CRM - B2B Marketing

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<p>Customer Relationship Building on the Internet in B2B Marketing: A Proposed Typology Author(s): L. Jean Harrison-Walker and Sue E. Neeley Reviewed work(s): Source: Journal of Marketing Theory and Practice, Vol. 12, No. 1 (Winter, 2004), pp. 19-35 Published by: M.E. Sharpe, Inc. Stable URL: . Accessed: 21/09/2012 01:19Your use of the JSTOR archive indicates your acceptance of the Terms &amp; Conditions of Use, available at .</p> <p>.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact</p> <p>.</p> <p>M.E. Sharpe, Inc. is collaborating with JSTOR to digitize, preserve and extend access to Journal of Marketing Theory and Practice.</p> <p></p> <p>CUSTOMER RELATIONSHIP BUILDING ON THE INTERNET IN B2B MARKETING: A PROPOSED TYPOLOGYL. JeanHarrison-Walker The University Houston-Clear of Lake</p> <p>Sue E. Neeley of Lake The University Houston-Clear</p> <p>of in the number customer there (CRM) applications relationship marketing currentlyuseontheInternet, is a lack Despite large with This a of ofanorganizing structure. paper focus presents3X3 typology e-CRMpractices, particular onbusiness-to-business is decisionprocessand (2) Berry The interactions. typology based on two dimensions: thestageof thepurchase and (1) Theproposed canbeusedtodesign evaluate firm e-CRM of and s( 1 a Parasuramarf 991) levels relationship 's marketing. typology relative itsB2B relationship to marketing objectives. strategies "relationship customers" and prefer personalized with communication thecompany representative. want They whoknows them understands needs(Beny and have their increasing someone historically emphasized strategies Marketing on andParasuraman and market shareto increase can 1991). Thus, primarily relationship profits, focused marketing be to haveloyal, transactional mass selling. In recent satisfied years,it has become beneficial all participants. Companies customers sales who recommend and themto othersand generate customers increasing that current apparent retaining that positive have shown word-of-mouth. Studies have is Customers efficient, to them farmorecost-efficient. dedicated and on consistent can be up to five times more suppliers trust depend for new customers service.As they winning their ofdoing reduce cost customer thanmaintaining customers business, relationships companies existing expensive may and lower for Reichheld Sasser be offered Leach 2002). In fact, prices products. (Bauer,Grether, the of between defection a negative correlation ( 1990) identify have The emergence the Internet of does not changea firm's customers company and existing profits.Companies fundamental to establish need andmaintaining customer shifted focus their toward stable, strong developing relationships. on Businesses must attract still with increasing an focus build customer and customers, trust, create relationships, long-term satisfaction. and committed value(Berger Nasr 1998). lifetime firms customer Building relationships requires measuring to interact withtheir customers meaning thatfirms must to customers individuals allowing as them to Customersalso recognize that (especially in highly strive treat by are control timing extent buyer-seller the and of interactions and relationships markets) good buyer-seller competitive the of customers sellers and and for As essential thesuccessofboth ("How through customization products services. noted for byMohammed al. (2004,p.224): it et to be a Preferred 1991). In fact, is common Supplier" in transaction-based traditional customers forego to marketing firms Arndt couldbe interactive, as ina such favor relationship of 1979). Particularly "Previously, (cf. marketing face-to-face a butonly with small number of customersoften want to be in service organizations, setting, INTRODUCTION Winter 2004 19</p> <p>e-business to models. Ps use thefour of marketing arrange (2001) use IT systemsand Gordijn and Akkermans models valuetousers. add how toexplain certain architectures (2001) analyzesbusinessmodelsbased on their Applegate et technical Dubosson-Torbay al. (2002) propose platforms. e-business models to of a number dimensions characterize at but traffic scale,andso forth), stopshort security, (required to e-business them. The onlyattempt classify classifying of on to focuses thestrategic models datethat objectives the to of firm relieson dimensions Businesses increasingly of are relating the sourceof value taking advantage thepower or and target audience withcustomers the (financial non-financial) the in to the Internet build relationships (customers, or publicat large)(Lam and Harrisonelectronic Sharma(2002) channel members, (Bakos 1991). marketplace that in marketing Walker2003). In any event,none of the classifications suggests theuse oftheInternet relationship in on can focuses customer hasincreased duetothevaluethat marketingtheB2B