Readings in Professional Literature:

Crossing the Chasm: Marketing and Selling Disruptive

Products to Mainstream Customers

Customer Relationship Management

BME12

Theodros Haile
Readings in Professional Literature: Crossing The Chasm

CONTENTS

1 INTRODUCTION........................................................................................................2

2 LITERATURE ANALYSISSS....................................................................................2
2.1 From Acquiring Customers to Customers Loyalty.................................................2
2.2 CRM in Marketing..................................................................................................3
2.3 CRM and Customer Service.….………..……………….………………………..4
2.4 Sales Force Automation………………..…………………………………………5
2.5 CRM in e-Business ……………………………………………………...……….6
2.6 Analytical CRM ………………………………………………………………….6
2.7 Planning a CRM Program.………………………………………………………..7
2.8 Choosing a CRM Tool……………………………………………………………8
2.9 Managing a CRM Project……………………………………………………...…8
2.10 CRM in the Future ……………………………………………………………...9

3 CONCLUSION AND PLANNED ACTION.............................................................10

SOURCES.......................................................................................................................12

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Readings in Professional Literature: Crossing The Chasm

1 INTRODUCTION
This literature analysis is done for the book of Geoffrey A. Moore with the
title “Crossing the Chasm: Marketing and Selling Disruptive Products to
Mainstream Customers”. The analysis is based on each topic throughout
the book. After the analysis of the book, there is a conclusion of the
reading and also how the knowledge and idea will be applied on a project
at the workplace.

2 LITERATURE ANALYSIS

2.1 The Service and Relationship Imperative: Managing in Service Competition

The service sector has dominated the economy in the world especially in
the western and industrialized countries. Service is not only necessary for
service companies but also for physical product manufacturers. When
customers are buying goods or services, what they have in mind is the
benefits of them that come along but not the products alone. Providing
customers different services builds a competitive advantage and
outperforms competitors.

Compered to other major strategic perspectives, such as a core product

perspective, a price perspective, and an image perceptive, service
perspective creates sustainable competitive advantage for firms. Choosing
any of the perspectives doesn’t mean that the other perspectives are less
important. The choice indicates where the firm allocates more resources
and develops competitiveness.

Adopting service competition logic has become a necessity for

company’s’ survival. Companies may have three main reasons to adopt
service completion logic; which are customer-driven, competition-driven
or technology-driven. Firms need to use information and knowledge to
create better customer-oriented and value enhancing services to provide
total service offerings related to physical products or services.

2.2 Managing Customer Relationships: An Alternative Paradigm in Management and

Marketing

In the old times, exchange marketing was popular in which, such as

physical products for money had been considered the main target in
marketing. Nowadays, the companies approach has changed to relation
marketing which focuses on customer’s relationship with the company.

Any kind of customer contact with physical products manufacturers,

service providers or any organizations creates a production of services.
These kinds of contacts create cooperation between customers and service
providers. As we consider marketing of services is based on relationships,
there can be circumstances where the customer does not want the

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relationship to be highlighted. What companies should remember is that

the services are basically relationship-oriented.

Value creation for customer in relationship marketing perspective is quite

different from the exchange marketing perspective. Relationship
marketing perspective focuses on value creating through cooperation with
customers while exchange marketing perspective bases on an already
crafted value by the company for money. To have a competitive advantage
in the market companies, for instance, may initiate direct contact with
customers and other business partners, gather relevant data about
customers and others, and develop customer-oriented service system.

There are three crucial strategic requirements of a relationship marketing

strategy; that are providing total service offerings as a competitive element
of the business as a service business, view the company from a process
management perceptive instead of functionalistic perspective, and create
partnerships and networks to manage the whole services process.

A company needs to manage service competition by creating total service

offering to have successful relationship marketing. A customer needs to
perceive the existence of two-way thinking between the customer and
supplier or service provider to understand relationship has developed.
Once the customer has understood the relationship has been established,
the company should consider the customer as a customer whether they are
making a purchase or not.

