Running head: E-CRM 1

Electronic Customer Relationship Management

Britni-Noel P. Duenas

University of Guam
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Abstract

The concept of Customer Relationship Management (CRM) was developed in 1983 to

further analyze sales opportunities by collecting and organizing external customer information.

Electronic Customer Relationship Management (E-CRM) is the implementation of internet-

based technologies (emails, blogs, forums, chat rooms, etc.) to maintain relationships between

businesses and customers through employees. However, over half of businesses within the

United States fail to have a successful implementation of an E-CRM system due to the inability

to adapt to the technological developments occurring. The utilization of IoT can reduce the

financial constraints which hinder companies to achieve success within these management

systems. IoT would also be able to further develop the objectives and goals set in place for each

CRM system which will be further discussed in this paper.

Keywords: electronic customer relationship management, eCRM, IoT, Internet of Things

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Electronic Customer Relationship Management

Customer Relationship Management (CRM) is an organization’s implementation of

technology to maintain interactions and relationships with current and potential customers. The

CRM system allows departments within a company to collect analyze and manage customer

information simultaneously, to develop and manage marketing campaigns, establish sales

opportunities and record service issues. However, the concept was further developed into

Electronic Customer Relationship Management (E-CRM) which is the utilization of internet-

based technologies (e-mails, websites, chat rooms, forums, etc.) to achieve the objectives of

CRM. The Internet of Things (IoT) is a development which network connectivity is available in

common products which allows data transmission. This advancement in online technology has

allowed for real time data, maintenance, purchases and more activities. The application of IoT

within an CRM software system will provide a high return on investment as it provides real time

analysis, improved customer service, price adjustments, customized promotions and an increase

in customer retention.

This paper examines the applications, advantages, and the effects made from the

implementation of IoT in E-CRM platforms as well as additional tools adapted from this method.

The paper first reviews relevant literature with respect to E-CRM and the evaluations of E-CRM.

A discussion is then developed from this framework along with the limitations of the studies

mentioned. The paper is concluded with managerial suggestions for future use of this electronic

marketing tool.
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Literature Review

Taylor, S. A., & Hunter, G. L. (2002) state that E-CRM is intended to be a marketing tool

which increases customer relationships however, through exploratory research the lack of

organizational coordination it has had the opposite effect within the industry. With a sample size

of 2,356 valid customer email addresses, the study was able to determine a series of hypotheses

ranging from the perception of quality affecting customer satisfaction to whether customer

loyalty is based on satisfaction, behavioral intention or word-of-mouth. The results from this

study support the previous studies which state that nearly eighty-percent of the companies having

issues with E-CRM also announce issues within company culture and technology.

The application of IoT would have drastically changed the methodology and conclusions

of these studies based on collection and analysis. The sample size would have not been collected

and confirmed by email addresses but rather from the products themselves, as products within

network connectivity can transmit data in real time to the manufacturing business. This process

creates ease of implementation for the consumer, analysts and researchers as the data can be

provided in real time without the hassle of interviewing the customer, however this does bring a

privacy issue to the limitation of the study. Having connectivity within products would reduce

the technological issues within companies to collect and analyze the data, as the products

themselves would communicate all data.

Lin, C., & Huang, Y.-A. (2007) conducted research to define influential factors of

Australian organizations implementing an E-CRM system as well as evaluating frameworks and

viable strategic approaches. The study was broken into two phases to ensure detailed
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information; the first phase was to include the benefits, costs and risks of implementing a E-

CRM and the second applied the results from phase one to assess the frameworks and strategies.

From the conducted research Lin & Huang were able to conclude that a majority of the

organization objectives of implementing an E-CRM system was to improve customer

satisfaction, however when assessed those companies failed in at least one aspect of aligning

business strategy towards the management of the E-CRM system. It was also stated that although

the theoretical aspect of implementing an E-CRM system within organizations the economic

state of Australia at that time could not support the IT budgets organizations needed to have an

effective system.

