To read the article describing the components of Payn'e CRM Framework The link below also describes the framework and gives you some insights in relation to how to apply it https://www.youtube.com/watch?v=9rmpE-Oqtg8

** search the net for three examples of how organizations apply/can apply the framework practically.

Adrian Payne & Pennie Frow A Strategic Framework for Customer Relationship Management In this article, the authors develop a conceptual framework for customer relationship management (CRM) that helps broaden the understanding of CRM and its role in enhancing customer value and, as a result, shareholder value. The authors explore definitional aspects of CRM, and they identify three alternative perspectives of CRM. The authors emphasize the need for a cross-functional, process-oriented approach that positions CRM at a strate- gic level. They identify five key cross-functional CRM processes: a strategy development process, a value creation process, a multichannel integration process, an information management process, and a performance assessment process. They develop a new conceptual framework based on these processes and explore the role and function of each element in the framework. The synthesis of the diverse concepts within the literature on CRM and rela- tionship marketing into a single, process-based framework should provide deeper insight into achieving success with CRM strategy and implementation. O er the past decade, there has been an explosion of cize the severe lack of CRM research that takes a broader, nterest in customer relationship management more strategic focus. The article does not explore people "CRM) by both academics and executives. How- issues related to CRM implementation. Customer relation- ever, despite an increasing amount of published material, ship management can fail when a limited number of most of which is practitioner oriented, there remains a lack employees are committed to the initiative; thus, employee of agreement about what CRM is and how CRM strategy engagement and change management are essential issues in should be developed. The purpose of this article is to CRM implementation. In our discussion, we emphasize develop a process-oriented conceptual framework that posi- such implementation and people issues as a priority area for tions CRM at a strategic level by identifying the key cross- further research. functional processes involved in the development of CRM strategy. More specifically, the aims of this article are CRM Perspectives and Definition .To identify alternative perspectives of CRM, .To emphasize the importance of a strategic approach to CRM The term "customer relationship management" emerged in within a holistic organizational context, the information technology (IT) vendor community and To propose five key generic cross-functional processes that practitioner community in the mid-1990s. It is often used to organizations can use to develop and deliver an effective describe technology-based customer solutions, such as sales CRM strategy, and force automation (SFA). In the academic community, the To develop a process-based conceptual framework for CRM terms "relationship marketing" and CRM are often used strategy development and to review the role and components interchangeably (Parvatiyar and Sheth 2001). However, of each process CRM is more commonly used in the context of technology We organize this article in three main parts. First, we solutions and has been described as "information-enabled explore the role of CRM and identify three alternative per- relationship marketing" (Ryals and Payne 2001, p. 3). spectives of CRM. Second, we consider the need for a Zablah, Beuenger, and Johnston (2003, p. 116) suggest that cross-functional process-based approach to CRM. We CRM is "a philosophically-related offspring to relationship develop criteria for process selection and identify five key marketing which is for the most part neglected in the litera- CRM processes. Third, we propose a strategic conceptual ture," and they conclude that "further exploration of CRM framework that is constructed of these five processes and and its related phenomena is not only warranted but also examine the components of each process. desperately needed." The development of this framework is a response to a A significant problem that many organizations deciding challenge by Reinartz, Krafft, and Hoyer (2004), who criti- to adopt CRM face stems from the great deal of confusion about what constitutes CRM. In interviews with executives, which formed part of our research process (we describe this Adrian Payne is Professor of Services and Relationship Marketing and process subsequently), we found a wide range of views Director of the Centre for CRM (e-mail: a.payne @cranfield.ac.uk), and about what CRM means. To some, it meant direct mail, a Pennie Frow is Visiting Fellow in Marketing (e-mail: p. frow@ cranfield.ac. loyalty card scheme, or a database, whereas others envi- uk), Cranfield School of Management, Cranfield University. The authors acknowledge the financial support of BT plc and SAS with this research, sioned it as a help desk or a call center. Some said that it and they thank the three anonymous JM reviewers and the consulting edi- was about populating a data warehouse or undertaking data tors for their helpful comments on previous versions of this article mining; others considered CRM an e-commerce solution, such as the use of a personalization engine