1. Introduction:
The purpose of this Essay is to discuss the potential benefits that arisewhenimplementing a Customer Relationship Management(CRM) system for the postgraduate recruitment at the University Of Essex, additionally analyzing the reasons for making such an investment in CRM software. Furthermore using diagrams and figures to clarify the method and mechanism involved in the core technology of a CRM system. One will argue the factors that make the system successful and unsuccessful, In addition present and highlight the reason for applying this sort of method in a higher educational institute. The paper will also be making an emphasis on referring to the experiences of company's which successfully implanted beneficial CRM systems.
1.2 CRM definition and characterization:
As defined by Bocij, et al (2006) Customer relationship management involves a company in forming a long term business relationship with its customers for mutual benefits. The essential aim of CRM is to improve customer service without harming company profitability. Typically information technology is used to obtain and analyze information on customer behaviour. Such an analysis might result in various actions, such as improving the products and services offered to customer. Kim et al, (2003) states that the objectives for a CRM system is customer knowledge customer interaction, customer value and customer satisfaction.
The term CRM is broadly used in the business industry and explains both the technology and the process between businesses and consumers. It usually refers to a software based approach to dealing with customer information. It exploits the use of technology to improve customer service and enable a grater degree of customer differentiation in order to deliver unique customer interactions. There are several CRM systems tailored for different approaches towards diverse customer relationships. However it is important to stress that a CRM software system will not be as successful as it can be if the implementation of the system is restricted to software installation only, there need to be a present and certain understanding of what relationship marketing is.
1.3 Relationship marketing:
Relationship marketing is a term used to explain the type of marketing developed from direct response with costumers. It is a marketing strategy focused on customer retention. Relationship marketing can be defined as a way of building long-term bonds and relationships with consumers, through giving them a reason to maintain a bond with the company. It is a strategic perspective that stresses the continuing buyer/seller interaction. For a CRM system implementation to be successful, a blend of human interaction and relationship marketing is key in order to develop the notion of trust, commitment and value growth. Relationship marketing recognizes that prospects and customers can be to very different points of awareness and interest. Understanding issues such as customers demand for the service and customer change over time can help differentiate between the diverse segments of customers. Building customer loyalty is an important aspect of relationship marketing as there is nothing better than satisfied customers who spread the word of mouth. CRM is values and strategies of relationship marketing with particular emphasis on customer relationships turned into practical application (Gummesson, 2002). A narrow based definition of CRM often contributes to the failure of CRM projects when an organisation views CRM from a limited technology perspective or undertakes CRM in a fragmented way.
2. Main Body:
There is a vast difference between a retail business approach to CRM and a University approach to CRM. The customer needs, wants and expectations are clearly different and they are providing two very separate and diverse services. When dealing with CRM in a higher educational context it is often referred to as Constituent Relationship Management, we are therefore looking at CRM from an institutional view, fundamentally managing the relationships between the institution and its constituents. The important thing to remember is that the University of Essex is looking to improve their postgraduate recruitment with the help of a CRM system. The key benefit linked to implementing a Costumer Relationship Management is the change in perception and development of better relations with the already existing customer base. So for the University to improve their recruitment they need to have a certain basic knowledge and understanding of the student body already attending the postgraduate programs. The CRM system will help developing the already existing relationships and from that point the University can build courses and programs from a student perspective.
2.1 Potential benefits:
There are many potential benefits when applying a CRM system in a University, it can manage day-to-day contact with students and prospects, send and track email marketing campaigns, generate online inquiries, promote and manage events, handle course registration, invoicing and payment, create personalized dynamic content and behavioural targeted messages and analyze results to name a few. It is quite obvious that a system like this will generate a more efficient and profitable time management for the faculty and staff, as they will be able to process more accurate information and make better decisions. Admission and recruitment staff are more productive as they can better identify contacts that need/require the most attention. By targeting out students the admission staff can follow each individual prospect and give them the information and feed back required, this will provide personalized service for each student. Besides giving efficient and good help the University can at this stage start the prospects University experience.
2.2 Reason for making investment:
For any organisation or company that deals with customers, CRM is a crucial and very important aspect, especially in the service industry where interaction with customers is constant and central. A University delivers a service for its students and it is therefore essential for both University and students that the University implements and regulates for the sake and matter of the attending students. For the University to become an experienced, qualified and approved learning facility by the students the need for understanding and developing relations with its students is essential. It is important to remember that the students is the “glue” for the potential applying students, a University with horrible exam results and unhappy students is not attractive for prospects. The core belief and principle of CRM is development of already existing bonds, so before even thinking of recruitment it is essential to get the basics in place.
By understanding the customer's needs before they even know them, the university can create great value for their students. A well defined value creation strategy proposes prominent value to individual customers as well as maximizes profitability from each relationship (Lindgreen, 2006). The university will also enhance their image along the way, and as described by Lindgreen (2006) Delivering superior value to customers will enhance the organisation's competitive advantage.
2.3 Technology involved in a CRM system:
This section is dedicated to discussing the technology involved when implementing a CRM system. By using different models, one will try to explain the different theories behind them.
