Successful Customer Relationship Marketing and The Customer Management Scorecard: Managing CRM for Profit

Measuring Business Excellence

ISSN: 1368-3047

Article publication date: 1 September 2004



Narasimhan, K. (2004), "Successful Customer Relationship Marketing and The Customer Management Scorecard: Managing CRM for Profit", Measuring Business Excellence, Vol. 8 No. 3.



Emerald Group Publishing Limited

Copyright © 2004, Emerald Group Publishing Limited

Successful Customer Relationship Marketing and The Customer Management Scorecard: Managing CRM for Profit

Bryan Foss and Merlin Stone, Kogan Page, ISBN 0-7494-3579-8, 2002, hardback, 544 pages, £35.00 and Neil Woodcock, Merlin Stone and Bryan Foss, Kogan Page, ISBN 0-7494-3895-9, 2003, hardback, 443 pages, £39.95

Successful Customer Relationship Marketing and The Customer Management Scorecard: Managing CRM for Profit

Customer management is a critical subject for many organizations as evidenced by the importance given to customer results in most of the business excellence models. The above two books show how to gain more value from managing customers by measuring the results and then improving it. The books are based on CMAT™ (customer management assessment tool), a proprietary diagnostic and assessment tool of QCi, and OgilvyOne Worldwide (a relationship marketing agency).

The authors have wide experience in the field of customer relationship management (CRM) and have based the book on research conducted at International Business Machines as well as other companies around the world. Over 25 international experts have also contributed to these books.

The book by Foss and Stone is divided into four parts and comprises 22 chapters. Part 1 on knowledge of CRM and customers considers some key issues about the CRM processes, measurement of quality of CRM and its relationship with business performance. It also contains results of a study on the extent of use of CRM data, data warehousing and mining (that is storing and retrieving CRM data) for identifying customer behavior, and issues involved in sharing data within the value chain.

Part 2 comprises five chapters and deals with the impact of technology and e-business on CRM strategy. First, issues surrounding developing an integrated CM system are covered. Second, developing effective and efficient supplier-customer relationships in an electronic supply chain are considered; also provided is a checklist to incorporating e-chain ideas into a business model. The next three chapters deal respectively with a description of customer value management to align value given to customers and benefits gained by an organization; an examination of the impact on CM of wireless devices including mobile phones; and an examination of the application of smart cards and how to make them work.

Some of the most important implementation issues faced by global companies in extending CM across the world; recruiting the right kind of CM employees and managing them; and managing marketing communication campaigns are examined in the four chapters of part 3.

The first six chapters of the final part respectively cover important issues faced in implementing CRM in the following sectors: travel, airlines, retailing, automotive, durable and other infrequently bought goods, and utilities and telecommunication. Limitations of CRM and how CRM is likely to develop in the future are covered in the final chapter.

The second, more recent book, comprises 33 chapters grouped into five parts, which are well supported by 40 tables and 52 figures. Bibliographic references are provided at the end of the chapters.

Part 1, the longest part (150 pages) comprises 17 chapters and documents the results of research conducted over 300 CMAT assessments in 17 industry sectors in 22 countries. Chapter 1 explains what CMAT is, its scope, how a CMAT assessment is carried out and lists the benefits of assessment. Chapter 2 gives eight reasons for companies performing poorly, despite investments in CRM and lists the characteristics of successful customer management (CM) practices in the eight areas of the CMAT model. In chapter 3, the results from around the world are explored. In chapter 4, the CM value chain is introduced and areas where companies can create and destroy value are highlighted. The eight CMAT assessment areas are considered sequentially in chapters 5 to 12. Examples of good practice are provided after an analysis of the research evidence.

In chapter 13, the authors conclude that "customer management is not going to work without a strong customer information structure to support it", based on a CMAT-research study project, involving 15 large corporations in the USA. In chapter 14, the study results of a CMAT study of the Dutch insurance industry at 27 insurance companies are presented. The next three chapters deal respectively with some key trends in CM development, developing a business case for improving CM, and guidelines for successful CRM implementation.

Some approaches to measurement and systems, and techniques required for effective measurement are explored in part 2 comprising five chapters. In chapter 18, the benefits of electronic-CRM (that is, using the Internet to improve marketing, sales and customer-support activities) are examined. The following two short chapters deal respectively with some research evidence on the use of business intelligence and issues related to implementing CRM systems to improve returns from CM value chain. The fairly long (32 pages) final chapter of this part addresses complex issues involved in understanding current and prospective customers from economic, attitudinal, and behavioral perspectives. Also presented is a multi-dimensional of operational, analytical, strategic and cultural components of CRM.

Part 3 comprises three chapters on CRM issues in three relatively new sectors. The first chapter concentrates on special issues affecting CM in the public sector and adapting experiences from the business sector. The second chapter is devoted to the context and methodology of CRM strategy and its implementation in the telecommunications sector. And the final chapter is a discussion of some of the key issues to be considered while implementing CRM in B2B (business-to-business) markets.

Channels and media issues are covered in part 4 comprising four chapters. In the first chapter, the area of multi-channel CM (i.e. using more than one channel or medium to manage customers) is explored, including the reasons for it, and the benefits accrued and problems faced. The next two chapters are devoted to issues particular to the e-mail channel. Based on studies in France and the USA it is concluded, in chapter 27, that culture and tradition play a major role in the adoption of ethical standards. Chapter 28 focuses on how organizations can manage the increasing volumes of data associated with e-mail contacts with customers. Measuring and improving the usability of electronic media such as the Web is considered in the short, final chapter.

The final four chapters forming part 5 focus on implementation and issues likely to be central to CRM work in the future. The first two chapters give an overview of main issues in managing staff and customer loyalty, and some research evidence of declining UK customer service standards, and reasons why customers do not switch after bad service. The role and function of senior managers and organizational issues in the success of CRM programs are dealt with in chapter 32; and the final chapter summarizes future challenges faced such as branding, building relationships into products, segmentation, managing local customers, understanding the customer, etc.

The books complement each other and are useful in the age of e-commerce. However, it is not easy to implant their ideas without their help as it is based on a proprietary product.

K. NarasimhanLearning and Teaching Fellow, Bolton Institute, UK

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