CHAPTER 1

AN INTRODUCTION TO CRM

CHAPTER OBJECTIVES
By the end of the chapter, you will be able to describe:
1. Three major forms of CRM: Strategic, Operational, and Analytical.
2. Where Social CRM fits in the CRM landscape.
3. The changing character of CRM.
4. Several common misunderstandings about CRM.
5. A definition of CRM.
6. Constituencies with an interest in CRM.
7. CRM deployments in several contexts.
8. Three models of CRM.

INTRODUCTION

The expression, ‘Customer Relationship Management (CRM)’, has been in use since the early
1990s. As such, there have been many attempts to describe the domain of CRM (see Table 1.1
for a sample of definitions). CRM incorporates a variety of business activities.

IT perspectives of CRM
IT companies tend to use the term ‘CRM’ to describe the software tools used to support
the marketing, selling and service functions of businesses. This equates CRM with technol-
ogy. The commercialisation of CRM software accelerated in 1993 when Tom Siebel founded
Siebel Systems Inc. (now part of Oracle). Over the ensuing decades, the market for CRM
software has become mature and now includes a diverse array of suppliers. According to a

DOI: 10.4324/9781003295150-2 3
UNDERSTANDING CUSTOMER RELATIONSHIPS

Table 1.1 Definitions of CRM

CRM is an information industry term for methodologies, software, and usually
Internet capabilities that help an enterprise manage customer relationships in an
organised way.1
CRM is the process of managing all aspects of interaction a company has with its
customers, including prospecting, sales, and service. CRM applications attempt to provide
insight into and improve the company/customer relationship by combining all these views
of customer interaction into one picture.2
CRM is an integrated approach to identifying, acquiring, and retaining customers. By
enabling organisations to manage and coordinate customer interactions across multiple
channels, departments, lines of business, and geographies, CRM helps organisations
maximise the value of every customer interaction and drive superior corporate
performance.3
CRM is an integrated information system that is used to plan, schedule, and control the
pre-sales and post-sales activities in an organisation. CRM embraces all aspects of dealing
with prospects and customers, including the call centre, sales force, marketing, technical
support, and field service. The primary goal of CRM is to improve long-term growth and
profitability through a better understanding of customer behaviour. CRM aims to provide
more effective feedback and improved integration to better gauge the return on investment
(ROI) in these areas.4
CRM is a business strategy that maximises profitability, revenue, and customer satisfaction
by organising around customer segments, fostering behaviour that satisfies customers, and
implementing customer-centric processes.5

2022 Fortune Business Insights report, global spending on customer relationship manage-
ment software applications is projected to grow from US$63.91 billion in 2022 to US$145.79
billion by 2029, at a compound annual growth rate of 12.5%.6
However, expenditure on CRM not only includes ongoing fees for software licences and
subscriptions, but for data storage (with about 75% of all CRM data now stored in the cloud7).
A more recent trend now sees suppliers offering CRM as a service, which means that com-
panies access the service on a subscription basis, without the need to buy separate software
licences (e.g., HubSpot, Salesforce).
Large businesses, for example, banks, telecommunications firms, and retailers, were
early adopters of CRM. However, recent growth in CRM expenditure is from a broader
array of sectors. Ubiquitous, online access to online CRM tools and support means
that CRM capabilities are now easy to access for most organisations. Indeed, small-to-
medium enterprises (SMEs), not-for-profits, and government departments all use CRM
systems.

Managerial perspectives of CRM

For managers who look to create sales, or support customers more broadly, ‘CRM’ refers
more to activities than it does to software. Rather than emphasising IT applications, they

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 AN INTRODUCTION TO CRM

take the view that CRM is a disciplined approach to managing the customer journey from
initial acquisition to their transition to a high-spending, profitable advocate for the com-
pany’s brands. While technology certainly plays a role in this process, it is not the main
feature of CRM. Instead, CRM equates to a customer management strategy. Through the
aggregation and analysis of customer-related data, companies use CRM to address ques-
tions such as:

• Which customers should we serve?

• What sorts of value propositions should we present to them?
• Which channels should we use to serve our target customers?

Well-considered answers to these questions allow managers to design and implement pro-
cesses, procedures, and systems that integrate diverse activities of the company to provide
near-seamless customer interactions.

CRM and customer experience management

Managerial perspectives of CRM have a close association with more recent attempts to man-
age customer experiences (CX).8 By understanding CX, companies are more likely to design
and implement measures that align with a comprehensive understanding of customers’ inter-
actions with company touchpoints such as storefronts, contact/call centres, and websites.
New technology, new processes, or new people (particularly new customer-facing employ-
ees) all have the potential to affect CX in different ways.
For example, sales reps can now show product information through tablets that they
carry with them. They can easily email the client links to product demo videos. They can
also share contact details via online apps. Sales reps can also access CRM technology to
gain in-depth client insights in real-time, thus developing customer rapport. There is scope
to place orders, to trace the progress of current orders, and to recall earlier orders, all in
real-time. CRM allows sales reps to create richer, more efficient CX than has been the case
historically.
It is also the case, however, that the implementation of CRM may produce poor CX.
Customers who prefer personal calls from sales reps might find these disappear in favour of
an online sales portal. Self-service through such portals results in a very different CX. Cus-
tomer resistance, resentment, and churn may result. There is also scope for a lack of a con-
sistent or coherent CX, where parts of the company do not successfully coordinate with one
another. Understanding customers’ perspectives during the implementation or enhancement
of CRM, therefore, is necessary.
CX is a major focus for consumer marketing and the provision of government services.
By understanding the end-to-end journey from need identification to using the solution in
situ, companies enhance their ability to create strategies and offers that truly engage their
target customers and promote longer-term loyalty. This involves understanding the value
customers extract in using the offer, all the steps involved in getting to that point, and the
integration of all the company’s online and offline channels to make that journey as easy and

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UNDERSTANDING CUSTOMER RELATIONSHIPS

rewarding as possible. CX therefore integrates strategic, operational, and analytical CRM to

focus on creating the right customer experiences.

THREE FORMS OF CRM

We can resolve the debate between technological and managerial notions of CRM by envi-
sioning CRM in three main forms: strategic, operational, and analytical, as summarised in
Table 1.2.

