CRM software applications and business performance

Abstract

After a period of decline at the turn of the century, demand for customer relationship management (CRM) software is rebounding. Our investigation of the Australian context, however, shows that a large proportion of companies are still undeveloped in terms of their application of software to support their customer management strategies. Less than 40 per cent of companies use CRM software. When it is used, the software is more commonly deployed for customer retention and customer development purposes. It is less extensively used to support customer acquisition, but when this does happen it results in more cost-effective marketing campaigns. Companies that do employ CRM software are generally satisfi ed with their return on investment (ROI) from the software. Our data suggest that companies ' level of satisfaction with software performance varies directly with its reported impact on business profi tability. The performance of the software in meeting companies ' expectations of customer retention is a statistically signifi cant predictor of profi tability. Larger companies tend to be less satisfi ed with software ROI, while service companies appear to be more likely to adopt CRM software than companies in other sectors. We fi nd that the intelligent application of CRM software can yield improvements in business performance.

CRM technology use and implementation benefits in an emerging market

“…18 Ang and Buttle conclude that Australian companies use CRM software mostly to support customer retention and development activities rather than customer acquisition activities. 2 Consistent with the focus of these studies, the present study examines the usage of CRM software in Saudi organizations, focusing on the analytical uses of the systems. It specifi cally investigates whether and how Saudi organizations use their CRM technology systems for analytics relating to three customer categories -potential, current and past customers.…”

“…1,2,19 -21 Issues addressed in these studies include the extent of CRM technology adoption, 2 the uses to which adopting organizations put their CRM technology systems 19 and the benefi ts they have derived from implementing CRM technologies. 2,21,22 These are examined in this section. However, fi rst we address the broader issues of organizational awareness of CRM as a concept, and their perceptions of what the concept entails.…”

“…Ang and Butler study CRM technology diffusion among Australian fi rms and fi nd that only 39 per cent of surveyed fi rms have adopted CRM software systems. 2 Reinartz et al examine the impact of CRM technology on business performance, 19 Jayachandran et al investigate how US organizations use CRM technology for various marketing and sales support activities, 21 whereas Mithas et al study the impact of CRM applications software (both legacy systems and ' modern CRM systems ' ) on organizations ' customer knowledge generation processes. 23 More recently, Kumar et al have quantifi ed the global growth and diffusion of CRM technology using a modelling framework.…”

“…7 There is a large literature on the strategy component of CRM, including discussions of the philosophical foundations, examination of strategic underpinnings and identifi cation of organizational conditions conducive to successful CRM implementation. 7 -16 However, a small but growing stream of research has focused on the role of CRM technology either as a central study focus 2,17,18 or as part of a larger CRM study. 1,2,19 -21 Issues addressed in these studies include the extent of CRM technology adoption, 2 the uses to which adopting organizations put their CRM technology systems 19 and the benefi ts they have derived from implementing CRM technologies.…”

“…Accordingly, it is important both from academic and managerial standpoints to understand how organizations implement, use and benefi t from these technologies, and there have been calls for academic studies of CRM technology adoption. 2 As with many other modern business concepts, CRM has its origins in the developed, Western world. However, owing to the marketing efforts of CRM technology vendors, organizations in developing parts of the world are increasingly becoming aware of, and adopting, CRM principles and technologies to manage relationships with their customers.…”