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Customer relationship management in electronic environment

Reza Jamali, Asghar Moshabaki, Hajar Aramoon, Akbar Alimohammadi,

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To cite this document: Reza Jamali, Asghar Moshabaki, Hajar Aramoon, Akbar Alimohammadi, (2013) "Customer relationship management in electronic environment", The Electronic Library, Vol. 31 Issue: 1, pp.119-130, https:// doi.org/10.1108/02640471311299173

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Customer relationship management in electronic environment

Reza Jamali and Asghar Moshabaki

Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran

Hajar Aramoon

Department of Management, Islamic Azad University, Abadan, Iran, and

Akbar Alimohammadi

Department of Accounting, Islamic Azad University, Tehran, Iran

Abstract

Purpose – Internet and electronic networks tend to be used to provide customers with services and to facilitate understanding of common variable demands by which many organizations may increase services’ quality from the customers’ point of view. In addition, e-libraries, though in some ways run for noncommercial goals, have been faced with great attention from customers, which makes them maintain and develop their services. The authors have come to a conclusion that the only way to increased financial benefits is through better service. Organizations as a part of the domestic information community therefore, have turned to implementation of new methods such as management of customer relationships. This paper aims to develop a valid and reliable method for evaluating and measuring the management relationship level with customers in e-libraries. In addition, the research tries to find how successful Yazd University Libraries has been to meet students’ expectations, as a guideline to take steps toward improving its services. Design/methodology/approach – The research was conducted among 381 e-library services users in Yazd University, using a questionnaire comprised of 78 items. Moreover, exploratory factor analysis was used to classify the CRM attributes into latent “CRM factors”. Finally, the study measures the gap between users’ expectations and perceptions about each CRM factor at Yazd University. Findings – The paper found only 37 of 78 items suitable enough to be used for CRM measurement in e-libraries. Results of factor analyzing show that there are three main factors in e-libraries’ CRM; two

• f them may need revision for improvement in meeting students’ demands.

Originality/value – The concept of customer relationship management assessment and improvement is relatively new among e-institutions especially libraries, and there is a lack of studies focusing of CRM in the digital world. This is the first study of its kind to survey the CRM scale in digital libraries. In addition, the study provides useful insights and guidance for managers to measure and improve CRM system toward improving customer satisfaction. Keywords Relationship marketing, Digital libraries, Gap analysis, Customer satisfaction, Libraries, Marketing Paper type Research paper

• 1. Introduction

According to (Ho and Lin, 2010), information technology as a rapid growth field, is one

• f the most important tools to achieve competitive advantage. Marketing activities in

competitive and customer-based world of today with increasing customers’

The current issue and full text archive of this journal is available at www.emeraldinsight.com/0264-0473.htm

Customer relationship management 119

Received 5 January 2011 Revised 21 April 2011 Accepted 24 May 2011

The Electronic Library

• Vol. 31 No. 1, 2013
• pp. 119-130

q Emerald Group Publishing Limited 0264-0473 DOI 10.1108/02640471311299173

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expectations where businesses strive to gain a larger market share through more satisfied customer, made it more important than ever to conduct a functional and flexible planning toward balancing of external relationship management. In particular, in electronic businesses where there is no face to face relationship between corporation staff and customers/users and determining an edge for customers’ loyalty is almost impossible, a vital necessity is to anticipate the customers’ reactions when they visit the company web site/portal in order to select their required electronic services. In support of customer relationship management (CRM) importance in such businesses, Hamill and Stevenson (2002) report an exciting result of the Gartner Group research, which found that approximately 65 per cent of electronic customer relationship management (E-CRM) projects have failed and that this is expected to rise even to 85 per cent. For many years, the problem of how electronic services can successfully deal with customer dynamic interests has been a fundamental research topic (Sherehiy et al., 2007). As a result, one of the most popular approaches in the context of organizational flexibility is E-CRM. Customer relationship management is a key driver not only for improvement in service quality based on customer needs’ perception, but also for quick response to the market changes. The concept of CRM in electronic services means that enterprises need to have a strong focus on each pixel of their homepages and web sites. The Internet is actually a basic element in the evolution of concepts such as, marketing, brand making, and customers’ relationship development. Through recent developments of information and communication technology, we have witnessed emergence of a new concept known as customer relationship management aimed to return to personal marketing era. It is a relatively simple concept, which indicates different customers have different product demands, so its advice to us is marketing for each individual customer instead of mass marketing. In this person-to-person approach, each customer’s information (their previous purchases, demands and needs) is used to classify goods and services in a framework, which increases their acceptability. On the

