Impact Of Customer Relationship Management On Non-Consumer Customer Buying Behavior
1.1 Background to the Study
All businesses and particularly financial institutions have been affected to some degree in what is happening in the global market place. Now, not only do organizations aim to satisfy the customers but they attempt to do this more efficiently and effectively than their rivals in the competitive market place in order to attain their goals. The most important goal of an organization is to maintain customer satisfaction and focus on customer centric approach in their organizational and marketing strategies. The significance of customer satisfaction cannot be dismissed while happy customers are like free advertising for the financial institutions. It is necessary to put the customer at the center of the business according to its strategies, events and processes. In fact, it is easier and more profitable to sell to present customers than to find new ones. Financial institutions are setting their strategies to ensure customer satisfaction, retention, therefore their employees should be more customer-focused and service-oriented in order to satisfy their customers. Customer relationship management (CRM) is a concept for managing a company’s interactions with customers, clients, and sales prospects which can achieve financial institutions goal such as customer satisfaction. It involves using technology to organize, automate, and synchronize business processes. The objectives of CRM are to enhance profitability, income, and customer satisfaction. To attain CRM, many organizations use set of tools, technologies, and procedures to support the relationship with the customer to enhance sales. Therefore, CRM is an issue of strategic business and process rather that a technical one. Customer relationship management (CRM) is a concept for managing a company’s interactions with customers, clients, and sales prospects. (Long, et. al, 2013)
Bowen and Chen (2001) argue that having satisfied customers is not sufficient. This is because customer satisfaction needs to have direct impact on customer satisfaction and loyalty. Sivadas and Barker Prewitt (2000) stress that there is a rising recognition that the last objective of customer satisfaction measurement should be customer loyalty. Many organizations merely categorize customer satisfaction measurement as type of “marketing intelligence” instead of using it as management tool to build customer service quality improvement processes and increase profit (Linnell, 2009)
Through CRM companies expect to improve their relationship with their existing and customers and attract new prospects in a bid to influence their buying behaviour, increase customer satisfaction and loyalty, and thus, growing their sales volumes and profitability. The business processes need to be supported by CRM system that makes it possible to create a single view of the customer as well as the company. CRM system facilitates collection and analysis of customer data which results into a more effective management of customer interactions. CRM functionality can be divided into three main categories which are marketing automation, sales force automation, and customer service & support (Persson, 2004).
Shukla (2010), emphasizing the need for marketing research, argues that a significant number of organizations fail to satisfy superior customer needs because their perception of what customers want is far from reality. ‘It is not because they do not care about the customers’ needs; but they try to reach the wrong end with the wrong means’.
1.2 Statement of the Problem
Customer perception of the world has significantly been changed by globalization and high usage of internet. People are more connected and informed now than ever. Flow of goods and services coupled with massive promotions and advertisements in various areas of the world tends to provide more choices to customers than ever before. On the other hand, researchers have found several issue and problems associated with Customer Relationship Management and its impact on consumer customers buying behavior. One of the issues is measurement of the effectiveness of the CRM initiatives.
Researchers still lack unanimous answers to some questions. These include, how can the impact of various CRM initiatives on non-consumer customers be measured? How can the success of CRM in an organisation be assessed? Many companies, especially in the developed world, have implemented the notion of CRM. However, researches show that, the main problem has become for the organizations to measure the success and impact of CRM on their customers’ buying behavior.
The problem on how the effectiveness of CRM in influencing the non-consumer customers’ buying behavior can be measured reliably however unsuccessful CRM implementations may lead to decreased customer satisfaction and loyalty. This means, increased defection and loss of loyalty.
1.3 Objective of the Study
The main objective of this study is to find out the impact of CRM on non-consumer customer behavior, specifically the study intends to:
- To find the impact CRM on the buying behavior of non-consumer customers
- To investigate the factors that influence the buying behavior of non-consumer customer behavior
- To examine the impact of CRM on organizations
1.4 Research Question
- Is there any impact of CRM on the buying behavior of non-consumer customers?
- What are the factors that influence the buying behavior of non-consumer customer behavior?
- What is the impact of CRM on organization?
1.5 Research Hypothesis
Ho: there is no impact of CRM on the buying behavior of non-consumer customers
Hi: there is impact of CRM on the buying behavior of non-consumer customers
1.6 Significance of the Study
Although there are lot of researches that have been carried out on the impact of CRM on consumers buying behavior, this research however took a different dimension i.e investigating the impact of CRM on ‘Non Consumer Customers’ buying behavior. The consumers are the ones who finally consume or utilize the products. These are the ones who can tell how it tastes. Non consumer customers on the other hand, may even have no idea how a product is used.