Strategic CRM
Strategic CRM focuses on the development of a customer-centric culture. Central to this cul-
ture is the dedication to identifying, winning, developing, and keeping profitable customers.
Creating and delivering better value propositions and experiences than those of competitors
are core pursuits of strategic CRM.
A customer-centric culture is evident in the behaviours of leaders, the design of formal
systems of the company, and in the common myths and stories. Resource allocations reflect
an emphasis on customer value maximisation (i.e., increasing customer benefits, reducing
customer costs), employee reward schemes align closely with customer value maximisation,
and customer-related data collection and analysis emphasise a whole-of-company, integrated
approach to managing CX.
Many businesses claim to be customer-centric, customer-led, customer-focused, or
customer-oriented, but few are. The reality is that it is hard to develop and implement
a customer-centric culture since it takes considerable resource investments and dedica-
tion to often difficult decisions that help the customer, sometimes to the detriment of the
company.
PayPal, the online payment service, is an example of strategic CRM (see Case
illustration 1.1).

Table 1.2 Types of CRM

Type of CRM Dominant characteristic
Strategic The aspects of company-level strategy that advocate a customer-
centric approach to identifying, winning, developing, and keeping
profitable customers.
Operational The integration and automation of customer-facing processes such as
selling, marketing, and customer service that create CX.
Analytical The process through which organisations transform customer-
related data into actionable insight useful for Strategic and/or
Operational CRM.

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 AN INTRODUCTION TO CRM

C A S E I L L U S T R AT I O N 1 . 1
STRATEGIC CRM AT PAYPAL 9
PayPal runs an online payment service, allowing customers to make online purchases easily,
securely, and instantly. The PayPal brand has a reputation for security, support, and supplying
safer online shopping. PayPal launched ‘Pay in 4’ in response to market demand for buy-now-pay-
later options, allowing business customers to easily adapt to changing consumer expectations.
PayPal is aware that consumers are looking for payment options that are fast, secure, and easy to
use. The PayPal business model offers consumers a no-fee secure payment service, while charging
merchants a percentage fee to offer the PayPal service.
PayPal manages over 400 million consumer and business/merchant accounts, collecting
data from both buyers and sellers. This data allows PayPal to track trends and changes in con-
sumer behaviour, and to offer different services to different customers in real-time; for example,
customer accounts in debt (with money owing) do not see the ‘Pay in 4’ option when purchasing
until the debt is cleared.
PayPal is expanding into cryptocurrency in response to changing consumer behaviours, with
digital currencies expected to play an increasing role in payment options long-term. Account
holders in the USA can already use cryptocurrency to pay for goods and services anywhere that
accepts PayPal. Recently, PayPal expanded its service to allow customers in the UK the option to
buy and sell and hold cryptocurrency in their accounts.
PayPal illustrates that convenient, secure payment options are in-demand globally. PayPal has
become the world’s leading payment platform by understanding that both its individual and busi-
ness customers are looking for secure self-service, automated, easy-to-use software, coupled with
buyer and seller protection policies. Despite this hands-off relationship, PayPal makes a significant
effort to understand and ensure the satisfaction of its customers.

Operational CRM
Operational CRM aims to improve the efficiency and effectiveness of customer-facing busi-
ness processes and their integration between different corporate divisions or teams, partic-
ularly through automation. Many CRM software apps enable marketing, selling, and service
process automation to varying degrees (normally depending on the package the company
signs up to). Table 1.3 has a brief description of some common applications. We will revisit
many of these applications in later chapters.

Marketing automation
Marketing automation (MA) involves the software-based application of rules and algorithms
that execute marketing activities with little or no human intervention.

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Table 1.3 Operational CRM – some applications

Marketing automation tools/apps Functions
Campaign management Allows marketers to use customer-related data
to develop, execute, and evaluate targeted
communications and offers across multiple channels.
Event-based (trigger) marketing Identifies significant events or triggers relevant to the
customer as the basis of communications content.
Marketing optimisation Targeting communications as precisely as possible to
simultaneously maximise effectiveness and efficiency of
marketing resources.
Sales force automation tools/apps
Account management Maintains positive relationships with current customers
through insight and planned communication.
Lead management Develops new sales leads through analytics and
insight, and targeted communications.
Opportunity management Prioritises sales opportunities and applies a workflow to
coordinate sales, marketing, and operations activities
to convert sales opportunities into new business.
Pipeline management Profiles sales opportunities in terms of the types
of products/services in demand, the timing of
such demand, and recommends a suitable service
approach.
Contact management Maintains records of communications from and to
potential, current, and previous customers.
Product configuration Through analytics and insight, recommends a product
combination for a target customer.
Quotation and proposal Normally through a structured workflow, the
generation application develops a new proposal or quotation for
a specified product offering for a given customer.
Service automation tools/ apps
Case (incident or issue) Upon receipt of a customer enquiry, creates a record
management of a customer issue and generates a workflow to
coordinate its resolution.
Customer communications Includes mechanisms to receive customer messages
management and to convey information to the customer (such as
status updates).
Queuing and routing The system uses algorithms to identify the most efficient
set of steps necessary to resolve the customer issue and
subsequently allocates the issue (or parts thereof) to
appropriate resources.
Service level management Monitors different service levels according to a set of
pre-determined standards (i.e., ‘service standards’),
identifies any deviations, and recommends remedies.

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 AN INTRODUCTION TO CRM

Campaign management (CM) tools and/or apps allow marketers to use customer-
related data to develop, execute, and evaluate targeted communications and offers. CM appli-
cations aim to lift customer engagement with the brand – be that a product brand or an
organisational brand. CM tools and/or apps often include an ability to pre-plan marketing
communications activities and to schedule their implementation. This is particularly the case
with social media marketing. For example, HubSpot allows marketers to develop content
(e.g., blog posts, videos, infographics) and schedule their dissemination among social media
platforms.
In multi-channel environments, campaign management is particularly challenging.
Fashion retailers may have several transaction channels including free-standing stores,
department store concessions, a website, home shopping catalogues, catalogue stores, and
even a TV shopping channel. Some customers may be unique to a single channel, but most
will be multi-channel prospects, if not already customers of several channels. Integration of
communication and offer strategies, and evaluation of performance, require a substantial
amount of technology-aided coordination across these channels.
Event-based, or trigger, marketing is the term used to describe messaging and offer
development to customers at points-in-time. An event triggers the communication and offer.
Customer behaviours or contextual developments act as the triggers. A call to a contact cen-
tre is an example of a customer-initiated event. When a credit-card customer calls a contact
centre to enquire about the current rate of interest, this is a sign that the customer is com-
paring alternatives and may switch to a different provider. This event can act as a trigger for
the company to make an offer to retain or develop the customer relationship. Examples of
contextual events are the birth of a child or a public holiday. Both can compel changes in
buyer behaviour, which trigger a marketing response. Event-based marketing also occurs
in business-to-business (B2B) market contexts. The event may be a change of personnel on
the customer-side, the approaching expiry of a contract, or a request for information (RFI).
Real-time marketing combines predictive modelling and workflow automation enabling
companies to make relevant offers to customers as they interact with different touchpoints such
as websites and retail outlets. This means it is possible to optimise marketing campaigns to align
with customer behaviours. As consumers share more data with companies, and as the compa-
ny’s ability to analyse that data improves, online and mobile marketing increasingly occur in
real-time. Through CRM, companies can match customer usage pattern data with customer
profiles, and those of similar people, to predict which communication and offers are most likely
to generate a desired outcome (often called the NBO or Next Best Offer). E-retailers, such as
Amazon, continually refresh recommendations because of customer searches, and Google
changes the advertising it pushes to you as a function of your location and search behaviours.
Increasingly, MA relies on sophisticated algorithms trained to predict desirable
outcomes, be they, to click to the next screen, express interest, buy a product, or make a
recommendation. Algorithms can be developed to improve decision making (from the
organisation’s perspective) and scale rapidly. This enables firms to (ideally) add most value
to their customers, at least maximise their revenue while minimising cost. It must be noted
that algorithmic decision making is under increasing scrutiny and there are demands for
organisations to take more responsibility for the assumptions upon which they are built and
the unintended consequences of their deployment.

