The priority factor model for customer relationship management system success

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The priority factor model for customer
relationship management system success
AuthorTae Hyup Roh, Cheol Kyung Ahn, Ingoo Han
From Expert Systems with
Applications 28 (2005) 641654

• Reporter ???
• Date 2006/12/05

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Outline

• Introduction
• Theoretical perspectives
• Theoretical development and research model
• Research methodology
• Results
• Discussion
• Conclusions

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Introduction

• Many firms have utilized the customer
  relationship management system for improved
  business intelligence, better decision making,
  enhanced customer relations, and good quality of
  services and product offerings.
• The underpinning of the customer-oriented
  managing concept is that identification and
  satisfaction of customer needs lead to improved
  customer retention, which is based on corporate
  profitability.

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Introduction

• Does CRM system lead to higher customer
  satisfaction and superior economic returns?
• If so, which factors critically improve customer
  relationship and profitability?
• The measurements of several dimensions of success
  factors have been used to assess IS success, such
  as process fit, customer information quality, and
  system support.

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Introduction

• The research goals

• Measure factors that influence intrinsic CRM
  success and extrinsic CRM success.
• Identify the scales of these factors.
• Test the relative importance of various factors.
• Appropriate for use by academics and
  practitioners.

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Theoretical perspectives

• DeLone and McLean (1992) formulated an IS success
  model using information and system quality to
  determine the effectiveness of an IS.
• It postulates a scheme for classifying a
  multitude of IS success measure into six aspects
  system quality, information quality, system use,
  individual impact, organizational impact, and
  user satisfaction.

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Theoretical perspectives
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Theoretical development and research model
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Research methodology

• Data collection and sample characteristics

• The 253 survey questionnaires were gathered from
  14 organizations.
• Target firms have been using the CRM system for
  about 25 years.
• Among the 253 collected questionnaires, 234 cases
  were used for actual study.

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Research methodology

• Scale development

• We first conducted literature reviews on related
  topics and carried out a series of in-depth
  interviews with CRM project managers and CRM
  operators to examine the external validity of our
  research model.
• This resulted in the identification of 30
  potential research items.

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Results
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Results
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Results
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Discussion

• Managerial implications

• If management wishes to improve the firms
  profitability, one logical way of achieving this
  is to employ CRM in different aspects of the
  business and enhance its internal efficiency in
  the CRM process.
• Efforts to increase current customers
  satisfaction primarily affect future purchasing
  behavior, the greater portion of any
  profitability from improving customer
  satisfaction also will be realized in subsequent
  periods.

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Discussion

• Managerial implications

• Strong support from top management, effective CRM
  strategies, innovative organizational culture,
  excellent IT personnel, and other resources must
  also be available to help exploit the promised
  benefit of a CRM system.
• Based on our test, customer information quality
  is one of the key factors to realize value from
  any CRM implementation.

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Discussion

• Managerial implications

• The insight to measure effectiveness, cut costs,
  reduce churn, understand relationships,
  anticipate trends, predict demand, optimize
  promotions, or segment the market must be used as
  a catalyst for action.
• From a causal perspective, the structural
  equation analysis suggests that efficiency may be
  an antecedent to customer satisfaction, rather
  than a parallel, or direct determinant of
  profitability.

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Discussion

• Study limitations and further research

• Although this study reports meaningful
  implications toward the development of
  multidimensional measures of factors that
  influence CRM success, the validity of an
  instrument cannot be firmly established on the
  basis of a single study.
• It is appropriate for CRM practitioners and
  academicians to interpret our findings as a guide
  model, rather than generalizing our measures in
  all industries.

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Discussion

• Study limitations and further research

• Initial instrument development efforts contain
  some ambiguity concerning the appropriate model
  for the underlying model framework.
• Further research could also investigate the
  relative importance of the factors impacting each
  stage of the CRM process.

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Conclusions

• We set out to investigate factors affecting the
  success of CRM implementation from three
  perspectives efficiency literature in IS,
  customer satisfaction literature in marketing,
  and firms aggregated profitability.
• A major conclusion of this study is that the
  three CRM initiatives, while not impacting
  profitability directly, could impact
  profitability via impacting efficiency and should
  not be ignored by those attempting to plan
  successful CRM systems.

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Thank you for your listening.