• ther hand, some experts have expressed their consideration regarding electronic

environment factors as a threat for today’s organizations and markets. Nowadays, an

• rganization’s web site has only one chance to attract its visitors, so that customers will

never return back to a web side, if they found it not interesting enough. Considering customers’ loyalty as a vital index for a business, online businesses have recently come up with a new concept, known as click loyalty, which means, the greater the number of clicks in one site, the more loyal are the visitors to that site and hence organization. However, facing with any deficit in services, customers may reconsider their choice and change the provider organization just by one click once and

• forever. Like Enterprise Resource Planning (ERP) systems in other organizations,

automated systems in e-libraries also have similar approaches to other organizations. If the approach fails to meet a user’s needs, it will lose its customers for sure (Wang, 2007). It is reasonable to say that, with emergence of social networks, the meaning of service quality, once defined as customers’ demand, has experienced substantial

• changes. Nowadays, importance of Word of Mouth is ever-increasing, so that if just one

dissatisfied customer leaves the company or web site, he/she can change other peoples’ mental image in a minute. In fact, the line between success and failure of an

• rganization is just one click. These results show that electronic services provider
• rganizations should alternatively measure customers’ level of satisfaction in order to

prevent any kind of negative consequences.

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However, there are no special criteria settled to measure scale thus far or if there is, with major defects. By investigating all customers’ relationship indices, the study tries to find a new evaluation tool for measuring customers’ satisfaction level through customer relationship management in e-libraries, which may be considered as a new factor in success of electronic libraries all over the world.

• 2. Theoretical background

What is the reason for attracting customer satisfaction in the new system formed by all electronic services provided by libraries in the form of electronic systems? One logical answer to this question regarding the competition concept it that: “It means libraries compete in the market for survival and sustain their activities”. It also means that they should work to satisfy their customers. To summarize, libraries in the new system need to develop programs for customer satisfaction regarding provided services. There are many different definitions for CRM. These definitions represent different viewpoints about CRM, for instance, CRM as a way of strategy, philosophy, capability or as a technological tool (Zablah et al., 2004). What we have here is the difference between technology and customer relationship management (CRM). Technology is actually a tool, considered by most researchers as a combination of strategy and information system. Technology emphasizes giving better services to customers. CMR is a continuous process in which market intelligence is classified in different levels in order to increase profitability through customer relationships (Zablah et al., 2004). Stakeholders and customers can create a good relationship with each other by CRM, which is considered as a factor that combines marketing strategies with IT. CRM gives you some good opportunities for using data and information, finding the value of customer relationship to have better understanding of

• customers. Having reliable understanding of customers and their values is a combined

process of operations, individuals and marketing abilities. We can combine these elements through information, technology and applications (Dimitriadis and Stevens, 2008). On one hand, as a tool CRM is a good choice to define relations and use the system for collecting and analyzing data. Moreover, it combines all activities in a company through defining relations between the activities and customers toward developing the value chain. This process leads to integration of value chain in companies and across the network. As final result, this operation creates shareholders for the company. It is said that there is a link between CRM and e-business theories in e-business (Tan et al., 2002). To make an e-CRM, we need to combine these two elements. Communicating and managing information is the key element in this relationship, with communicating being the main part of CRM, and where the Internet improves by e-business (Boyle, 2001). It can be said that combination of the Internet and CRM provides valuable

• pportunities for companies to compete with each other (Chaston and Mangles, 2003).