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UNDERSTANDING CUSTOMER RELATIONSHIPS

Sales-force automation
Sales-force automation (SFA) is the application of computerised technologies to support
and manage the sales activities of the company whether these be through customer-facing
staff or through self-service channels. The main aim for companies that implement SFA is
to optimise resource use. On the one hand, companies wish to maximise their likelihood of
ongoing, profitable sales. On the other hand, companies also wish to invest the least resources
possible. By using SFA, companies have a means to achieve these outcomes.
The selling process involves multiple stages. These include lead generation, lead quali-
fication, lead nurturing, needs discovery, proposition development, proposal presentation,
negotiation, closing the sale and after-sales follow-ups. Enacting each step can be complex.
There is substantial scope for each salesperson (or sales team) to use different approaches or
techniques. While this may be fine, it does lead to a series of potential problems. Inconsistent
messages can confuse the customer. Poor communication between sales team members can
compromise sales leads. There can be differences between sales promises and the ability of
the company to deliver.
To address these problems, many companies adopt a sales methodology – an agreed
framework or process that catalyses a sales effort. Sales methodologies allow sales team mem-
bers and management to adopt a standardised view of the sales cycle, and a common lan-
guage for discussion of sales issues. The presence of a sales method is often a precursor to the
implementation of SFA.
SFA is then useful for a wide variety of typical sales activities. We discuss several of the
more common examples here.

• SFA allows companies to assign leads automatically to sales personnel for further
follow-up. SFA software then allows sales personnel and their managers to track
and manage sales opportunities as they progress through the sales pipeline towards
closure.
• Contact management lets users manage their communications programme with cus-
tomers. Digital customer records hold customer contact histories. Contact management
applications often have features such as automatic customer dialling, the salesperson’s
personal calendar, and email functionality.
• Product configuration applications enable salespeople, or customers themselves, to auto-
matically design and price customised products, services, or solutions. Configurators
are useful when the product is particularly complex, such as IT solutions. Configurators
are typically based on an ‘if … then’ rules structure. The general case of this rule is “If X
is chosen, then Y is needed, prohibited, or legitimated or unaffected”. For example, if the
customer chooses a particular feature (say, a particular hard drive for a computer), then
this rules out certain other choices or related features that are technologically incompat-
ible or too costly or complex to manufacture.
• Quotation and proposal generation allow the salesperson to automate the production
of prices and proposals for customers. The salesperson enters details such as product
codes, volumes, customer name and delivery requirements, and the software automati-
cally generates a priced quotation. This functionality often comes with product configu-
ration in what is known as CPQ – Configure, Price, Quote.

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C A S E I L L U S T R AT I O N 1 . 2
SALES-FORCE AUTOMATION AT ROCHE
Roche is one of the world’s leading research-based healthcare organisations, active in the discov-
ery, development, and manufacture of pharmaceuticals and diagnostic systems. The organisation
has traditionally been product-centric and quite poor in customer management. Roche’s customers
are medical practitioners prescribing products to patients. Roche used to access customer infor-
mation through several mutually exclusive sources, ranging from personal visits to handwritten
correspondence. This information was not part of a single database, which resulted in an incom-
plete view of the customer. Roche found the need to adopt a more customer-centric approach
to better understand their customers, improve services offered to them, and to increase sales
effectiveness. Roche implemented a Sales Force Automation system that stores all customer-related
data and records of customer interactions in a central database which is accessible throughout
the organisation. Roche can now create customer profiles, segment customers, and communicate
with existing and potential customers. Since implementation Roche has been more successful in
identifying, winning, and retaining customers.

Service automation
Service automation involves the application of technology to customer service operations.
It helps companies manage service operations, whether delivered through call centre, con-
tact centre, field-service, web, or face-to-face with high levels of efficiency, reliability, and
effectiveness.10 Service automation software enables companies to handle in-bound and out-
bound communications across all channels. Software vendors claim that this enables users
to become more efficient and effective, by reducing service costs, improving service quality,
lifting productivity, enhancing customer experience, and lifting customer satisfaction.
Service automation differs significantly across contexts. The first point of contact for ser-
vice of consumer products is often the retail outlet or a call centre. The company’s employees
that work at these touchpoints often use online diagnostic tools that help identify and resolve
a customer’s problem. Several technologies are common to service automation. Call routing
software directs inbound calls to the best handler. Technologies such as Interactive Voice
Response (IVR) and AI enabled chatbots enable customers to interact with company com-
puters. Customers can input to an IVR system after listening to menu instructions either by
telephone keypad (key 1 for option A, key 2 for option B), or by voice. If first contact problem
resolution is not possible, the service process may then involve authorising a return of goods,
or a repair cycle involving a third-party service provider. Increasingly, firms are deploying
Artificial Intelligence (AI) to this process and ever-improving chatbots – robots capable of
conversation with customers – can reduce costs while ensuring service quality standards.
Most large organisations now respond to customer complaints through social media
such as Facebook and X (formerly Twitter) in close to real-time. Social media posts by angry
customers can pose significant risks to the company. Real-time engagement in the social
media conversation enables companies to intervene promptly to resolve the customer’s issue

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before a social media storm erupts. Some companies employ people and/or technologies to
watch and respond to tweets and other social media content. However, other participants in
the conversation, for example other users of X (formerly Twitter), might also be able to con-
tribute to the resolution of a consumer’s problem, through crowd-sourced customer service.