The Australian economy at the time was in a downfall due to the decline of other

countries which had a major effect on the trade, unemployment rates decreased by 8.53% from

the previous year. The inflation rate also decreased from 3.49% to 2.33%. If the business

industry cannot be supported the economy, it stands in then both will be condemned to failure.

The economy provides support in terms of technological advancements such as IoT and if the

funds are not available to provide advancements then the implementation of this system will

create inconsistent results and an inaccurate data collection. While IoT may be able to provide

leeway on the budget constraints in the business aspect, as it will be the consumers job to

purchase and conduct upgrades to the technology, as innovations must be made for the

manufacturing company to maintain relevance.

Zaman, A., Ishaku, I., & Haslinda, H. (2015) further develop previous research conducted

on E-CRM and the critical success factors of implementing these systems in small and medium
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enterprises. Success factors mentioned within this article are “operational and strategic benefits,

top management support, technological readiness and knowledge management capabilities”

(Zaman, Ishaku & Haslinda, 2015, p.58). The differences of direct and indirect benefits are

discussed, and customer behavior and satisfaction are labeled as an indirect benefit. It is then

hypothesized operational benefits and strategic benefits from using CRM technology are

positively related to CRM impact (2015, p.60). Hypotheses are then created for the rest of the

success factors respectively and how they are positively related to the impact of CRM. The study

was conducted by having a SME Manager of an organization in Malaysia fill out the

questionnaire created by the research group which was based on data from previous literature

reviews of online journals.

The term return on investment (ROI) is discussed within this paper and while it they

mentioned both financial and nonfinancial benefits of implementing a E-CRM, this discussion

created insight to further research the monetary amount of ROI. Nucleus Research company

analyzed the case studies on CRM and concluded that “CRM pays back $8.71 for every dollar

spent” (2014). Although this study is five years old, it depicts an image of growth for the CRM

system through the integration of IoT, this system would be able to achieve more than double the

return from previous research if implemented correctly and technological updates are managed

correctly.

Nikou, S. H., Selamat, H. B., Yusoff, R. C., and Khiabani, M. M. (2016) examine the

investigative research on E-CRM conducted by previous scholars to provide insight for both

academic and management training purposes. The telecommunication industry of the Middle
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East was the target of this study and if the application of E-CRM had an association with

customer loyalty and/or retention. All definitions and research found during this study conclude

that the sole purpose of E-CRM is enhance the customer satisfaction ratings within an

organizations by collecting pre-sales information, post-sales support and other e-commerce

services.

Nikou, S. H., Selamat, H. B., Yusoff, R. C., & Khiabani, M. M. (2016) stated that “the

following advantages can be succeeded: more effective marketing, enhanced customer loyalty,

cost reduction, greater efficiency and enhanced customer support and service if the appropriate

implementation of E-CRM is conducted”. The defining point of this statement is “appropriate

implementation” as if there are any complications within the application of an E-CRM system, it

will result in either inconsistent results or failure.

Factors of failure with the implementation of CRM in organizations is a weak strategic

management plan and lack of technological applications. An organization should have a strategic

management plan that has analyzed the external environment and internal capabilities as well as

the competitive advantage, that can be flexible to unseen circumstances and fully communicated

accordingly before the application of an E-CRM system. Clear communication to personnel

avoids internal conflict during software programming as well as analyzing collected data.

The financial capabilities an organization also determines the success of implementing

an E-CRM software system, because of frequent technological advancements. The competition

to maintain relevance within an industry relies heavily upon the investments placed within

information technology. A studied conducted by Deloitte and OnResearch in August of 2018

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concluded that one third of 500 privately owned companies whom are in mid-market budget

more than 5% of their annual revenues to information technology.

Dr. Tabitha Durai and G. Stella (2017) discuss their research studies on E-CRM and

customer satisfaction. The objectives of this study were to “analyze the demographic variables of

online consumers and to identify the effect of Electronic customer relationship management on

customer satisfaction in E-commerce websites” (2017). With a sample size of 100 it was found

that females have more of an effect on E-CRM if they are highly satisfied with the qualities of an

E-commerce website.

