CUSTOMER RELATIONSHIP MANAGEMENT

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 Executive summary
Customer relationship management is used by organisations in managing their current
and potential future customers to understand what they need to meet their expectations.
It is used to improve business relationship with customers with an intention to retain and
attract more customers to drive sales growth. This report has discussed the reason why
most organisations fail when it comes to CRM. One of the reasons that have been
covered is that CRM fail due to poor planning and implementation. It has also discussed
why CRM should be implemented as through it, organisations are able to learn more
about their target market and how best to meet their expectations. It has proposed that
Zara Company should implement either collaborative or operative CRM. This will be
vital in enabling the company to increase its market base and competitiveness.

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Table of Contents

Executive summary ................................................................................................................................. 2

Introduction ............................................................................................................................................ 5
Question 1............................................................................................................................................... 6
Critical discussion of why CRM fail ....................................................................................................... 6

Explanation of the need to implement a CRM strategy ........................................................................ 6

Improve customer service:............................................................................................................... 6

Increased personalized service- ....................................................................................................... 7

Improve customization of marketing- .............................................................................................. 7

Question 2............................................................................................................................................... 7
Development of two new CRM strategies for Zara Company ............................................................... 7

Operational CRM ..................................................................................................................................... 8

Sales automation-................................................................................................................................ 8

Marketing automation- ....................................................................................................................... 8

Service automation- ............................................................................................................................ 9

Collaborative CRM................................................................................................................................... 9
Evaluation of the collaborative and operative CRM strategies using force-field analysis ........................ 10
Recommendation .................................................................................................................................. 12
Conclusion............................................................................................................................................. 13
References ............................................................................................................................................ 14
Bibliography .......................................................................................................................................... 16

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List of Figure

Figure 1: Forces for and against the collaborative CRM ................................................................. 10

Figure 2: Forces for and against the operational CRM ................................................................... 12

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Introduction
Customer relation management has an impact on an organisation’s sales performance
and the general performance of the organisation (Bateman et al., 2011). The company
is able to integrate and automate sales, marketing and customer support. In this report,
the researcher will discuss how customer relationship management fail and why it is still
important to implement a customer relationship strategy in Zara Company. The
researcher will be able to develop new CRM strategies for Zara Company that will be
via the force field analysis. This is to understand the best strategy that the company
should apply in order to meet customer needs.

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Question 1

Critical discussion of why CRM fail

Companies face challenges when trying to implement customer relationship
management systems leading to failure and unprofitability (Kotler and Keller, 2011).
This is because they may not effectively or adequately use their interactions and
connections with customers due to development of misunderstanding of the CRM
system’s analysis. Customers are constantly frustrated with the company’s inability to
meet their relationship expectations due to inability to understand and translate data
from CRM software into feasible plan of action (Chernev, 2009). Customers have many
expectations making it hard for an organisation to meet those expectations. For
example, customers may expect follow-up calls from the company, and if this doesn’t
happen, they feel undervalued, hence, showing poor customer relations. Some
customers want to be treated like friends where in turn an organisation treats them like
a party for exchange. Lack of training programmes is the reason why CRM systems fail
in an organisation where it is hard to get the staff to use the system installed. For
example, the employees may fail to understand how to implement the strategic CRM
that put customers first, hence, leading to poor customer attraction and retention rate. It
is important for these organisations to use market research regarding customers’
preferences to increase its adoption of CRM for consumer satisfaction.

Explanation of the need to implement a CRM strategy

Zara is a Spanish clothing and accessories retailer based in Arteixo, Galicia which is
one of the world’s largest apparel retailer where the company also owns other brands in
the market (Annual report, 2015). The company serves worldwide with more than 2100
stores therefore customers are important in enabling the company to perform towards
achieving its goals and objectives (About us, 2016). Implementing CRM is important to
Zara Company due to the following reasons;

Improve customer service: CRM is important in the company where it provides the
ability to produce, allocate and manage customer requests (Evans, 2012). Call centre
software helps to connect different customers with managers to assist them with their

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existing problems. For example, the customer service staff may receive customer
complaints via phone, forward to management so that organisational strategies and
products are adjusted to meet customer needs. The company is able to improve
customer service to increase efficiency which is one of the abilities of customer
relationship management.

Increased personalized service- CRM is used by Zara Company to understand and

gain important knowledge about the target audience based on their fashion taste,
preferences, requirement and demands (About Us, 2016). For example, the company
does altering service of their clothing products in order to meet preferences of each and
every customer segments. This is important in product development where the
company is able to develop quality designs to match with the customers’ expectations.
This also improves customers’ knowledge through acquiring information by tracking
customer behaviour to customers’ expectations.

