International Journal of Scientific & Engineering Research Volume 2, Issue 8, August-2011 1
ISSN 2229-5518
Customer Relationship Management (CRM)
and Its Risk Factors
Mohammad Sourizaei, Dr.Ahmad Reza Keikhayfarzaneh, Dr.Javad Khalatbari, Mohammad Mojtaba Keikhayfarzaneh
Abstract— Today, the relationship with clients is highly regarded, and many of the organization’s or company’s strategies are established based on them. But as much as this issue is important, considering the risk factors and the challenges is very important and vital as well. Because the lack of importance may cause the project to be failed. In this article, CRM is firstly taken account, and after expressing the problems, a few of the important risk factors for customer relationship management projects has been reviewed.
Index Terms— Customer Relationship Management (CRM), Risk factors, Customer Satisfaction, psychology.
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N 1990s, trading management is transformed into rela- tionship management in many of organization’s strate- gies. By relationship paradigm, it is meant that all the activities are oriented to establishment, expansion, and
successful communication exchange [1].
These paradigms are called relationship management
system towards customers, which if used effectively, a company’s capabilities for achieving the final target, that
is customer’s maintenance, will be increased, and conse- quently, a strategic benefit against the competitors will be achieved [2].
From the point of view of theoreticians, some of the defi- nitions of customer relationship management are as fol- lows:
1. CRM is a part of an organization’s strategies for re- cognizing and satisfying the customers and making them as permanent customers. They also can help organization in terms of customer relationship management and max- imizing every customer’s credit [3].
2. CRM is the set of methodologies, processes, software
and the systems that help organizations and companies
have an effective and systematic management relation-
ship with customers [4].
3. Customer relationship management includes moni-
toring on customers ( such as suitable collecting data re- lated to them), management and evaluation of data, and
finally, creating a real benefit from extracted information in interaction with them [5]
4.Customer relationship management is the set of busi-
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Assistant Professor of Persian Language and Literature, University of
Sistan and Baluchestan , Zahedan, Iran.
Department of Psychology, Islamic Azad University, Tonekabon Branch, Tonekabon, Iran.
Department of Psychology, Young Researcher Club, Zahedan Branch,
Islamic Azad University, Zahedan, Iran.
nesses and networking that makes processes technolo- gies and all of the businesses activities around the cus- tomer [6]
From these definitions, it can be concluded that CRM is a type of strategy that helps the organization in achieving the customer’s satisfaction and therefore, their mainten- ance in business.
After the experiments showed the significant effects of customer attraction and the value of customer mainten- ance, all the attentions has been focused on the necessity of customer relationship management. In fact a new economy was emerging. The organizations and compa- nies decided to increase their budgets concerning cus- tomer relationship. Nevertheless, many of the projects concerning customer relationships were failed.
The significant amounts of failure in these projects coerced the scientific groups to deal with the problems and risk factors relating to them.
Inappropriate applying of these projects makes the cus- tomer trust to be damaged. Therefore, the necessity of paying attention to risk management in these projects was revealed more than ever [7].
Considering all the risk factors is beyond the extent of this article; therefore, some of them are reviewed.
Companies and organizations should have a more awareness of their types of customers. For example, how managers can have an effective sale to irritable customers. What types of behaviors managers can have towards the customers who have not much stability and easily change their behavior from warm-tempered to cold-tempered. Not only a seller should be a lot of patience, but necessari- ly know the techniques of how to sell their goods to these types of people, and must be aware that the base of these
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International Journal of Scientific & Engineering Research Volume 2, Issue 8, August-2011 2
ISSN 2229-5518
people’s personality traits is fear. However, a successful marketer and seller should be armed with customers’ epistemology. What so far are effective in an effective selling is no more necessarily successful for enhancing the selling in the future [8].
In implementing customer relationship management, that kinds of organizations are experienced in terms of IT that in implementing integrating technological systems have enough experiences [9]. Having enough experiences in this context is one of keys to succeed in customer relation- ship management [9].
Customer is the main and primary factor in survival of an organization. Therefore, customer-oriented culture is the main factor in succeeding and surviving of an organiza- tion, as well. Customer-oriented culture is the prerequi- site for gaining qualified information from the customers and creating and distributing the achieved knowledge from the customers and the origins of changeable ideas and improving the organization processes [10].
The relationship with the customers is has a key role in customer satisfaction. Therefore, those who have direct interaction with customers should be chosen appropriate- ly. It is necessary to pay attention to enough synergetic forces within different communication channels and their integration.Developing the suitable communication channels with customers is the key factor in customer relationship management success [11].
An IJSER copyright form must accompany your final Lack of suitable commercial brand is one of the determin- ing factors in repeating purchases of the customers. The more the commercial brand successful, the more the cus- tomer’s loyalty towards it [12].
Of the factors concerning the lack of senior manager’s support of customer relationship management project can be their unawareness of the benefits and opportunities that the organization can achieve by implementing cus- tomer relationship management [13].
Of the most important factors of customer relationship management projects can be the inappropriate definition of customer relationship management nature [14].
One of the matters the senior managers should focus in an organization to customer relationship management can be the amounts of funding they consecrated to this
matter. Because the lack of enough funding can lead to these project’s failure. As one of the experiments pointed out, applying customer relationship management project is a costly one and its implementation needs a funding equals to 60-130 million $ [7].
The lack of a comprehensive and integrated methodology for implementing customer relationship management projects is one of the obstacles in succeeding these kinds of projects [15]. According to an experiment conducted,
61% of the organizations which apply customer relation-
ship management have not a defined framework in im-
plementing customer relationship management [16].
CRM is an integrated orientation and it requires that the different parts of business cooperate with each other which acted independently before. The data collected in one part should be shared in all other parts. It is possible that some parts are reluctant and dissatisfied to share their data towards others [17].
By considering the materials mentioned above, it is found out that though the CRM is founded its station in busi- ness market, lack of attention to the problems, challenges, and risk factors may lead the project to be failed. It is rec- ommended that the organizations pay attention to how they interact with customers, and have more efforts in IT and E-commerce of CRM. They should become aware of their customer’s morale and moods in order to far better provide customer satisfaction. They also should internal- ize customer-oriented culture in organizations or compa- nies. Worthy and cognizant managers should be chosen to have a mutual relationship with the customer, and enough and appropriate funding must be consecrated in this regard.
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