C A S E I L L U S T R A T I O N 1. 3
SERVICE AUTOMATION AT MERCEDES-BENZ 11
Mercedes-Benz is an iconic automotive manufacturer, selling and servicing cars globally. The
Mercedes-Benz brand name is synonymous with excellent customer experience, both from a driv-
ing perspective and from a service perspective.
Mercedes-Benz uses CRM software to automate service technician efficiency. The result
is faster car servicing, quicker problem diagnosis, reduced costs, and reduced environmental
impacts.
As automobiles become more and more digitised, computer technicians must increasingly work
with dealership service technicians to diagnose problems. Mercedes-Benz uses two programmes
to speed up the diagnosis process. In real-time, a dealership service technician with access to a
tablet device can see both the Mercedes-Benz engine and a 3D model, in a mixed reality view. This
programme is used in conjunction with “Remote Assist” allowing multiple experts from the factory
offices to see what the technician sees, diagnose the problem, and to supply visual information.
Mercedes-Benz’s service automation reduces problem diagnosis time, allowing a single team
of experts to help dealerships around the world without the travel costs or carbon emissions, both
hugely positive impacts for customer service.

Service automation for large capital equipment is different from other types of service
automation. This normally involves diagnostic and corrective action taken in the field, at the
location of the equipment. Examples of this type of service include industrial air conditioning
and refrigeration. In these cases, service automation may involve providing the service tech-
nician with diagnostics, repair manuals, inventory management, and job information on a
laptop or mobile device. This information is then synchronised at regular intervals to update
the central CRM system. Many mechanical and electrical systems also include inbuilt diag-
nostics, with real-time back-to-base issue reporting. Rolls-Royce aeroengines, for example,
are offered with a service contract which includes Rolls-Royce engineers monitoring aircraft
engines in flight to help airlines maximise efficiencies, reduce service cost, and, most impor-
tantly, reduce downtime of the airplane through preventative service interventions. Rolls-
Royce calls this “Power-by-Hour”. GE, its chief competitor in aircraft engines, offers a similar
service. The Internet of Things (IoT) is accelerating this trend by enabling remote diagnostics
for items such as locomotives and industrial tyres. In addition to diagnostics for after sales
service, IoT supplies real-time location data. Firms can therefore use smart systems, powered
by IoT data, to enhance their offers.

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 AN INTRODUCTION TO CRM

Analytical (or Analytic) CRM

Analytical CRM, also called analytic CRM, is concerned with capturing, storing, extracting,
integrating, processing, interpreting, distributing, using, and reporting customer-related data
to enhance both customer and company value. Analytical CRM continues its rapid growth
due to the proliferation of Big Data sets holding customer-related data.
Analytical CRM looks to harness a diverse array of customer-related data from multiple
sources. Customer-related data is often accessible in enterprise-wide repositories: sales data
(purchase history), financial data (payment history, credit score), marketing data (campaign
response, loyalty scheme data), and service data. Data from external sources such as business
partners with whom companies have data sharing agreements (subject to customer accep-
tance) and third-party organisations such as research firms that supply geo-demographic
and lifestyle data can complement the internal data sources. These are typically structured
datasets held in relational databases. A relational database is like an Excel spreadsheet where
all the data in any row is about a particular customer, and the columns report a particular
variable such as name, postcode, and so on. With the application of data mining tools, a com-
pany can interrogate the data and advance their customer relationship goals.
The expression ‘Big Data’ has been around since 2000, but it’s only since 2010 that busi-
nesses have been able to manage the large volumes of ever-changing data, which takes many
different forms. According to technology giant IBM, “big data comes from everywhere: from
sensors used to gather climate information, posts to social media sites, digital pictures and
videos posted online, transaction records of online purchases, and from cell phone GPS sig-
nals to name a few”.12 Big Data extends beyond structured data, including unstructured data
of all varieties: text, audio, video, click streams, log files, and more. The tools for searching,
making sense of, and acting on unstructured data differ from those available for data-mining
structured datasets. Some technology firms offer ‘social CRM’ solutions that can help users
understand and exploit ‘Big Data’.
Analytical CRM has become an essential part of many CRM implementations. Oper-
ational CRM struggles to reach full effectiveness without analytical information about cus-
tomers. For example, an understanding of customer value or propensities to buy underpins
many operational CRM decisions, thus helping to answer questions such as:

• Which customers shall we target with this offer?

• What is the relative priority of customers waiting on the line, and what level of service
should we offer?
• Where should I focus my sales effort?
• Which customers are most influential in social media?

From the customer’s point-of-view, analytical CRM can deliver prompt, customised,
solutions to problems, thereby enhancing customer satisfaction and loyalty. From the
company’s point-of-view, analytical CRM offers the prospect of more powerful cross-
selling and up-selling programmes, and more effective customer retention and customer
acquisition programmes.

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C A S E I L L U S T R A T I O N 1. 4
ANALYTICAL CRM AT DR MARTENS 13
Dr Martens began in 1947 as a wholesale business selling iconic footwear with a unique style.
The British brand is now available to buy directly online, or through retail stores in over 60 coun-
tries.
Dr Martens has ambitious plans to expand its online and retail sales, recognising opportu-
nities for growth and a need to evolve. Dr Martens was functioning with multiple legacy systems
and applications, many of which were site specific and not integrated to share data.
Dr Martens replaced all its legacy systems with Microsoft Dynamics end-to-end solution. Vis-
ibility and access to unified global business data is allowing Dr Martens to realise benefits in all
areas of the business. Accurate information is generating accurate reporting, allowing informed
real-time decisions to be made.
Dr Martens’ retail channel benefits from real-time visibility of stock levels through the supply
chain, enabling the right products to be in the right stores at the right time. Customer satisfaction
is also higher during peak trading periods such as through the Black Friday to Cyber Monday
weekend, with stock levels efficiently scaled up using the data-driven technology.

Where does social CRM fit?

