Current issues in managing customer relationships

M.Comm.In the past year or two, there has been a phenomenal interest among academic and marketing practitioners regarding the concept of Customer Relationship Management (CRM). With the emphasis that is placed on the importance of Relationship Marketing, one would expect the existence of a clear description of the concept, as well as a management framework for the evaluation, implementation and management of such a concept that impacts on the total organisation. However, there are only a few valid theories and learnings to assist Marketing managers and Marketing directors in their understanding of the concept. The purpose of this study was to identify the issues that influence CRM and to assess their importance among South African Marketing managers (MM) and Marketing directors (MD). The study also attempted to evaluate the current perception and understanding of the terms Relationship Marketing (RM) and Customer Relationship Management (CRM). But the most important aspect of this study was to attempt to identify the elements to be included in a possible managerial framework that addresses the issues related to the development and implementation of a CRM strategy. The issues that influence CRM and the elements for inclusion in such a framework were identified by means of: A literature study of various secondary sources which provided the identification of international CRM issues and a conceptual framework for the understanding of Relationship Marketing (RM) and Customer Relationship Management (CRM). An empirical study to test the identified issues within the South African environment, to assess the current perception of MM and MD's regarding the concepts of RM and CRM and to generate and purify the possible elements for inclusion in a CRM framework. The methods used to generate the variables were an analysis of secondary sources and individual input • from CRM experts (exploratory study) through the use of e-mail discussions. A survey among MM and MD in various industries, situated mainly in South African metropolitan areas, quantified the issues. In the exploratory study, 34 CRM variables were generated. The variables represented the elements related to the CRM concept. An attempt was made to summarise the initial information into the most important dimensions, which also had the most potential for stimulating further research. Therefore the elements were tested among CRM experts in a QSort technique and 11 variables were eliminated. The purpose of the questionnaire was to determine the opinion of a larger sample of respondents in the marketing environment and to gain their understanding regarding the concepts of RM and CRM as well as to test the internationally identified issues in the South African environment. It was necessary to refine the elements for inclusion in a possible CRM framework by reducing the variables and restructuring the dimensions. Two techniques, namely factor analysis and coefficient alpha, were used for this purpose. A computer software programme was used to calculate the factor analysis and coefficient alpha. The repetitive procedure of calculating coefficient alpha and the item-tototal correlation for each factor, followed by the elimination of variables, and the factor analysis to determine the dimension of a CRM framework, led to the reduction from the original 23 variables to 3 descriptive factors. The statistical results and findings indicated that these dimensions had a high interval consistency and reliability. The results of the study were satisfactory in terms of the objectives and confirmed that MM and MD were not completely sure in their understanding of the terms RM and CRM. They were also not able to agree on the elements for inclusion in a CRM or RM definition. But the researcher did gain valuable information regarding the issues that influence CRM and that should possibly be included in a CRM framework to assist MM and MD with the development and implementation of CRM strategies. The findings of the study indicated that the terms RM and CRM were encompassing concepts and it was not possible to identify only a few elements for inclusion into a definition. The study however indicated that a possible CRM framework holds a large variety of potential implications for further research and for marketing applications. The framework must be tested in practice in further studies to verify the reliability, validity and general acceptability of the issues and, if necessary, to make adjustments accordingly. The most important implication that the research results hold for marketing management is that the framework can be used to evaluate their company's orientation towards a 'customer centric' organisation and to identify the problem areas regarding the implementation and management of CRM