2.3 The Nature of services and Service Consumption, and Its Marketing
Consequences

Defining service is complicated and there is no agreed meaning because of

the complexity. The book defines service based on the proposed definition
in the 1990, as “A service is a process consisting of a series of more or
less intangible activities that normally but not necessarily always, take
place in interactions between the customer and service employees, and/or
physical resources or goods and/or systems of the service provider, which
as provided as solutions to customer problems.

The three basic characteristics of services are that services processes

accompanied by related activities, they are in most cases produced and
consumed at the same time, and the customer has some part in the process
of production.

The difference between high-touch and high-tech services is that the

former depends on people in t he process of service production and the
later relies on physical resources such as information technology and
automated systems. The other classification of customers is between
contentiously rendered service and discretion transactions where the
former represents a contentious flow of interactions between the customer
and service provider while the later relies on service performed by the
service provider to the customer for a specific time.

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In the marketing context of physical products and services, the main

difference is the fact that the service marketing misses pre-produced
product. While the product marketing emphasizes on product features, the
service marketing relies on interactive marketing and customer-oriented
technologies and systems.

2.4 Service and Relationship Quality

In the process of service, it is difficult to separate production and

consumption where the customer also coproduces in most cases. This
makes evaluating the perceived service quality very complex. In the
context of service quality, it should be always noted that what matters is
quality as it is perceived by the customers.

The dimensions of the perceived service can be a technical or outcome

dimension and a functional process-related dimension. The interaction
between a customer and a firm is often considered as the quality of the
service delivered from the internal point of view. However, this is just one
dimension of a service delivery called the technical quality of the outcome
of the service production process. The quality of service a customer
receives and experiences in the process of simultaneous service production
and consumption is another part of the service quality dimension called
functional quality of the process.

Service quality can be used as a necessary competitive edge for firms that
implement a service strategy. The functional quality is emphasized in
becoming a competitive firm but it doesn’t mean that the technical quality
part is less important since it is the prerequisite for good quality.

The five determinants of service quality based on the SERVQUAL

instrument include the service tangibility, reliability, responsiveness,
assurance, and empathy. Tangibility refers to the quality of facilities,
equipment, and material the firm uses to provide its services in addition to
the appearances of service employees. Reliability represents the delivery
of the promised service in a precise manner. Responsiveness is about hoe
service employees are willing to help customers and provide sufficient
information. Assurance is the firm’s ability to feel customers safe and
have knowledgeable employees to respond to customers’ questions.
Empathy means that the firm gives an individual customer attention,
understands customers’ problems and act in their best interest.

The seven criteria of good perceived service quality are professionalism

and skills, attitude and behavior, accessibility and flexibility, reliability
and trustworthiness, service recovery, serviscpae, and reputation and
capability.

The dynamics of expectations can be characterized as fuzzy, explicit and

implicit expectations. Fuzzy expectations are when a customer doesn’t
understand the solution process but expects a service provider to solve a
problem. Explicit expectations when a customer understands the solution
process to the problem solving and these can be realistic and unrealistic

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expectations. Implicit expectations are solution processes that are so clear

to the customers perceived unconsciously and taken for granted.

2.5 Quality Management in Services

A service quality depends on the strategy of the firm providing the service
and the expectations of the customer who perceives the service. Based on
the customer’s expectation, there are four possibilities as an outcome
named underquality, confirmed quality, positively confirmed quality and
overquality. For a service to be considered a good quality, it needs to be as
equal or exceed to the expected quality.

Based on the Gap Analysis Model, there are 5 gaps in the service
provision and expectation process. The model divides the process in two
parts where the first part is about customer’s expectation. This expected
service is a result of word of mouth communications, past experience,
personal needs and the marketing of the firm. The perceived service is a
result of management perceptions of consumer expectations, translation of
perceptions into service quality specs, service delivery and marketing
communication to the customers.

While there are gaps between every factor, the main and final gap occurs
between the expected and perceived service. To manage gap qualities
require better research to meet the needs of the customer and probably
change of management for lack of competencies. In addition, commitment
to service quality, remove all reasons of ambiguity on the part of the
personnel, create a system that coordinates planning for execution of
external market communications, find out the reasons of the quality
problem and close the gap in appropriate action.