We have highlighted three different types of CRM here – strategic, operational, and analyti-
cal. Another expression that has found widespread traction is ‘social CRM’. This expression
has its origins in the early 2000s when CRM technology companies began to develop stand-
alone tools enabling their clients to manage their presence in social media. Today’s more
comprehensive CRM systems routinely incorporate such functionality.
Early CRM endeavours coincided with advances in database technology that allowed
companies to create a single view of the customer. Companies would capture and integrate
customer-related data from various organisational siloes (e.g., sales, marketing, services,
operations, finance) to create a whole-of-customer overview.
Advances in CRM then led to the formation of data-sharing partnerships or alliances
that allowed companies to access customer and other relevant data from their suppliers.
Suppliers could also do the same from companies. This led to greater insight as to demand
patterns, thus allowing companies to plan, along with their supply chain, to meet customer
requirements in more efficient and effective ways.
The advent of social media (e.g., Facebook, TikTok, X (formerly Twitter), Instagram)
created yet another source of customer-related data giving companies access to some of the
richest customer-related data in history.
We do not regard social CRM as equivalent to strategic, operational, or analytical CRM.
Interactions between members of social networks produce a colossal amount of data, often
unstructured, which many businesses are now trying to collect, interpret, and use to create

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 AN INTRODUCTION TO CRM

and support long-term beneficial relationships with their customers. Sophisticated analytical
techniques are enabling these companies to make sense of social media data and apply those
learnings for strategic and operational CRM purposes. Hence, our view is that social media
are providing yet another important data stream that can improve CRM performance.

THE CHANGING FACE OF CRM

Since companies began to recognise the importance of CRM in the 1980s, there has been a
gradual and ongoing evolution of CRM. This resembles shifts in managerial practice as well
as technological advances. We can think of earlier forms of CRM as CRM 1.0, where compa-
nies were the creators and maintainers of customer-related data that informed CRM (stra-
tegic, operational, and analytical). The fact that the company handled the implementation
of all CRM-related activities by drawing on its own data and resources meant that CRM 1.0
was ‘on-premises CRM’. CRM would normally sit in company databases, behind corporate
firewalls, and would involve licensed software use.
CRM 1.0 did involve the use of data from some external third parties. Market research
companies, for example, did supply customer-related data through customer surveys or focus
groups. Government agencies were also useful for supplying demographic or geographic
customer-related data. Companies could also tap into marketing or management consul-
tancies to analyse the data and to produce recommendations. This complemented internal
corporate analytics. Analyses tended to focus on several key statistical procedures, such as
cluster analysis (for market segmentation), regression (to explain customer behaviour), and
Neural Networks and other forms of Machine Learning (to predict customer behaviour) –
which rely on structured data sets.
Over the past 40 or so years, CRM has continued to evolve. One of the biggest changes
has been the shift from on-premises CRM to ‘cloud-based CRM’. About 75% of all CRM
data is now stored in the cloud, not on corporate database servers.14 This means that compa-
nies have become comfortable with outsourcing many of the traditional CRM activities (data
cleaning, storage, analysis, presentation) to third parties. In return, companies have been able
to use external expertise in data science and data analytics without having to invest signifi-
cant resources themselves. This allows companies to focus on their core competencies, which
often do not include CRM. Companies do, however, require internal resources, systems, and
processes that allow them to manage CRM-related activities – this is the only way to ensure
their investment in cloud-based CRM is worthwhile.
The prevalence of cloud-based CRM, or CRM 2.0, coincides with the ability of mod-
ern CRM tools and apps to handle broader, more diverse, customer-related data sets and to
produce user-friendly insights from them. Analytics for unstructured data such as Natural
Language Processing and Video Analytics are now widely available, and machine learning
applications such as neural networks and artificial hierarchical processing are available to
find meaning in large and amorphous datasets. This means that CRM 2.0 is much more use-
ful than CRM 1.0. We summarise some of the differences between CRM 1.0 and CRM 2.0 in
Table 1.4.

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UNDERSTANDING CUSTOMER RELATIONSHIPS

Table 1.4 How CRM has changed over time

CRM 1.0 CRM 2.0
Period 1990 > 2010 >
Customer data sources Mostly internal corporate Internal siloes plus external
siloes ‘Big Data’ sources
Data character Structured Structured and unstructured
Data storage Corporate servers Cloud
Analytics Standard multivariate Standard multivariate statistics
statistics plus Artificial Intelligence
Mobile CRM access Rare Common
Customer interactions Pre-planned Real-time
Dominant CRM model On-premises Software-as-a-Service

DEFINING CRM

Against the background of the three types of CRM, it is no easy matter to settle on a single
definition of CRM. However, we can name several core CRM attributes and integrate them
into a definition that underpins the rest of this book.
CRM is an ‘organisational capability’. This clearly denotes that CRM is not just about
IT. CRM is a basic business discipline that focuses on managing the company’s relationships
with customers. An organisational capability amounts to a set of inter-related systems, pro-
cesses, procedures, and resources. To provide seamless CX, it is necessary for each of these
elements to produce a coherent and cohesive means for the company to manage its customer
relationships. This is consistent with strategic CRM, which looks to embed customer rela-
tionships into the culture of the company. It is also consistent with operational CRM since it
acknowledges the systems, processes, procedures, and resources necessary to conduct CRM
operations. It is also consistent with analytical CRM in that some of the systems, processes,
procedures, and resources are necessary for CRM analytics.
CRM ‘centres on the creation and maintenance of profitable customer relationships’. This
implies that customers go through a series of stages in their relationship with a supplier. CRM
practitioners tend to think of customer relationships in terms of a life cycle or journey. The
‘creation’ phase means that CRM is used to acquire or on-board a new customer. The ‘mainte-
nance’ phase means that managers use CRM to keep the customer. The qualification that the
relationship should be ‘profitable’ shows that not all potential customers are worth attracting
or keeping. Some customers may be so costly to attract that a relationship with them has no
chance of turning a profit; equally, the costs of keeping a relationship may prove insurmount-
able, meaning that it is better to conclude the relationship (ideally in an amicable way).
CRM is also about ‘the design and delivery of superior value propositions’. Companies
develop value propositions (offers or offerings) and present and promote them to customers
through communication and distribution channels. When customers own or use these offers,
they experience value. Companies that succeed ensure that the value customers experience from
use and ownership is superior to what they experience from competitors’ value propositions.

16
 AN INTRODUCTION TO CRM

CRM is ‘grounded in insights from customer-related data’. This element of our definition
highlights the essential role of customer analytics and insight – as well as the importance of
high-quality customer-related data that underpins these activities. As we outline earlier in the
chapter, analytical CRM is a core aspect of CRM in that it produces the outputs (analytics)
that inform customer insights. These then guide many CRM-related decisions. Of course,
robust analytics and insights rely on customer-related data. Many recent developments in
data processing methods and approaches mean that it is now possible to accommodate a
broader variety of data and to overcome, at least to some extent, poorer quality data. Such
data now originates from multiple sources, so our definition also implies the ability to access
a diverse range of customer-related data from multiple sources, to process it (thus improv-
ing its quality), to analyse it (through a range of sophisticated algorithms and other analyt-
ical techniques), and to produce it in a user-friendly format (and thus render meaningful
insights).
Given these attributes, we can therefore define CRM:

CRM is an organisational capability that centres on the creation and maintenance

of profitable customer relationships through the design and delivery of superior
value propositions grounded in insights from customer-related data.