on the Internet 2005, American Marketing Association Journal of Marketing ISSN: 0022-2429 (print), 1547-7185 (electronic) 167 Vol. 69 (October 2005), 167-176or a relational database for SFA. This lack of a widely (1997), Singh and Agrawal (2003), and Swift (2000). Fol- accepted and appropriate definition of CRM can contribute lowing this phase of our work, we identified Zablah, to the failure of a CRM project when an organization views Beuenger, and Johnston's (2003) research, which supported CRM from a limited technology perspective or undertakes our view of these perspectives. CRM on a fragmented basis. The importance of how CRM is defined is not merely The definitions and descriptions of CRM that different semantic. Its definition significantly affects the way an authors and authorities use vary considerably, signifying a entire organization accepts and practices CRM. From a variety of CRM viewpoints. To identify alternative perspec- strategic viewpoint, CRM is not simply an IT solution that tives of CRM, we considered definitions and descriptions of is used to acquire and grow a customer base; it involves a CRM from a range of sources, which we summarize in the profound synthesis of strategic vision; a corporate under- Appendix. We excluded other, similar definitions from this standing of the nature of customer value in a multichannel list. environment; the utilization of the appropriate information An important aspect of the CRM definition that we management and CRM applications; and high-quality oper- wanted to examine was its association with technology. ations, fulfillment, and service. Thus, we propose that in This is important because CRM technology is often incor- any organization, CRM should be positioned in the broad rectly equated with CRM (Reinartz, Krafft, and Hoyer strategic context of Perspective 3. 2004), and a key reason for CRM failure is viewing CRM Swift (2000) argues, and we concur, that organizations as a technology initiative (Kale 2004). For this reason, we will benefit from adopting a relevant strategic CRM defini- review the definitions in the Appendix with special attention tion for their firm and ensuring its consistent use throughout to their emphasis on technology. This review suggests that their organization. Thus, we developed a definition of CRM CRM can be defined from at least three perspectives: nar- that reflected Perspective 3. We examined the CRM litera- rowly and tactically as a particular technology solution, ture, synthesized aspects of the various definitions into a wide-ranging technology, and customer centric. These per- draft definition, and then tested it with practicing managers. spectives can be portrayed as a continuum (see Figure 1). As our research progressed, we went through several itera- One organization we interviewed, which spent more tions. The result is the following definition, which we use than $30 million on IT solutions and systems integration, for the purposes of this study: described CRM solely in terms of its SFA project. At this extreme, CRM is defined narrowly and tactically as a par- CRM is a strategic approach that is concerned with creat- ticular technology solution (e.g., Khanna 2001). We call ing improved shareholder value through the development this CRM "Perspective 1." Other definitions, such as that of of appropriate relationships with key customers and cus- tomer segments. CRM unites the potential of relationship Kutner and Cripps (1997), though somewhat broader, also marketing strategies and IT to create profitable, long-term fall into this category. relationships with customers and other key stakeholders. In another organization that we interviewed, the term CRM provides enhanced opportunities to use data and CRM was used to refer to a wide range of customer- information to both understand customers and cocreate oriented IT and Internet solutions, reflecting Stone and value with them. This requires a cross-functional integra- Woodcock's (2001) definition. This represented CRM "Per- tion of processes, people, operations, and marketing capa- spective 2," a point near the middle of the continuum. bilities that is enabled through information, technology, "Perspective 3" reflects a more strategic and holistic and applications. approach to CRM that emphasizes the selective manage- This definition provided guidance for our subsequent ment of customer relationships to create shareholder value. research considerations and the strategic and cross- This reflects elements of several previously noted defini- functional emphasis of the conceptual framework we tions of CRM, including those of Buttle (2001), Glazer developed. FIGURE 1 The CRM Continuum CRM Defined CRM Defined Narrowly Broadly and and Tactically Strategically CRM is about the CRM is the CRM is a holistic implementation of a implementation of an approach to managing chnology integrated series of customer relationships solution project. customer-oriented to create shareholder technology solutions. value. 