2.6

2.6 CRM in Marketing g

Target marketing evolved once companies understand customer data is

important to product or service to potential customers and prospects.
Companies could gather relevant data when consumers purchase and use
products. The association of a product and the customer buying them gives
crucial information for data analysis.

As many companies still categorize customers based on business and

residential, modern companies create segments to optimize marketing
their product to a relevant audience. The main groups of customers for

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these modern companies are based on location, sales channel, profitability,

tenure, household demographics, risk score, privacy preference, number of
products, psychographics, infographics, firmographics, sales territory, life
stage and lifetime value.

The likelihood of a customer to buy a new product or service is also

considered as a segmentation method to categorize customers by many
companies as early adopters, pragmatists, skeptics and laggards.

Relationship marketing and one-to-one help marketing department

understand their customers intimately of their preferences and increase the
chances of retaining them. The two-way dialog between a company and its
customers to create custom products and services tailored for individuals
is called a one-to-one. Not only customers should be communicated as an
individual but also understood when and how they are willing to be given
information. This method is related to the concept of “permission
marketing”.

Companies have different CRM marketing initiatives. The goals can be

cross-selling and up-selling, customer retention, behaviour prediction,
customer profitability and value modelling, channel optimization,
personalization and event-based marketing.

2.7 CRM and Customer Service

The call volumes for companies have risen and call center technologies
enter the market to reduce the repeat work and increase efficiency. Some
companies are using their statistics of their calls, categorize them by call
type, time to resolution, escalation percentage and average call duration to
forecast call volumes and organize call center staffing. Such companies
are able to reduce cost and problem resolution times by increasing agent
productivity and turnover rates.

Companies are adopting computer telephony integration (CTI) to automate

different communication processes and providing on-demand global
support. There is a possibility of dispersing contact centers in various
locations based on the company’s regional offices, staff expertise or
product specialization, proximity to key research and development
activities, the location of the firm outsourcing the company’s contact
center and different escalation levels for trouble cases.

Web-based self-services made customer service easier for both the

customer and company. Customers can easily retrieve the information they
need from a webpage without having to call a contact center, which takes
much more time in most cases. Companies are posting FAQ on their
websites to help customers get a quick answer for the most asked
questions. However, customers may have specific questions, which are not
under FAQ need a representative to help them. Companies are
implementing the instant chat feature, which helps them to assign a single
agent to communicate with multiple customers at a time.

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2.8 Sales Force Automation

Being an organizational business initiative from a focused application,

CRM is the main factor for the beginning of sales force automation (SFA).
Customer-focused projects in marketing and customer support collect the
important customer data that can be used by SFA projects to forecasting
relationship and revenue improvements. The emergences of SFA products
were meant to improve the productivity of sales force and to communicate
their activities. In addition to these objectives, SFA products are focused
more and more on improving customer relationship and satisfaction.

SFA products can be used to manage activities of sales reps and guide
them through the steps of a sales process. This is not only a guidance but
also creates a unified sales process throughout the company and activates
are performed accordingly.

Various sales force automation products allow managers to organize sales

teams and assign a sales person to accounts. The teams can also work with
specialists in the company such as industry experts and product managers.

Contact management as a subset of SFA is a tool used to organize and

manage data with the company’s customers and prospect organization.
Contact management tools provide information such as; who is the
company’s contact individual for a customer, what are the customer’s
mainlining and billing addresses, who is the customer’s purchasing agent,
what is the customers phone number and other related data.

Lead management alternatively called “opportunity management” tools

are part of CRM products with the objective to provide sales strategies so
that all sales related tasks, documents or communications are not
misplaced. The aim is to follow us customer account’s history, monitor
leads and turning opportunities into deals.

Field force automation (FFA) is a mixture of on-site customer support

such as repair with a combination of wireless mobile technology where the
customer reports any needed service.

