RMIT International University Vietnam

Course: Teachers: Topic: Student ID: Class code: Date: Academic English Level 6 Andrea Flores & Adam Wright Communication technology and business/client relationships Tran Duc Linh L9916531 L06-05-F July 1, 2011 Assignment: Research essay

Student name:

INTERNET-BASED CUSTOMER RELATIONSHIP MANAGEMENT The success of any firm depends on its ability to create and maintain profitable relationships with customers (Camponovo et al. 2005). It can be inferred that customer relationships have a significant influence on the companys revenue and long run profitability. Therefore, managing these

relationships is an essential skill for all organizations in business activities. According to Chen and Popovich (2003), customer relationship management (CRM) is a combination of three factors: people, processes and technology. Many studies have pointed out that the Internet, in terms of technology, is a powerful tool that could be involved in CRM. The main benefits of the Internet as a CRM strategy are its possibility to become a primary advertising channel, to build one-to-one relationships with customers and enhance their satisfaction by helping them save time. The first advantage of the Internet in managing customer relationships is that it is an effective and efficient advertising channel the companies can use to introduce their products and develop relationships with potential customers. Advertising on the Internet is becoming increasingly popular because it is low-

cost, convenient and may reach the customers with higher possibility. For example, many enterprises are advertising on Facebook where more than 500 million people have account and spend in total over 700 billion minutes per month (Facebook 2011). In addition, advertising on the Internet is more

informative and trustworthy than other channels. Most respondents in a survey by Schlosser, Shavitt and Kanger (1999) believe that the Internet

advertisement gives more useful and reliable information compared with traditional advertising channels. As another advantage, the Internet could be used as a personal communication channel to build one-to-one relationships between service providers or manufacturers with their clients via online shopping systems. Peppers and Rogers (1993) claim that communicating with customers on an individual basis is a requisite for implementing a CRM. According to Novo (2003, cited in Scullin et al. 2004) and Berinato (2002, cited in Scullin et al. 2004), basing on the results of online surveys that the customers are asked when logging on their websites or the number of times a customer click a particular website, the service providers can create customer behavior-based profiles. From that, the companies may serve their customers successfully by fulfilling their individual needs. McCall (2002, cited in Scullin et al. 2004) talks about Invacare, a home medical equipment company, as an example of this application. This company creates a website for the clients to customize their medical equipments as well as alert them if a problem occurs in these devices. At the time the clients are modifying their equipments, this website will show the information about the current prize of these devices and also, the cost and features of items similar to their purchases based on customers profiles. By

doing that, the company supports its clients individually by considering their personal demands. Finally, the Internet could help the companies improve customers satisfaction which takes an important role to repeat purchases and maintain the relationships. With web-based systems, the companies increases the possibility to assist their customers by giving mobility and remote access as well as services availability for 24 hours a day, seven days a week (Mulligan & Gordon 2002). Consequently, this saves time for customers, and as result boosts their satisfaction. For demonstration, a recent survey on furniture online shops (Jeong & Lee 2010) shows that saving time is the main reason for the customers to prefer Internet shopping. It also points out that the high service quality of the Internet shopping malls improves competiveness and raises customers loyalty. Online retailing marketplace, therefore, is developing very fast. The Time (2001) estimates that this kind of marketplace in UK is worth 1.8 billion a year (cited in Kelly et. al 2003) In conclusion, Internet is a powerful tool that could be used in CRM as an effective and efficient advertising channel. It is also very personalized to build one-to-one relationships with customers by fulfilling individual needs.

Moreover, the Internet as the role of a CRM strategy can boost the customers satisfaction by providing mobility, possibility for remote access and availability at any moment to help them save time. For those reasons, the Internet should be used in the customer relationship management as a key component.

References
Camponovo, G, Pigneur, Y, Rangone, A & Renga, F 2005, Mobile Customer Relationship Management: An Explorative Investigation of the Italian Consumer Market, Proceeding of the International Conference on Mobile Business (ICMB'05), 11-13 July 2005, IEEE, Sydney, pp. 42- 48

Chen, JI & Popovich, K 2003, Understanding customer relationship management (CRM): People, process and technology, Business Process Management Journal, vol. 9, no. 5, pp. 672-688. Facebook, Statistics, Facebook, viewed 26 June 2011, <http://www.facebook.com/press/info.php?statistics > Jeong, Y & Lee, Y 2010, A study on the customer satisfaction and customer loyalty of furniture purchaser in on-line shop, The Asian Journal on Quality, vol. 11, no. 2, pp. 146-156 Kelly, LL, Gilbert, D & Mannicom, R 2003, How e-CRM can enhance customer loyalty, Marketing Intelligence & Planning, vol. 21, iss. 4, pp. 239 248 Mulligan, P & Gordon, RS 2002, The impact of information technology on customer and supplier relationships in the financial services, International Journal of Service Industry Management, vol. 13, no. 1, pp. 29-46 Peppers, D & Rogers, M 1993, The one to one future: building relationships one customer at a time, 1st edn, Currency Doubleday, New York Schlosser, EA, Shavitt, S & Kanger, A 1999, Survey of Internet users attitudes toward Internet advertising, Journal of interactive marketing, vol. 13, no. 3, pp. 34-54 Scullin, SS, Fjermestad, F & Jr, NCR 2004, E-relationship marketing: changes in traditional marketing as an outcome of electronic customer relationship management, The Journal of Enterprise Information Management, vol. 17, no. 6, pp. 410415