168 / Journal of Marketing, October 2005Processes: A Strategic Perspective cross-functional conceptualization of CRM. For example, Gartner (2001) calls for a fresh approach to business pro- Sue and Morin (2001, p. 6) outline a framework for CRM cesses in CRM that involves both rethinking how these pro- based on initiatives, expected results, and contributions, but cesses appear to the customer and reengineering them to be this is not process based, and "many initiatives are not more customer centric. Kale (2004) supports this view and explicitly identified in the framework." Winer (2001, p. 91) argues that a critical aspect of CRM involves identifying all develops a "basic model, which contains a set of 7 basic strategic processes that take place between an enterprise components: a database of customer activity; analyses of and its customers. To address this challenge of adopting a the database; given the analyses, decisions about which cus- fresh approach to CRM processes, we aimed to identify the omers to target; tools for targeting the customers; how to key generic processes relevant to CRM. build relationships with the targeted customers; privacy We examined the literature to identify appropriate crite- issues; and metrics for measuring the success of the CRM ria for process selection but found little work in this area. program." Again, this model, though useful, is not a cross- with the exception of the contribution by Srivastava, Sher- functional process-based conceptualization. This gap in the vani, and Fahey (1999), who establish four process selection literature suggests that there is a need for a new systematic criteria for marketing and business processes. We chose their process-based CRM strategy framework. Synthesis of the work as a starting point for the identification of process diverse concepts in the literature on CRM and relationship selection criteria for CRM. The criteria these authors pro- marketing into a single, process-based framework should pose are as follows: First, the processes should comprise a provide practical insights to help companies achieve greater small set that addresses tasks critical to the achievement of success with CRM strategy development and implementation. an organization's goals. Second, each process should con- tribute to the value creation process. Third, each process Interaction Research should be at a strategic or macro level. Fourth, the processes Conceptual frameworks and theory are typically based on need to manifest clear interrelationships. combining previous literature, common sense, and experi- As part of our research, we conducted a workshop with ence (Eisenhardt 1989). In this research, we integrated a a panel of 34 highly experienced CRM practitioners, all of synthesis of the literature with learning from field-based whom had extensive experience in the CRM and IT sectors. interactions with executives to develop and refine the CRM The director of a leading research and management institute strategy framework. In this approach, we used what specializing in the CRM and IT sectors selected the panel. Gummesson (2002a) terms "interaction research." This Participants were selected on the basis of the following form of research originates from his view that "interaction attributes to ensure that they were knowledgeable about and communication play a crucial role" in the stages of CRM, its implementation, and its operation: substantial research and that testing concepts, ideas, and results management and industrial experience (average of 17.2 through interaction with different target groups is "an inte- years), maturity (average age of 40.2 years), international gral part of the whole research process" (p. 345). The representation and international experience (managers from sources for these field-based insights, which include execu- nine countries attended; most of them had international lives primarily from large enterprises in the business-to- experience), and academic qualifications (degree or equiva- business and business-to-consumer sectors, included the lent). In the first part of the workshop, which involved small following: group sessions, the panel reviewed and subsequently unani- mously agreed that these four criteria were fully appropriate An expert panel of 34 highly experienced executives; for selecting CRM processes. However, they also proposed Interviews with 20 executives working in CRM, marketing, and IT roles in companies in the financial services sector; two further criteria: First, each process should be cross- Interviews with six executives from large CRM vendors and functional in nature, and second, each process would be with five executives from three CRM and strategy considered by experienced practitioners as being both logi- consultancies; cal and beneficial to understanding and developing strategic Individual and group discussions with CRM, marketing, and CRM activities. We used these six criteria to select key IT managers at workshops with 18 CRM vendors, analysts, generic CRM processes. and their clients, including Accenture, Baan, BroadVision, Chordiant, EDS, E.piphany, Hewlett-packard, IBM, Gartner, NCR Teradata, Peoplesoft, Oracle, SAP, SAS Institute, A Conceptual Framework for CRM Siebel, Sybase, and Unisys; Grabner-Kraeuter and Moedritscher (2002) suggest that the Piloting the framework as a planning tool in the financial ser- absence of a strategic framework for CRM from which to vices and automotive sectors; and define success is one reason for the disappointing results of Using the framework as a planning tool in two companies: many CRM initiatives. This view was supported both by the global telecommunications and global logistics. Six work- shops were held in each company. senior executives we interviewed during our research and by Gartner's (2001) research. Our next challenges were to identify key generic CRM processes using the previously Process Identification