Int. j. econ. manag. soc. sci., Vol(3), No (4), April, 2014. pp.

222-227

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International Journal of Economy, Management and Social Sciences

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Review and application of theoretical models of customer relationship

management on organizational productivity
Hadi Nuri
Master of Business Administration student at Islamic Azad University of Kermanshah, Iran.

Zahra Khoshiman *
Master of Marketing Management, Islamic Azad University Kermanshah, Iran.

*Corresponding author: khoshimanzahra@yahoo.com

Keywords

Abstract

theoretical model
customer relationship management
metrics for evaluation
conceptual design

This article aims to review and apply theoretical models of customer relationship management on the
organizational productivity. The purpose of this paper is to examine the concept of customer relationship
management, objectives, and the customer relationship management models and systems. The method is
documentary analytical and print and electronic resources are implemented. There are also three categories
of customer relationship management systems; including operational, analytical, and interactive. Among the
customer relationship management goals we could point to increasing revenue, creating customer loyalty,
and reducing costs and the customer relationship management, Gartner model, Wendy Close model, GL
model, M.POLO model are among theoretical ones and the most important factors in productivity include
competitive advantage, identifying and monitoring the measures of success and customer data.

The concept of customer relationship management

Different definitions of customer relationship management have been provided by the experts, which are addressed briefly below:
Abbasi, quoted Burnt (2001), writes: the customer relationship management is a part of organization strategy to identify and satisfy the customers and change them
into permanent ones. It also helps in managing the customer relationship with company and maximizing the value of every customer (Abbasi, 1389, page 21). He
also notes: customer relationship management is a collection of methodologies, processes, softwares and systems assisting to companies and departments due to
the customer relationship effective and organized management (Abbasi, 1389, page 30). Elsewhere, the customer relationship management is in fact a process to
collect and integrate data for efficient and objective operation. This information can be useful in having relationship with customers, sales, effective marketing,
sensitivity and market needs (Elahi, 1384, page 21). In another definition, customer relationship management means to establish and maintain personal
relationships with profitable customers through the appropriate use of information and communication technology (Kavoussi, 1384, page 389). Customer
Relationship Management is comprised of three main parts: customer, relationship, management. Customer means the end consumer which plays a critical role in
valuable relationships. With relationship we mean creating more loyal and effective customers through learning relationship and management includes creativity
and directing a customer-center business process and considering the customer at the center of organization processes and experiments (Elahi, 1384, page 3).
Customer relationship management is a business strategy which could be enhanced by improving technology and then the companies seek to establish effective
relationships based on optimizing the customer's cognitive and comprehensive value (Safari Nejad, 1387, page 63). Kamalian et.al, quoted Anton (2002), write:
customer relationship management is a comprehensive business and marketing strategy which integrates processes technology and all customer's property business
activities (Kamalian et.al, 1388, page 25). Sufi, quoted Adrienne (2005), writes: customer relationship management is a strategic approach about improving the
beneficiary value through developing the proper relationships with customers and key customer segments (Sufi , 1389, page 4).
Thus, according to the above definitions, we can say that customer relationship management is the collection of strategies, methodologies, processes, software and
systems that help institutions and companies in effective and organized customer relationship management.
Customer relationship management objectives
Various insights on customer relationship management have been proposed by experts, which are paid briefly below:
Najafi, quoted Brent (2001), writes: customer relationship management objectives can generally be divided into three groups "costs saving, increase revenue
increase, and strategic effects". He admits that the following objectives seem reasonable for the organization running customer relationship management: recovery
rate, increasing profits, increasing customer satisfaction, reducing administrative costs, marketing and public Sale costs (Najafi, 1391, page 90). Kabiri, quoted
Noel (2009), writes: total customer relationship management involves identifying the things that have created value for the customers and then delivering them in
this view. While consumers have different attitudes towards value, many methods are available to satisfy any of them. Then, customer Relationship Management
objectives include: identifying the specific values of each segment of customers, understanding the needs relative importance for each customer segment,
determining whether providing such positive manners will be effective or not, communicating and presenting values appropriate to each customer in a manner that
they wish to receive information, measuring results and demonstrating the investment return (Kabiri, 1376, page 94). Najafi, quoted Swift, writes: customer
relationship management has continuous learning process in which information about each customer is converted to establishing relationship with them and it is
not enough just to have information about each customer but the individual needs should be collected and analyzed and be answered appropriately. He also states
that the purpose of customer relationship management is to increase business opportunities through: improving easy relationship with customers, providing the
right products to each customer, offering the right products through the right channels to each customer, offering the right products at the right time to each
customer (Najafi, 1391, page 100). Atibaei, quoted Asatmn (2002), writes: since customer is the organization's life pulse, CRM main objective is based on
attracting and retaining customers. The basic idea of customer relationship management helps the organizations on using technology and human resources due to
gain better insight toward customer business behaviors and the values of each customer for the organization. Some comprehensive customer relationship
management objectives include: managing and organizing the relationship between organization and customers, making the customers' needs accountability easy
and fast and providing services, reducing the customer's needs accountability time and costs, attracting new customers, retaining old customers and making them
satisfied, reducing the sales cost, distribution and marketing, boosting sales, increasing organization profits and income, taking advantage against other competitors
in attracting market positions, providing more effective byproducts, predicting sales, market and customers future needs, increasing the work efficiency, and
making sales cycle shorter (Atibaei, 1386, page 63).
Therefore, considering the above arguments, we can say customer relationship management objectives are consisted of increasing revenue including identifying
new opportunity and reducing missed opportunities, creating customer loyalty through improving customers' services and organization sight, reducing information
storage costs and reducing administrative costs, marketing and public and sales costs.