Suggestions made Dr. Durai and Stella are that companies place more concern within

data security, discounts and after sale services. The implications made by Dr. Durai and Stella

prove that the expansion of online technology into physical objects allow companies to collect

more consumer data. If the study conducted had the capacity of including products that were

connected through a network, the results may have been skewed as the qualities would be easily

implemented and data provided through the device rather than a survey or data collection by

telephone or website.

Discussion

The studies conducted by Durai, D., & Stella, G. (2017), Lin, C., & Huang, Y.-A. (2007)

Nikou, S. H., Selamat, H. B., Yusoff, R. C., & Khiabani, M. M. (2016), Taylor, S. A., & Hunter,

G. L. (2002), and Zaman, A., Ishaku, I., & Haslinda, H. (2015) all conclude that the current

failing applications of E-CRM systems are lacking to adapt to the technological advancements
E-CRM 9

that are occurring. It is discussed that insufficient financial capacities however with the progress

being made with IoT costs to research purposes would be reduced, creating opportunity to

expand on research and development within the current E-CRM systems in place. Real time

analysis would now be implemented and would be able to better determine the causality or

critical success factors and customer satisfaction ratings.

Customer service would be improved as maintenance would be proactive, rather than

reactive and reduce the inconvenience of customer calls and attempts to obtain maintenance and

after sales care. IoT would allow E-CRM to alter prices in real time basing demand on trending

products, through social collaboration, product searches through search engines and voice

services products such as Amazon’s Alexa. Marketing campaigns and promotions have the

opportunity to become specialized based on consumer preferences and due to IoT there has been

another channel added through broadcasting on voice service products or any other items that are

connected to the network. An increase in customer retention will be made due to these

developments in E-CRM through the utilization of IoT.

Limitation of These Studies

The inconsistencies analyzed may be concluded from multiple limitations found in the

studies of the literature reviewed. These limitations can emerge from technological as well as the

cost restrictions associated with these studies. Each of these limitations will be discussed in

further detail in the following sections.

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Technological restrictions. The review of the study by Taylor, S. A., & Hunter, G. L.

(2002) analyzed that data collected was based on email transmission which isolates data and

opens room for error. Lack of data would arise through the collection process, the first would be

eliminating emails which are no longer in service, second would be the lack of responses

received due participants choosing not to respond. Inconsistent data could arise, due to

unfulfilled surveys as well as fabricated responses. Lin & Huang (2017) evaluated the studies

which were conducted more than a decade ago, this method eludes the technological impacts that

have been made within that time. Studies conducted by Durai and Stella were conducted through

physical questionnaires, which limited the number of questionnaires distributed as well as the

time frame in which data was analyzed and interpreted.

The technological advances made within the time that has passed during these studies

have developed secure ways to ensure data is consistent and provided in real time while enticing

the participants to respond and complete the entire survey. Surveys may be conducted overtime

by devices which would decrease the chances of consumer irritation due to the length of surveys.

Cost Restrictions. Most of the studies conducted were based on literature reviews of

previous studies and utilized secondary data to deduce new conclusions and analyze

methodologies that could have been improved, which did not create a high cost as most of the

information was published in journals that were open to the public. However, their studies

conducted through primary data such as Taylor, S.A. & Hunter G.L (2002) were limited due to

cost restraints therefore the conclusions made could not be applied on a global aspect because the

sample size is specific to the Northern American geographical region. The same geographical

region bias applies to the studies of Lin & Huang (2017) and Zaman, A., Ishaku, I., & Haslinda,

H. (2015) within Australia and Malaysia respectively.

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The application of IoT within CRM would reduce the cost of previous studies due to the

fact that information would be collected simultaneously through products which can be

distributed globally. Eliminating the need to focus on secondary data, because compiling primary

data can be collected through multiple methods, traditional methods which include, questionnaire

(online, mobile, and/or hard copy), interview (face-to-face, telephone, and/or video), request

from the manufacturer. It will also be possible to negotiate request terms with third parties, as it

will be beneficial for organizations to sell the information collected by the devices sold to

consumers for research, marketing and other purposes.

