Introduction
A recent visit to the service department of the local auto dealership I purchased a car from two years ago forms the foundation of this analysis. As auto dealerships rely on service departments for the majority of their revenue I thought the experience would be a mix of pure efficiency and relationship building. Previous experiences with this dealership have shown them to be not as trustworthy as I had hoped they would be as well. One of the most critical aspects of transitioning customers from being treated as members of a transaction to actually being fans is trust (Gronroos, 1994). Trust is such a critical catalyst to make a customer experience successful that technologies need to better measure and evaluate this critical component as broader CRM strategies (Mitussis et al, 2006). Going in to the dealership to get a door problem fixed presented the ideal opportunity to complete this analysis.
Analysis of Interaction
Driving up to the customer service window and giving the technician my name and address started the process. He printed out a worksheet and walked out of the small building and asked what I needed done. I explained the door had not been closing completely and the lock would “freeze” in one place and not let go. The conversation went to how the entire lock could potentially need to be replaced to the suggestion of WD-40. In other words, both ends of the pricing spectrum, from the very expensive to the solution that would cost only the can of lubricant immediately were recommended. I asked if they could simply take the lock out of the door and check it out and give me an estimate for no charge as the car was still under warranty. The technician debated with me on whether the car’s warrant...
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Customer relationship management: the companies that focus on satisfying their customers and create for them a superior value will build and maintain profitable customer relationships. The satisfied customer is more trusted than others because it awards the company a great share of business
In line with the above discussion, it should be noted that there is a present shift in the world towards a view of the benefits of collaboration as opposed to the earlier understanding of competitive buyer-seller relationship (Ford, 1990, p. 542). Indeed, if reviewed from a relatively modest start, it can be easily seen that buyer-seller collaboration and relationship marketing has come to be the most valued asset of any company in the business marketing agenda as well as real business practice. Following the past four decades in which the marketing mix view was the most dominant of marketing activities in every aspect of marketing literatures, relationship marketing has gradually established itself as an alternative view of marketing scheme (Blois, 1996).
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Marketers have recently realized the importance of thinking about their customers in terms of relationships rather than transactions. To build relationships, companies use Customer Relationship Management (CRM) to encourage loyalty from their most valued customers. CRM refers to the practices, strategies, and technologies that companies use to organize and evaluate customer interactions and data. Companies gather data from customers using frequent shopper or shopper loyalty cards and store credit cards to understand their individual purchasing behaviors. In addition to strengthening business relationships, the overall goal of CRM is to increase customer retention while encouraging the growth of sales. To meet the customer’s needs, retailers
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Gummesson (2004) describes CRM as "the values and strategies of relationship marketing with particular emphasis on customer relationships- turned into a practical application." CRM has become a necessity to successfully and profitability manage customers and a firm’s relationship with them, with the market reaching a value of approximately $11.5 billion in 2002. (Xu et al. 2002). However, despite this large spending it is estimated that 70% of CRM implementations fail. (Xu et al. 2002). There are a number of reasons for these failures, such as a failure to implement it throughout the organisation and resistance from employees. But in some cases the buyer-seller relationship does not merit a collaborative-style relationship; the customer may only require a transactional relationship. It is because of this reason than I believe that CRM does not always have to constitute the heart of B2B marketing.
Customer satisfaction is noted to be an ambiguous area with no conceptual framework, especially in public transportation (Kostakis & Pandelis, 2009). Customer Satisfaction is indeed intangible and a central concept in marketing literature (Angelova & Zekiri, 2011), business and the academic world (Tikkanen & Alajoutsijaui, 2002). It has attracted an increasing interest and importance since 1950’s till today (Bilgin, 2010). The actual manifestation of satisfaction would differ from person to person and product/service to product/service. Peyton, et al., (2003) note that it would indeed be an understatement to say that there is no general agreement on how to define satisfaction. The most commonly used conceptualizations are based on two perspectives: cumulative and transaction (Gandhi & Kang, 2006). Several authors agree that there is a need to adopt cumulative definition of satisfaction (Johnson, 2002) because cumulative satisfaction is a more fundamental indicator of the firm's past, current, and future performance (Hsu, 2008) instead of specific transactional information about a product or service encounter.
It is argued by some researchers that CRM can be seen as the organizational implementation of a relationship management philosophy (Ryals and Knox, 2001, Ryals and Payne, 2001). Through delivering more responsive and customized services to customers, CRM increases customer satisfaction and this, in turn, improves customer loyalty. The importance of relationship management is increasingly being recognized. Kotler (1992) wrote that companies must move from short-term transaction-oriented goals to long-term relationship-building
Companies are beginning to move their CRM application out of data centers and onto the cloud making CRM less expensive and easier to expand. (Shein, 2009) Technology advances are also allowing companies to begin to take better advantage of big data, combing internal data with social media and mobile to deliver more business value. (Goodwin, 2013) In the future, more devices will be connected to the Internet. Cars, buildings, bodies and many other things will be connected through sensors and it is expected that this increase in information will continue to drive the changes in CRM and how it is used to support sales, marketing and customer service. (Sartain,
Relationship marketing is a new-old concept. The idea of a business earning the customers' favor and loyalty by satisfying their wants and needs was not unknown to the earliest merchants. Until recently, marketing's focus was acquiring customers. Formally marketing to existing customers to secure their loyalty was not a top priority of most businesses nor a research interest of marketing academics. As Schneider wrote in 1980: phrase "relationship marketing" appeared in the services marketing literature for the first time in a 1983 paper by Berry (Gronroos 1994). Berry defined relationship marketing as
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