2.3.1 Model 1, Business strategy perspective on CRM:
Model 1, Source: Marketingteacher.com
2.3.2 Model 2, The Relationship between IT and CRM:
Model 2, Source: marketingteacher.com
Customer touch points: The most important focus in the CRM system is the focus on the present and potential customers and their current and future needs. The top bulk shows the relationship marketing point of view of CRM, where the business reaches its customers. Applications are the software and programmes that support the process. This is where the hard work is done, plans and objectives will be set and the application step gives all its attention to customers. As mentioned before this is the point where a lot of people misunderstand and tend to call it the whole of CRM. Although the software is important it need to bee processed with relationship marketing. Data sources are showed as the foundation of the model and prove that both collecting and maintaining customer data is important. Data on the life time value of individual customers is stored here, as well as details of how and when the customer was recruited, how and for how long - individuals have been retained. (Source: Marketingteacher.com)
2.6 Factors that make CRM successful:
Payne and Frow (2006) argue that successful implementation of CRM programme depends upon four critical factors. (1) CRM readiness assessment, (2) CRM change management, (3) CRM project management and (4), employee engagement. A CRM readiness assessment is an examination of the company's overall willingness and position in terms of readiness to start a CRM implementation. CRM change management involves strategic organisational change and cultural change. This stage involves all the people working outside and inside the business on a senior level, cross functional integration is vital. CRM project management involves forming cross-functional teams of experts who manage the company's CRM implementation program. CRM programs are only successful when they support the corporate objectives and the business strategy. Employee engagement is the last critical factor and states that firms recognize the value their employees contribute to the business when employee engagement, support and commitment take place. Companies cannot develop and operate appropriately customer-focused CRM systems and processes without motivated and trained employees
Successful CRM projects are planned carefully and cautiously. With out an advanced plan, the CRM systems have no use or value what so ever. All aspects need to be covered for the project to run smoothly, the greater the change the greater the fall. If customer strategy is not set before implementation of the relationship-management program, managing the program is likely to fail (Brown & Gulych, 2002: Cited by Lindgreen et al, 2006). The suitability of the software chosen to implement a particular functionality is also important. Usually there are two main options, get a tailored CRM system which suits the company's business plan and goals, or set new goals with software already designed. Another important factor is the consideration of corporate culture when choosing CRM software, the last thing one wants is to discover a culture clash. It is also important to begin the training before implementing the system, so the employees and staff are ready to take on the change.
The University of South Florida (USF) is one university who has implemented a successful CRM software system. They are announcing that they are effectively and efficiently supporting the growth of IT services by using the service as its strategic CRM platform. USF's implementation has been so successful that they have been able to see a substantial increase in support volume, from 5,000 annually to 40,000 annually in the last four years without increasing their staff. The CRM system has helped them gained control of both students and prospective students.
Tesco, one of the UK's biggest supermarket retailers are to this day being called the “customer relationship management champion”. As cited by Jim Barnes, Executive Vice President of Bristol Group, a Canada-based Marketing Communications and Information firm, and a CRM expert: “They (Tesco) know more than any firm I have ever dealt with how their customers actually think, what will impress and upset them, and how they feel about grocery shopping." By using the customers “Clubcard” which can show data from all their customers' purchases, they are able to identify and categorize their customers in different segments and groups. By knowing their customers so good, they are more than capable to treat them in the best matter and understand them.
2.7 Negative factorsconcerning CRM:
As the University are interested in applying a CRM system, one need to consider some of the negative factors concerning the system. Companies have invested huge amounts to implement CRM strategies, tools and infrastructure in order to win the battle in the increasingly competitive economy (Moedritshcher and Mussnig, 2005) and despite the enormous growth in the acquisition of CRM systems in the last ten years and widely accepted conceptual underpinning of a CRM strategy, critics point to the high failure rate of CRM implementations as evidenced by commercial market research studies (Pettey, 2008).
Rama et al, (2006) states that in an international survey of 1.337 companies who have implemented CRM systems to support their sales force, insights has estimated that only 25 per cent reported significant improvements in performance. This shows the bigger picture of the CRM system and one can clearly state that a system like this is not for everyone. But as Day (2000) states: The main reason for CRM project failure is the lack of strategic planning prior to the implementation of CRM, the problem is there long before the CRM system is implemented. Maselli (2001) found that the reason for failure of many CRM initiatives ranged from technological implementation problems to organisational integration and customer orientation.
3. Conclusion:
In conclusion, a CRM system will help improve recruitment in the sense of gaining knowledge from previous and existing postgraduates. The cost of implementing such a system can be quite expensive, but in the long run one believes the benefits will “catch up” with the expenses as the help and assistance of the CRM system will make it easier to maintain the relationship with the students. CRM is about more that simply managing customers and monitoring their behaviours. CRM has potential to change customer relationship within a company and increase revenue in the bargain. The system will undoubtedly help the recruitment of postgraduates as the CRM system can track, seek and tailor specific programs for each individual student. All in all the recruitment part of the CRM system is just a detail, looking at the big picture, implementing a CRM system can improve and explore so many more opportunities for the university.
The reason for success and failure turn out to be pretty closely related as one need to take into consideration that the system needs a lot of attention and a proper plan needs to be worked out and implemented in forehand. As discussed by Christopher et al, 1991: Cited by Lindgreen, 2006: Relationship management needs a shift from product-focused culture towards a customer-focused culture.
