Impact Of Crm On Customer Satisfaction And Retention Management Essay

1. Introduction

Customer relationship management (CRM) is a set of strategic practices and is a broadly used term that covers different functions and concepts of organisations in aspects of operational, collaborative and analytical frameworks (Ramsey, 2010). There are many benefits the company could derive upon implementation of CRM systems. These benefits are: customers-suppliers linkage, access, hassle-free communication, and reduction of implementation cycles, centralised and regularised systems upgrade, centralisation of maintenance and enhancement expertise and homogenisation of CRM technology (Kelly and Gillbert, 2003) (Harrington, 2008) (Taylor, 2004) (Hunter, 2009).

Customer Relationship Management is a fresh and prominent business approach that has integrated permanently in the contemporary business management literature (Chen, 2003). It usually refers to business activities directed towards initiating, establishing, maintaining, and developing successful long-term relational exchanges (Sharma and Mittal, 2007). CRM not only impacts business performance but has an effect upon customers. It results in client’s retention, satisfaction and loyalty (Smith, 2006). The benefits of customer retention and satisfaction are many, therefore companies eagerly tries to secure a significant customer base (Kumra, 2005).

Information technology plays an important part in facilitating the link between CRM and customer retention. Company can utilize the combination of computer’s speed and storage capabilities along with the internet connectivity. This helps in providing a powerful linkage among several functions of the company (Ramsey, 2010). For companies of different sizes, different CRM systems are available which range from the simplest contact-management systems that focus on assisting individual salespeople to most complex enterprise-wide and cross-enterprise systems (Newby and Sherif, 2005). The basic function of the CRM systems is to connect the company with its customers and suppliers. CRM systems ensure that customers have a consistent experience across multiple sales channels (Han and Kim, 2003). It is vital for a company to successfully implement CRM system as an effective implementation assists the company in meeting the customer needs. It is the responsibility of the management to integrate the system in the company and train its staff to effectively work on the CRM systems (Zarali, 2009). It is aimed to explore these issues and the researcher will attempt to identify the impact of CRM systems on the overall marketing system of the company.

2. Research Question

Determine how CRM systems can impact the customer loyalty and retention, and its effect on skills of employees and customers’ satisfaction?

3. Aim and Objectives

The main aim of this dissertation is to study the value and importance of CRM systems in terms of customer satisfaction and retention.

To achieve this aim following objectives are to be achieved:

* To analyse the published literature on CRM and to identify related issues.

* To assess the impact of CRM systems on customer satisfaction and retention.

* To summarize all the literature and the findings and present them in customer satisfaction context.

* To provide recommendations to the company.

4. Company’s Profile

The company selected for this dissertation is MobileNet, Ltd which is situated in the heart of Delhi, the capital of India. The company deals with providing mobile phone and network connections to individual customers as well as corporate clients. Along with the mobile products, it provides direct and indirect services related to handsets and network system. It started as a small company with few employees but gradually developed into a successful medium size enterprise. Reasons for the choice of selecting this company includes: Availability of appropriate data, personal contacts with the company management and previous job experience with the company. The other motives are ease to conduct research, less finance needed and time effectiveness. The company has recently adapted and implemented CRM systems within the company. This has improved its overall business transactions, activities and performance as well as increased profits.

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5. Research Significance and Problem Identification

Although CRM is an established concept in contemporary management studies, little has been focused upon impact of CRM systems on customer satisfaction. There are literally no studies available on it regarding Indian environment. Constantly changing environment and performance oriented industry are influencing the organizational structure and leading to increased reliance on staff and customer loyalty. CRM is basically a new concept in India. It needs time to improve and integrate other aspects into it. But this problem can be addressed by relating effectiveness of CRM systems on organization’s marketing activities. This issue is now established as it affects the field of management in several ways. It is especially valuable for companies seeking better performance.

6. Hypothesis

The company can satisfy its customers, attract new ones and retain existing ones by successfully and effectively implementing latest CRM system within the company. If appropriate system is implemented, it can prove beneficial and help the company to achieve its marketing objectives.

7. Rationale

Companies tend to apply out-dated and inadequate systems that most of times doesn’t work on their business situations. While doing so, they often ignore to adapt advanced CRM systems. In order to improve the customer satisfaction, companies need to adapt new ways that can impact overall customer loyalty as well as help to successfully retain existing customers. There are many other specific topics that can be explored regarding the application of CRM systems. There is need to increase the limited knowledge regarding the implications and effects of CRM systems. This study proposes to focus on marketing activities of the chosen company. The research rationale is to determine the benefits of CRM systems implementation in marketing.  

8. Theoretical Framework

The main aim of the dissertation is to investigate the impact of CRM systems and its implementation on customer satisfaction. In this research, the researcher will try to reveal the general customer behaviours in existence. This will also include the exploration on patterns of customer satisfaction, retention and loyalty. Prior to this, the researcher will try to present information on the recent CRM systems in use in marketing and to discover its importance. In addition, the paper will also seek to discuss the benefits and limitations of CRM systems in marketing and how it could possibly improve the overall performance and position of the company. Moreover, the research will also aspire to investigate customer information management which includes responses and relationships. The role of management in implementing and managing CRM system will also be critically analysed in this dissertation. Finally, the paper will aim to compare actual practices on organisations with benchmark practices. This research will specifically examine impact of CRM systems focusing on marketing issues by taking into account environmental and cultural requirements of the company. The researcher will compare the literature with case study of the company and conclude on the benefits of adapting CRM systems 

9. Usefulness of the Research

This research will consider all the relevant factors related to marketing theory of CRM. It can be useful for the company for comparison reasons with its own survey. It can be a guideline for the company to take improvement measures. Further it can be used by students for reference purposes. This research when completed can provide better understanding of the risks associated with implementation of CRM systems. From a broader sense, this paper can essentially contribute to corporate decision making. It may contribute to help students improve their learning skill regarding CRM systems and how it applies to customer satisfaction. This research can be an important management or information technology endeavour in the academia.  