Improve customization of marketing- the use of CRM enables Zara Company to

adapt to market changes based on its products and services to meet customer
expectations. The company is able to present different and unique fashion products to
ensure customer satisfaction through customization. Through CRM the company is able
to frequently interact with customers by personalized messages produced to match on a
timely basis (Bruhn et al., 2012). For example, through segmentation, Zara company
divides its market into different segments and implements a different marketing strategy
for example use of pamphlets and newsletters to make their customers much closers to
it, hence, retaining most of them.

Question 2

Development of two new CRM strategies for Zara Company

In this section, two CRM strategies will be developed for Zara Company. According to
the annual report (2015), Zara has not in the past implemented the operational and
collaborative CRM strategies. The company has no specified CRM approach and only
relies on market research to identify the needs of its customers (About us, 2016). This

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has been significant in enabling it to win a large customer base in the fashion market in
the UK and globally (Annual Report, (2014). In the competitive market, it is important for
an organisation to share the right information with customers at the right time for the
business to avoid losing its opportunities to sell its products (Freling and Forbes, 2013).
CRM is used to communicate with current and potential customers in the market to
enable the organisation to understand what customers’ fashion trends are. Zara
Company uses CRM software to retain existing customers and capture new
opportunities in the market by building strong customer relationship (Expert Market,
2007). Below is an explanation of the different CRM approaches that have been
developed for Zara Company;

Operational CRM

The main purpose of operational CRM is to generate leads and converting them into
contacts to capture all the required details to provide proper customer care services
(Carauna, 2002). The CRM strategy is used to streamline the business process
including sales automation, marketing automation and service automation.

Sales automation- Sales automation includes various CRM sales modules including
contact management, lead management and sales forecasting (Kotler et al., 2009).
CRM is important in sales automation where it helps Zara to automate sales process
which is used to set standards within an organisation to deal with current customers and
acquire new customers. For example, the company has online platforms that contribute
to sales automation as they are vital in enabling online customers to access its products
and communicate with the company. The company is able to organize important
information about the market to increase sales more efficiently and effectively.

Marketing automation- CRM is also important in marketing automation as it helps in

finding out the best way to approach customers in the market and how to offer different
fashion designs to meet their expectations (Jaccard and Becker, 2010). Campaign
management is important in marketing automation where it enables the business to
decide effective channels of communication to meet up with potential customers. For

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example, through social media marketing, the company links with customers via the
social media sites and communicates with them on how to improve its products.

Service automation- this is where Zara Company retain customers by providing quality
fashion products to build strong relationship with customers worldwide. The company is
able to fix customers’ issues and problems by handling customers’ request based on
the company products and services based on key performance indicators (Barnet,
2016). For example, through its websites, the company is able to link with customers,
serve them, receive their complaints, and improve its products to meet their
expectations, satisfactorily.

Collaborative CRM

This is an effective CRM strategy, which will enable Zara Company to share customers’
important information with other units in the organisation including the sales team,
marketing team, technical and support team. This is based on interrelationship between
various departments where each department depends on each other in the decision
making process. Collaborative CRM is used to unite all departments in the company
with the main goal of improving the quality of customer care services given to customers
(Jobber, 2013). For example, through collaborative CRM, employees work together
whilst serving customers in order to, fully, satisfy their needs and to retain as many of
them they can. This is to gain loyalty of current customers while acquiring new
customers to increase sales.

Feedback from support team in the company is useful in various organisations including
marketing team to be able to approach targeted customers to provide fashion products
that meet their expectations (Berthon et al., 2012). For example, the feedback makes
the company to learn about new fashion demands of customers and offer them what
they need, so as to meet their expectations. Lack of interrelationship between functional
units in an organisation leads to poor organisation performance and business losses.
Information from one functional unit in the company is used to influence operations in
the other unit in the organisation to make important decisions based on customers’
expectations. Different types of CRM applications have different features and advantage

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therefore it is important for the company to implement CRM strategies that are effective
in achieving future goals and objectives.

Evaluation of the collaborative and operative CRM strategies using force-field

analysis

Force field analysis is a useful decision-making technique enabling an organisation to

make decisions analysing the forces for and against a change (Brassington and Pettit,
2006). Force-field analysis is also used to identify if a certain decision made is effective,
including the use of operational and collaborative CRM strategies to build strong
customer relationship.