Some researchers believe that CRM is operable just through internet tools (Bradshaw and Brash, 2001; Hamid and Kassim, 2004; Harrigan et al., 2008). Generally, the main benefit of e-CRM for digital libraries is to increase the final

• efficiency. The benefit of e-CRM - less wasted materials in the production process - can be

internalized by supply chain or through spotting the customers’ high priority demands. Actually e-CRM facilitates dedication of resources, lessening related costs, which leads to more competitive advantages for companies. Among other advantages are taking market share more easily, making personalized relations among customers and making more marketing efficiency. There are some ambiguities in e-commerce investment. It means

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that investment in e-commerce is not just walking in safe side. For instance, Kula and Tatoglu (2003) argued that we have no ways to understand direct benefits of e-commerce

• investment. Thus, we should have some empirical evidences to show that e-CRM affects

financial results. In his report Harrigan et al. (2008) argued that it is not easy to have face-to-face contact with customers in e-CRM. The direct contact with customers means a lot for companies, as the main advantages of Internet technology is realizable by face to face customer relation. In this way, more security and trust is feasible through relationships (McGowan et al., 2001). To put it in another way, it is believed that e-CRM is more useful when there is a direct relationship between organization and customer. Regarding the obstacles for e-CRM application in digital libraries, these organizations should consider many issues as barriers which prevent successful CRM. In a recent study (Gotzamani and Tzavlopoulos, 2009) find dimensions that affect on perceived quality in electronic commerce such as esthetics, trust, responsiveness and reputation. Many researchers report that service quality can influence customer perceptions about CRM that we believe it is not different in electronic customer relationship management.

• 3. Research methodology

3.1 Questionnaire As one of the most comprehensive instrument in this field, the research uses Sin et al’s (2005) CRM tool for measuring CRM. The research is based on 78 items and modifications made to this tool for more control on e-CRM. A CRM definition is presented with some questions used to collect information from librarians and library managers; this is followed by discussion of the results. Then each of them were interviewed individually in order to resolve ambiguities. Participants were taken from among nearly 8,000 students of Yazd University. Morgan’s table was used for sample determination, which yielded 367 peoples. Of 400 questionnaires distributed among students, 381 were returned with usable answers. Table I lists the characteristics of respondents. 3.2 Data collection Three questionnaires were used for data gathering. The questionnaires comprised of questions in five scales: 1: very low, 2: low, 3: fair, 4: high, and 5: very high. There were three kinds of question emphasizing: importance, expectation and perception. Afterwards, factor analysis was performed to remove 41 items of questionnaire for measuring CRM in digital libraries. In Table II, a factor of Cronbach’s was used for

• ther items. Then, the 37 items were classified into three main factors based on
• btained results. Three factors are taken into account in the research: customer’

demands factor, Communication factor and Information factor. First, refined correlation of all items were calculated, concluding that all items have the same construction. Corrected correlation represents the correlation between the item and the rest of the scale. Corrected correlation of all items found between 0.509-0.904. For items in the scale, correlations were above 0.20. They also met the stringent criterion of item convergent validity of greater than 0. 40. Therefore at this point no items were deleted. 3.3 Factor analysis Dimensions of CRM tool were analyzed for digital libraries at this section. By the Varimax rotation method, factor analyses are listed in Table III in an exploratory

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Frequency percent Frequency Level Frequency percent Frequency Gender Frequency percent Frequency Entrance year 0.63 239 BA 0.43 163 Male 0.12 44 2004 0.33 127 Master 0.32 121 2005 0.04 15 PhD 0.25 94 2006 0.57 218 Female 0.13 49 2007 0.19 73 2008 100 381 Total 100 381 Total 100 381 Total Table I. Respondents’ characteristics

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• manner. About, 83.61 per cent of the total variance exceed 50 per cent. Most items were

loaded in a suitable way with factor loadings of greater than 0.5 and less than 0.3 with

• ther factors. So e-CRM tool is a reliable tool for digital libraries. We have to mention

that all indicators with a less than 0.3 factor loading, eliminated from last questionnaire.