sector. relationship dramatically, primarily The allows be generated delivered customers. Internet and to businesses to the makesitpossiblefor to It In summary, Internet customer. accessto information instant specific a single while them of with numbers customers, communication interact large for where can communities treating provides virtual is reliance the on there increasing in occur and customers company between Although employees a setting as individuals. with the for on thatnevercloses. The dependence reaching someone Internet building relationships customers, business structure that lack in and hours" beeneliminated theproblems models use ontheInternet an organizing has during "regular ties the models to relationship indifferent zonesreduced.Transactions specifically with time marketing operating a is of The can be completed a 24/7 basis. This is particularly objectives. purpose thecurrent on project to present businessthat Internet-enabled the in transactions whereboth typology classifies various important business-to-business the CRM options availableduring various somelimited of to-business set to are stages during parties likely be operating can of businesshours. An additional typology assist advantage the of thedecisionprocess.The proposed "regular" new or in and firms designing CRM strategies, evaluating Internetthe is reduction costsfor of both existing buyer seller.The relativeto the relationship and more CRM strategies, reducestime costs through self-service marketing buyer of efficient ordering processesand the seller reducescosts objectives thefirm. Both elements reduce automated information systems. through is the costoftransactions interactions leadtooperational Theremaining and discussion presented four in sections. and First, for is efficiencies eachparticipant for (Sharma 2002). Forexample, the rationale the typology discussed. Second,the when Dell Computers the receives orders from of proposed are business customers dimensions the Third, typology described. these orders are also instantaneously received by in B2B authors adopta seller'sperspective classifying CRM and the practices within proposed the contributions Fourth, manufacturing,suppliers byFedEx,whodelivers by typology. of the current researchand managerial are (Sharma 2002). computers implications and to identified issuesrelating selective ofCRM application While more thanhalf of all e-commerce occurs in the arediscussed. business-to-business market, mostof theliterature to (B2B) dateon CRM tends focuson business-to-consumer to RATIONALE FOR THE PROPOSED TYPOLOGY (B2C) interactions. B2C interactions involve one-way communication and a passive recipientwhereas B2B Whenchoosing e-business modelsas part a firm's of overall communications are interactive and involve two-way CRM strategy, keyissuesemerge focus thefirm's two that on often and at in communications, in real-time First, what (Varadarajan Yadav strategic objectives. point thebuying process email customized shouldthewebsite used? Shoulditbe usedprior the be to 2002). Online FAQs,automatic responders, webpages,andorder status are to and and customers reports justsomeoftheCRM purchase, attract assist potential existing in more for aboutproduct practices usetoday.Other sophisticated applications in searching and accessinginformation in B2B markets include custom alternatives? Shouldthefocusbe on helping in customers vendor-managed inventory, virtual and involvement placing their the or seminars, training meetings customer order, finalizing transaction, coordinating in product whileas many 50 revenue- fulfillment delivery? should focus onproviding as and Or the be planning.In fact, havebeendeveloped usedon business models and customerservice and promoting continuouscustomer generating the (Hanson Net has after is 2000;Rappa2001), rarely any underlying involvement thetransactioncompleted? rationale beenexplained Walker (Lam andHarrison2003). The secondobjective relates thelevelof relationship to the Whilerecent to wants havewith particular to a customer. Muchhasbeen yearshave seen sporadic attempts classify firm e-business to aboutthevalueofa customer theextent which and to models,classifications date have not written existing beentiedto strategic and HarrisonWalker customers and firms want relationships witheach other (Lam objectives Strauss Frost and wantrelationships with 2003). Forexample, (2001) andShin(200 1) (Dorschand Carlson1996). Firms firms customers. their Similarly, couldindividualize or but scale. offerings, notona large product service The Internet allows for interactivityand out individualization be carried in a way never to before. Withthe adventof the Internet, possible with large businessesare able to both interact them individuals." as numbers customers, treat of yet (EvansandWurster 1997) 20 Journal Marketing THEORY AND PRACTICE of</p> <p>are for that to customers