Rejuvenating Customer Management:: How to Make Knowledge For, From and About Customers Work
Introduction
Customer relationship management (CRM) and knowledge management (KM) initiatives are directed towards the same goal: the delivery of continuous improvement towards customers. Initiatives stemming from this effort have been labelled ‘customer knowledge management’ (CKM) or ‘knowledge-enabled CRM’ (Gibbert, Gebert). In this contribution, we conceptualise CKM as the utilisation of knowledge for (e.g. product information) from (e.g. their ideas about product improvements) and about customers (e.g. their requirements and expectations) in order to enhance the customer-relating capability of organisations. Recent research shows that an organisation’s KM capabilities are the most significant critical success factor affecting CRM impact (Croteau and Li, 2003). However, due to a history of poor solutions coupled with technology failures, many companies have a hard time justifying CKM initiatives in today’s business world (Yu, 2001). Nevertheless, the idea of combining KM initiatives with CRM activities is still alive as it has also proven to bring about considerable benefits when done correctly (Gibbert et al., 2002). Therefore, we want to introduce the actual status quo of CKM initiatives within organisations and shed light on the question how companies successfully utilise knowledge for, from and about customers to achieve superior performance in CRM processes.
In order to address these issues, we applied a two-stage research approach combining quantitative-empirical data with results from a multiple case study design. The quantitative-empirical data was collected by means of a survey of 1,000 CRM executives of renowned companies in German-speaking regions such as Allianz, Deutsche Bank, Lufthansa and Audi. At the same time, we extended the insights derived from the survey by in-depth case studies at three companies where we identified successful practices of customer knowledge management: Union Investment, Siemens and Credit Suisse.
We present the theoretical foundation of this paper in the following paragraph. After a brief outline of our research approach we introduce the results of our survey regarding the status quo of CKM initiatives within organisations. Subsequently, the case studies of Union Investment, Siemens and Credit Suisse illustrate how these companies managed their knowledge for, from and about customers effectively. From this we suggest implications for practice by means of a managerial framework.
Section snippets
A CRM Process Map
In general, two core developments can be identified which finally led to the emergence of CRM. One of these developments was the shift from a focus on transactions to the establishment, marketing and nurturing of relationships with customers (Bose and Sugumaran, 2003). Companies that pursue a CRM approach focus on customer retention rather than on single sales (Webster, 1992). Formally, relationship marketing can be characterised as an integrated effort to identify, maintain, and build a
Knowledge Flows in CRM Processes
The CRM discipline’s relationship with KM approaches and technologies has widely been recognised as a relevant field of research (Winer, 2001, Massey).
As CRM processes can be considered semi-structured or even unstructured, they reveal a high complexity as well as a strong knowledge intensity. Since collecting, storing and distributing relevant knowledge for those CRM processes makes the deployment of KM techniques necessary, it is evident that an organisation’s KM capabilities play a key role
Research Methodology
For our research purpose, we adopted a two-stage strategy that combines quantitative-empirical data, based on a large-scale survey with an explanatory multiple-case study approach. In the first stage, we used data derived from a survey of 1,000 CRM executives in order to identify the status quo of knowledge-enabled CRM initiatives within organisations. This part covers aspects referring to “who”, “how many” and “how much” (Yin, 2002). Therefore, the survey represents the exploratory part of our
A Survey on Knowledge-based CRM
As outlined above, we structured the survey’s questions on CRM process implementation according to the process map for CRM introduced in the theoretical foundation of this paper. The knowledge management category was explained to the participants as comprising two perspectives on the management of customer knowledge within the organisational context: (a) knowledge exchange between customers and the organisation and (b) knowledge dissemination within the organisation to those entities where it
Implications for Practice
Based on our findings, we present four implications of the successful improvement of CRM processes by KM. According to the business engineering concept, these implications can be arranged in a managerial framework for knowledge-based CRM strategy, processes, systems and change management (see Figure 2). The business engineering concept enables the transformation of enterprises from the industrial age into the information age by means of procedure models, methods, and tools (Österle, 1995).
This
Conclusion and Outlook
As a result of our research effort, we established a managerial framework for knowledge-based CRM. The proposed framework enables practitioners to successfully utilise knowledge for, from and about customers in order to achieve superior performance of CKM initiatives. Currently, the authors are engaged in follow-up research to ensure the generalisability of the framework. By doing so, we will pursue the opportunity to undertake longitudinal studies with the same organisations in order to
HARALD SALOMANN, University of St. Gallen, Institute of Information Management, Mueller-Friedberg-Strasse 8, CH-9000 St. Gallen, Switzerland. E-mail: [email protected]
Harald Salomann is Research Associate at the Institute of Information Management at the University of St. Gallen, Switzerland. His research interests include the infusion of technology in customer relationships by means of self-services as well as issues regarding privacy and trust in the field of customer relationship
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HARALD SALOMANN, University of St. Gallen, Institute of Information Management, Mueller-Friedberg-Strasse 8, CH-9000 St. Gallen, Switzerland. E-mail: [email protected]
Harald Salomann is Research Associate at the Institute of Information Management at the University of St. Gallen, Switzerland. His research interests include the infusion of technology in customer relationships by means of self-services as well as issues regarding privacy and trust in the field of customer relationship management (CRM).
MALTE DOUS, University of St. Gallen, Institute of Information Management, Mueller-Friedberg-Strasse 8, CH-9000 St. Gallen, Switzerland. E-mail: [email protected]
Malte Dous is Research Associate at the Institute of Information Management at the University of St. Gallen, Switzerland. His research focuses on the organisational design of internal client relationships between IT and business units as well as on the management of customer knowledge.
LUTZ KOLBE, University of St. Gallen, Institute of Information Management, Mueller-Friedberg-Strasse 8, CH-9000 St. Gallen, Switzerland. E-mail: [email protected]
Lutz Kolbe heads the Competence Center Customer Management at the Institute of Information Management and teaches at the University of St. Gallen, Switzerland. His research interests are customer relationship management, security management as well as advanced technologies in the residential environment.
WALTER BRENNER, University of St. Gallen, Institute of Information Management, Mueller-Friedberg-Strasse 8, CH-9000 St. Gallen, Switzerland. E-mail: [email protected]
Walter Brenner is Professor of Information Systems at the University of St. Gallen and Managing Director of the Institute of Information Management. His research focusses on integrated information management, customer relationship management and innovative technologies.