Acquiring Knowledge via CRM.

Leveraging Knowledge for Better Customer Relations by Anastasia S. Malicka.

A.   Background.

Effective communication of information is critical in supporting the overall company’s decision-making process and operational efficiencies, especially in supporting its sales force efforts to achieve future growth of the organization. All of the major business decisions require certain amount of knowledge, which can be derived from either data sources or internally acquired competencies. However, data by itself does not constitute knowledge (A. Gross, E. Solymossy, 2016). Therefore, how the company transforms data, especially collected about their customers’ needs, into internal knowledge is one of the key competitive advantage, increasing in importance in global economy, especially in highly competitive markets such as electronics and appliances. By integrating all of their customers’ touch-points through Customer Relationship Management (CRM) software system, the company can develop and leverage market knowledge to improve sales efforts and maximize its profits (Cameron Fisher, 2017).

B.   Knowledge Management (KM).

Knowledge is the most important strategic asset of the organization, critical to achieving competitive advantage (B. van der Hooff, M. Huysmany, 2008). Customer understanding is the basis for achieving positive long-term relationship that will translate into customer loyalty and lead to increased profitability. The knowledge of the customer is realized through effective communication and on-going collaboration. How the organization generates knowledge determines its success in the marketplace.

In 1993-1994 Hoffmann-LaRoche, the Swiss pharmaceutical company, introduced knowledge management initiative to reform the process of developing new products, which resulted in achieving a savings of $1 million a day (T. H. Davenport, L. Prusak, 2000). The company maintains its market leadership, and continues to invest in improving their Knowledge Management. 

However, knowledge cannot be purchased. Instead, it has to be cultivated within organization, incorporating both internal as well as external factors such as experiences, values, and situation-behavioral outcomes. Knowledge generation and management is a systematic process that transforms data and information into greater understanding of events that empower decision-making process. The success of this process is heavily dependent on the skills of the individuals involved, their collaborations with customers, and the organizational commitment (M. Barcelo-Valenzuela et al. 2018).

There are different tools and methods that can aid organizations to transform data into knowledge. However, they need to incorporate, on an on-going basis, the feedback from their internal and external customers to make it relevant, actionable and impactful.

C.    Customer Relationship Management

Customer Relationship Management (CRM) empowers organizations to meet their customer’s needs better than their competition. It leverages the organizational Knowledge Management (KM) with the objective to increase value to their customers and ultimately to the organization. Maximizing the value to the organization by winning new customers with better information system is well established and documented.

One of the appliance manufacturing company in Asia Pacific region achieved such a value creation by implementing CRM where they were able to augment their products designs based on their customers’ input. They leveraged their internal Knowledge Management to intergrade it with CRM, to inform strategic marketing and product design decision, resulting in improved customer value creation (S. Golrizgashti e al. 2012).

Therefore, due to increasing global competitive pressures, more effective integration of customers understanding is needed to monitor their evolving needs and preferences to create value, and thus processes such as CRM are greatly needed.

The implementation of CRM can be accomplished using different technologies such as sales Force Automation (SFA), cloud computing, intranets and/or extranets. For successful implementation of CRM, it is important to consider the understanding of the cultures, procedures and people within and outside the organization (M. Barcelo-Valenzuela et al. 2018). Furthermore, it needs to incorporate the existing organizational Knowledge Management and all of the channels of communication with their customers on an on-going basis. This is necessary in order to anticipate customer needs with the purpose of providing the target customers with the right product at the right time, in the right place.  

D.   Integration of CRM with KM

The feedback and interactions with customers are the most important sources of knowledge. It is especially true for existing customers using company’s services and products. It is the continuous source of innovative ideas for new products and services, and it helps to develop more customized communication approach with customers, making it more actionable and impactful. This communication and interaction with their customers need to be captured and updated on an on-going basis, to increase the rate of learning and integrated with the rest of the organizational knowledge management. 