Through collaborative CRM, information gained from functional units in the company will
enable different departments to make decisions based on the company products and
services (Beccera and Korgaonkar, 2011). The sales automation is important in the
sales department and the marketing department where the company is able to
automate sales forces to meet customers’ expectations. This means that the company
will handle the customer demands and complaints online (sales automation) and this
will improve service delivery. According to the diagram below, the forces for change
include customers’ needs for new products, therefore the sales team communicate with
the marketing team using collaborative CRM in decision making. Through the strategy,
the company’s operations will be automated, effective CRM policies will be developed
and implemented and customers’ needs will have high chances of being met. However,
high employee training costs will be incurred, there will be excessive concentration on
customers and as a result slow decisions will be made as customers will have to be
consulted from time to time by management.

Figure 1: Forces for and against the collaborative CRM

FORCES FOR FORCES AGAINST

Sales automation meaning that the Excessive concentration on customers and

company will deal with customer via online this may make the company to forgo its

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platforms, hence, speeding service priority of maximising sales and revenues
delivery to meet customer needs on time in the market it operates in (Kotler and
(Clemens and Reilly, 2004). For example, Kevin, 2006)
the customers can access the products via
the company’s website.

Customer needs are met and this is vital in Slow decision making as customers will
enabling the company to attract a lot of have to be consulted from time to time by
customers and retain them to improve its management so that their needs and
market share (Aaker, 2006) wants can be met (Barnett, 2016). For
example, customers have to be consulted
when the management is deciding on the
new products and the consultations slows
decision making.

Development of effective CRM policies Employee training costs will raise the
that will facilitate good relationship expenses of the company, hence,
between the company and its customers minimising the revenues that could have
been generated by the organisation

The force for operational CRM is that through sharing important information and
knowledge about customers, it will enable Zara Company to lower its maintenance
costs. This is important, enabling the company to develop quality products and services
to retain current customers and attract new customers, clients and partners in the
market. Sharing information between departments will save operational time ensuring
the staff commit in their performance to meet customers’ expectations and achieve
organisation objectives (Jobber, 2007). One of the forces against is the extra operations
costs that will be incurred as a result of employee training fees (Kwaku, 2009).
Resistance to change by employees is another force that may affect the full
implementation of the CRM strategy in Zara. This may result to ineffective development
of customer relationship hence damaging its competitiveness in the market.

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Figure 2: Forces for and against the operational CRM

FORCES FOR FORCES AGAINST

Low maintenance costs in the organisation Extra operational costs as a result of

since automation via the operative CRM employee training for the strategy to be
strategy of the company’s operations will fully implemented, hence, minimising
be done via advanced and effective revenue generation capacity of the
technology company (Armstrong, 2011)

Customer attraction and retention since Resistance to change as employee may

the needs and wants of customers will be fail to adapt and fully implement the new
met on time and satisfactorily (Kotler and CRM strategy, meaning that the
Keller, 2011) operations of the company will be slowed
down

Time will be saved since through online Competitiveness may be reduced as the
service, customer complaints will be company will mostly focus on needs of
acquired and timely acted upon for the customers rather than improve its market
overall benefits of the company (Goodwin performance in the fashion industry
and Wright, 2004). For example,
customers’ complaints will be acquired via
the website rather than manual system
hence time will be saved as they will be
attended to immediately.

Recommendation

It is significant for Zara Company to use the operative customer relationship

management strategy where the forces of change are stronger than the forces against.
According to Kamakura and Russell (2003), operational CRM is also effective although
all the processes require the use of various functions of the organisation and the

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strategy is vital in improving the speed of serving customers. For example, through the
company’s website, customers will order the products that they need online and get
them delivered on time. The discussion of this report has shown that through direct
mails, the client will communicate with the company in a timely fashion and have their
complaints attended to, leading to development of good customer relationships. Hence,
the decision for Zara Company to use operative CRM will enable the company to
operate effectively and efficiently to meet the needs, preferences and desires of
customers in the market. This will ensure sales automation, service automation and
marketing automation hence making the company’s operations to be effectively and
efficiently executed.

Conclusion

Customer relationship management is important in an organisation where customers’

needs and expectations are identified to develop strategies to meet those needs. It is
vital for an organisation to identify new CRM systems to enable them to share
information about the target audience in the market to build strong customer
relationships. Collaborative and operation CRM are effective CRM strategies used in
various organisations to ensure efficiency in organisation operations in achieving its
general goals and objectives.

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