Technology-Based Customer Relation Management: Its Impact in the Company’s Performance

Posted: October 28, 2016


In the field of business, managing the relationship of the company’s relation of the customer has been one of the favorite aspects that draw interests among academics and business experts. The efficiency of strategies implemented in customer care management is investigated in this paper. Moreover, the processes implemented by the firm in order to maintain the loyalty of the customer is also investigate. A comprehensive review on existing studies about customer relation management is conducted by the researcher. Forty existing journals about CRM and customer acquisition processes were reviewed. It is then concluded in this paper, that most of the business sectors have employed various strategies in sustaining customer relation management. The business sectors have made use of the advancement in technologies and even utilized the social media as a strategy in having an immediate and efficient feed backing of customers’ satisfaction and in establishing better company-consumer relationship. Moreover, it was found in the study that the efficient customer relationship management of the company can influence the organization’s competitive potentials and can increase revenue and profitability. Moreover, it was also found out that efficiency of employed strategies are dependent on the ease of navigation, hence the easier the system is the stronger is the customer relationship that can be established.

Moreover, it was illustrated in the results of the literature review that the administration of programs that aims for the improvement on the quality of customer service can yield higher satisfaction of the clients. It is the major role of the CRM approach to provide significant information about the company’s customer, their preference and desires in order to maximize the satisfaction levels of the consumers. Augmenting the company’s program on customer service and providing better opportunity for the clients’ involvement in the company can have a positive impact on increasing the loyalty and trusts of the clients. Considering that confidence and trust of the consumers has an impact on the satisfaction level of consumers, this can be a good subject for further studies and research.

Key words: customer relationship management, CRM strategies, luxury market, marketing performance.

Customer Relation Management: Its Impact in the Company’s Performance


Along with the breakthrough and the advancement of technology, several business sectors had faced challenges caused by the increasing demand of globalization and borderless market. It is then the priority of most company to give greater attention and demands on enhancing the service they could offer to their clients, thus they work on implementing programs that could uplift the satisfaction of their clienteles and programs which can ensure sustainable growth and development of the company. As a means of achieving these goals, the company should invest on programs that could have a better and well-developed customer relationship. Moreover, it is also a requirement that administrators realize the significant roles of the consumers being the principal factor in sustaining the growth of the business and in ensuring the success of the organization. Therefore, companies should employ effective and efficient strategies related to customer relationship management which will surely increase the business transactions and amplify the profitability (Alhawari, 2010).

Background of CRM Strategies

The proliferation of various companies all over the globe has increased the competition among companies which result from various aspects such as globalization, opening and spreading of new firms all over the world (Bull, 2003). Moreover, the opening of new organizations and marketing firm in other places of the world have caused the addition of multiple products available in the market, have caused diversity of  a single product and lead to wider options among customers hence organizations and business companies are challenged to be more customer-focused (Nunes, 2009). In addition, the awareness of companies that clients are the basic foundation of marketing and are basically the determinant on their existence have led them to impose and adopt better client-relation management approach. Thus, if an organization wants to retain their existence and want to improve their profits, it is indeed necessary that they build especial relationships with their clients in order to achieve stability and in order to achieve their long-term goal for their companies.

Purpose of the Study

The above mentioned facts about CRM are the primary reasons why the researcher had become interested with the influence of technology-aided CRM on the success of the business firm. This paper aims to investigate the influence of the ICT-based customer relation management on the performance of the company, especially on its revenue and the level of satisfaction among its consumers.

How Investigation will be Done

A comprehensive review of the existing papers about consumer relation management will be done in order to assess the efficiency and effectiveness of the strategy employed among companies. The basis on the assessment whether the strategy is effective enough is on the aim of the study, the research design and the results obtained by the survey/study conducted. Moreover, limitations and weaknesses of the reviewed journal articles will also be considered to be utilized as the basis for improvements for future studies.

Literature Review and Related Studies

Since the initiation of consumer relationship management approach in America in 1990, several firms and business experts had become interested in the strategies and process of CRM. It was further stressed by Nunes, Yardley & Spelman (2013) that several companies have adopted customer-centered strategies and technologies as their CRM approaches as a proficient and successful way of managing customer relationships. The close relationship and the partnership of companies and clients have been awakened due to the widespread utilization of technologies and with the implementation of social media networks.