The checklist for successful SFA incudes realizing how the SFA will help
a sales rep at the start, communicate the value proposition to the sales
force, understanding the sales process and finding out the necessary
infrastructure to facilitate mobile technologies.

2.9 CRM in e-Business

The eCRM starts evolving when companies understand investing on

infrastructure alone doesn’t guarantee to a customer satisfaction.
Companies having warehousing and the best distribution facilities won’t
matter to win customers and retaining them without considering their
need.

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Multichannel CRM designed by brick-and-mortar businesses to facilitate

more information to their customers on their websites. Companies offering
specialized online service survived while those online retailers who failed
is because of the lack of customer’s tactile experience.

The Internet boosted the business processes much more than the
traditional way. Initially e-commerce businesses were built to collect
customer’s payment information to check inventory automatically.
Companies later understood that they can provide the service to their
customers 24/7 and utilized the opportunity.

Enterprise resource planning (ERP) systems meant to reduce inventory

level and maximize processes efficiencies in the chain of supply by also
integrating core business systems. The companies that implemented the
ERP systems complied with order processing and fulfilment, production
planning and scheduling, logistics management, accounting, and human
resources allocation and planning.

2.10 Analytical CRM

The information stored in a data warehouse is valuable for offering an

integrated view of the customer also called “a single version of the truth”.
The data gathered from different systems across the company a real
current and historic view of activities. The data source systems can be
billing systems, order and provisioning systems, enterprise resource
planning systems, human resource systems point of sale, web servers,
marketing databases, call center systems, corporate financial packages and
external data providers. The more sources are used to collect data, the
richer information the company obtains.

Businesses are using the CRM application without picturing how to

improve the current business processes. While companies understand that
data cannot be separated from CRM, they are pushing for a quick result
without caring from where the data is collected as long as they get it when
fast. The IT department inputs data to the CRM system without
understanding which data is needed to be used for the improvement of the
business process. CRM is not the requirement to have a data warehouse
but on the opposite data warehousing providing rich customer information
is mandatory. However, we have to keep in mind that data warehousing by
itself is not sufficient for a successful CRM.

The practice of online data analytical processing, also knows as OLAP

concentrates on a set of data attributes from a data collected around a
certain dimensions, such as time and location. As the analysts needs to
have a hypothesis in mind to perform OLAP analysis, the data mining on
the other hand can provide information on patterns and relationships
without the analysts knowledge. Companies can trace through web
visitor’s footprint from arriving to the web to leaving that provides
information for clickstream analysis.

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For a successful data analysis companies should not underestimate data

integration, beware of “dirty data”, reinvest in data warehouse, know who
is analysing data, translate analysis into action, consider customer data as
an asset, and keep in mind the business processes.

2.11 Planning a CRM Program

The scope of planning a CRM program can be a wide, months of project

within and outside of the company stakeholders or a simple process of
building common objective with key stakeholders. In any scope, planning
a CRM program is a complicated process. A CRM program needs an
understanding of the firm’s customer-focused business principle,
compliance with the company’s goals, commitment of staff and
understanding of customer’s perception.

The main task of establishing a CRM program is creating an

understanding of the program’s vision between everyone in the company
and defining success metrics based on the vision. Companies understand
the specifically set success metrics doesn’t matter as long as the final
strategic impact and usefulness of the resulting tool set that affect the
realization of success.

Preparing a CRM business plan may consist of the requirement to new

technologies, the impact on existing technologies, ongoing support and
maintenance requirements and CRM alternatives. These topics are a good
starting point to consider for the discussion of business plan.

CRM can be successful only when it is customer-focused and tactical in

nature in addition to understanding the set of business requirements it will
address. Even though listing requirements can be a complex and time
consuming process, it stipulates how the CRM can help the business.
Business requirements such as defined boundaries, a high value-to-cost
ratio, less impact to existing systems, improving work efficacies for more
staff and involving process change are the means to maximize the success
of a CRM program.