The sales force generates tremendous amount of data on their customers and competition. They provide direct link between customers’ needs and company products’ offerings. Another source of customers’ data is collected on an on-going basis by the customer service representatives and fulfillment centers, handling product related questions. The above two touch-points can capture the customer experience and identify areas for improving customer satisfaction which is critical to sustain sales growth. It is equally important in the continuous innovation to improve the quality of product offerings to fulfill changing needs of their customers. Lack of integrating this data into overall company’s strategy and tactics can significantly disadvantage organization from remaining competitive, and it can quickly put them out of business (T. H. Davenport, L. Prusak, 2000; Y. Jomphe et al. 2013).

In addition, marketing and market research generates data on market segments that are most attractive for sales force targeting efforts, as well as products’ usage and attitudes collected from both qualitative and quantitative market research studies. The data collected by marketing and market research is synthesized into internal organizational knowledge that directs development of effective strategies and promotional tactics. However, this knowledge needs to be integrated with the other information through CRM system, placing an organization in competitive advantage over competition.

Transforming all of the data from different parts of the organization into knowledge for better decision-making can be achieved through implementation of CRM system through a technology such as salesforce automation (SFA). It will enhance productivity, track goal attainment and execute a multi-channel contact strategy (Cameron Fisher, 2017). This can be achieved through:

- Designing a system that integrates salesforce processes

- Incorporates digital marketing initiatives and their impact

- Customer service interaction

- Marketing initiative and outcomes

- Market research with potential & existing customers/consumers.

It can help to improve their targeting efforts, overcome any quality problems and help anticipate changes in future products’ demands. In addition, internally gathered data from customer service, marketing and manufacturing can also be leveraged to improve future business decisions, related to sales and marketing efforts as well as product’s performance.

References:

1.    A. Gross, E. Solymossy (2016). Generations of Business Information, 1937-2012: Moving from Data Bits to Intelligence. The University of Texas Press. Information & Culture, Vol. 51, No. 2, pp. 226-248. DOI: 10.7560/IC51204.

2.    T. H. Davenport, L. Prusak. (2000) Working Knowledge - how organizations manage what they know. Harvard Business School Press.

3.    Ahad Ali, Zaifeng Chen, Jay Lee, (2008). Web-enabled platform for distributed and dynamic decision-making systems. International Journal of Advanced Manufacturing Technology. Vol. 38 pp. 1260–1270 DOI 10.1007/s00170-007-1172-z

4.    Cameron Fisher (2017). New Technologies for Mobile Salesforce Management and CRM. American Journal of Industrial and Business Management, No. 7, pp. 548-558.

5.    Nick Gill, Guido Kamann, Avishek Sen (2019). The Changing Dynamics of the Global High-Tech Industry - An analysis of key segments and trends. Capgemini Consulting Group.

6.    L. Desroches, K. Garbesi, H. Yang, M. Ganeshalingam, C. Kantner, R. Van Buskirk (2013). Trends in the cost of efficiency for appliances and consumer electronics. Lawrence Berkeley National Laboratory. 

7.    M. Barcelo-Valenzuela, E. Hernandez-Rojas, A. Perez-Soltero, J. Luis Ochoa-Herna?ndez (2018).

A CRM Strategy for Integrating Customer Knowledge. The IUP Journal of Knowledge Management, Vol. XVI, No. 4.

8.    Jomphe Y, Plaisent M, Pecquet P and Bernard P (2013), “Key Factors of Success of CRM Software in the Car Industry”, International Journal of Research in Engineering and Technology, Vol. 2, No. 2, pp. 77-81.

9.    Sedighi M M, Mokfi T and Golrizgashti S (2012), “Proposing a Customer Knowledge Management Model for Customer Value Augmentation: A Home Appliances Case Study”, Journal of Database Marketing & Customer Strategy Management, Vol. 19, pp. 321-347.

10. Van den Hooff B and Huysman M (2009), “Managing Knowledge Sharing: Emergent and Engineering Approaches”, Information & Management, Vol. 46, No. 1, pp. 1-8.