This research is therefore purported to contributing to existing literature and help to roll out the knowledge of CRM and its impact on non-consumer customers buying behaviour in Nigeria. Again, the research provides additional evidence that CRM can impact non consumer customers buying behavior in a positive way.
And finally this research will add to the existing literatures on CRM and also serve as a guide and reference for other research on the same dimension.
1.7 Scope of the Study
This research will be carried out in Lagos state in the south western part of Nigeria, also this research will review related literature and concepts on CRM and non-consumer customer behavior.
1.8 Delimitation of the Study
Finance for the general research work will be a challenge during the course of study. Correspondents also might not be able to complete or willing to submit the questionnaires given to them.
However, it is believed that these constraints will be worked on by making the best use of the available materials and spending more than the necessary time in the research work. Therefore, it is strongly believed that despite these constraint, its effect on this research report will be minimal, thus, making the objective and significance of the study achievable.
1.9 Definition of Terms
An approach to manage a company’s interaction with current and potential customers. It uses data analysis about customers’ history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth
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Frequently Asked Questions
Does Customer Relationship Management improve customer satisfaction and customer loyalty?
In this study, we review literature on Customer Relationship Management (CRM), focusing specifically on the impact of the CRM on customer satisfaction and customer loyalty. CRM is a set of practices that organizations adopt to maintain and increase their customer base.
Why is Customer Relationship marketing important in the service industry?
Due to tough competition in today’s business, it is the basic requirement for companies to build and maintain strong relationship with the customers to achieve their loyalty. That’s why customer relationship marketing becomes more important especially in service industry.
What is the best book on Customer Relationship Management?
Journal of Marketing 69, no. 4 (2005): 201-20 9.  Dyche, Jill. The CRM handbook: A business guide to customer relationship management. Addison-Wesley Professional, 2002.  Morgan, Robert M., and Shelby D. Hunt. “The commit ment-trust theory of relationship marketing.” The journal of marketing (1994): 20-38.
How does waiting in line affect consumer behavior?
The amount of time customers spend waiting in line results in increased consumption, provided they do not leave the line. These researchers found that waiting in line for a longer period can cause customers to spend more. Researchers explain this phenomenon as “mental accounting for sunk costs.”
What is relationship marketing and why is it important?
First and foremost, relationship marketing is important because it helps you not only get new customers, but keep them once you have them. Why? Because you’re building a better experience for them as they engage with your business. Here are some other benefits of a successful relationship marketing strategy. 1. Enhanced Customer Experience
Why is Customer Relationship Management (CRM) important?
Since it’s often the service and aftercare which truly makes a difference with how people feel towards a company, it’s critical that customer relationship management (CRM) is an ongoing focus. Because of this, how you create your relationship marketing matters.
Why is it important to maintain a good relationship with customers?
Once you have established a relationship with your customers, it’s important to maintain and improve upon it to ensure that you not only stay at the forefront of your customer’s minds, but your brand is also cemented as their ‘go to’ for that product or service.
What is the relationship between a company and its customers?
Relationships aren’t something which can be built and ignored, they require time and effort to maintain—and the same is true for the relationship between a company and its customers. Ensuring that your team communicates regularly on platforms that are relevant to your customers is one way to do this.
How does waiting in line affect consumer spending?
Their findings were surprising. The amount of time customers spend waiting in line results in increased consumption, provided they do not leave the line. These researchers found that waiting in line for a longer period can cause customers to spend more.
What are the negative effects of waiting?
Waiting is often psychologically painful, because it causes us to renounce more productive and rewarding ways of using our time and because it may increase the investment that we have to make to obtain a product or service. Waiting may also be costly in and of itself as we become aware of the passage of time.
How does time affect consumption?
It is necessary to give up time for consumption to occur, but time can affect consumption in three forms: i. Time Pressure— When customers don’t have a lot of time they tend to process less information because time is important for thorough problem solving.
What are the costs of waiting in lines?
We spend a lot of time waiting in lines, incurring economic costs due to lost time, as well as psychological costs such as boredom, frustration, and anxiety. Naturally, lines are also costly for companies, as they potentially result in lost sales and lower customer satisfaction.