Corrected item-total correlation Item number Correlation with criterion Customer needs factor Overall Cronbach’s a ¼ 0. 835 1 0.719 0.609 2 0.801 0.729 3 0.724 0.736 4 0.789 0.821 5 0.720 0.678 6 0.813 0.724 7 0.819 0.559 8 0.726 0.692 9 0.755 0.675 10 0.712 0.786 11 0.773 0.836 12 0.728 0.881 13 0.703 0.806 Communication factor Overall Cronbach’s a ¼ 0.912 1 0.777 0.790 2 0.856 0.678 3 0.509 0.954 4 0.904 0.743 5 0.892 0.758 6 0.857 0.712 7 0.843 0.839 8 0.810 0.693 9 0.899 0.776 10 0.838 0.710 11 0.822 0.842 Information factor Overall Cronbach’s a ¼ 0.872 1 0.725 0.653 2 0.791 0.744 3 0.830 0.698 4 0.788 0.687 5 0.823 0.764 6 0.854 0.817 7 0.793 0.741 8 0.841 0.796 9 0.518 0.704 10 0.805 0.830 11 0.732 0.899 12 0.820 0.812 13 0.842 0.882 Table II. Item-total statistics (remained items)

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3.4 Gap analysis The gap analysis technique was used for determination of different steps for the present research and future researches. The steps were as following: (1) Providing a list of characteristic factors of present research (for example: attributes, competencies, performance levels). (2) Factors in several lists in order to achieve the goals of researches in future. (3) Emphasizing factors that need to be considered and analyzed, followed by analyzing the students’ perceptions and expectations based on CRM’s terms.

Item number Customer needs factor Communication factor Information factor 1 0.683 2 0.721 3 0.729 4 0.712 5 0.830 6 0.765 7 0.749 8 0.673 9 0.719 10 0.891 11 0.845 12 0.711 13 0.728 1 0.733 2 0.782 3 0.815 4 0.713 5 0.735 6 0.618 7 0.739 8 0.832 9 0.809 10 0.702 11 0.944 1 0.753 2 0.821 3 0.811 4 0.825 5 0.723 6 0.689 7 0.780 8 0.697 9 0.701 10 0.645 11 0.750 12 0.841 13 0.807 Table III. Exploratory factor analysis of three factor structure

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The study investigated three hypotheses: H1. There is no significant difference between student’s expectations and perceptions of customer needs factor. H2. There is no significant difference between student’s expectations and perceptions of communication factor. H3. There is no significant difference between student’s expectations and perceptions of information factor. Table IV lists the results of these tests. It is clear from the Table that the first hypothesis about customer needs and information factors is rejected (high level less than 0.05); however, the digital library is based on student’s communication factor. Table V in each CRM indices lists the gap between these two factors. There are 13 items based on students’ needs and 24 items not based on their needs in al libraries of Yazd University in Table V. Librarians and library managers of Yazd University need to take into account more elements in order to improve system of CRM. Conclusion Necessity for online service industries is inevitable. E-CRM uses the Internet as a tool to combines commerce and information technology for business development. There are different definitions of CRM, however, and it uses IT and the Internet to provide better results of CRM management. Customer relation management is classified in four stages as follows (Stefanou et al., 2003; Wang, 2007): “the preliminary, manual, and non-IT-assisted stage; IT is developed to help the current manual process (Wells et al., 1999). Analytical instruments for analysis of data gathered about customers point toward better understanding of customers’ expectation; the IT-automated CRM stage is feasible through using a set of technologies, such as the internet and telephone/computer integration; and last stage is the integrated CRM (i-CRM) stage through employing sophisticated CRM information systems providing highly integrated back-office, front-office and internet functions in order to pursue customer personalization, high level of services and customer satisfaction.” There are many technologies for the determination of consumers needs such as, statistical packages, query language, extraction software, data warehouse technology, data mining, collaborative filtering and rules engines (Bradshaw and Brash, 2001). For library applications, the first stage is much more suitable, as there is no web and IT

• facilities. Many libraries have these facilities so they have to adopt the second and third
• stages. There are also some libraries equipped with other facilities such as

computer-telephony-integration (CTI) or e-mail response management system (ERMS). Stage 4 includes some more sophisticated matters, such as, how to store CRM data, where to store the data, how to extract meaningful knowledge from the data, and how

Factor Customer needs Communication Information Z statistics 21.211 21.689 21.129 Significance level 0.000 0.166 0.023 Table IV. Mann-Whitney statistical test

