implement CRM applications is to track customer behaviour to gain insight into customer tastes and evolving needs. By organizing and using this information, firms can design and develop better products and services.  It is argue that customer knowledge has certain attributes that make it one of the most complex types of knowledge.  . For example, customer knowledge may be derived from multiple sources and media and may have many contextual meanings. Customer knowledge is also dynamic, and it changes rapidly. 

Customer relationship management applications facilitate organizational learning about customers by enabling firms to analyze purchase behaviour across transactions through different channels and customer touch points.  For example, FedEx and American Airlines used their investments in IT systems at the customer interface to gain valuable customer knowledge. More recently, firms have invested in an integrated set of tools and functionalities offered by leading software vendors to gather and store customer knowledge. Firms with greater deployment of CRM applications are in a better position to leverage their stock of accumulated knowledge and experience into customer support processes. In addition, firms with a greater deployment of CRM applications are likely to be more familiar with the data management issues involved in initiating, maintaining, and terminating a customer relationship. This familiarity gives firms a competitive advantage in leveraging their collection of customer data to customize offerings and respond to customer needs.

Customer relationship management applications help firms gather and use customer knowledge through two mechanisms. First, CRM applications enable customer contact employees to record relevant information about each customer transaction. After this information is captured, it can be processed and converted into customer knowledge on the basis of information-processing rules and organizational policies. Customer knowledge captured across service encounters can then be made available for all future transactions, enabling employees to respond to any customer need in a contextual manner. Firms can also use customer knowledge to profile customers and identify their latent needs on the basis of similarities between their purchase behaviours and those of other customers. Second, firms can share their accumulated customer knowledge with customers to enable those customers to serve themselves by defining the service and its delivery to suit their needs. 

The process of customer self-selection of service features provides additional opportunities for firms to learn about their customers' evolving needs and to deepen their customer knowledge. 

SOURCE:

Mithas, Sunil; Krishnan, M. S. and Fornell, Claes (2005) “Why Do Customer Relationship Management Applications Affect Customer Satisfaction?”, Journal of Marketing, Vol. 69, No. 4 (Oct., 2005), pp. 201-209

Business Process Reengineering (BPR)

Business Process Reengineering

Business process reengineering (BPR) began as a private sector technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service, cut operational costs, and become world-class competitors. A key stimulus for reengineering has been the continuing development and deployment of sophisticated information systems and networks. Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing work.

Business process reengineering is one approach for redesigning the way work is done to better support the organization's mission and reduce costs. Reengineering starts with a high-level assessment of the organization's mission, strategic goals, and customer needs.  Basic questions are asked, such as "Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?" An organization may find that it is operating on questionable assumptions, particularly in terms of the wants and needs of its customers. Only after the organization rethinks what it should be doing, does it go on to decide how best to do it.

Within the framework of this basic assessment of mission and goals, reengineering focuses on the organization's business processes--the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets. As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modelled, and improved. It can also be completely redesigned or eliminated altogether. Reengineering identifies, analyzes, and redesigns an organization's core business processes with the aim of achieving dramatic improvements in critical performance measures, such as cost, quality, service, and speed.

Reengineering recognizes that an organization's business processes are usually fragmented into sub-processes and tasks that are carried out by several specialized functional areas within the organization. Often, no one is responsible for the overall performance of the entire process. Reengineering maintains that optimizing the performance of sub-processes can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded. For that reason, reengineering focuses on redesigning the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. This drive for realizing dramatic improvements by fundamentally rethinking how the organization's work should be done distinguishes reengineering from process improvement efforts that focus on functional or incremental improvement.

Figure 1 indicates that work processes, information needs, and technology are interdependent.  When a reengineering project leads to new information requirements, it may be necessary to acquire new technology to support those requirements. It is important to bear in mind, however, that acquiring new information technology does not constitute reengineering. Technology is an enabler of process reengineering, not a substitute for it. Acquiring technology in the belief that its mere presence will somehow lead to process innovation is a root cause of bad investments in information systems.

Figure 1: Relationship of Mission and Work Processes to Information Technology

Reengineering a business process drives changes in other aspects of the organization that support and control the process (figure 2).

Figure 2: Reengineering Drives Many Changes

Because so many issues are interconnected in reengineering, evaluators need to scope their assessments broadly and take a holistic view of the effort.  For example, an agency that is in the midst of designing a new process should have previously laid a solid foundation for change by clarifying its mission, identifying customer and stakeholder needs, assessing performance problems, setting new performance goals, and determining that reengineering is an appropriate approach to take. Even implementation issues need to be considered in the early stages of the project, so that executives can begin preparing the agency for changes in goals, values, and responsibilities.