CRM strategies had always been one of the priorities of business sectors all over the world. In fact, 60% of most of the budget of the company had been allotted for strategies in managing consumer relations (Ajzen, 1991). The advancement in technology has assisted the business sectors in augmenting their communication and partnership with clients. Moreover, the companies are also concern in improving the business environment which is equipped with information that surely contributes to the improvement of the proficient approaches especially in dealing with clients (Chen & Popovich, 2003).

Business practitioners have viewed CRM as a leading approach that contributes to the improvement of the knowledge and information of the company about the preference of their clients, feedback on products and service and the suggestions they have regarding the company’s service (Agyei & Kalika, 2013). Alryalat & Hawari (2008) revealed that the success of the CRM approaches greatly depends on the continuous and harmonious partnership between the company and the clients. Business intellectuals had even made investigation and studies about CRM, as well as on its nature and characteristics and on finding new strategies that can uphold the collaboration between the client and the company.

Furthermore, business experts have revealed growing motives in several aspects of business, including channeling, marketing, advertising and other methodologies that can motivate more clients (Hamid, n.d). Included of those CRM approaches that are commonly employed by business administrators are the categorization and selection of clients; one-on-one relationship with consumers, management on the primary accounts and business development, promulgating programs on consumer loyalty; implementation of co-branding and joint-marketing and several other forms of tactical alliances (Kamakura,, 2005). The technology-inclined businessman on the other hand, had investigated on the information technology as a way of CRM and has employed these new trends on the implementation of current strategies that ensure well-planned and well-organized frontline information system (FIS) which can proficiently handle the relationship of the company with consumers. Commonly, these programs used software tools and contemporary gadgets which can enhance the application of CRM and its introduction in the market. Alhawari (2012) stressed that most of the existing applications and tools are capable of providing one-on-one relationship and more personalized connection between the firm and clients. Furthermore, Alhawari (2012) cited that among the common approaches implemented are shared filtering, rule-based expert systems, utilization of artificial intelligences and relational databases.

CRM approaches are generally relevant and useful in inviting, persuading and winning new clienteles (Balasbramanian & Drake, 2015). Consumer relationship management can also be advantageous in enriching and sustaining the existing clients in the company and in inviting again that previous costumer in order to recuperate the once-lost loyalty of the clients and in the reduction of the marketing cost that may incur for the programs related to customer services. Vallath & Roberts (2014) stressed that CRM can be the general approach implemented by the organization which focused on the satisfaction of the clients. The competence and proficiency of the strategy depends greatly on the dedication and the commitment of the personnel and the entire work force to implement the program and on the kind of technology employed on the implementation of the program. These factors had definitely great impact on the growth of the company’s profitability as well as on the reduction of the firm’s operational costs.


Technology-Based CRM

Telecommunication has a significant position in the economy as well, and it has an important role in realizing daily transactions and routines of the company (Chen & Popovich, 2003). Telecommunications aid in making decision, providing feedback, enhancing business relationship and in exchanging information (Alhawari, 2010). The nature of the telecommunication business affects the business place and its daily transactions. It is a given fact among business experts that for any organization, it is easier for them to draw new clients than to retain the existing ones, hence it is important for business sectors to institute a strong and profitable long-term relationship with their clients through utilizing the new technologies of the information system (Nunes, 2013). The long-term relationship and partnership with clients which ensure loyalty among patrons and high increase in profitability can be enhanced by implementing Customer Relationship Management strategies that provide worthy experience to clients and give them comfort and easiness in navigating the technology employed (Chen & Popovich, 2003).

One strategy that allowed customers to be more involved and was proven to be an effective means of building better relationship with the clients is the one that utilizes social networks (Hamid, n.d). This technique has been proven to be effective especially for business that targets the teens as their primary consumers. This customer-led growth approach centers on the potentials of generating long-term relationships with clients and therefore provides a greater possibility of achieving high revenue and profits. Moreover, customer engagement also secures customer dependability and guarantees that consumers will stay and remain consistent in patronizing the company’s services.

