Establishing realistic performance measurements for customer relationship management in the SME context

Abstract

This research reviews aspects. of Customer Relationship Management (CRM) literature. It examines, in particular, the area of CRM performance measurement. The main objective of this research is to develop a business-orientated measurement tool for the assessment of CRM performance. The research context is set within the Small and Medium-sized Enterprises (SMEs) across the United Kingdom. Although the literature review showed that there are both successful· and unsuccessful cases of CRM performance, the research highlighted a significant issue concerning CRM performance measurement. It was found that many companies are unable to quantify their performance claims. Additionally, there is little or no strong evidence that companies measure their CRM performance, it is therefore questionable in regard to the justification of reported cases of CRM success and failure. Further literature evidence on the area of existing CRM performance measurement tools was critically reviewed. Overall the evidence points to the need for a simplified and realistic measurement tool that is based on what CRM user companies are actually doing or capable of doing regarding the assessment of CRM performance. Research methodological approaches undertaken were hierarchical in their nature. Two stages of empirical work were conducted: questionnaire survey and semistructured interviews. The questionnaire survey covered the scope of 2,200 SMEs across the United Kingdom. The survey aimed to identify Key Performance Indicators (KPIs) ,adopted by companies and to also create a profile of CRM companies for the next phase of research. The interview stage aimed to gain insight into CRM performance measurement in order to aid the development of a practical and business-orientated CRM performance measurement framework. There were 26 self-selected CRM user companies involved at the interview stage. Results from the quantitative analysis of survey data revealed a number of KPIs adopted by companies including the profile of CRM users. The qualitative· and quantitative analyses of interview data allowed a CRM performance measurement framework to be derived and developed. The main findings suggested that companies should focus primarily on assessing the process rather than putting the entire focus only on the final outcome or bottom line (i.e. financial outcome). The close relationship between the process and outcome measures implied that the effective assessment ofprocess would result in the effective outcome. There were also other outcomes relevant to the research such as issues with CRM market forecasts, issues with existing CRM measurement tools and extreme views on CRM. In regard to the ways they assess their CRM, one of the interesting findings of this research revealed that CRM user companies who view CRM from a customer perspective enabled by technology perspective appear to be more successful than those who view CRM solely from a strategy perspective.