MISUNDERSTANDINGS ABOUT CRM

As with all major management initiatives, there are several common misunderstandings
about the nature of CRM. We outline some common ones below:

1. CRM is an IT system. In the authors’ experience, this is the most serious of the misun-
derstandings. There is no doubt that IT is a necessary enabler of CRM in most organ-
isations, given the need to store, analyse, and distribute huge amounts of data quickly
throughout the organisation and its business partners. However, too many managers
consider CRM implementations as IT initiatives, rather than broader strategic initia-
tives. The implication of this is that there is little deference to the actual purpose of the
CRM system – to create, build, and sustain profitable customer relationships. Instead,
there is a focus on the implementation of the CRM system – so managerial conversa-
tions tend to concentrate on time, budget, and resource allocations rather than the value
that a CRM system can deliver to the company.
2. CRM is the responsibility of the marketing and/or sales teams only. The functionality
of many CRM systems centres on marketing and sales process automation. This may
allow the company to increase the efficiency and effectiveness of its sales and marketing
activities. This then generates more demand for the company’s products and services. If
the company does not prepare for this, then the outcome is an inability to service cus-
tomer requirements, thus leading to customer disappointment. Without a coordinated
approach to managing sales/marketing activities in line with the company’s ability to
service the resulting new demand, the company’s CRM approach may in fact destroy
customer relationships. It is important to recognise that CRM, while involving systems,
is a whole-of-company responsibility.

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UNDERSTANDING CUSTOMER RELATIONSHIPS

3. CRM automates ‘everything’. Many companies embark on the implementation of a

CRM system in the hope that it will replace the need for existing resources by automating
those roles. For example, the sales automation capabilities of some CRM systems allow
companies to compile proposals or quotes for customers and distribute them efficiently.
Such systems allow the use of templates for documents, step-by-step ‘wizards’ that allow
sales representatives to follow a workflow to generate pricing, and a distribution mech-
anism that sends the proposal or quote to the customer after sign-off. While such tools
are attractive, there is a considerable amount of work necessary to calibrate them and
refine them. The company must also be able to source data, which often requires busy
sales professionals to enter data diligently and regularly. Such tools also do not equate to
customer relationships. Instead, they can support customer relationship development,
but they are not substitutes for good sales professionals practising and honing their craft.
Automation both reduces the cost of low value-added routines and empowers customer
facing people to deliver exceptional service.
4. CRM is about loyalty schemes. Loyalty schemes are but one part of a wide range of
customer relationship management initiatives. They are common in many industries:
car-hire, airlines, food retail and hotels, for example. Customers accumulate credits
such as points from purchases. Customers can then redeem points for some bene-
fits at some future time. Most loyalty schemes require new members to supply their
personal details when they join the programme. Companies then combine this infor-
mation with purchase records data to help calibrate their customer communications
and customer-specific offers. Loyalty schemes allow real-time tracking of customer
purchase behaviour. When combined with the other data in the CRM system, com-
panies can then design approaches that result in customer acquisition, retention, and
development. A major function of loyalty schemes is to incentivise customer reten-
tion. The accumulation of reward points can serve as a barrier for customers who
may wish to exit the loyalty scheme. So, while CRM systems and loyalty schemes are
both potent tools, CRM is much bigger in scope and capability than a single loyalty
scheme.

CRM CONSTITUENCIES

CRM has a range of constituencies (i.e., stakeholders):

1. Companies implementing CRM. Many companies have implemented CRM. Early

adopters were larger companies in financial services, telecommunications, and man-
ufacturing, in the US and Europe. Medium-sized businesses have followed. The CRM
message is reaching smaller companies, other worldwide markets, government agencies
at local, regional or national levels, not-for-profits, and new business start-ups.
2. Customers and partners of those companies. The customers and partners of companies
that implement CRM are a particularly important constituency. Because CRM influ-
ences customer experience, it can affect customer satisfaction, customer engagement,
and customer loyalty.

18
 AN INTRODUCTION TO CRM

3. CRM software houses. Major CRM brands at the time of writing include Oracle, Sales-
force.com, Microsoft Dynamics, Adobe, and HubSpot. However, there are hundreds of
other players, some of which specialise in sub-disciplines of CRM such as analytics,
social CRM, marketing automation, and lead management. There has been considerable
consolidation of CRM software developers over the years. IBM has been integrating ana-
lytic solution providers as it builds a comprehensive analytical CRM capability, and now
offers Watson Campaign Automation. Oracle acquired and integrated many solutions
providers into its Customer Experience cloud.
4. IT vendors. IT hardware and infrastructure vendors provide the technological
foundations for CRM implementations. They supply technologies such as serv-
ers, computers, handheld and mobile devices, call centre hardware, and telephony
systems.
5. Social media companies. Facebook, X (formerly Twitter), TikTok and other social
media platforms are building enormous communities that generate huge amounts of
potentially valuable data about people’s preferences, activities, friends, and wants. Tech-
nology firms are competing to offer clients functionality that enables them to learn from
and use social media data for customer management purposes.
6. Management consultants. Consultancies offer clients a diverse range of CRM-
related capabilities such as strategy, business, application, and technical consulting.
Consultants can help companies implementing CRM in several ways: systems inte-
gration, choosing between different vendors, developing implementation plans, and
project management. Most CRM implementations are composed of many smaller
projects, for example: systems integration, data quality improvement, process engi-
neering, and culture change. Major consultancies such as McKinsey, Deloitte, KPMG,
and Bain all offer CRM consultancy. Smaller companies sometimes offer specialised
expertise.

