Extending customer relationship management: from empowering firms to empowering customers
| Date | 26 April 2013 |
| Published date | 26 April 2013 |
| Pages | 140-158 |
| DOI | https://doi.org/10.1108/13287261311328877 |
| Author | Hannu Saarijärvi,Heikki Karjaluoto,Hannu Kuusela |
| Subject Matter | Information & knowledge management |
Extending customer relationship
management: from empowering
firms to empowering customers
Hannu Saarija
¨rvi
School of Management, Research and Education Centre Synergos,
University of Tampere, Tampere, Finland
Heikki Karjaluoto
Department of Marketing, School of Business and Economics,
University of Jyva
¨skyla
¨, Jyva
¨skyla
¨, Finland, and
Hannu Kuusela
School of Management, University of Tampere, Tampere, Finland
Abstract
Purpose – The focus of customer relationship management (CRM) literature has been predominantly
on the firm perspective and on IT, not on customer or service orientation and value co-creation. This
paper seeks to explore and analyse contemporary CRM frameworks and suggests future research
directions. To achieve this, a thorough literature review on CRM is conducted focusing on recent
advances within CRM. This provides a good basis for critically analysing the current status of both
CRM theory and practice.
Design/methodology/approach – The paper reviews CRM literature published 2003-2011. Based
on the literature review, it introduces a conceptual framework of the changing role of customer data in
the CRM framework.
Findings – Literature has not adequately addressed the role of the emerging service orientation,
value co-creation and the opportunities provided by new technology and communication channels.
Drawing on a thorough CRM literature review, we argue that a fundamental change in CRM thinking
is needed to shift the focus of CRM from empowering firms to empowering customers.
Research limitations/implications – The paper is conceptual in nature and presents only a few
empirical examples of the changing role of customer data within the CRM framework. The paper calls
for more research on the emerging service orientation, value co-creation and the impact of new media
on the contemporary CRM framework.
Practical implications – Customer data remain, and will remain, a critically important input
resource informing a firm’s processes. However, using customer data for the benefit of the customer
too, to serve customers better, is clearly an emerging phenomenon. Refining and giving customer data
back to customers may represent a future mechanism through which companies deepen and develop
their customer relationship management to a whole new level.
Originality/value – The study is among the first attempting to critically evaluate the contemporary
CRM framework from the perspective of empowering customers.
Keywords Customer relationship management, Customerdata, Customer centricity,
Service-dominantlogic, New media
Paper type Conceptual paper
Introduction
Customer relationship management (CRM) is generally defined as the management of
mutually beneficial relationships (LaPlaca, 2004), in which customer data often has
The current issue and full text archive of this journal is available at
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Journal of Systems and Information
Technology
Vol. 15 No. 2, 2013
pp. 140-158
qEmerald Group Publishing Limited
1328-7265
DOI 10.1108/13287261311328877
JSIT
15,2
140
a major role (Verhoef and Langerak, 2002). The diversity of the theoretical, practical, and
managerial discussion around CRM is well characterized within its current domain that
often applies two classifications: the strategic and the operational perspective
(Richards et al., 2006). From the strategic perspective, the core idea of CRM is to develop
strategies to attract (the right) customers and maximize their lifetime value by fostering
their loyalty. CRM is all about acquiring, cultivating, managing, and retaining
customers, which is why it underlines the importance of relationship strategy and the
process used to identify customers, create customer knowledge, build customer
relationships, and shape customer perceptions of the firm and its products and solutions.
Furthermore, strategic CRM determines how a firm relates to its customers via channels,
messages, products, and services (Richards et al., 2006).
The operational perspective on CRM, in turn, deals with automating customer-facing
processes such as interactions and general front-office processes including sales,
marketing and customer service. According to Peppers and Rogers (2011, p. 9),
operational CRM “focuses on the software installations and the changes in process
affecting the day-to-day operations of a firm – operations tha t will produce and deliverer
different treatments to different customers”. This definition also reveals the very nature
of the customer-focused way of doing business: treat different customers differently.
Both practitioners and scholars identify analytical CRM, referring to plans needed to
build customer value by managing customer databases to perform data analysis like
data mining, as a third angle of CRM (Peppers and Rogers, 2011, p. 9).
Conceptual complexity around CRM is further deepened, for example, by Parvatiyar
and Sheth (2001) who underline the importance of CRM in integrating different company
functions such as marketing, sales, customer service and supply chain functions to
enhance efficiency in delivering value. The process-oriented definitions encourage
companies to gather customer data, identify the most valuable customers over time, and
increase customer loyalty by providing customized products and services (Rigby et al.,
2002). In contrast, the managerial meaning of the term CRM refers to the collection of
customer data and other activities related to the management of the customer-firm
interface (Boulding et al., 2005), and so resembles the definition of operational CRM.
Despite the increasing managerial interest in CRM, as well as the scholarly interest in
both its operational and strategic perspectives, the CRM activity being undertake n by
firms may be inadequate. This is due to many reasons. Companies are increasingly
shifting attention from selling goods to supporting customers’ value-creating processes,
which is related to the current marketing thinking emphasizing intangibility, exchange
processes and relationships (Vargo and Lusch, 2004, 2008). As part of their quest to
provide a better service, firms are establishing service applications where customer dat a
is used for the benefit of the customer instead of the overarching focus on firm’s value
creation, as is largely emphasized within the contemporary CRM framework. Moreover,
perceptions of the conventional roles of customers and firms are constantly being
adjusted and reconfigured. Both customers and firms implement new ways to engage in
each other’s value-creating processes, often referred to as value co-creation. Certainly,
the changes in the operational CRM and communications landscape, such as the
evolution of the customer from a passive receiver of marketing communications to an
active partner and discussant (Hennig-Thurau et al., 2010), opens up new opportunities
for value creation for the firm and the customer, as well as offering a new source of
customer data.
Customer
relationship
management
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