and the CRM Framework described selection criteria and to develop them into a con- We began by identifying possible generic CRM processes ceptual framework for CRM strategy development. from the CRM and related business literature. We then dis- Our literature review found that few CRM frameworks cussed these tentative processes interactively with the exist; those that did were not based on a process-oriented groups of executives. The outcome of this work was a short A Strategic Framework for CRM / 169list of seven processes. We then used the expert panel of experienced CRM executives who had assisted in the devel- opment of the process selection schema to nominate the CRM processes that they considered important and to agree on those that were the most relevant and generic. After an initial group workshop, each panel member independently completed a list representing his or her view of the key generic processes that met the six previously agreed-on process criteria. The data were fed back to this group, and a detailed discussion followed to help conrm our under standing of the process categories. As a result of this interactive method, ve CRM pro- cesses that met the selection criteria were identied; all ve were agreed on as important generic processes by more than twothirds of the group in the first iteration. Subse quently, we received strong conrmation of these as key generic CRM processes by several of the other groups of managers. The resultant ve generic processes were (1) the strategy development process, (2) the value creation process, (3) the multichannel integration process, (4) the information management process, and (5) the performance assessment process. We then incorporated these ve key generic CRM pro- cesses into a preliminary conceptual framework. This initial framework and the development of subsequent versions were both informed by and further rened by our interac- tions with two primary executive groups: mangers from the previously noted companies and executives from three CRM consulting firms. Participants at several academic conferences on CRM and relationship marketing also assisted with comments and criticisms of previous versions. With evolving versions of the framework, we combined a synthesis of relevant literature with fieldbased interactions involving the groups. The framework went through a con siderable number of major iterations and minor revisions; the nal version appears in Figure 2. This conceptual framework illustrates the interactive set of strategic processes that commences with a detailed review of an organization's strategy (the strategy develop- ment process) and concludes with an improvement in busi- ness results and increased share value (the performance assessment process). The concept that competitive advan tage stems from the creation of value for the customer and for the business and associated cocreation activities (the value creation process) is well developed in the marketing literature. For large companies, CRM activity will involve collecting and intelligently using customer and other rele vant data (the information process) to build a consistently superior customer experience and enduring customer rela- tionships (the multichannel integration process). The itera- tive nature of CRM strategy development is highlighted by the arrows between the processes in both directions in Fig- ure 2; they represent interaction and feedback loops between the different processes. The circular arrows in the value creation process reect the cocreation process. We now examine the key components we identied in each process. As with our prior work, we used the interaction research method in the identication of these process components. 170 I Journal of Marketing, October 2005 Strategy Development Process This process requires a dual focus on the organization's business strategy and its customer strategy. How well the two interrelate fundamentally affects the success of its CRM strategy. Business Strategy The business strategy must be considered rst to determine how the customer strategy should be developed and how it should evolve over time. The business strategy process can commence with a review or articulation of a company's vision, especially as it relates to CRM (e.g., Davidson 2002). Next, the industry and competitive environment should be reviewed. Traditional industry analysis (e.g., Porter 1980) should be augmented by more contemporary approaches (e.g., Christensen 2001; Slater and Olson 2002) to include coopetition (Brandenburger and Nalebuff 1997), networks and deeper environmental analysis (Achrol 1997), and the impact of disruptive technologies (Christensen and Overdorf 2000). Customer Strategy Whereas business strategy is usually the responsibility of the chief executive ofcer, the board, and the strategy direc- tor, customer strategy is typically the responsibility of the marketing department. Although CRM requires a cross functional approach, it is often vested in functionally based roles, including IT and marketing. When different depart ments are involved in the two areas of strategy develop ment, special emphasis should be placed on the alignment and integration of business strategy. Customer strategy involves examining the existing and potential customer base and identifying which forms of seg mentation are most appropriate. As part of this process, the organization needs to consider the level of subdivision for customer segments, or