Kamura (2005) had conducted an investigation on the impact of utilizing technology on the organization’s CRM approach. It focused on the investment of the company on technology and on gadgets especially in obtaining and storing data in the information system. The results illustrated that it the utilization of new technologies had indeed affected the performance of the company and is one of the reasons why it had gain great profits and high revenue. Furthermore, it was revealed in the investigation that the profitability and performance of the business firm is influenced mainly by the integration and utilization of modern gadgets in the establishment of company-client relationship.

Hamid (n.d) also investigated on electronic consumer relationship management in hotel industries.  It was the aim of the research to identify scope of the e-CRM and its impact on consumers’ satisfaction. Data collection was done through survey questionnaires. Findings of the study showed the fourteen key elements of electronic CRM are indeed necessary in the success of those implemented strategies. Among those elements are the quality of information, customers’ fulfillment, channels employed in marketing, utilization of online networks, rewards, securing online sites, value added services and the promotion of loyalty and trust. These key elements were found to be essential in upholding the excellence of hotel services as well as in ensuring customers’ satisfaction which in turn will ensure better relationship with clients and enhance loyalty. Moreover, it was also found out that the efficient utilization and incorporation of technology in business and marketing evidently improve the hotel’s competitive advantage. It is further recommended that hotel operators should adopt CRM strategies that used new technologies and should also work on the addition of value on hotel services which includes the reservation, accommodation and modification of reserved facilities, tracking of reservation histories and providing some extent of personalization and understanding of the client’s distinct needs and preferences which improve customers’ worth consequently increasing their loyalty and trust to the company.

Customer Loyalty

Having a good foundation in the loyalty of clients has always been considered competitive tool for the victory of several companies. This has been emphasized in the common set up of business today which is exceptionally globalized, industrialized and highly competitive in the markets (Vallath & Roberts, 2014). The augmentation and continued existence of corporation mostly depend on the loyalty of their clients.

Investigations were conducted order to verify the efficiency of CRM strategies, especially on the level of the client’s level of satisfaction in banking and financial services in New Zealand (Nunes, 2013).  A random sampling was done to 1917 respondents basing on their telephone numbers. It was revealed that applying CRM strategy result to both advantages and disadvantages’ on the company. Its advantage is that it can increase the satisfaction level of the consumers if efficiently and properly implemented. Nevertheless, the unfavorable impact lies on the capacity of the personnel in administering the CRM approach which greatly affected the level of satisfaction of the clients on the services and products of the company. Moreover, those weaknesses had also influences the degree of trust and loyalty established by the clients on the organization.

It was emphasized by Nunes (2009) that the efficiency of the CRM approaches in winning the clients loyalty and trusts on the company is dependent on the utilization of time efficiently. Hence, the efficiency of the program depends on the wise and meaningful utilization of time, especially in the implementation of the strategy and the program. One practical strategy to this ground is the opening of an online outlet for shopping malls which is especially intended for those patrons who are too busy to do shopping. In order to address this problem which caused by the advancement of the lifestyle as an impact of technology trends, the company should make use of gadgets and the convenience of social networks in providing service to the clients.

Various investigations suggested that the quality of the relationship of the client and the company is an appropriate solution for the company to evaluate the nature and strength of customer relationships and to develop competitive advantage which difficult to duplicate for other companies (Hamid, n.d). This is in accordance with the business scholar’s idea that relationship quality is more significant in certain situations such as high degrees of ambiguity, long delivery times, the great susceptibility to opportunistic behaviors and many other influential factors.

Similarly, results of various investigations revealed that companies of high performance and those with better client relationships respond to new opportunities and employed customer relation management approaches which are differentiated in order to appropriately address the needs and demands of consumers (Vallath & Roberts, 2014). Companies achieve revenue growth by investing on CRM strategies that designed for longer terms, rather than the short-term goal approach.

