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These results are parts of my research “The State of Using Customer Relationship Management (CRM) Systems in the student Recruitment Phase at Higher Education Institutions (HEIs)”.

Any consumer in their lifetime can recall certain products or services that he was completely satisfied with and would constantly recommend the product to others. The cost to acquire a new customer is from 5 to 25 times the amount of money that firms spend to retain an existing one, and companies could significantly improve their profits by slightly increasing their customer retention rates. The reason is that happy customers tend to keep buying from the companies and recommending the products or services to others. And that is why relationships with customers are important and need to be managed.

In the 1960s, the concept of Customer Relationship Management (CRM) was introduced by management scholars such as Peter Drucker and Theodore Levitt. Although CRM has been recognized and used by many organizations, it has no universally accepted definition. In their literature review, Karunannithy and Kajendra demonstrated the evolution of CRM definition, from a function to retain clients in the 1990s, to an IT software to manage customers in the 2000s, to a strategy that requires the coordination and cooperation of the whole organization to create values for the customers and the firms in the 2010s. In this research, the researcher used the definition of CRM as a process of leveraging customer data to enhance customer satisfaction and develop long-term relationships which can, in turn, improve business performance. 

Khodakarami and Chan defined CRM systems as “a group of information systems that enable organizations to contact customers and collect, store and analyze customer data to provide a comprehensive view of their customers”. Schwede came up with a CRM system classification which was still used in many recent studies such as Khodakarami and Chan and Soltani and Navimipour. We could categorize CRM systems into collaborative CRM, operational CRM, and analytical CRM. In another word, collaborative CRM systems facilitate communication with customers and team members through multiple channels such as website and email. Analytical CRM systems enable organizations to store and analyze customer data to provide actionable insights. Operational CRM systems improve firms’ productivity using Information Communication Technology (ICT) platforms such as sales force automation, marketing automation, and call center. 

In 2017, Gartner reported that CRM had reached annual revenue of $39.5 billion and surpassed the database management software market to become the largest software market worldwide. Business leaders around the world have recognized the benefits of CRM and implemented CRM systems in their organizations. But not all CRM projects succeed. According to Merkle Group Inc, 63% of CRM projects failed. While technology plays an essential role in CRM, many firms mistake CRM systems as the responsibility of only the IT departments, and it leads to failures in execution. Successful CRM implementation requires a company-wide focus on the customers and the right combination of all company resources such as people, technology, and process. Recently, in their action research on the adoption of CRM at a university, Rigo et al. introduced a detailed list of 21 critical success factors (CSFs) that were developed around those 3 constructs. They also emphasized the need for organizations to select CRM solutions that could satisfy their specific requirements and characteristics. The research of Steel, Dubelaar, and Ewing supported this implication and concluded that organizational context has a strong influence on CRM system implementation. 

CRM enhances organizations’ capability to generate customer knowledge, which can be classified into three types: knowledge about customers, knowledge from customers, and knowledge for customers. Knowledge about customers helps firms to understand their customers’ needs and motivation to provide appropriate products and services. Examples: age, gender, purchasing history. Knowledge from customers is collected by communicating with them and can be used to improve the firms. Knowledge for customers is provided for the customers to satisfy their knowledge needs. 

Those types of knowledge can help firms increase revenue and identify areas for business improvement. For example, through CRM, firms can recognize the most profitable customers and allocate resources to serve them better. Hence, they might become loyal to companies and increase their lifetime value (LTV). Knowledge about and from the customers can also enable the organizations to provide personalized communications that can satisfy the unique needs of each customer and thus can foster a better relationship with him or her. Moreover, CRM systems can also help firms gain crucial organizational information such as revenue per product, customer lifetime value, customer retention rate, sale cycle duration, and cross-sell & up-sell ratios. This information is essential for managers to understand their business performance and adjust their business strategies accordingly. Customer knowledge, obviously, plays a crucial role in CRM. 

One of the widely used definitions for knowledge creation is “the process of making available and amplifying knowledge created by individuals as well as crystallizing and connecting it to an organization’s knowledge system”. 

CRM systems play a key role in creating customer knowledge. But different types of CRM have different levels of contribution to the customer knowledge creation process. By conducting semi-structured interviews with many organizations, Khodakarami and Chan explored the 3-way relationship between three types of CRM systems, three types of customer knowledge, and four stages of the knowledge creation process. That research reached the conclusion that CRM systems were essential to organizations in terms of generating valuable knowledge and increasing productivity. Although their work had many theoretical and managerial implications, the researcher questioned their applicability in a specific context such as in the field of Higher Education because CRM implementation is heavily influenced by the norms of industry.

In the next article “Customer Relationship Management in Higher Education Institutions”, we will dig deeper into how CRM impacts the process of Student Recruitment in these organizations.

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