segment granularity. This involves decisions about whether a macro, micro, or oneto-one seg mentation approach is appropriate (Rubin 1997). Several authors emphasize the potential for shifting from a mass market to an individualized, or onetoone. marketing environment. Exploiting e-commerce opportuni- ties and the fundamental economic characteristics of the Internet can enable a much deeper level of segmentation granularity than is affordable in most other channels (e.g., Peppers and Rogers 1993, 1997). In summary, the strategy development process involves a detailed assessment of busi- ness strategy and the development of an appropriate cus tomer strategy. This should provide the enterprise with a clearer platform on which to develop and implement its CRM activities. Value Creation Process The value creation process transforms the outputs of the strategy development process into programs that both extract and deliver value. The three key elements of the value creation process are (1) determining what value the company can provide to its customer; (2) determining what value the company can receives from its customers; and (3) FIGURE 2 A Conceptual Framework for CRM Strategy Strategy Performance Development Value Creation Multichannel Integration Process Process Process Assessment Process Value Customer Sales force Shareholder Business Receives Results Strategy Physical .Value .Employer value .Business vision .Customer value .Industry and proposition Outlets . Value assessment .Shareholder value competitive .Cost reduction characteristics Telephony Customer Segment Lifetime Value Analysis Cocreation Integrated Channel Management Performance Direct marketing Value Monitoring Organization .Standards Electronic .Quantitative and Receives . Acquisition qualitative commerce measurement Customer economics Virtual . Results and Strategy . Retention Mobile economics key performance .Customer choice commerce indicators and customer characteristics K .Segment granularity Data Repository IT systems Analysis tools Front office Back office applications applications A Strategic Framework for CRM / 171 Information Management Processby successfully managing this value exchange, which involves a process of cocreation or coproduction, maximiz- ing the lifetime value of desirable customer segments. The Value the Customer Receives The value the customer receives from the organization draws on the concept of the benets that enhance the cus tomer offer (Levitt 1969; Lovelock 1995). However, there is now a logic, which has evolved from earlier thinking in businessto-business and services marketing, that views the customer as a cocreator and coproducer (Bendapudi and Leone 2003; Prahalad and Ramaswamy 2004; Vargo and Lusch 2004). These benets can be integrated in the form of a value proposition (e.g., Lanning and Michaels 1988; Lanning and Phillips 1991) that explains the relationship among the performance of the product, the fulllment of the customer's needs, and the total cost to the customer over the customer relationship life cycle (Lanning and Michaels 1988). Lanning's (1998) later work on value propositions reects the cocreation perspective. However, a more detailed synthesis of work in this area is needed in further research. To determine whether the value proposition is likely to result in a superior customer experience, a company should undertake a value assessment to quantify the relative impor- tance that customers place on the various attributes of a product. Analytical tools such as conjoint analysis can be used to identify customers that share common preferences in terms of product attributes. Such tools may also reveal substantial market segments with service needs that are not fully catered to by the attributes of existing offers. The Value the Organization Receives and Lifetime Value From this perspective, customer value is the outcome of the coproduction of value, the deployment of improved acquisi- tion and retention strategies, and the utilization of effective channel management. Fundamental to this concept of cus- tomer value are two key elements that require further research. First, it is necessary to determine how existing and potential customer protability varies across different cus- tomers and customer segments. Second, the economics of customer acquisition and customer retention and opportuni ties for crossselling, upselling, and building customer advocacy must be understood. How these elements con- tribute to increasing customer lifetime value is integral to value creation. Customer retention represents a signicant part of the research on value creation. For example, Reichheld and Sasser (1990) identify the net present value prot improve ment of retaining customers, and Rust and Zahorik (1993) and Rust, Zahorik, and Keiningham (1995) outline proce dures for assessing the impact of satisfaction and quality improvement efforts on customer retention and market share. More recently, research has emphasized customer equity (e.g., Blattberg and Deighton 1996; Hogan, Lemon, and Rust 2002; Rust, Lemon, and Zeitharnl 2004). Calculat- ing the customer lifetime value of different segments enables organizations to focus on the most protable cus 172 l Journal of Marketing, October 2005 tomers and customer segments. The value creation process is a crucial component of CRM because it translates busi- ness and customer strategies into specic value proposition statements that demonstrate what value is to be