COMMERCIAL CONTEXTS OF CRM

Companies use CRM in a wide variety in the commercial contexts. We’ll consider four con-
texts: banks, automobile manufacturers, technology solution vendors, and consumer goods
manufacturers.
Banks deal with many individual retail customers. They want CRM for its analytical
capability to help them manage customer defection (churn) rates and to enhance cross-sell
performance. Data mining techniques can be used to identify which customers are likely to
defect, what can be done to win them back, which customers are hot prospects for cross-sell
offers, and how best to communicate those offers. Data mining can also improve predictions
of payment default. Banks want to win a greater share of customer spend (share of wallet)
on financial services. In terms of operational CRM, most banks initially transferred service
out of branches into contact centres and online; a second wave of CRM innovations have
involved banks in delivering service by mobile applications (Apps). This is proving popu-
lar with some customer segments but introduces banks to non-banking competitors from

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UNDERSTANDING CUSTOMER RELATIONSHIPS

IT and telecommunications industries including Apple Pay, Google Wallet, PayPal, Simple,
Moven, T-Mobile, and WeChat. Banks have been slow to introduce innovative technologies
that digitise the mobile customer experience, allowing these nonbanking competitors to gain
significant share of the fee stream associated with retail payments.
Auto manufacturers sell through distributor/dealer networks. They have little contact
with the end-user owner or driver. They use CRM for its ability to help them develop better
and more profitable relationships with their distribution networks and to help their dealers
improve their customer management. Due to their physical separation from drivers, they
have built websites that enable interactions with end-users and to generate qualified sales
leads for the dealer network. This has improved their knowledge of customer requirements
and their capability throughout their distribution network. They hope CRM will enable them
to win a greater share of end-user spend across the car purchase, maintenance, and replace-
ment cycle.
Technology solution vendors manufacture or assemble complex bundles of hardware,
software, and implementation, sold by partner organisations. Historically, small innovative
software developers have traditionally partnered with established companies to obtain distri-
bution and sales. Dell’s direct-to-customer (DTC) channel strategy for PC’s and Apple’s for
smartphones have by-passed this practice. This process of avoiding established channels and
going DTC is known as ‘disintermediation’. CRM helps these DTC companies to collect cus-
tomer information, segment their customer base, automate their sales processes with product
configurator software, and deliver their customer service online. Modern solutions are often
entirely web/software based so the DTC model is increasingly popular.
Consumer goods manufacturers deal with the retail trade. They use CRM to help them
develop profitable relationships with retailers. CRM helps them understand costs-to-serve
and customer profitability. IT-enabled purchasing processes deliver higher levels of accuracy
in stock replenishment. Manufacturers can run CRM-enabled marketing campaigns that are
highly cost-effective.

THE NOT-FOR-PROFIT CONTEXT – THE ‘THIRD SECTOR’

The ‘third sector’, i.e., the not-for-profit community (Charity, Non-Government Organisation
(NGO), Education, and Government), includes many instances of CRM usage. Universities
wish to keep relationships with alumni, charities campaign to raise income, and government
increasingly is interested in changing citizens’ behaviour. It is sometimes difficult to translate
concepts developed for commercial, profit-centric organisations to the third sector. One key
element of strategic CRM is the customer selection and targeting process: there are some
customers for whom a business does more, and some customers for whom it does less. Gov-
ernments interact with citizens, not customers. Governments supply services to all citizens,
but typically supply more services to the most vulnerable. Operational CRM solutions can
help improve government service delivery. For example, New Zealand Trade and Enterprise
(NZTE) uses operational CRM solutions to help domestic businesses expand internationally
(see Case illustration 1.5).

20
 AN INTRODUCTION TO CRM

C A S E I L L U S T R A T I O N 1. 5
THE UK NEW ZEALAND TRADE AND ENTERPRISE AGENCY
New Zealand Trade and Enterprise (NZTE) is a New Zealand Government agency helping busi-
nesses expand internationally, to grow the New Zealand economy. The agency has employees in
50 countries, helping over 6000 businesses across all industries.
NZTE implemented CRM software to pool data from multiple sources into one system. New
Zealand Trade and Enterprise boosted customer engagement by 400 per cent, through enhanced
decision making due to improved data insights.
New Zealand Trade and Enterprise holds over 300 trade and marketing events each year,
connecting businesses to information and contacts, to help them make more trade deals. The
agency tailors its support for each customer by collecting a range of data at trade events and by
analysing data from past events.
NZTE customer service, marketing, and events departments now all access the same
customer-related data, ensuring the right events are run for the right groups of customers,
in the right places at the right times, having a positive impact on business and the New
Zealand economy.

MODELS OF CRM

Several comprehensive models of CRM have been published. We introduce three of them
here.

The IDIC model

Peppers and Rogers developed the IDIC model.15 The IDIC model suggests that
companies should take four actions to build closer one-to-one relationships with
customers:

1. Identify who the customers are and build a deep understanding of them.
2. Differentiate customers to find which customers have most value now and which offer
most for the future.
3. Interact with customers to ensure that you understand customer expectations and their
relationships with other suppliers or brands.
4. Customise the offer and communications to ensure that the expectations of customers
are met.

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UNDERSTANDING CUSTOMER RELATIONSHIPS

The CRM value chain

Buttle, Jones, and Stone’s model of CRM, shown in Figure 1.1, consists of three core processes
and five enabling conditions having the end goal of enhanced customer profitability. The core
processes are:

1. Identify opportunity.
2. Develop offer.
3. Manage the customer journey. The customer journey consists of the three main stages
we explore from the supplier’s perspective in this book: customer acquisition, customer
retention, and customer development.

Five supporting conditions enable the three core processes:

1. Data and analytics.

2. Marketing, sales, and service processes.
3. Network relationships (with suppliers, distributors, service providers, etc.).
4. Organisational culture.
5. People.

When these enablers do not provide the necessary support the core processes are much more
likely to fail.16

Customer Network Value Manage

Cu

Primary Customer
sto

Portfolio Development Proposition The

stages Intimacy
m

Analysis (SCOPE) Development Customer

er

Lifecycle

Leadership and culture

Data and information technology

ity

Supporting
bil
ita

conditions
of

People
Pr

Processes

Figure 1.1 The CRM value chain

22
 AN INTRODUCTION TO CRM

Strategy Performance
Development Value Creation Multi-Channel Assessment
Process: Process: Integration Process: Process:

Business Value Sales Force Shareholder

Customer Segment Lifetime Value Analysis

Customer Results
Strategy

Physical
Receives

Integrated channel management

• Value • Employee value
Outlets • Customer value
• Business proposition
• Value • Shareholder
Vision assessment value
Direct Marketing • Cost reduction
• Industry and
Co-creation
Competitive Call Centres/ Performance
Characteristics Value Telephony Monitoring
Organisation
Receives Electronic/Mobile • Standards

Virtual
Customer • Acquisition Commerce • Satisfaction
economics measurement
Strategy • Retention • Results and
economics Social Media K.P.I.s
• Customer
Choice and
Characteristics
• Segment Data Repository (‘the corporate memory’)
Granularity IT Analysis Front Office Back Office
Systems Tools Applications Applications

Figure 1.2 Payne and Frow’s model of CRM17

The Five-process model

Payne and Frow developed the five-process model of CRM.18 This model (Figure 1.2) clearly
identifies five core processes in CRM: the strategy development process, the value creation
process, the multi-channel integration process, the performance assessment process, and the
information management process. The first two represent strategic CRM; the multi-channel
integration process represents operational CRM; the information management process is
analytical CRM.