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Review and application of theoretical models of customer relationship management on organizational productivity
International Journal of Economy, Management and Social Sciences Vol(3), No (4), April, 2014.

Customer relationship management systems

In customer relationship management, these systems can be divided into three general categories:
1. Operational CRM: In this method, all stages of the customer relationship from marketing and sales to post-sales services and the customer feedback, are given to
one person; Of course, in such a way that the salespeople and engineers can get the history of each customer's information without referring to him/her. Among the
means and methods of operational CRM, automate sales force systems can be noted that are responsible for all operations related to contact management, stock
and sales management. Operational part of CRM typically involves three general areas of sales operations automation, support and customer service and marketing
operations automation. Marketing segment provides information about competitors, market trends, and environmental macro variables. Marketing segment
automates some sales processes and company sales management and seeks to collect information about certain buying habits, tastes, and customers demographic
and sales staff efficiency. Customer service segment automates some services such as information requests, complaints and returned products (Chang, 2001, page
23).
2. Analytical CRM: in analytical CRM, means and methods used analyze the information obtained from CRM and prepare the results for business operation
management. In fact, operational and analytical CRM have a two-way interaction; that is the operational data are submitted to analytical section. After analyzing
data, the results directly affect operational section. Through analysis in this section, customers are classified and this allows organizations to focus on a particular
segment of customers (Chang, 2001, page 23).
3. Interactive CRM: In this type of relationship, the customer can communicate with organization by the easiest way possible like telephone, mobile, fax, internet
and other desired methods. Because the customers could choose the method and most processes are submitted to the related authority in the shortest possible time,
Interactive CRM causes the customers to revisit and continue their relationship with the company (Chang, 2,001th the page. 24).
Considering the above arguments we can say: operational CRM involve all stages of customer relationship, marketing, sales and post-sales services. In interactive
CRM a communication is formed between the customer and the organization.

Theoretical models for the customer relationship management

1. Customer relationship management is considered as innovative design in organizations and investigating this in service organizations is a priority. According to
the customer relationship management concepts, we can find that customers, employees, leadership, organizational culture, strategy and structure are the main
factors for CRM implementation and therefore the following theoretical model, consisting three intellectual, social, and information technology could be design
and explained.

The theoretical model for customer relationship

management implementation

Intellectual dimension

Social dimension

IT

Strategy

Interaction with
stakeholders

Electronic Markets
Applications

Business Models
Organizational Culture
Scope of work
The plan structure
Customer
Leadership

IT capacity

Knowledge
Management

Staff

Figure 1.1: Adapted from article (Abbasi, 1389, page 26)

Based on the proposed model, the research original dimensions for organizations' customer relationship management include: intellectual dimension, social
dimension, and information technology (Abbasi, 1389, page 26).
2. In Gartner conceptual model, according to figure 1.2, the vision is defined first. Then, strategies to achieve the vision are identified. Next, the needs of
customers, the partnership structure and the organization culture such as synchronization with the system are mentioned. After that, the knowledge management
processes such as customer relationship management are mentioned. Next, the data and their analysis are presented and in later stages the IT infrastructure
performance evaluation measures are discussed.

Hadi Nuri, Zahra Khoshiman *

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International Journal of Economy, Management and Social Sciences Vol(3), No (4), April, 2014.

1. CRM vision

2. Strategy: objectives, sectors, effective interactions

3. Customers analysis:

4. Organizational

Identifying needs,

corporation:

monitoring expectations

Culture and customer

Satisfaction against the

perception-based structure

competition

based

Collaborate and feedback

Strong relationships
Staff Partners

5. Processes: customer life cycle, knowledge management

6. Information: data and their analysis

7. Technology: Applications, Architecture and Infrastructure

8. Measures: satisfaction, retention, loyalty and ...

Figure 1.2: Gartner models derived from article (Mousavi Madani, 1390, page 61)
3. In Wendy Close conceptual model ( 2002), in accordance with Figure 1.3, CRM perspective that is the ultimate goal of CRM design and
implementation is defined first. Secondly, CRM strategy and in other words the way to get vision defined in the previous step, is noted. Then,
the customers' valuable experiences are mentioned, and it is necessary to place the organization partnership due to achieve objectives in the next
vision. In the fifth step, define and automate CRM processes are performed. In the sixth step, useful data and necessary information relating to
customers should be withdrawn. In the seventh step, CRM IT infrastructures will be created. Finally, in the last step, CRM monitoring and
tracking metrics are defined (Mousavi Madani, 1390, page 62).