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No. CRM items in digital libraries Gap Customer needs factor 1 My university digital library fully understands the needs of key customers via knowledge learning 21.62 2 Customers can expect prompt service from employees of library using internet 0.42 3 My university digital library is well organized and integrated internally to suit the needs of students and faculty members 20.87 4 Any changes or actions deemed necessary would be implemented to the benefits of customers 21.98 5 My university digital library has established clear business goals related to customer acquisition, development, retention and reactivation 22.3 6 My university digital library structure is meticulously designed around our customers 21.73 7 My university digital library commits time and resources towards customer needs by providing value 20.34 8 My university digital library has the technical expertise and resources to succeed in CRM 21.21 9 CRM responsibilities of each employee are clearly defined, assigned and understood 20.25 10 My university digital library has the right hardware to serve

• ur customers

22.43 11 My university digital library has the right software to serve

• ur customers

20.97 12 My university digital library frequently and systemically measures customer satisfaction using internet forms 21.54 13 Customer feedback is used to create strategies conducive to positive customer perceptions 20.74 Communication factor 1 My university digital library provides channels to enable

• ngoing, two-way communication with key customers

21.23 2 My organization makes concerted and coordinated efforts among functions to satisfy customers 0.39 3 My university digital library commits time and resources in managing customer relationships 0.11 4 My university digital library has the sales and marketing expertise and resources to succeed in CRM 20.26 5 The technical/production/operation people treat customers with great care

• 1. 21

6 Our university digital library objective is primarily driven by customer relationships 0.07 7 IT facilitates the management of customer relationships 2.31 8 Customers can expect exactly when services will be performed 1.12 9 My university digital library has the right technical personnel to provide technical support for the utilization of computer technology in building customer relationships 0.13 10 My university digital library has the service resources and excellence to succeed in CRM 0.04 11 My university digital library embraces CRM for mutual benefits 0.53 (continued) Table V. Gap analysis of students’ perceptions and expectations

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to make the “knowledge” easily accessible to the right person in timely manner. This research uses server log data. The results from this research show that 37 tested items from customer relation management may be classified into three groups. Results from gap analysis showed that library managers need to increase the level of students’ satisfaction by CRM system in digital library of Yazd University. The more utilization of this approach, the more satisfaction of students from digital libraries services. Finally it can be concluded that changes, not based on customers’ expectations, will cause some interruptions in demand chain which leads to high risk for customers especially if this process is not performed in appropriate time.

References Boyle, A.B. (2001), “The internet in industrial channels: its use in (and effects on) exchange relationships”, Journal of Business & Industrial Marketing, Vol. 16 Nos 6/7, p. 452. Bradshaw, D. and Brash, C. (2001), “Management customer relationships in the e-business world: how to personalise computer relationships for increased profitability”, International Journal of Retail & Distribution Management, Vol. 29 No. 12, pp. 520-30. No. CRM items in digital libraries Gap Information factor 1 My university digital library shares customer information across all points of contact 0.87 2 Computer technology of my university digital library can help create customized offerings to customers 0.2 3 My university digital library maintains a comprehensive database of customers 20.83 4 Any new knowledge about key customers would be well received and used to provide better offerings to customers

• 21. 27

5 My university digital library customizes customer interactions to optimize value

• 21. 54

6 When my university digital library finds that customers would like to modify a product/service, the departments involved make concerted efforts to do so 20.66 7 My university digital library involves key customers in product design 22.71 8 My university digital library believes that mining data intelligently is a source of competitive advantage 20.76 9 My university digital library continuously monitors and maintains our customer information 20.1 10 My university digital library information systems are designed to give comprehensive data about all aspects of customers 22.02 11 My organization has sound mechanisms for effective knowledge dissemination 21.5 12 My university digital library understands individual customer’s character, needs and preferences and behaviors through past interactions with us and our database 21.82 13 My university digital library has a process in place to obtain and validate customers’ permission to interact with them through various channels 0.28 Table V.