SOURCE:

Dodaro, Gene L. and Crowley, Brian P. (1997) “Business Process Reengineering Assessment Guide”, Accounting and Information Management Division, United States General Accounting Office, May 1997, Version 3

E-Commerce & Information Quality

Electronic Commerce

Over the past decade, the emergence of electronic commerce has highlighted quality information as an increasingly critical component for organizational success. Quality information is necessary for purely digital products and also for information-augmented products where information about a product supplements the physical product or a service itself. In all these cases the product experience is degraded when information quality is deficient. 

Speed and reach characterize electronic commerce environments. Each affects information quality by affecting attributes such as information timeliness, completeness, and context. Beyond their impact on information attributes, speed and reach also change the inter-organizational dynamic regarding innovation. Prior to the internet, another firm could copy one company's revolutionary product or product enhancement only after experiencing time lags caused by temporal barriers involving information access, product development, and customer response. In electronic commerce environments the dynamic of product copying has indeed changed. Web site enhancements and new business practices are immediately available and easily duplicated. Developers now may upgrade internally or draw from others, and the time necessary is no longer measured in months or years, but often in weeks, days, or even hours. This altered landscape has affected information quality and its relationship to business success.

Information Quality

Numerous studies have identified the various attributes of information quality (in the literature, sometimes referred to as “data quality”).  The plethora of dimensions mentioned in these studies – each logical but when aggregated, overwhelming – begs summarization.  A common thread throughout these papers is using four dimensions to capture many possible information quality (IQ) attributes:

Intrinsic IQ measures accuracy, believability, objectivity, precision, and reliability and indicates quality inherent in the information itself.

Contextual IQ measures relevance, timeliness, completeness, and appropriateness and relates to considering information in the context of the task at hand.

Representational IQ includes understandability, interpretability, concise and consistent representation, format, and appearance and addresses how systems store, process and present information.

Accessibility IQ measures accessibility, security, system availability, ease of operation, and privileges and deals with system aspects of how easy one can “get at” information and how secure is that information.

Information Systems Adoption Models

Many models and analysis frameworks have been developed to help organisations construct strategies or provide a starting point for a working agenda of progressive implementation in their company. Most of the models use a categorisation system for the positioning of an individual company at a predefined level.  This process analysis extracted from quantitative results has paved the way for a qualitative inter-organisational examination to expand and dissect issues faced by an organisation implementing a new technique.

Successful implementation of strategic information systems is based on a process of strategy formulation, which is embedded into the business strategy that includes a socio-technical element.  The various models analyze organisational values such as strategy, structure, systems, culture; to form the resulting socio-technical fit.  There have been many models created identifying and analysing the implementation, integration and impact of adoption of new information communication techniques into an organisation. It is becoming more apparent that for a comprehensive and successful inclusion of new communication technology the recognition and analysis of socio-technical fit and culture should be included in parallel with process development in formulating an adoption strategy. 

It has been identified by many authors that getting people and technology working in harmony is the key to high productivity.  Organisation and human factors have to be dealt with concurrently to smooth the transition to a new system.  There are other authors who have extended the understanding of socio-technical fit by constructing a table of categorised implementation problems that beset BPR projects following an exhaustive factor analytic procedure – “Categories of reengineering implementation problems”.  It is indicated that changing values and beliefs is one of the most important aspects in any serious attempt to transform business performance.  In addition to this cultural change is one of the most intractable aspects of successful business process management. 

Creating an accurate picture of the current business situation and of future business requirements is essential for stage monitoring or predefined progressive change and development. Both technical and social elements could result in the improvement of the clarity of that picture.

SOURCE:

Jackson, Martin L. and Sloane, Andy (2007) “A model for analysing the success of adopting new technologies focusing on electronic commerce”, Business Process Management Journal, Vol. 13 Iss: 1, pp.121 – 138

Miller, Holmes (2005) “Information quality and market share in electronic commerce”, Journal of Services Marketing, Vol. 19 Iss: 2, pp.93 – 102

CRM as a Business Process

In a business-to-business environment, customer relationship management is the business process that provides the structure for how relationships with customers are developed and maintained. Increasingly, customer relationship management (CRM) is being viewed as strategic, process-oriented, cross-functional, value-creating for buyer and seller, and a means of achieving superior financial performance.  Management identifies key customers and customer groups to be targeted as part of the firm's business mission.  The decision regarding who represents key customers includes evaluation of the profitability and potential profitability of individual customers.  Often it is assumed that the marketing function is responsible for creating, maintaining and strengthening relationships with business-to-business customers because it does this with consumers. However, for two large organizations to be able to coordinate their complex operations, all corporate functions must be involved and actively participate in the relationship in order to align corporate resources with the profit potential of each relationship. 