theextent customers profitable the of may be direct company. The profitability a customer from with revenues the (associated generated sales)as wellas customer referrals other of from indirect loyalty, (resulting andCarlson1996;Lam and andso forth) customers, (Dorsch a Harrison-Walker 2003). After developing databaseof customers segments a can or customer activity,firm identify Calculations of can be in thatdiffer terms profitability. in to how to performed determine much invest each kindof with that havea profitable customer ensure they to relationship with can bonds be sought more thefirm. relationship Stronger and customers. (1 Berry Parasuraman 991) provide profitable for ofstrategies a parsimonious appropriate building depiction with levelsofrelationships customers. various two is Theproposed issues, typology basedonthese strategic whichare labeled"Buyphase"and "Type of Relationship classifiesa large respectively.The typology Bonding," business-to-business number existing of (e-B2B e-strategies This into them fewer and categories. provides models) groups current an to a guideforfirms conduct e-B2B auditoftheir are to the toascertain extent which they successfully practices with the building desiredlevel of relationships customers the process. throughout buying DIMENSIONS OF THE PROPOSED TYPOLOGY is of dimension theproposed The first typology thestageof and includes decision thepurchase pre(Buyphase) process andpost-purchase stages. The rationale purchase, purchase, as dimension of for the process a first using stages thedecision customers that is basedon thenotion when buying products, that a follow decision process insomewayinvolves generally behaviors that and and purchase, post-purchase pre-purchase, at the to support customer each itis themarketer's objective over the to inorder retain customer thelongterm.The stage as is seconddimension thelevel of relationship marketing and Parasuraman identified Berry (1991). The seminal by workby Berryand Parasuraman (1991) on relationship a of heart CRM andthus is presentslogical marketingthevery to theproposed for seconddimension According typology. canbe andParasuraman marketing (1991),relationship Berry on on levels,depending thetypeand practiced one ofthree Level uses a of number bondsthat company to foster loyalty. leveltwobysocialand oneischaracterized financial bonds; by bondsto the adds structural financial bonds;and levelthree mix.</p> <p>and competitive (Varadarajan Yadav 2002,p.299). A firm's in affect marketplace its (customer positional advantages, turn, share growth) market and customer and satisfaction, loyalty, financial (ROI, earnings growth,shareholder wealth) and outcomes (Varadarajan Yadav 2002). performance and Yadav (2002) examineselected Second,Varadarajan The of (drivers competitive strategy). current paper linkages with and supported at least two of the is consistent by between skills (1) firm-specific and linkages: therelationship with and (2) therelationship resources competitive strategy environment the and buying characteristics between buyer with competitive strategy. First, with regard to the skills with between relationship firm-specific and resources and out strategy, Varadarajan Yadav(2002) point competitive in of skillsand resources terms theamount of a that firm's customers the and information possessedaboutindividual to with to interactions ability use IT resources customize a determine firm'sabilityto pursue certain customers in strategies the electronic marketplace.For competitive to to allowa firm recommend technologies products example, an individualcustomer,e.g. a segmentsize of one in interest (Varadarajanand Yadav 2002). Increasing the for customer relationships highlights imperative managing on information and assets to firms focus developing superior assets. Second,withregard the to information processing between buyer and buying environment relationship and with characteristics competitive strategy, Varadarajan in are Yadav (2002) notethat significant changes occurring as buyersand the buyingenvironment a resultof the and sellerson the emerging relianceof buyers increasing can communications be replaced Standardized marketplace. of The availability sophisticated with customized messages. can environments decisionaids in onlinebuying interactive search product for information customers howpotential alter and make purchasedecisions(Haubl and Trifts 2000). and is search quicker, Information relevant, easier, produces about the current purchase timelyproductinformation a howtoevaluate product, not can decision.Buyers only learn who of butthey also access theevaluation other can buyers have already purchased and used the product may and (Varadarajan Yadav 2002).</p> <p>of As theuseofInternet increases, every technology stage the will s (Varadarajan process beaffected buyer'decision-making to the and Yadav 2002). Sellersca...</p>