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Chaston, I. and Mangles, T. (2003), “Relationship marketing in online business-to-business markets: a pilot investigation of small UK manufacturing firms”, European Journal of Marketing, Vol. 37 Nos 5/6, p. 753. Dimitriadis, S. and Stevens, E. (2008), “Integrated customer relationship management for service activities”, Managing Service Quality, Vol. 18 No. 5, pp. 496-511. Gotzamani, K.D. and Tzavlopoulos, Y.E. (2009), “Measuring e-commerce-quality: an exploratory review”, International Journal of Quality and Service Sciences, Vol. 1 No. 3, pp. 271-9. Hamid, A. and Kassim, N.R. (2004), “Internet technology as a tool in customer relationship management”, Journal of American Academy of Business, Cambridge, Vol. 4 Nos 1/2,

• pp. 103-8.

Hamill, J. and Stevenson, A. (2002), “Internet forum”, International Marketing Review, Vol. 19 Nos 2/3, pp. 209-12. Harrigan, P., Ramsey, E. and Ibbotson, P. (2008), “e-CRM in SMEs: an exploratory study in Northern Ireland”, Marketing Intelligence & Planning, Vol. 26 No. 4, pp. 385-404. Ho, C-T.B. and Lin, W-C. (2010), “Measuring the service quality of internet banking: scale development and validation”, European Business Review, Vol. 22 No. 1, pp. 5-24. Kula, V. and Tatoglu, E. (2003), “An exploratory study of internet adoption by SMEs in an emerging market economy”, European Business Review, Vol. 15 No. 5, pp. 324-33. McGowan, P., Durkin, M.G., Allen, L., Dougan, C. and Nixon, S. (2001), “Developing competencies in the entrepreneurial small firm for use of the internet in the management of customer relationships”, Journal of European Industrial Training, Vol. 25 Nos 2/4, p. 126. Sherehiy, B., Karwowsk, I.W. and Layer, J.K. (2007), “A review of enterprise agility: concepts, frameworks, and attributes”, International Journal of Industrial Ergonomics, Vol. 37,

• pp. 445-60.

Sin, L., Tse, A. and Yim, F. (2005), “CRM: conceptualization and scale development”, European Journal of Marketing, Vol. 39 Nos 11/12, pp. 1264-90. Stefanou, C.J., Sarmaniotis, C. and Stafyla, A. (2003), “CRM and customer-centric knowledge management: an empirical research”, Business Process Management Journal, Vol. 9 No. 5,

• pp. 617-34.

Tan, X., Yen, D.C. and Fang, X. (2002), “Internet integrated customer relationship management: a key success factor for companies in the e-commerce arena”, Journal of Computer Information Systems, Vol. 42 No. 3, pp. 77-86. Wang, M.U. (2007), “Introducing CRM into an academic library”, Library Management, Vol. 28 Nos 6/7, pp. 281-91. Wells, J.D., Fuerst, W.L. and Choobineth, J. (1999), “Managing information technology (IT) for

• ne-to-one customer interaction”, Information and Management, Vol. 35 No. 1, pp. 53-62.

Zablah, A.R., Bellenger, D.N. and Johnston, W.J. (2004), “An evaluation of divergent perspectives

• n customer relationship management: towards a common understanding of an emerging

phenomenon”, Industrial Marketing Management, Vol. 33, pp. 475-89. About the authors Reza Jamali is a PhD candidate in Strategic Management at Tarbiat Modares University and top researcher of Yazd University. He has led cluster and competitiveness projects in many parts of the industries and published several papers in leading journals like Performance Measurement and Metrics, Business Strategy Series, Library Management and has participated in international conferences in the USA, UK, Australia and Iran. His research interests are internet applications,

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social networks and science and technology policy. Reza Jamali is the corresponding author and can be contacted at: r.jamali1984@gmail.com Dr Asghar Moshabaki is an Associate Professor in Business Administration majoring in business and industrial management. He has been teaching at the graduate and post graduate levels at Tarbiat Modares University for the last 25 years and has published more than 80 articles in scientific journals. Hajar Aramoon is a university teacher in the Management Faculty in Azad University of

• Abadan. She holds a BA in Industrial Management and an EMBA (Executive Master of Business

Administration). She has participated in many international and national conferences and she has had articles published in national magazines. Her main interest focuses on issues such as women networking, female entrepreneurship and other subjects affected by gender. Akbar Alimohammadi is a Master’s student in Accounting. He has worked in a variety of settings including higher education and pubic and private sector policy. In addition, he teaches accounting and financial management at Azad University.

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