Customer Relations Management in Information Systems Research

Abstract

Customer Relations Management (CRM) involves attracting and keeping “Economically Valuable” customers while repelling and eliminating “Economically Invaluable” ones. CRM involves changing relationships and improving return-on-investment from customer relationships (ROI-CR.) We are experiencing a shift from a transaction-based economy to a relationship-based one (Keen 1999.) Two important business relationship types exist: those between enterprises and customers; and those between and among enterprises (Kalakota 1996.) This paper addresses the former. However, a there is a significant amount of research into traditional “Market Channels” (See (Bowersox 1990; Ganesan 1994; Syed Saad 1996; Cannon 1999; Geyskens 1999) for examples) as well as into eCommerce (EC) Market Channels (See (Kim 1999; Menon 1999; Son 1999)) Recent and upcoming scholarship and professional activities illustrate the importance the IS Research Community places on CRM. This paper presents a framework for IS CRM Research Topics, a discussion of IS CRM scholarly and professional research directions and activities. 1. A Framework for IS CRM Research I propose an IS CRM framework consising of five nonmutually-exclusive research areas: CRM within Markets; CRM Business Models; CRM Knowledge Management; CRM Technological Issues and CRM Human Issues. Each topic is comprised of several sub-topics, due to the complexity and richness of CRM. 1.1 CRM within Markets Commerce, whether traditional or electronic, involves markets serving to “allocate resources among participants (Williamson 1983.)” the Internet and other Information Technology (IT) are not merely media forms and communication methods, but are in themselves “marketplace instruments (Forbes 2000.)” Currently resource allocation is via transactions. Traditional transactions have three phases: Information; Agreement and Settlement (Selz 1998.) A fourth phase, communication, extends this model connecting multiple transactions across time and establishing relationships among customers and between customers and business enterprises (Selz 1998.) All four phases involve IS CRM issues that have yet to be thoroughly researched. 1.2 CRM Business Models 1.2.1 Historical Background Ives and Learmonth (Ives, 1984) proposed one of the earliest business models for IS CRM, the Customer Resource Life Cycle CRLC, which considers a firm’s relationships with its customers and how those relationships can be bespoke through application of Information Technology (IT.) Table 1 shows the thirteen stage CRLC, which expands on both the IBM four stage model and the eleven step resource life cycle proposed by Burnstine (Burnstine, 1980.) 1.2.2 Electronic Commerce CRM Business Models Recently it has been asked whether the “e” or the “c” in ‘e’lectronic ‘c’ommerce should be emphasized (Keen 1999.) Table 1. IBM Four stage Model and CRLC IBM’s Four Stage Model Ives and Learmonth’s CRLC 1. Requirements 1. Establish Requirements 2. Specify 2. Acquisition 3. Select Source 4. Order 5. Authorize and Pay for 6. Acquire 7. Test and Accept 3. Stewardship 8. Integrate 9. Monitor 10. Upgrade 11. Maintain 4. Retirement 12. Transfer or Dispose 13. Account for The “C” is taking center stage as what lies behind DOT COM interfaces, such as order fulfillment, organizational business processes, and incentives, are exploited by enterprises to remain competitive (Keen 1999.) Much more is needed beyond the “Right” Web site to be competitive, but it is not very clear just what that something else is or how to design and develop it (Keen 1999; Korner The result has been a shift the term “Strategy” to talk about how to do business in the digital economy to the term “Business Model” (Keen 1999; Korner Keen stresses six vital for success (Keen 1999): 1. Perfect Logistics; 2. Perfect Long-term Customer Relations; 3. Harmonize Channels; 4. Build a powerful portal/hub brand; 5. Transform capital and cost structures; and 6. Build value-adding intermediation. These imperatives involve a CRM focused business model, however little research has been offered in the literature as to “how” to accomplish these goals. Research into alternative EC business models and their CRM components is needed to develop descriptive and prescriptive frameworks and theories. One recent IS CRM perspective, ’Management of Customer Relation-ship in Business Media’ (MCR-BM) – concept, has been offered (Korner The concept is defined as 'The Management of Customer Relationship in Business Media comprises the design, development and application of holistic concepts in order to manage relationships to economically valuable current or future customers (Korner 2000.) The MCR-BM concept (Korner 2000) considers electronic markets through open platforms, based on the media concept (Klose 1999), as typical business media that provide independent agents environments within which to create and exchange value as goods and services. The MCR-BM concept offers a basic framework for the design of business models to meet the challenges posed by the Digital Economy. MCR-BR consists of seven interrelated building blocks: 1. Customer Interaction; 2. Customer Added Value; 3. Customer Profiling; 4. Trust; 5. Virtual Communities; 6. Processing; and 7. Controlling. This makes customers ‘Equal Members’ in business communities, rather than value-chain end-nodes. Customer focus places CRM at the core of business models. MCR-BM