20_measuring customer relationship management performance a consumer-centric approach

Measuring Customer RelationshipManagement Performance

A Consumer-Centric ApproachMarkus A Zinnbauer

Markus Eberl

ABSTRACT The concept of CRM has evolved into an inherent com-ponent of the sales processes of most medium-sized and large compa-nies However despite the high costs involved the quality of itsimplementation has hitherto been neglected To provide the conceptualqualitative CRM control that is lacking we have developed a measuringinstrument that allows the evaluation of the activities in the three coreCRM domains namely interaction insight and offer We pilot-tested thetool in an automotive industry setting and the results reflect the CRMstatus quo achieved by twelve national and foreign brands [Article cop-ies available for a fee from The Haworth Document Delivery Service 1-800-HAWORTH E-mail address ltdocdeliveryhaworthpresscomgt Website lthttpwwwHaworthPresscomgt copy 2005 by The Haworth Press Inc All rights reserved]

KEYWORDS Customer relationship management automotive indus-try national brands

INTRODUCTION

Business literature is frequently concerned with the numerous andvaried impacts such as the yet to be ascertained change from a seller toa buyerrsquos market and the increasing homogenization of products and

Markus A Zinnbauer and Markus Eberl are affiliated with Ludwig-Maximillians-Universitaumlt of Muumlnchen

Journal of Marketing Channels Vol 12(3) 2005Available online at httpwwwhaworthpresscomwebJMC

copy 2005 by The Haworth Press Inc All rights reserveddoi101300J049v12n03_05 79

services faced by business It is therefore no wonder that the mainte-nance and management of customer relationships currently pose a fun-damental challenge to companies Simultaneously customersndashespeciallythose in the end customer marketsndashare exposed to increasing levels ofstimuli culminating in an information overload (Malhotra Jain andLagakos 1982 pp 27-29) In turn the latter makes mass communica-tionndashoften the lifeblood of client communicationndashmore difficult

In response to these developments companies have for some timeadopted an approach that focuses on relationships with customers Cus-tomer relationship management (CRM) is based on the notion that suc-cessful customer relationships are a prerequisite to better fulfillment ofcustomer requirements which in turn translates into a strategic gain incompetitive advantage The customerndashas a scarce resourcendashhas becomethe main element of long-term company success

From a review of the relevant marketing literature which is oftenconcerned with theoretical applications and practical implementationsof CRM concepts the following research question arises To what ex-tent are such customer-oriented processes implemented in the corpo-rate reality In general the quality of CRM measures implementationand in particular the issue of identifying a valid corresponding analy-sis have until now remained largely unexplored That is why todayrsquosCRM research is also concerned with the performance measurementof CRM activities and data integration aspects (Cuthbertson and Laine2004 p 291)

Existing concepts of CRM control usually stem from consultingpractices and are heavily slanted towards an investment theory perspec-tivendasha concomitant rate-of-return orientationndashor evaluate from an inter-nal point of view only (Examples are scorecard systems by Foss Stoneand Woodcock (2003) or CRM metrics by Younker (2001)) We on theother hand will make the point that it is the customersrsquo perspective thatcounts one cannot judge the implementation of CRM from a technicalinternal perspective Active or potential customers never evaluate theinternal perspective of the firmrsquos CRM systemrsquos conceptualization orset-up but rather assess how they actually behave towards them thecustomers And yet most existing CRM measures do not focus on thisdimension of CRM implementation

As far as the lack of precedents allows this paper will develop a mea-suring instrument capable of assessing relationship managementrsquos ob-servable key dimensions Since customer orientation is by nature adynamic process the tool should also be suitable for regular applicationin time-series studies In addition the results of a pilot study conducted

80 JOURNAL OF MARKETING CHANNELS

within the automotive industry will also be presented thereby providinga detailed insight into the status quo of CRM activities in the Germannew car market (as opposed to used cars)