delivered to customers, and thus, it explains what value is to be received by the organization, including the potential for cocreation. Multichannel Integration Process The multichannel integration process is arguably one of the most important processes in CRM because it takes the out- puts of the business strategy and value creation processes and translates them into value-adding activities with cus- tomers. However, there is only a small amount of published work on the multichannel integration in CRM (e.g., Fried- man and Furey 1999; Funk 2002; Kraft 2000; Sudharshan and Sanchez 1998; Wagner 2000). The multichannel inte gration process focuses on decisions about what the most appropriate combinations of channels to use are; how to ensure that the customer experiences highly positive inter actions within those channels; and when a customer inter acts with more than one channel, how to create and present a single unied View of the customer. Channel Options Today, many companies enter the market through a hybrid channel model (Friedman and Furey 1999; Moriarty and Moran 1990) that involves multiple channels, such as eld sales forces, Internet, direct mail, business pMers, and telephony. There are a growing number of channels by which a company can interact with its customers. Through an iterative process, we categorized the many channel options into six categories broadly based on the balance of physical or virtual contact (see Figure 2). These include (1) sales force, including eld account management, service, and personal representation; (2) outlets, including retail branches, stores, depots, and kiosks; (3) telephony, includ- ing traditional telephone, facsimile, telex, and call center contact; (4) direct marketing, including direct mail, radio, and traditional television (but excluding e-commerce); (5) ecommerce, including email, the Internet, and interactive digital television; and (6) m-commerce, including mobile telephony, short message service and text messaging, wire- less application protocol, and 3G mobile services. Some channels are now being used in combination to maximize commercial exposure and return; for example, there is col- laborative browsing and Internet relay chat, used by compa nies such as Lands End, and voice over 1? (Internet proto col), which integrates both telephony and the Internet. Integrated Channel Management Managing integrated channels relies on the ability to uphold the same high standards across multiple, different channels. Having established a set of standards for each channel that defines an outstanding customer experience for that chan- nel, the organization can then work to integrate the chan- nels. The concept of the \"perfect customer experience," which must be affordable for the company in the context of the segments in which it operates and its competition, is a relatively new concept. This concept is now being embraced campaign management analysis, credit scoring, and cus- in industry by companies such as TNT, Toyota's Lexus, tomer profiling. Oce, and Guinness Breweries, but it has yet to receive much attention in the academic literature. Therefore, multichannel Front Office and Back Office Applications integration is a critical process in CRM because it repre- Front office applications are the technologies a company sents the point of cocreation of customer value. However, a uses to support all those activities that involve direct inter- company's ability to execute multichannel integration suc- cessfully is heavily dependent on the organization's ability face with customers, including SFA and call center manage- to gather and deploy customer information from all chan- ment. Back office applications support internal administra- els and to integrate it with other relevant information. tion activities and supplier relationships, including human resources, procurement, warehouse management, logistics software, and some financial processes. A key concern Information Management Process about the front and back office systems offered by CRM The information management process is concerned with the endors is that they are sufficiently connected and cocoordi- collection, collation, and use of customer data and informa- nated to improve customer relationships and workflow. tion from all customer contact points to generate customer insight and appropriate marketing responses. The key mate- CRM Technology Market Participants rial elements of the information management process are Gartner segments vendors of CRM applications and CRM the data repository, which provides a corporate memory of service providers into specific categories (Radcliffe and customers; IT systems, which include the organization's Kirkby 2002), and Greenberg (2001) and Jacobsen (1999) computer hardware, software, and middleware; analysis provide detailed reviews of CRM vendors' products. The tools; and front office and back office applications, which key segments for CRM applications are Integrated CRM support the many activities involved in interfacing directly and Enterprise Resource Planning Suite (e.g., Oracle, Peo- with customers and managing internal operations, adminis- pleSoft, SAP), CRM Suite (e.g., Epiphany, Siebel), CRM tration, and supplier relationships (Greenberg 2001). Framework (e.g., Chordiant), CRM Best of Breed (e.g., NCR Teradata; Broadvision), and "Build it Yourself' (e.g., Data Repository IBM, Oracle, Sun). The CRM service providers and consul- The data repository