2.12 Choosing a CRM Tool

When choosing a CRM tool, we should consider the requirements-driven

technology. Evaluating CRM technologies based on business
requirements, however, is not sufficient though it is crucial. The business
requirements listed must be able to generate subsequent functional
requirements. The distinction between business requirements and
functional requirements is that former focuses on the need and problem of
a customer while the later defines how to solve the issue.

A business process consists of functions, which define “how”, within itself

and each function should map back to a business requirement, which

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defines “what”. The need to support a customer-focused process with a

technology should be the main issue to consider when defining necessary
functionality.

Once the needed functions to be addressed are identified, the next step is
narrowing down the CRM tools that can perform each of the main
functions. Scoring which functions are the most important helps to
evaluate and choose different CRM tools.

In addition to considering functionality, companies should make a list of

needed technical requirements to make sure the CRM tool works in the
company’s environment. The requirements, for example, may include
integration and connection, processing and performance, security,
reporting, usability, function-enabling features, performance and
availability.

To choose the right CRM tool, companies should consider the team
selecting the product, be completely clear about the requirements to ASPs
(outsourced firms), choose from the customer’s viewpoint, avoid religion
about consultants and not only relying on CRM technologies alone.

2.13 Managing a CRM Project

Companies need to do a pre-implementation- checklist before

implementing CRM development. The first thing to consider is if the
CRM business plan is prepared. Then check if the business requirements
are defined and if the success metrics have been set. Companies should
also consider the funding of the project, agree on the desired customer
behavior, make sure everyone in the company understands who is the
customer, the ability to map the desired functionality to data requirements
and consider the necessity of external data.

Considering the current organizational environment in relation to the

CRM project is also a necessary to understand the CRM tool’s
development environment requirement. Companies should also take into
account the impact of CRM on other corporate systems and how the data
flows through the systems effectively.

CRM is a big project to implement and because of this reason, it needs a

well-organized CRM development team. The main CRM development
roles include business sponsor, CRM steering committee, implementation
project manager, lead developer, database developer team, front-end
developer team, subject matter experts for SMEs, director of e-business,
director of data warehousing, chief information officer, vice president of
strategic planning and chief privacy officer. As each role is very important
for the success of a CRM program, it is also good to understand there
might be a need for outside help.

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When implementing CRM, each project should focus on at least one

defined requirement. Planning a CRM project requires the understanding
of its complexity. Before responsible party in the company casts a CRM
project, there is a need to list the CRM requirements and their
corresponding required functionality. Based on how fast a project is
needed, requirements can be converted into individual CRM projects.

CRM implementations techniques might differ from each other. However,

every CRM development project should include the CRM development
success metrics, such as incremental development, requirements-driven
development, continuous user involvement, and implementation process
rigor. For a successful CRM implementation companies should define a
CRM strategy, manage staff expectation, define success, analyze and
understand the pros and cons of ASP, improve business process, integrate
data and socializing CRM to the enterprise at large.

2.14 CRM in the Future

Preparation for CRM needs we-l defined business requirements before

introducing the concerned stakeholders. It is also good to discuss with
colleagues prior to presentation what issues and problems CRM will solve,
the resulting business action and changes, the return on investment, the
success of similar projects in another company of the same industry and
the budget requirements.

It is also good not to focus on specific products, be positive when

organizational or political issues are raised, be clear that CRM is not a
project with a definite beginning and ending, not to drown into
complicated statistics and reports, and not to cover up risks.

The success or failure of a CRM project depend mostly on Process,

Perception, Privacy and Politics also called the FOUR Ps. Companies that
are not willing to adjust their business process fail to have a successful
CRM project. The perception of the final users matter in making them
understand the CRM simplifies their task than it is just a corporate usual
politics. Privacy and CRM are related and they are both big businesses.
Consumers and the government bodies who regulate privacy can affect the
success of CRM because of the type of data they allow to be gathered and
used. Complicated projects sometimes reveal serious and problematic
politics in a company. Some managers may decide part of the project by
themselves to leaving others in the company unaware of the CRM going
on. The politics of developing a data warehouse or other related CRM tool
and claiming it as a CRM without a clear requirements, planned process
improvements and organizational change doesn’t make it one.

