Improving the Competitive
Advantage of Software as a
Product Companies through
Relationship Marketing
Lessons from India and Ireland
Sai Malathi Anandini Valluri is
program manager by profession and
the author of You Can Become Anything
You Want, They Said! and Celebrating
Life. Her having a strong academic
background in technical studies and
management studies has helped her
research. She holds a masters degree
in communication engineering and
management studies from National
College of Ireland.
Business Expert Press 978-1-94744-185-9 (2018)
www.businessexpertpress.com
Abstract: Relationship Marketing is about establishing,
developing, and maintaining a successful exchange that
helps faster conversion of the product to a healthy rev-
enue. Though Porters Five Forces have worked in the
areas of strategy, structure, and rivalry of software firms,
relationship marketing contributes massively to a firms
competitive advantage, which isnt noticed by all the
firms at its early stagesbecause of which it has led to
gaps between the client and the firms.
Through this research, we understand the ways of
adopting relationship marketing and how it applies in the
software products industry. The business tools and strate-
gies that are used in maintaining an effective customer
relationship are studied.
This research bridges the gap between customers ex-
pectations and the strategies followed by companies to
deliver their customers demands.
We study customers expectations from software as a
product (SaaP) or service firms, right from the stage of
trying the software to the stage of making a purchase de-
cision. The follow-up process before and after the sales
cycle is studied.
Second, the study gives a broad understanding of how
carefully firms need to design their customer relation-
ship management process to ensure positive interaction
experiences that, in turn, help the firm to stand out in
competitive markets. Finally, we develop a few proposi-
tions for assessing the worth of relationship marketing
to software companies.
Keywords: competitive advantage, Customer expectations,
decision making, follow-ups, Propositions, Relationship
Marketing, software management.
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 Improving the Competitive Advantage of Software as a Product Companies
Introduction
The competitive strategies of software pro-
ducing organizations are based on various
challenges that are looked upon as oppor-
tunities, and hence, Information Technol-
ogy is the fastest growing sector of the
Irish and the Indian economies. As per
OGorman (2001), and also, in accordance
with Porters forces, development of a com-
petitive advantage in software industries
previously happened in areas of the firms
suppliers, structure, and competitors,
but in recent times, it has become more
customer-focused as innovation in the com-
pany had a certain value only when there
was a user to buy it. In order to survive in
saturated competitive markets, companies
are adopting customer relationship mar-
keting, as recommended by Xu, Yen, Lin,
and Chou (1980), which is giving an edge to
firms today by constructing a competitive
advantage through people.
According to Ghoshal (2002), man-
agers understand the implications of a
service-intensive economy, and hence, are
closely involved in the development of re-
sources required to meet the needs of their
customers using their internal resources.
Relationship Marketing
The nature of service offered to customers
has remained ambiguous over a long time
as per Reve and Stren, (1978), though un-
derstanding the customers requirements
has become a prerequisite. In order to de-
liver the best from a companys understand-
ing of consumers needs, its important that
a certain relationship is built between the
consumer and his point of contact to de-
liver as per the expectations.
According to Nevin (1995), the bond
that builds over time leads to a healthy
conversion and retention of the customer;
this form of selling comes under the term
relationship marketing. By keeping the
employee capability in mind, strategic
methodologies are being adopted in the-
ory and practice to make human capital a
source for a strong customer relationship.
2 Business Expert Press 978-1-94744-185-9 (2018)
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Customers are viewed as a lifetime value
to organizations. As observed by Reinartz,
Krafft, and Hoyer (2004), the engagement
of a customer happens during various
transactions; it is not just the delivering of
the product, understanding the wants and
needs of their customers during the pro-
cess and post purchase can be a challeng-
ing task for most companies. The customer
relationship management has been consid-
ered as Wahlberg, Strandberg, Sundberg,
and Sandberg, (2009) a new way to deal
with it in the field of relationship market-
ing as told by Oh (1999).