CONCLUSION

This chapter introduces CRM. We begin with an overview of the major interpretations of
CRM – the IT perspective and managerial perspectives. We also discuss how CRM and CX
relate to one another. The chapter then presents three forms of CRM – strategic, operational,
and analytical. Importantly, operational CRM encompasses marketing automation, sales
automation, and service automation. We also argue that social CRM is not a distinct type of
CRM, just a broader interpretation of customer-related data sources (i.e., particularly from
social media sources), which then serves as an input to operational CRM and analytical CRM.
We next consider the changing face of CRM by contrasting CRM 1.0 and CRM 2.0. We
then describe a range of common misunderstandings about CRM and then go on to offer
our own definition of CRM, which underpins the rest of the book. The chapter then covers

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UNDERSTANDING CUSTOMER RELATIONSHIPS

multiple contexts where CRM is common, including a discussion of third-sector CRM con-
texts. The chapter then concludes with a description of three comprehensive models of CRM
(the IDIC model, the CRM value chain, and the five-process model).
Overall, this chapter presents introductions to a range of CRM-relevant concepts and
ideas. We delve into more depth in each of these areas in the chapters to follow.

DISCUSSION QUESTIONS

1. Define the three major forms of CRM. How might each CRM form apply to a pet food
retailer?
2. Is social CRM a distinct form of CRM or something else? Explain your answer.
3. Provide a summary of core changes to CRM over time. What are the major differences
between CRM 1.0 and CRM 2.0?
4. Name the common misunderstandings about CRM. How might managers overcome
these?
5. How would you define CRM? What are the implications of your definition for an organ-
isation that implements CRM with these properties?
6. Who are the major CRM constituencies? Do you foresee any major tensions between
CRM constituencies? How might managers overcome such tensions?
7. How might different contexts influence CRM deployments?
8. Outline the three comprehensive models of CRM.

NOTES

1 http://whatis.techtarget.com/definition/0,289893,sid9_gci213567,00.html. Accessed 29 November

2005.
2 http://onlinebusiness.about.com/cs/marketing/g/CRM.htm. Accessed 29 November 2005.
3 http://www.siebel.com/what-is-crm/software-solutions.shtm. Accessed 29 November 2005.
4 http://computing-dictionary.thefreedictionary.com/CRM. Accessed 29 November 2005.
5 http://www.destinationcrm.com/articles/default.asp?ArticleID=5460. Accessed 29 November
2005. This definition is attributed to Gartner Inc. (www.gartner.com).
6 https://www.fortunebusinessinsights.com/customer-relationship-management-crm-market-
103418. Accessed 19 December 2022.
7 https://www.gartner.com/smarterwithgartner/cloud-to-represent-75-of-total-spend-on-crm-in-
2019. Accessed 12 November 2021.
8 Maklan, S., Antonetti, P. and Whitty, S., (2017), A Better Way to Manage Customer Experience.
California Management Review, Vol. 59(2), pp. 92–115.
9 https://www.cleverism.com/company/paypal/, https://www.cnbc.com/2021/08/22/paypal-crypto-
service-launches-in-the-uk.html, https://www.newscientist.com/article/2288039-will-paypals-
adoption-of-bitcoin-make-cryptocurrency-more-mainstream/, https://www.paypal.com/au/
webapps/mpp/home, https://www.businessinsider.com.au/paypals-andrew-toon-advantages-
disadvantages-buy-now-pay-later. Accessed 10 October 2021.

24
 AN INTRODUCTION TO CRM

10 Contact-centres differ from call-centres in that they handle not only phone calls, but communica-
tions in other media such as mail, fax, email, and SMS.
11 https://customers.microsoft.com/en-us/story/839709-mercedes-benz-automotive-holoLens-en-
usa. Accessed 10 October 2021.
12 http://www-01.ibm.com/software/au/data/bigdata/. Accessed 24 January 2014.
13 https://customers.microsoft.com/en-us/story/775579-dr-martens-retailers-dynamics-365.
Accessed 10 October 2021.
14 https://www.gartner.com/smarterwithgartner/cloud-to-represent-75-of-total-spend-on-
crm-in-2019. Accessed 12 November 2021.
15 Peppers, Don and Rogers, Martha (1996). The 1-to-1 future: building business relationships one
customer at a time. London: Piatkus; Peppers, Don and Rogers, Martha (1998). Enterprise 1-to-1.
London: Piatkus; Peppers, Don and Rogers, Martha (1999). The 1-to-1 fieldbook. London: Piatkus;
Peppers, Don and Rogers, Martha (2000). The 1-to-1 manager. London: Piatkus; Peppers, Don and
Rogers, Martha (2001). One-to-one B2B: CRM strategies for the real economy. London: Piatkus;
Peppers, Don and Rogers, Martha (2011). Managing customer relationships: a strategic framework.
Hoboken, NJ: John Wiley and Sons; Peppers, Don and Rogers, Martha (2005). Return on customer:
creating maximum value from your scarcest resource. New York: Doubleday; Peppers, Don and
Rogers, Martha (2017). Managing customer experience and relationships: a strategic framework.
Hoboken, NJ: John Wiley and Sons.
16 The original version of the CRM value chain appeared in the first edition of Buttle, Francis (2004).
Customer relationship management: concepts and tools. Oxford: Elsevier Butterworth-Heinemann.
This revised version appears courtesy of Francis Buttle, Julie Jones, and Merlin Stone. At the time
of writing this model is scheduled for publication on CustomerThink.com
17 Payne, A. and Frow, P. (2013). Strategic customer management: integrating relationship marketing
and CRM. Cambridge University Press.
18 Payne, A. and Frow, P. (2013). Strategic customer management: integrating CRM and relationship
marketing, Cambridge University Press p. 211. See also Payne, Adrian (2005). Handbook of CRM:
achieving excellence through customer management. Oxford: Elsevier Butterworth Heinemann;
Payne, Adrian and Frow, Pennie (2005). A strategic framework for customer relationship manage-
ment. Journal of Marketing, Vol. 69, October, pp. 167–176.

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