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10. Knowledge Gaps and a Future Research Agenda

Research questions which are needed to be addressed include:

How important is the implementation of CRM systems in marketing activities of the organisations?

What are the benefits and limitations of CRM systems in marketing?

How does the implementation of CRM systems in marketing affect the general performance of the organisations?

Is the implementation of CRM systems in marketing improved the current position of the organisations?

What are the strategic planning activities does the CRM systems provide the organisations?

How do CRM systems contribute to customer satisfaction and retention?

In what ways do CRM systems contribute to customers’ loyalty?

Does the implementation of CRM systems affect the supplier-buyer relationship? In what ways?

11. Research Methodology

According to Kothari (2008), research is a systematic study for the collection of data and information to solve the problem or achieve an objective. Saunders et al. (2010) describe it as a rigorous activity that involves organized development and acquisition of knowledge. Kumar (2005) defines methodology as a focused investigation beyond generally available knowledge in order to obtain specific and detailed information which later provides analysis basis on the topic of enquiry.

For this dissertation, the researcher will examine all the available research techniques. Only the appropriate research methods will be selected and the reasons for the made choices with justification will also be provided. Gantt chart will be applied to plan and coordinate dissertation tasks. It will also assist in presenting the research graphically (Bryman and Bell, 2007). Data would be carefully collected and would remain within the research scope (Saunders et al. 2010). The researcher will make sure that all the data gathered is reliable and valid. Both secondary and primary information collection methods will form the data collection structure for this dissertation. Both of these methods will include ‘Qualitative’ and ‘Quantitative’ data (Saunders et al. 2010). The researcher has decided to apply cost effective methods to obtain maximum information from the target population. Company’s internal information will be researched along with external sources. External research sources include catalogues, magazines, newspapers, technical publications and journals. In addition latest articles from renowned journals and contemporary marketing and management books will be consulted and reviewed to give a broader view (Kumar, 2005).

According to Bryman and Bell (2007) interviews are one of the best ways for collecting relevant information from participants’ experiences. It is the most effective way to collect primary data. As planned, interviews will be conducted from the managers and employees to review their opinions. Questionnaires will also be used that will be distributed to randomly selected customers. Questionnaires can be effective for the collection of data that can be later quantified using appropriate scales (Kothari, 2008). The researcher can easily circulate the questionnaire. It is also the cheapest method of communication with fastest response rate. Questionnaire can target huge base of customers. It also minimises the risk of losing the answers (Saunders et al. 2007). Multi-method/mixed-method technique (triangulation) will be applied. This technique focuses on combining quantitative and qualitative data to achieve the goals. All the collected information will be analysed on Microsoft Word 2010 Bryman and Bell, 2007). Both managers of the company will be interviewed; randomly selected few employees for interviews and randomly selected customers will be selected. The reason for selecting managers is quite forward as they can provide enough information on company’s management of CRM system and related issues. Employees are selected to discuss their views on impact of CRM on their performance and satisfaction. It will be difficult to question every customer so the researcher will try to distribute questionnaire to as many people as possible so that the enough data can be collected to represent the whole population.

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12. Limitation

Limitation would arise as the research will progress. It may include management and employee or even customer bias, unavailability of essential data, ineffective time and resource allocation, etc. It is a natural limitation that information cannot be gathered from all the sources; therefore sampling will be done randomly. Not all sources can be searched; therefore Bell’s six point parameter will be applied to minimize sources and avoid collecting irrelevant data.

13. Time Scale Chart


Date (Start)

Date (Finish)

Time Estimated

Research Proposal

Research Findings

Literature Review

Research Methodology

Findings and Analysis

Drafting and Submission

14. Summary of the Research

Chapter 1 is introduction. The research’s overview will be laid out in this section. Aim and Objectives will be included along with the hypothesis and rationale. Research significance and usefulness will be explained as well as theoretical framework. In the end of this section knowledge gaps and research agenda will also be emphasized, before finally providing the research layout.

Chapter 2 of dissertation is literature review which comprises almost half of the dissertation. Latest issues related to CRM will be discussed and critically analysed. This section will be divided into sub-topics of important subjects. The impact of CRM system, its adaption and implementation, its importance for customer satisfaction and retention, the role of management and employees and other important issues will be critically analysed. Several authors’ views will be considered and will be linked to CRM. Debate on important CRM issues and arguments presented by different scholars will also be provided.

Chapter 3 reviews the methodology of the research. Selected research methods and techniques will be explained as well as research approaches will be clearly defined. All this will be clarified with justification. The researcher will clearly describe the benefits of using chosen methods to validate the research. It will be ensured to examine the research process in detail as well as to assess the limitations and constraints faced. Information about sampling method and data analysis tools will also be provided. By conducting research, the researcher will try to examine the importance of CRM system for customer satisfaction.

Chapter 4 is the analysis of the gathered data which will partially be graphical presented. Findings of the research and analysis of the data collected will be combined for this section of the dissertation. The researcher will critically analyse results from interviews and questionnaires.

Chapter 5 summarises all the literature and data to research conclusion. Recommendations will be proposed to the company in this section.

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