Time Constraints. While the duration of these studies was not discussed within the

articles it can be approximated based on the methods used to collect data. Approximate one to

two weeks to determine the marketing objectives, another week to develop a questionnaire as

well as determining methodology and appropriate sample size. Dependent on timeline provided

the results of the survey could take days or weeks to collect and then another couple of weeks to

analyze and then interpret. For example, Zaman, A., Ishaku, I., & Haslinda, H. (2015) conducted

research through specific SME Managers, this would have created issues time due to scheduling

times that each manager could have completed the survey. IoT would reduce time constraints by

having data collected in real time based on consumers behavioral, purchase, viewing and other

patterns. Information collected from product searches, requests would reduce a large portion of

time demanded and would be able to organizations would be able to implement changes either

strategic or organizational based on the interpretations provided at a faster rate which would

increase competitive edge and ultimately satisfaction.

Conclusion and Further Study

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This paper has determined the underlying issues within the implementation of customer

relationship management and the lack of technological advancement capabilities of businesses

applying the software. The studies within the articles chosen for the literature determine at least

two factors which have caused CRM systems to fail and within those factors technology has

been one. Whether it be the incapability for a business to implement an E-CRM due to unstable

financial positions or maintaining relevance within rapid technological advancements occurring

it has been determined that more than half of businesses fail to have a successful implementation

of a CRM system due to technology. Further research into IoT has proved that this development

will enhance the purpose of CRM by increasing ROI through the decrease of time constraints by

providing real time analysis, improving customer service through convenient product

maintenance, price adjustments which can be determined by demand through product purchases

as well as inquiries. Marketing professionals will be able to develop customized promotions

again based on consumer inquiries, habitual viewings and more. An increase of customer

retention will be the result of the improvements to the current management systems in place.

It is recommended that business and management professionals observe the present

developments as well as future developments that will occur within technology and the

correlations that will occur within business as relationships will be altered based on these

changes. The inability for a management team of a business to adapt to the rapid developments

of IoT, will be the cause of the net loss and possible end of the business. As IoT developments

offer higher value to products through network connectivity, with the rising population of

millennials the demand for connectivity is rapidly increasing and the trend for any product to be

connected to network is increasing as well.

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References

Benes, R. (2018, August 13). How Much Are Companies Spending on Technology? Retrieved

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spending-on-technology

Durai, D., & Stella, G. (2017). A Study on the Effect of Electronic Customer

Relationship Management (ECRM) on Customer Satisfaction of E-Commerce

Websites. Journal of Marketing Strategy, 332-339.

Inflation Rate between 2006-2007 | Australia Inflation Calculator. (2013). Retrieved

April 18, 2019, from http://www.in2013dollars.com/Australia-inflation-rate-in-

2007

Lin, C., & Huang, Y.-A. (2007). An integrated framework for managing eCRM

evaluation process. International Journal of Electronic Business, 340-359.

Nikou, S. H., Selamat, H. B., Yusoff, R. C., & Khiabani, M. M. (2016). Electronic

Customer Relationship Management, Customer Satisfaction, and Customer

Loyalty: A Comprehensive Review Study. International Journal of Management

and Economics Invention, 1133-1144.

Nucleus Research. (2018, September 26). Retrieved April 19, 2019, from

https://nucleusresearch.com/research/single/crm-pays-back-8-71-for-every-dollar-

spent/

Taylor, S. A., & Hunter, G. L. (2002). The impact of loyalty with e-CRM software and e-

services. International Journal of Service Industry Management, 452-474.

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Zaman, A., Ishaku, I., & Haslinda, H. (2015). The Critical Success Factors of e-CRM

Implementation to Small and Medium Enterprises. International Conference on

E-Commerce, 58-62.