provides a powerful corporate memory tants that offer implementation support specialize in the fol- of customers, an integrated enterprisewide data store that is lowing areas: corporate strategy (e.g., Mckinsey, Bain); capable of relevant data analyses. In larger organizations, it CRM strategy (e.g., Peppers & Rogers, Vectia); change may comprise a data warehouse (Agosta 1999; Swift 2000) management, organization design, training, human and related data marts and databases. There are two forms resources, and so forth (e.g., Accenture); business transfor- of data warehouse, the conventional data warehouse and the mation (e.g., IBM); infrastructure building and systems operational data store. The latter stores only the information integration (e.g., Siemens, Unisys); infrastructure outsourc necessary to provide a single identity for all customers. An ing (e.g., EDS, CSC); business insight, research, and so enterprise data model is used to manage this data conver- forth (e.g., SAS); and business process outsourcing (e.g., sion process to minimize data duplication and to resolve Acxiom). The need for comprehensive and scalable options any inconsistencies between databases. has created scope for many new products from CRM ven- dors. However, despite their claim to be "complete CRM IT Systems solution providers," few software vendors can provide the full range of functionality that a complete CRM business Information technology systems refer to the computer hard- strategy requires. ware and the related software and middleware used in the The information management process provides a means organization. Often, technology integration is required of sharing relevant customer and other information through- before databases can be integrated into a data warehouse out the enterprise and "replicating the mind of the cus- and user access can be provided across the company. How- tomer." To ensure that technology solutions support CRM, ever, the historical separation between marketing and IT sometimes presents integration issues at the organizational t is important to conduct IT planning from a perspective of level (Glazer 1997). The organization's capacity to scale providing a seamless customer service rather than planning for functional or product-centered departments and activi- existing systems or to plan for the migration to larger sys- ties. Furthermore, data analysis tools should measure busi- tems without disrupting business operations is critical. ness activities. This kind of analysis provides the basis for Analytical Tools the performance assessment process. The analytical tools that enable effective use of the data warehouse can be found in general data-mining packages Performance Assessment Process and in specific software application packages. Data mining The performance assessment process covers the essential enables the analysis of large quantities of data to discover ask of ensuring that the organization's strategic aims in meaningful patterns and relationships (e.g., Groth 2000; terms of CRM are being delivered to an appropriate and Peacock 1998). More specific software application pack- acceptable standard and that a basis for future improvement ages include analytical tools that focus on such tasks as is established. This process can be viewed as having two A Strategic Framework for CRM / 173main components: shareholder results, which provide a macro view of the overall relationships that drive perfor- mance, and performance monitoring, which provides a more detailed, micro view of metrics and key performance indicators. Shareholder Res ults To achieve the ultimate objective of CRM, the delivery of shareholder results, the organization should consider how to build employee value. customer value, and shareholder value and how to reduce costs. Recent research on relation- ships among employees, customers, and shareholders has emphasized the need to adopt a more informed and inte- grated approach to exploiting the linkages among them. The service prot chain model and related research focuses on establishing the relationships among employee satisfaction, customer loyalty, protability, and shareholder value (e.g., Heskett et al. 1994; Loveman 1998). Organizations also need to focus on cost reduction opportunities. Two means of cost reduction are especially relevant to CRM: deployment of technologies ranging from automated telephony services to Web services and the use of new electronic channels such as online, selfservice facilities. The development of models such as the service prot chain has been important in enabling companies to consider the effectiveness of CRM at a strategic level in terms of improving shareholder results. Performance Monitoring Despite a growing call for companies to be more customer oriented, there is concern that, in general, the metrics used by companies to measure and monitor their CRM perfor mance are not well developed or well communicated. Ambler's (2002) research ndings raise particular concern; he nds that key aspects of CRM, such as customer satis- faction and customer retention, only reach the board in 36% and 51% of companies, respectively. Even when these met- rics reach the board level, it is not clear how deeply they are understood and how much time is spent on them. Tradi- tional performance measurement systems, which tend to be functionally driven, may be inappropriate for cross functional CRM. Recent efforts to provide crossfunctional measures, such as