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Review and application of theoretical models of customer relationship management on organizational productivity
International Journal of Economy, Management and Social Sciences Vol(3), No (4), April, 2014.

CRM

outlook

Strategies
Identifying customer needs
Cooperation
Processes Definition
Customer data
Technology
Identifying and monitoring track success measures
Figure 1.3: Wendy Close model, derived from the article (Mousavi Madani, 1390, page 63)

4. In GL conceptual model (2003), according to Figure 1.4, the desired strategic outcomes are defined first. Secondly, processes and activities
necessary to achieve the strategic objectives are identified. However, human fixed capitals are considered independent of the technology.

Strategic Results

Customer Results

Mission and
Business Results

Value

Processes and Activities

Value

Other fixed assets

Technology

Human Capital

Input

Figure 1.4: GL model (2003), Derived from article (Saniei Monfared, 1390, page 66).

5. In M.Polo model (2002), according to figure 1.5, we first address the strategies include improving quality and increasing loyalty, members
pre-defined management such as services and processes and insights, analytical models dealing with life-cycle based on the needs and
satisfaction and retention and receiving answer, organizational changes like business and relationship marketing alignment, technology platform
that is sales automation and data analysis, development and education like sales and service training and continuous learning processes. Finally,
strategic decisions regarding product development and the balance between supply and demand channels and the performance quality control are
supported by administrative staff.

Hadi Nuri, Zahra Khoshiman *

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International Journal of Economy, Management and Social Sciences Vol(3), No (4), April, 2014.

Analyzing

Members

Strategic

models

profile

Concepts

management
Organization

Business

Technology

al changes

processes

Performance

Strategic

Development

Metrics

decisions

and Training

support
Figure 1.5: M.Polo model (2002), derived from article (Alvandi, 1388, page 64)

The proposed model

Regarding the models investigated in this article, the customer relationship management system would involve five hierarchical components in
which each component indicates the next one. These five stages are: CRM Vision, strategies and guidelines, processes definition, technologies
identification, performance evaluation metrics, which are used in most organizations to increase efficiency and productivity. This model is
shown in Figure 1.6.

Vision

Strategies and guidelines

Processes Definition
Technologies identification

Performance Evaluation Metrics

Figure 1.6: The proposed model

Implementing CRM models in organizational productivity

Today, due to growth and survival in today's in economic competitive arena, companies and organizations must give importance to customers and increase their
relationship with customers more than before. Attracting and retaining the customers and understanding their needs are considered as the most important corporate
strategy.
Many successful organizations have emphasized that there is a relationship between customer satisfaction and organizational productivity. In Gartner model
(2001), visions, customer life cycle, technologies, and identifying the customer needs cause customers retention and thus affect the organizational productivity and
create competitive advantage. In Wendy Close model (2002), visions, strategies, customer data and information, technologies, identifying and monitoring success
track measures dramatically affect the organization performance and efficiency. In GL model (2003), Organization inputs such as human capitals, fixed assets,
values, processes and activities, strategies results leave significant effect on organizational performance. In theoretical model of implementing customer
relationship management (1389), the social dimension including interaction with stakeholders, customers and employees and technological dimension involving
information and applications and knowledge management refers to the organizational capacity which in directly related to achieving the competitive advantage on
organizational performance. In M.Polo model (2006), strategic concepts regarding costs reduction, customers attraction, customer loyalty and retention increase,
revenue recognition, and certain members management, analysis models, technology, business process, organizational changes that address intensive marketing
communications and customer segmentation management, development and training, and product development all contribute to customer satisfaction and thus
productivity of the organization.
Thus, according to the model proposed, it can be said that Wendy Close is the best model which considers CRM as the most important competitive advantage and
introduces success measures monitoring as dramatically affective on organization performance and productivity.

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Review and application of theoretical models of customer relationship management on organizational productivity
International Journal of Economy, Management and Social Sciences Vol(3), No (4), April, 2014.

Conclusions
In this article, we review theoretical models of customer relationship management and it's usage in organization efficiency. In the present competitive
environment, organizations need to maintain their valuable customers due to keep competition. CRM is a method that can be used to achieve customer loyalty and
currently has provided any kind of customer service. Customer relationship management includes a series of strategies, methodologies, processes, software and
systems, which helps institutions and companies in organized and effective management. The customer relationship management objectives involve: increasing
revenue including identifying new opportunities and reduceing missed opportunities, creating customers loyalty including improved customer service and
improved organization sight, reducing costs including the information storage costs, and reducing administrative, marketing, public and sales costs. Types of CRM
systems include: operational CRM which covers all stages of having relationship with customers from sales to post-sales service; analytical CRM which analyzes
operational methods and submits the results due to a better customer relationship; and interactive CRM which includes establishing relationship with customer via
fax, mail and the Internet. Among models, the theoretical model of implementing customer relationship management, Gartner model, Wendy Close model, GL
model, and M.Polo model were addressed. Finally, the proposed model introduced a new simple and efficient model for Customer Relationship Management.
Wendy Close model could be used for organizational productivity. This model of customer relationship management identifies the competitive advantage and
monitoring success measures as the most important factors on organization performance and efficiency.

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