The Current Scenarios
According to Ranaweera and Prabhu (2003),
firms having fixed phone line operators
and their immediate response to customer
mails helps in a better retention of the
customers and leads to increased levels of
satisfaction. But a customers purchase in-
tention is based on the quality of service of-
fered by the firms and various channels of
communication (Kennedy, 2006); though
firms invest enormous amounts of money
in the technology and state-of-the-art mar-
keting, most managers ignore the impor-
tant factor in maintaining competitive
success: people. People here indicate the
firms employees and their customers as
well.
In order to deliver the best of services,
as mentioned by Pfeffer (1994), successful
firms have overcome the barriers to change
by training their employees and have
built-in solid frameworks to approach their
customers queries. These concerns lead to
a comprehensive investigation of the fac-
tors and the management techniques that
influence the implementation of relation-
ship marketing within the software compa-
nies in Ireland and India.
The Purpose of This Research
There is a need to understand and de-
velop the golden propositions to effective
customer retention. Though researchers
have defined various types of customer
Expert Insights
 Improving the Competitive Advantage of Software as a Product Companies
expectations and service performance,
the gap between what is offered and what
is expected has not been studied. This re-
search is the latest observation made in
SaaP firms in India and Ireland wherein
semi-structured interviews with the man-
agers helped in understanding the current
ways of handling customers; this was fol-
lowed by a survey that gave us a detailed
understanding of the common customer
expectations. The two sides of the study
were then analyzed and certain conclu-
sions were drawn, which would eventually
help the as software product management
teams.
Literature Review
Introduction
This chapter will cover the topics neces-
sary to get a deeper understanding of soft-
ware product management over the years.
The first section will focus on the following
themes: the strategies adopted so far, driv-
ers of consumption from the companies
point of view; the second section will pres-
ent consumer behavior, their consump-
tion, the financial situation and retention,
as well as their loyalty. This review hopes
to provide a comprehensive picture of the
knowledge acquired by the academic com-
munity, and also, explains how customer
service has changed over time to where it
is heading to.
Software Product Management
Software is growing as an important fac-
tor in customer and business experience
as it has become a crucial component of
all goods and services. But as mentioned
by Power (2014), the rapid changes in soft-
ware development on a daily basis has cre-
ated a certain pressure on managing it, in
general. Adapting to new changes created
new problems in processing the informa-
tion from the product development teams
to the sales and marketing teams. As men-
tioned by Grnroos (1999), one of the key
problems was the measurement of the
Business Expert Press 978-1-94744-185-9 (2018)
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communications; the response of the cus-
tomer to product changes was tough as
there were a line of product releases that
needed the same amount of attention.
Internally, there was an issue in inte-
grating the teamwork as there needed to
be a certain closeness to be built between
the company and the customers as the
products had so much to offer, it was hard
to understand and speed up the process
of solving customers issues. Hence, the
beginning of software product manage-
ment had a lot to offer, but as mentioned
by Brem and Voigt (2009), innovation has
created a push and a pull on the market as
there lacked a certain connection between
the two parties.
Innovation versus Customer
Satisfaction
Having said that, as per Keiningham,
Perkins-Munn, Aksoy, and Estrin (1991),
customer satisfaction brings profit as there
is a chain of effects when the right informa-
tion and the right feature is not available
to the customer, in spite of having the big-
gest and the best software product in the
market, it leads to dissatisfaction that even-
tually does not contribute to the revenue
generation of the company.
Drivers of Consumption
Though there are gaps between satisfying
a customer and the companys process of
innovation, as mentioned by Razavi, Safari,
Shafie, and Khoram (2012), the customers
perception of value and satisfaction are
very different. There is a gap in the deliv-
erables and the expectations; though the
new trend of software start-ups has enabled
the progress of technology, it still lacks an
understanding from the customers point
of view. In order to survive in saturated
competitive markets, companies are adopt-
ing customer relationship marketing, as
recommended by Xu, Yen, Lin, and Chou
(1980). Whats giving an edge to firms to-
day is constructing a competitive advan-
tage through people.
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