For example, in complex business relationships such as the one between The Coca-Cola Company and Cargill, Incorporated there is broad cross-functional representation and CEO-to-CEO involvement. The collaborative activities worked on by the teams have included: joint research and development on a new, natural, zero-calorie sweetener; logistics managers from the two companies working to reduce global transportation footprints; and, joint communication and cooperation on sustainability issues.  The benefits for each company are substantial. For example, in the case of the new sweetener; “The Coca-Cola Company has exclusive rights to develop and market the partnership's product in beverages, and Cargill has exclusive rights to develop and market it in foods”.

Typically, large sums of money are spent to attract new customers; yet management is often complacent when it comes to nurturing existing customers to build and strengthen relationships with them.  However, for most companies, existing customers represent the best opportunities for profitable growth. There are direct and strong relationships between profit growth; customer loyalty; customer satisfaction; and, the value of goods delivered to customers.  Relationship marketing concerns attracting, developing, and retaining customer relationships.  CRM has become a critical business process as a result of: competitive pressures; the need to achieve cost efficiency in order to be a low-cost, high-quality supplier; a recognition of the fact that customers are not equal in terms of their profitability; and, knowledge that customer retention can significantly affect profitability. CRM and supplier relationship management provide the critical linkages throughout the supply chain. 

For each supplier in the supply chain, the ultimate measure of success for the CRM process is the growth in profitability of an individual customer or segment of customers over time. In addition to trends in past profitability, “current and projected profits of customers (existing and potential) need to be analyzed and forecast”.  For each customer, the most comprehensive measure of success for the supplier relationship management process is the impact that a supplier or supplier segment has on the firm's profitability. The goal is to increase the joint profitability through the co-production of value.  A potential roadblock is failure to reach agreement on how to split the gains that are made through joint process improvement efforts. The overall performance of the supply chain is determined by the combined improvement in profitability of all of its members from one year to the next. 

While there are a great number of software products that are being marketed as CRM, these technology tools should not be confused with the relationship-focused, macro-business, CRM process.  CRM software has the potential to enable management to gather customer data quickly, identify the most valuable customers over time, and provide the customized products and services that should increase customer loyalty.  When it works, the costs to serve customers can be reduced making it easier to acquire more, similar customers. However, according to Gartner Group, 55 per cent of all CRM (software solutions) projects do not produce results.  In a Bain Survey of 451 senior executives, 25 per cent reported that these software tools had failed to deliver profitable growth and in many cases had damaged long-standing customer relationships. One firm spent over $30 million only to scrap the entire project.  There are four major reasons for the failure of CRM software projects:

1. implementing software before creating a customer strategy;

2. rolling out software before changing the organization;

3. assuming that more technology is better; and

4. trying to build relationships with the wrong customers

To be successful, management must place its primary focus on the CRM process and the people and the procedures that make the technology effective. The technology is simply a tool. Relying on the technology by itself will most often lead to failure. 

Source: Lambert, Douglas M. (2010) "Customer relationship management as a business process", Journal of Business & Industrial Marketing, Vol. 25 Iss: 1, pp.4 - 17

What is Podcasting?

PODCASTING

Podcasts are digital media files (most often audio, but they can be video as well), which are produced in a series. You can subscribe to a series of files, or podcast, by using a piece of software called a podcatcher. Once you subscribe, your podcatcher periodically checks to see if any new files have been published, and if so, automatically downloads them onto your computer or portable music player for you to listen to or watch, whenever you wish.

Podcasting attracts people who want the ability to choose their own content (much like using the Internet), instead of the TV and radio model of broadcast where you tune in and select from one of the programs playing. It shares common ground with other time shifting technologies like TIVO, which allow you to download programs and watch whenever you want. Many people like the convenience of always having fresh material loaded on their iPods or personal music players, and listen to their podcasts throughout the day.

Many consider podcasting an alternative to commercial radio and TV, because the low cost of producing a podcast allows more voices and viewpoints to be heard. Also, unlike TV and radio, which produce programs for mass consumption, podcasts are “narrowcasts,” where only those interested in a certain topic seek out programs and sign up to listen. There are thousands of podcasts which target very specific niche interests, producing communities around topics which are too obscure for traditional broadcasting to cover.