The automotive industry is an appropriate test market because onthe one hand product homogenization and dwindling levels of preoc-cupation with prestige (and the associated increase in price elasticity)can be identified rendering classical generic strategies inadequate(Cornette and Pontier 2002 pp 177) On the other hand there are ex-tremely costly sales structures due to sales intermediariesrsquo key position(eg Landmann Wolters Bernhart and Harsten 2001) In such a mar-ket environment channel management becomes a critical issue (MehtaDubinsky and Anderson 2002)

CRM can potentially lead to a decisive and irreproducible competi-tive advantage in the automotive sector especially in the new car busi-ness (Starkey Williams and Stone 2002 p 378) More emphasis shouldtherefore be placed on dealer evaluation by using qualitative measure-ment standards (customer loyalty among other things) and they shouldbe rewarded accordingly (Jackson 1997 p 2) By extending the conti-nuity of relationships as revealed by after sales services repurchasescross selling and recommendations customer loyalty can have a posi-tive impact on profit maximization in the long run (Palmer 1994)

In the following section the term ldquocustomer relationship manage-mentrdquo will first be defined and its relevance to the automotive markethighlighted The CRM features relevant to this paper are then identifiedThereafter a measuring instrument as well as its constituent weight fac-tors is discussed before the results of the pilot study are reported in thefinal section of the paper

CUSTOMER RELATIONSHIP MANAGEMENT

Customer Relationship as a Vital Value

The foundation for research on customer relationship managementwas laid in the late 1970s when discussions about channel managementled to a deeper understanding of intangible assets such as the relationshipwith customers (eg Rosenbloom 1978 p 185 f Stern and El-Ansary1977 p 222 f)1 Berry (1983 pp 25) defined the concept ldquocustomer re-lationship marketingrdquo as ldquoattracting maintaining and [ ] enhancingcustomer relationshipsrdquo In doing so a strict delineation of transitionmarketing and relationship marketing was observed The increasing

Markus A Zinnbauer and Markus Eberl 81

significance of the relationship aspect was described as a new market-ing paradigm in business-to-business (Blois 1996) and consumer mar-kets alike (Malhotra and Agarwal 2002) while also deploying theInternet (Bauer Grether and Leach 2002) The transition led to cus-tomer loyalty becoming the priority instead of customer acquisitionmaximization of sales volume and accumulation of anonymous customeropinions Accordingly the traditional stimulus-response perspective gaveway to an interaction-oriented approach

From a corporate point of view the objectives of customer satisfac-tion customer loyalty and commitment or retention as well as crossselling are therefore pursued in order to increase long-term yields (An-derson Fornell and Lehmann 1994 p 54)

When acknowledging the existence of a marketing construct ldquocus-tomer relationshiprdquo the question of its controllability arises automati-cally It is this aspect of CRM that has attracted significant attentionfrom both a theoretical point of view as well as from the practice In therespective literature CRM is mostly defined as a two-dimensional pro-cess parallel to a customerrsquos life cycle and based on various manage-ment concepts producing a mutual advantage in the long run (for adetailed overview of the sub processes cf for example SrivastavaShervani and Fahey 1998 p 5 f) With reference to the managementof such sub-processes Reinartz Krafft and Hoyer (2004 p 295) iden-tify the evaluation of and interaction with customers as the main con-trolling dimensions throughout the whole customer life cycle Otherauthors neglect the life cycle dimension and place more emphasis onmanagement aspects such as the selection individualization interactionand integration of the customer

Yet despite the shift in perspective from object to process orienta-tion classic marketing instruments like price and product have not ofcourse become obsolete Rather activities have to take the entire busi-ness process instead of individual parameters into account (Groumlnroos1990 p 3)

Core CRM Capabilities

In order to make the implementation of CRM activities measurablethe normative measurement standards used in this study are demands onthe company that have been inferred from the relevant theory Makingsuch inferences is legitimatendashafter all the customer is only able to judgeobservable company performance from an external perspective whichis why the perceived CRM quality is a unique target variable for the


company The term ldquosubjective qualityrdquo (Jiang Klein and Carr 2002p 145 ff) as understood in general and in marketing-specific literatureon quality (cf in particular Zeithaml 1988 and Garvin 1984 p 27) isassumed to be valid in the CRM domain (Gummesson 1987 p 18)The capabilities that any random company or automobile manufacturermust possess to achieve the above-mentioned CRM goals will thereforebe assessed and evaluated In order to identify these capabilities the rel-evant literature has been analyzed and the observed CRM competencieshave been categorized

