Assignment Task:
Dell's Competitiveness Advantage
A few decades ago, customers would personally go to supermarkets or other stores where they had previously purchased products or availed a service in order to either register complaints, to inquire about other products and services, or in order to purchase the product or book the service again. Likewise, businesses would attempt to observe and manually record which items left their shelves sooner and which items were less popular with customers amongst other data such as sales figures, regular purchasing patterns of customers, and how many customers were satisfied/dissatisfied with a product/service (Reinartz, Kraft, & Hoyer, 2004). While ti previously took weeks or months for businesses to attempt to gather this information, such information is now available to businesses within seconds. However, the benefit of convenience is not only limited to businesses as customers also enjoy the facility of lodging complaints, asking questions, placing orders, and getting a fully personalized customer service based upon their interests and preferences. While some customers enjoy the fact that businesses are aware of everything about them including their birthdays and the number of members in their family, some customers are not as enthusiastic about this sphere of customer relationship management software systems. Accordingly, customer relationship management software systems have their respective advantages and disadvantages (Chen &Popovich, 2003).
A case study of Dell will be provided further in the paper in order to illustrate the applicable concepts mentioned. Customer Relationship Management Systems and Their Effect on Ebusiness: "E-business is an overall strategy which enables the proper management of business functions including time cycle, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage" says Lou Gerstner, CEO IBM (Lecture 2). Previously, businesses were not properly aware of what their customers needed and attempted to fulfil those needs and wants through guesswork or by asking a few customers what they preferred over what they did not desire in a product. Thus, managers recorded customer complaints in registers and attempted to resolve them eventually, while this process often resulted in delays over months. However, the implementation of business systems and the widespread use of e-commerce have enabled the introduction of customer relationship management systems, which include the "Methodologies, software, and communication capabilities, that help organizations to structure and manage their customer relationships and interactions with the objective to increase customer satisfaction with the organisation's products or services"
Therefore, customers are now able to access reliable, accurate, and vital information regarding the products and services that they have used with the click of a mouse (Bose, 2002). Customer relationship management systems have benefitted firms by integrating people, processes, and technology to increase the level of efficiency in organizations and enabling firms to use customer information to their advantage. The system enables the production of a customer database recording all customer details and creating a customer profile, which provides the company with details regarding the customer's needs and frequent purchases. While previously companies would attempt to sell the same product to every customer in the same manner, customer relationship management systems allow the information regarding customer preferences to be used to differentiate and specifically target the firm's products to a customer (Payne & Frow, 2005).
Customer relationship management systems are not only used to remain in communication with customers, but are used as a tool to connect a firm's customers, distribution channel members, suppliers, and other similar parties within the same platform and maximising all of these relationships to increase profitability in the business. This is done through the various features of the customer relationship management systems which provide vital information for all of the parties involved in the business, thus making the conduction of business more convenient, information easily accessible, and operations efficient and cost-effective (Payne & Frow, 2005). For example, the sales force automation function of customer relationship management systems provides information on customers, previous deals, and competitors to support the sales force of the team. Thus, the system helps the sales force of the firm perform their job more effectively and also provides the suppliers of the business information regarding customer preferences and the products in highest demand amongst different target groups. Other functions of the system include customer service and support systems, which enable customers to track their orders, monitor their requests, and enables managers to reply to customer queries promptly thus aiding both customer service personnel and customers to fulfil their functions with ease.
Field service is a function that allows remote staff to quickly and effectively communicate with the customer service personnel to meet individual needs. Thus, the customer relationship management system provides information to remote staff regarding customer needs in order to enable them to meet them more adequately (Jayachandran et al, 2005). The marketing automation function of the system allows up-to-date information on customers' buying habits to enable the construction of effective marketing campaigns. Accordingly, the system also facilitates the marketing team of an organization to construct and design specifically targeted and effective marketing campaigns which may help increase the profitability of a firm (Bose, 2002). Therefore, the customer relationship management system provides information for several parties involved in the business process and thus integrates the use of technology with people in order to improve and enhance business processes. This is one of the main reasons that customer relationship management systems are becoming highly popular amongst firms. The use of the system enables a firm to grow revenue, provide better customer service, introduce repeatable and consistent sales processes, create new value and increase customer loyalty (Campbell, 2003).
It also allows firms to implement the three phases of customer relationship management systems, which enables the acquisition of new customers, enhancement of the profitability of existing customers, and the retention of profitable customers for life. It enables the implementation of core customer relationship management processes including cross-selling and up-selling, direct marketing, customer support, and sales force automation. Thus, the use of these processes brings substantial improvements in marketing campaigns, product development, sales, and field service (Lin, Chen, & Chiu, 2010). The use of customer relationship management systems has enabled firms to communicate within their organization, with customers, and across their organization to other firms, who may be members of the distribution channel or the firm's suppliers, by sharing and gathering vital information regarding customers and processing this information to make ti useful in the business process. The best practices of customer relationship management systems include well-establishment of organizational needs, good interdepartmental communication, the integration of front-end and back-office data-mining procedures, and the establishment of an up-to-date central warehouse of data (Oztaysi, Sezgin, &Ozok, 2011).
Many firms currently apply customer relationship management strategies through the implementation of social customer relationship management and the use of social media to get their message across to customers effectively. Platforms, such as Facebook, Twitter, and LinkedIn, are used in order to communicate with customers and advertise products/services to them (Bose, 2003). However, while the use of customer relationship management systems provides extensive advantages to a contemporary business, there are still challenges involved in the use of these systems. While many customers are now accustomed to buying products online, other customers are still highly wary of using such systems and exposing personal information on such websites. Moreover, while the people of some cultures prefer communicating via an electronic source, others are only satisfied with personal contact (Oztaysi, Sezgin, &Ozok, 2011).These challenges will be discussed in the next part of this paper. Challenges of Customer Relationship Management Systems and Social Implications of their Use: In order to gather all of the data needed to meet customer needs and provide information to suppliers, sales force, managers, and other parties in the business process, the business needs to use the aid of cookies to track customer surfing details and to record what types of products customers purchase from other websites.
The problem is that some customers regard this as an invasion of privacy and refrain from shopping online because they are aware that firms are monitoring their actions. Statistics show that 51% of shoppers are highly concerned about privacy online and 48% refrain from shopping online because of privacy issues (Lecture 3). This can pose serious problems for firms who want to efficiently use their customer relationship management systems and prevent customers from using spyware protection software, making the use of these systems redundant (Fan & Ku, 2010). Other challenges posed by the use of customer relationship management systems include the lack of appropriate executive support as some customers feel that they do not receive adequate service online while some business executives also feel that these systems are not satisfactory for use in organizations and refrain from using them. Additionally, many firms lack rationale when they decide to use customer relationship management systems (Ang, 2011). For example, a firm who has a highly personal relationship with customers and thrives upon the personal contact that it enjoys with its customers may not benefit from the adoption of a customer relationship management system as it may lose the element of being able to personally attend to customers. Other problems with the use of customer relationship management systems include an inappropriate network infrastructure, user resistance, and the lack of cultural preparation of these systems (Fan & Ku, 2010). One of the major flaws of CRM systems includes their lack of adaptability to different cultures. Contemporary business research has found that customers belonging to different cultural backgrounds tend to act differently when interacting with businesses and have varying preferences regarding the type of contact that they find suitable in business settings.
Based on Article above, answer the questions below:
Q1. Analyse each of the SIX (6) SCOR processes.
Q2. Explain the FIVE (5) role of customer service during marketing exchange in Dell Company.