2010:111 CIV MASTER'S THESIS Customer Relationship …

2010:111 CIV

MASTER'S THESIS

Customer Relationship Management

Jens Berfenfeldt

Lule? University of Technology MSc Programmes in Engineering Industrial Business Administration Department of Business Administration and Social Sciences Division of Industrial marketing and e-commerce

2010:111 CIV - ISSN: 1402-1617 - ISRN: LTU-EX--10/111--SE

"If growth is what you're after, you won't learn much from complex measurements of customer satisfaction or retention. You simply need to know what your customers tell their

friends about you." -Frederick F. Reichheld

"If I'd asked my customers what they wanted, they'd have said a faster horse." -Henry Ford

Acknowledgements

Writing this thesis has been both difficult and fun to do, it has also been a very interesting experience, especially the parts concerning the understanding of how real world business works.

There have been many late nights and early mornings, and after all the work I can finally conclude that the thesis is finished. Through all of this there have been several helpful people I would like to thank for their support.

My supervisor Tim Foster has been a great resource throughout the research. He has steered me in the right direction and given me great support throughout the work process.

Furthermore I want to thank my contact person Ulf Herlin at Haldex for making this thesis possible and also all the other employees at Haldex Traction Landskrona for sharing your time, office, and many laughs in the time that I spent there. I would also like to thank Robert Knudsen at Nefab for his time and answers.

Furthermore, I want to thank my family and friends who have been very supportive and helpful and encouraged me every step of the way. Special thanks to you Johanna for keeping me motivated through all the work.

I would finally like to thank the Thoresson family for providing me company and roof over my head for the months that I spent in Helsingborg.

Abstract

Businesses are in a constant race to increase profits, keep the current customers and gain or poach new ones, competing for customers on a globalised market like never before. One of the many sets of tools aimed at aiding the interaction between supplier and customer are the Customer Relationship Management methodologies. CRM is aimed at building strong long term relationships that keep customers coming back repeatedly. It aims to help organizations build individual customer relationships in such a way that both the firm and the customer get the most out of the exchange, providing both parties with long term benefits.

The purpose of this thesis is to provide a better understanding of the usages of CRM in B2B firms. To reach this understanding the thesis starts with three research questions based on this purpose on which theory is collected. The three areas of concern are: objectives, strategy and measurement of CRM. Using the collected theory about these questions a frame of reference is chosen and used to collect information from two large firms operating from Sweden, Haldex and Nefab. These companies were studied through case analysis and compared to each other and to theory. The data collected from them was primarily attained through structured interviews.

The findings indicate that much of the explored theory regarding CRM is true for the B2B sector. There are however a few areas in which the firms diverge from theory, specifically those relating to the usages of estimated values such as loyalty and satisfaction in customer evaluations. It was also found that there is a lack of research in the areas of evaluation of CRM. Furthermore the findings indicates that CRM in B2B focuses on the organizational aspects of CRM, and a strong goal for businesses is to unlock the information the employees have and store it in a place the business can own.

Table of Contents

1.0 Introduction .......................................................................................................................... 2 1.1 Background..................................................................................................................... 2 1.2 Problem Discussion ........................................................................................................ 4 1.4 Purpose & Research Questions ...................................................................................... 6 1.5 Demarcations .................................................................................................................. 6

2.0 Literature Review ................................................................................................................. 7 2.1 The Objectives & Benefits of CRM ............................................................................... 7 2.2 CRM Strategies ............................................................................................................ 10 2.2.1 Interaction .............................................................................................................. 10 2.2.2 The Value of a Customer ....................................................................................... 10 2.2.3 The Continuing Process ......................................................................................... 12 2.2.4 Overview Models................................................................................................... 17 2.2.5 CRM Development ................................................................................................ 20 2.3 Measuring performance of CRM.................................................................................. 26

3.0 Conceptual Framework ...................................................................................................... 30 3.1 RQ1: How can the objectives & benefits of CRM be described? ................................ 30 3.2 RQ2: How can strategies used for CRM be described? ............................................... 32 3.2.1 Customer Touch Points.......................................................................................... 32 3.2.2 Front Office............................................................................................................ 33 3.2.3 Back Office ............................................................................................................ 33 3.2.4 CRM System / Warehousing.................................................................................. 34 3.3 RQ3: How can performance of CRM be measured? .................................................... 35 3.4 Frame of Reference ...................................................................................................... 36

4.0 Methodology ...................................................................................................................... 37 4.1 Research Purpose.......................................................................................................... 37 4.2 Research Approach....................................................................................................... 37 4.3 Research Strategy ......................................................................................................... 37 4.4 Data Collection Method ............................................................................................... 38 4.5 Sample Selection .......................................................................................................... 38 4.6 Data Analysis................................................................................................................ 38 4.7 Validity and Reliability ................................................................................................ 39

5.0 Data .................................................................................................................................... 40 5.1 Case 1: Haldex Traction AB......................................................................................... 40 5.1.1 Objectives of CRM. ............................................................................................... 41 5.1.2 CRM Strategy. ....................................................................................................... 43 5.1.3 Performance of CRM ............................................................................................. 55 5.2 Case 2: Nefab AB. ........................................................................................................ 60 5.2.1 Customer Objectives .............................................................................................. 60 5.2.2 CRM strategy. ........................................................................................................ 62 5.2.3 CRM Performance. ................................................................................................ 69

6.0 Analysis .............................................................................................................................. 73

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