As discussed above the CRM process is often conceptualized as twodimensions the customer life cycle and various management conceptsAs the management conceptsrsquo requirements do not vary widely betweenthe stages of the life cycle our research objectives could profitably fo-cus on only the management functionrsquos operationalization Those capa-bilities that are mentioned in the literature and which various authorshave postulated for successful CRM implementation are depicted inTable 1

All approaches obviously share one common component eithercommunication or interaction with customers (eg Lin and Su 2003p 721) Morgan and Hunt (1994) have also shown that communica-tion is a key driver of trust and relationship commitment It is also un-derstood as common groundndasha companyrsquos product and service rangeis a central component within its relationship with a customer Sharp(2003 p 9) for example points out the importance of an early inte-gration of customer needs into product and service development Cus-tomized product offers are also key for online offers (SrinivasanAnderson and Ponnavolu 2002 p 42) Furthermore the majority ofauthors agree on the importance of getting to know the customer in or-der to gain valuable insights (eg Reinartz Krafft and Hoyer 2004p 295) Directly linked to the latter are postulations concerning theconsistency of interaction (eg Day 2003 p 78 or Fill 2001 p 413)which requires a comprehensive syste as well as data integration bymeans of an integrated marketing information platform (Parvatiyarand Sheth 2001 p 20)

Other aspects such as organizational structure arenrsquot relevant to thisstudy as they mainly affect corporate efficiency rather than having animpact on the relationship itself

In summary three core capabilities have been identified that are pre-requisites for successful CRM and stable customer relationships inter-action between the company and customer the product and service



TABLE 1 Required Competencies for Successful CRM

Author(s) Identified CRM Capabilities

CuthbertsonLaine (2004)

bull Customer knowledgebull Customer contactbull Process of data capture

Day(20002003)

bull Orientation (focusing employees on customer retention)bull Communication and therefore gaining of customer databull Configuration (utilization of the data during interaction and developing

of products and services offered)bull Seamless intra-organizational interaction (consistent

information flow through system integration)bull Organizational incentives

Gummesson(1987)

bull Interactionsbull Gaining understanding of the market structure

Hirschowitz(2001)

bull Customer interactionbull Customer insight

LinSu (2003) bull Customer knowledgebull Customer interaction technologiesbull Customer value

LingYen (2001) bull Analysis to gain customer insight (Profiling)bull Customer interactionbull System integration

ParvatiyarSheth (2001)

bull Team structurebull Role specificationbull Communicationbull Common bondsbull Planning processbull Process alignmentbull Employee motivationbull Monitoring process

PlakoyiannakiTzkoas (2002)

bull Engaging customers in learning relationships as part of value maximizationbull Market orientationbull Integrationbull Analytical capabilitiesbull Operational capabilities

ReinartzKrafftHoyer (2004)

bull Customer evaluation (ldquounderstandingrdquo)bull Customer interactionbull Design of transaction processes

Sharp (2003) bull Interactingbull Analyzing and learningbull Planning (market strategies)

SrinivasanAndersonPonnavolu(2002)

bull Customizationbull Contact Interactivitybull Cultivationbull Carebull Communitybull Choicebull Conveniencebull Character

range (customer offer) and the perceived consistency of the interactionswith the company

In the following this core capability structure provides the basis forthe construct CRM qualityrsquos further operationalization

Customer Interaction

According to Parvatiyar and Sheth (1994 p 1) a core capability thatwill determine the degree to which the value of customer relationshipsis increased is the development of close interactions with selected cus-tomers by means of a sensibly organized and interactive sequence ofverbal and nonverbal communication