the balanced scorecard (Kaplan and Norton 1996), are a useful advance. The format of the balanced scorecard enables a wide range of metrics designs. Indicators that can reveal future nancial results, not just historical results, need to be considered as part of this process. Standards, metrics, and key performance indicators for CRM should reect the performance standards necessary across the ve major processes to ensure that CRM activities are planned and practiced effectively and that a feedback loop exists to maximize performance improvement and organizational learning. A consideration of \"return on relationships\" (Gummesson 2004) will assist in identifying further metrics that are relevant to the enterprise. Discussion In this article, we develop a crossfunctional, processbased CRM strategy framework that aims to help companies avoid 174 1 Journal of Marketing, October 2005 the potential problems associated with a narrow technologi- cal denition of CRM and realize strategic benets. Our research was based on large industrial companies because the size and complexity of such enterprises is likely to pre- sent the greatest CRM challenges. We did not examine issues related to small or medium-sized companies and nonprot organizations in this work. This study contributes to the marketing literature in sev- eral ways. First, our work extends a managerial perspective that stresses the importance of cross-functional processes in CRM strategy and contributes to the positioning of the poorly dened CRM concept within the marketing litera- ture. Second, it provides a processbased conceptual frame work for strategic CRM and identies key elements within each process. Third, it makes a contribution to the limited literature on interaction research. Finally, the research rep- resents a grounded contribution that offers managers insight into the development and implementation of CRM strate- gies. To date, this framework has been used by companies to address several issues, including surfacing problematic CRM issues, planning the key components of a CRM strat- egy, identifying which process components of CRM should receive priority, creating a platform for change, and bench- marking other companies' CRM activities. Much research remains to be done in the exploration of the multifaceted nature of CRM. Sheth (1996) notes that for an emerging management discipline, it is important to have an acceptable denition that encompasses all facets to focus understanding and growth of knowledge in the discipline. He proposes a multistage process for achieving this that begins with delimiting the domain, agreeing on a denition, developing performance measures, and developing explana- tory theory. The framework we propose in this article offers a potentially useful starting point for the development of improved insight into these aspects of CRM theory. The task of delimiting the domain, agreeing on a denition for CRM, and building a research agenda will be an evolving process in this nascent area. We do not attempt to build such a research agenda in the current work; however, we empha- size the importance of CRM implementation and related people issues as an area in which further research is urgently needed. Initial work by Ebner and colleagues (2002), Gummesson (2002b, c), Henneberg (2003), Pettit (2002), and Rigby, Reichheld, and Schefter (2002) provides a useful platform from which to develop this important research area. Appendix Some Definitions and Descriptions of CRM CRM is an ecommerce application (Khanna 2001). CRM is a term for methodologies, technologies, and e- commerce capabilities used by companies to manage cus- tomer relationships (Stone and Woodcock 2001). -CRM is an enterprisewide initiative that belongs in all areas of an organization (Singh and Agrawal 2003). -CRM is a comprehensive strategy and process of acquiring, retaining, and partnering with selective customers to create superior value for the company and the customer (Parvitiyar and Sheth 2001). .CRM is about the development and maintenance of long- .CRM involves using existing customer information to term, mutually beneficial relationships with strategically sig- improve company profitability and customer service (Could- nificant customers (Buttle 2001). well 1999). .CRM includes numerous aspects, but the basic theme is for .CRM attempts to provide a strategic bridge between informa- the company to become more customer-centric. Methods are tion technology and marketing strategies aimed at building primarily Web-based tools and Internet presence (Gosney and long-term relationships and profitability. This requires Boehm 2000). "information-intensive strategies" (Glazer 1997). .CRM can be viewed as an application of one-to-one market- CRM is data-driven marketing (Kutner and Cripps 1997). ing and relationship marketing, responding to an individual .CRM is an enterprise approach to understanding and influ- customer on the basis of what the customer says and what encing customer behavior through meaningful communica- else is known about that customer (Peppers, Rogers, and Dorf tion to improve customer acquisition, customer retention, 1999) customer loyalty, and customer profitability (Swift 2000). CRM is a management approach that enables organizations to identify, attract, and increase retention of profitable cus- tomers by managing relationships with them (Hobby 1999). REFERENCES Achrol, Ravi S. 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