3 CONCLUSION AND PLANNED APPLICATION

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The book provides a deep insight on customer relationship management

(CRM) planning and implementation process. The steps from planning to
implementation, how to tackle the blockroads in each step, the precautions
a company should take in each stage, the business requirements to
consider and the business processes function to change are clearly mapped
for any CRM implementing company to understand the core points.

The writer gave many scenarios and examples from personal experience of
being involved in many CRM projects and conferences. The real
experience in the CRM projects provides more clarity and understanding
of the CRM implementation process instead of only considering the
philosophies and doctrines of CRM.

Implementing the knowledge I gathered from this book to my organization

could help me more to understand more about CRM. My plan is to use the
CRM program application I learnt in the product development and
marketing departments. Before even beginning the planning process, I will
analyze the problems or needs of our customers and the possibility for
everyone in the organization to understand the CRM as a helpful tool
instead of another cumbersome task to perform.

Once I realize what issues customers are facing and there is a possibility to
solve it, I will start with defining the vision and the success metrics of the
CRM program. Then, I will prepare the CRM business plan. For this
paper’s requirement, I will consider one of the main problems customers
mostly mention and try to show how I would use this book’s contents in
our company.

The one problem our customers mostly mention is not getting enough
information about our products on our website. On the planning stage, the
business requirement would be providing sufficient information of
products to website visitors. The metrics for the success of the CRM
project would be getting less customer requests about product
specification.

In the CRM business plan I will include the business and functionality
requirements, the success metrics, the budgeting needed, the expertise
required, the new technologies to install, the cost to benefit ratio and how
it affects the current organizational system. Once the CRM business plan
is ready, I will discuss with my close colleagues and ask their opinion
before presenting it to the managers and decision makers in the company.

After the CRM business plan is presented and accepted by the decision
makers, the next step is to make everyone in the organization understand
the planned CRM program, the goal and the expected business
functionalities and requirements. I will also make sure that the business
functionality or the solution process will map out with the corresponding
business requirements.

The next step after planning and making everyone in the organization
understand the goal of the CRM program will be choosing the right CRM

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tool and sourcing the right vendor. Since our company doesn’t have it’s
own IT department, the ideal vendor would be that provides both the CRM
application and IT service combined. The CRM application will be
evaluated based on how well it facilitates the CRM program and gives the
path to perform the business process change.

Choosing qualified employees from inside the company will be the next
task before implementing the CRM program. The positions that cannot be
filled from the inside the company will be outsourced to external
expertise. One of the main tasks will be to make everyone understand the
goal of the CRM program, the expected outcome and their role in the
position assigned.

After the CRM business plan is approved, the right tool and vendor is
chosen and the expertise positions are filled, the implementation process
starts. Before starting the implementation process the chosen expertise will
do pre-implementation- checklist, such as the completeness of the CRM
business plan, the precise definition business requirements and success
metrics, the agreement on the desired customer behavior and who the
customer is and our ability to map the desired functionality to business
requirements.

Data about our product descriptions will be collected from customers’

archived emails, telephone conversations, written online reviews and
comments. The CRM tool chosen earlier should be able to organize and
sort the data for further processing. The goal of the CRM program is to
improve the product descriptions as customers wish to see. The desired
customer behavior will be sending fewer questions about products’
specifications and make more purchases from the online shop. The data
will go through the analysis process through the line of expertise before
designing the change needed in the company process. The results of the
CRM program will be assessed for answering the business requirements
and finds solutions as a functionality to guide through the company
process change.

Using the result of the CRM program, the changes in the company process
will be advised the decision makes and managers. If the changes required
approved by the decision makers, the next step will be providing the result
to the product development department to make the necessary changes in
rewriting the descriptions and to the marketing department to include more
product specifications in the future marketing programs.

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SOURCES
Dyche, J. (2002). The CRM Handbook: A Business Guide to Customer
Relationship Management. Boston: Addison-Wesley, Boston.

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