Companies should be strategic enough to maintain quality consumer service, especially that customers are the essential factor that determines the success and stability of the company. Kennedy (2006) further stressed that communication and interaction with clients should also be highlighted and given emphasis by the companies in order to improve consumer services. If ever difficulty in communication is encountered in consumer service then it may be attributed to the insufficient knowledge of the business administrators on their clients’ behavior and needs and hence an evaluation of the company’s CRM approach should be done. In a highly aggressive and competitive environment of technology such as the internet, unpleasant experiences such as miscommunication must be avoided because this may cause the organization to lose not only one consumer but even more especially issues like this might spread readily through the “word of mouth”. Therefore, it is necessary that the company should attend readily to their consumers’ complaints by means of providing clear links to consumer service and costumer assistance desks and to have any service representative available at all times.

Alryalat & Hawari (2008) conducted another investigation on the extent of CRM’s impact on the retention of customers.  Two stages of collecting data were done, on the first stage data was collected through the random sampling of the 6525 customers and obtained a response rate of 35%. The second stage was able to obtain 1986 respondents. Two sets of dependent variables were determined in the study – a) customers’ realization of the fair price paid for the company’s services which is measured by the customer’s level of willingness to keep the partnership with the firm and how satisfied the clients are with the services of the company; and b) the representation of the relationship of the customer and the company through the use of marketing tools which involve both the direct mail and the programs implemented to enhance customer loyalty. It was found out in the study that the company’s retention of clients and its growth of shares and profitability are greatly affected by the desire of the client to lengthen his/her relationship with the firm and his confidence in programs implemented by the company that enhance loyalty and trust of customers. Moreover, it was also realized that direct mailing affects only the increase on customers’ share while customer-loyalty strategies can be an effective approach in increasing customer retention and on developing the customer’s share.


Generally, the studies reviewed in this paper have variation in treating customer relationship management. Studies differed in results in the influence of the aspects of CRM on the company’s performance while others have not.

CRM systems showed potential for the future in the realization and understanding of the long-term goals of every business sectors. In the study conducted Hamid (n.d) on the implementation of the best practices in sales administration, 50% of the companies which obtain sales of 1 million dollars declared that they adopted CRM strategies, and 55% of those companies confirmed that the CRM approaches they have implemented greatly helped their company strengthened their relationship with clients. Moreover, 81% of those companies which achieved sales of 100 million dollars confirmed that they have adopted ready-made CRM strategies and these approaches were indeed helpful in establishing a healthy and strong relationship with their clients.

Moreover, it was observed that among companies adopting CRM strategies, it was found out that the effectiveness of the strategy employed is dependent on how easy it is to the customers. The easier the system is the stronger is the customer relationship that can be established (Vallath & Roberts, 2014). Consequently, it was viewed that CRM technology in the future will be an essential indicator of improvements in the CRM technologies which can enhance marketing programs both on electronic and direct marketing, augment prediction models, improve the planning system of project resources and innovate the framework and the organizational structure (Alhawari, 2010). As a result, this will lead to superior selling teams, increased sales and an amplified investment revenue rate as well as helping other business CRM-users to understand the compensation that they could gain from adopting CRM strategies. Alryalat & Hawari (2008) further state that achieving the strong link and relationship with the clients depends on having more simplified strategies and on providing ample time for consumers to learn and be acquainted with the technology employed in the CRM approach.

The result of this review on existing studies showed that customer relationship management strategies such as customer-loyalty programs, technology utilization, and customer knowledge approach definitely affected the company’s retention of their clients and on the increase of their profitability. The effectiveness of the approach further affect the extent of satisfaction of the clients on the services offered by the organization which eventually caused an increase on their loyalty and reliance on the company thereby increasing the revenue and the returns of investments.

In addition, results revealed that administering programs that promote improvement on the quality of customer service can yield higher satisfaction of the clients. It is the major role of the CRM approach to provide significant information about the company’s customer, their preference and desires in order to maximize the satisfaction levels of consumers. Implementing programs that uphold better customer services and providing opportunity for the consumers to be involved in the company definitely promotes loyalty and trust of the clients. Given that the assurance and trust of the clients can affect the satisfaction of the clients, then there might be several factors that can affect the approval of the clients on the company which can be a good subject for further investigation about the subject.

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