Podcasting is an easy and powerful way to communicate your ideas and messages. You can potentially reach anyone with a broadband connection who is searching for podcasts and subscribes to your show. People who start podcasts usually want to deliver their content in a series, stretched out over a period of time. There are minimal equipment and start up costs if you already own a computer, and so this allows anyone who ever dreamed of owning a radio station (and some who didn't) the chance to transmit their ideas far beyond the reach of a radio transmitter.

Podcasters often start shows with the intention of building online communities, and often solicit comments and feedback on their programs. People use web blogs, groups, and forums to communicate with other listeners and the show's producers. Businesses are beginning to realize that podcasting is a cheap way to advertise to groups with very specific interests. Many large companies are starting to produce podcasts, both to communicate with their customers, and also with their own employees.

Source: Bertucci, Brian (2012) “What is Podcasting?”, About.com, Available at: http://podcasting.about.com/od/basics101/a/whatis.htm, Accessed: September 2, 2012

Customer Relationship Management (CRM)

CRM OVERVIEW

Customer relationship management (CRM) has been adopted by many organisations in recent years because of their effort to become more customer focused to face the increasing competition. Many companies highlighted that they have applied CRM methods and experienced success. CRM evolves from business processes such as relationship marketing and the increased emphasis on improved customer retention through the effective management of customer relationships.

One view of CRM is the utilisation of customer-related information or knowledge to deliver relevant products or services to customers.  Another view of CRM is that it is technologically orientated. Advances in database technologies such as data warehousing and data mining are crucial to the functionality and effectiveness of CRM systems.  A study conducted in a UK-based manufacturing company demonstrates that in reality CRM is a complex combination of business and technological factors.  In addition, CRM is considered a holistic process of acquiring, retaining and growing customers.  Thus, CRM is not simply some applications or software but the philosophy, the way a company works so as to build long-lasting relationships with its customers.  CRM is a comprehensive strategy and the process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.

BENEFITS OF CRM

CRM permits businesses to leverage information from their databases to achieve customer retention and to cross-sell new products and services to existing customers.  Companies that implement CRM make better relationships with their customers, achieve loyal customers and a substantial payback, increased revenue and reduced cost.  CRM when successfully deployed can have a dramatic effect on bottom-line performance.

According to a study conducted in the sector of banking, convenience of location, price, recommendations from others and advertising are not important selection criteria for banks. From customers’ point of view, important criteria are: account and transaction accuracy and carefulness, efficiency in correcting mistakes and friendliness and helpfulness of personnel.  Thus, CRM, high-quality attributes of the product / service and differentiation proved to be the most important factors for customers.

Another study conducted in a European bank shows that with CRM, the bank was able to focus on profitable clients through efficient segmentation according to individual behaviour. Information about ‘who buys what and how much’ enabled the bank to have a commercial approach based on the client and not solely on the product. Thus, the bank was able to better satisfy and retain its customers.

SUCCESS AND FAILURE FACTORS OF CRM IMPLEMENTATION

CRM should be placed at the heart of the organisation and a holistic approach should be adopted because CRM reaches into many parts of the business.  Thus, CRM should be beyond a front-office contact management system.

Another issue is that of sourcing, since many organisations have few alternatives but to outsource a significant proportion of their CRM solution as they lack the resources to develop CRM software.  Managers have a basic understanding of CRM and the IT department has little time to research CRM or to develop software solutions. Thus, in many cases, external consultants should be used to acquire knowledge of CRM. In addition, best-practice examples, that is, the practical guidelines on how to design and implement CRM successfully are few within an industry.

In CRM implementation, a vision or strategic direction for the project is highly important because else the project may fail.  Furthermore, CRM involves business process change to align with the system.  Another major problem is the selection of the appropriate project team.  The integration of CRM systems is also essential, as well as the selection of a suitable CRM software package, which is able to integrate with many other enterprise applications.  Customers should not have to deal with the complexity of the companies and CRM should make things easier for them.

Other success factors of CRM are: Process fit, that is, the CRM system must be designed around an elaborate understanding of a CRM process so as to leverage the marketing and sales effort. Customer information quality, that is, making effective use of customer information resources. System support, because only if the system has been implemented and adopted successfully, a firm is able to reap its benefits.  Another important factor is culture, because employees should accept the changes and be prepared for what the implementation of CRM will bring.

Source: Blery, Evangelia and Michalakopoulos, Michalis (2006) “Customer relationship management: A case study of a Greek bank”, Journal of Financial Services Marketing, 11 (2), pp. 116-124