During the first stage the initiation phase there is no form of interac-tion At this stage the channel enabling a customer to seek contact withthe company is established Interaction only occurs when some form ofverbal or nonverbal communication has taken place in this pre-relation-ship phase (Andersen 2001 p 172) and during which the communica-tion normally possesses the potential to bring about behavioral change

It is important to differentiate between direct and indirect customerinteractions since the communication that each demonstrates has a dis-tinct level of individualization

Indirect market communication can be described as a form of massmedia appearance which is not addressed or personalized but is con-structed to generate reactions by means of a clear invitation to actTherefore indirect communication describes a mediated connection be-tween communicator and recipient

The publishing media are specifically characterized by a one-sided(on the senderrsquos side) application of technique (Picot Reichwald andWigand 1997 p 64) Under this category the various advertising carri-ers such as daily newspapers popular magazines brochures and flierscan be differentiated Consequently it is possible to activate responses orthrough the layout of the advertisement evoke distinct responses

In comparison direct customer interaction takes place during per-sonal dealer visits ie either when a customer visits dealers or duringtelephone calls Such bilateral interactions are a prerequisite for develop-ing the relationship to the level of negotiations (Dwyer Schurr and Oh1987 p 13) The dealer can approach the public or individual customertoo There is an increasing belief that relative to other variables directcommunication and the accompanying individuality and interactivitywill be far more important in future (Landmann et al 2001)


Since there is no clear boundary between direct and indirect interac-tions in the literature this paper classifies commercial advertisementsbrochures e-mailsletters websites and newsletters as indirect cus-tomer interaction Communication channels such as call centers andpersonal visits to the dealers are categorized as direct communication

Customer Offer

When discussing customer relationship management issues onemust not forget that not only communication aspects impact on the rela-tionship quality but that they are also heavily influenced by an individ-ual product and service range This is achieved by proactive marketingand the availability of a customized and individually tailored offer(Day 2000) Individualization in production involves the manufactur-ing and selection of products The possibility of offering tailor-madeproducts with individual modifications such as highly individualizedauxiliary services is becoming increasingly important Ford USA forexample already offers customized automobiles straight from the plant(Winter 1999 pp 21)ndasha move contrary to its founder Henry Fordrsquos phi-losophy that ldquoYou can have any color car you want as long as itrsquosblackrdquo (Pine 1993 p 7) This study does not explore unrealistic ideaslike maximum individualization translating into absolutely unique auto-mobiles but rather the kind of product individualization that has alreadysurfaced and takes the form of a variety of designs engines and extras

Consistency of Interaction Channels

As shown above apart from aspects of customer-specific interactionand products or services another constitutive capability has been identi-fied Many authors have particularly emphasized the aspect of understand-ing customersrsquo needs in order to gain insight into their motives andbehavior Strictly speaking customer insight refers to the customer-relatedinformation that a company possesses and which is relevant to its situationin the market The objective is to have the clearest possible picture of thecustomerrsquos need structure and behavior Hence the gaining of insight actsas a catalyst between the interactiondata gathering in the front office andthe back-office processes such as for example product development Con-sequently the saving transmitting and processing of customer data withinand between communication and interaction channels have become majorresearch interest areas

A companyrsquos knowledge of its customers becomes accessible by verify-ing the consistency between the contact channels since a customer always


wants to receive congruent information regardless of the chosen communi-cation medium The understanding of customer demands is therefore notonly reflected by the ability to offer adequate products or services but alsoby the ability to deal consistently with a customerrsquos requests Thus it is ofutmost importance to ensure that information disseminated to a customer atdifferent points of contact is constantly and seamlessly coordinated andsynchronized (Fleischer Hersch and Hollman 2001 p 62)

DESIGN OF THE SURVEY INSTRUMENT

The above mentioned CRM aspects are without doubt differently in-fluenced by company characteristics and the time period Our measure-ment model is primarily concerned with the level of activity in each corecapability Before the theoretical constructs like customer interactioncustomer offer and consistency of interaction can be operationalizedthe directly observable and therefore measurable variables (indicators)have to be defined2

Since the simultaneously complex and ldquosoftrdquo research issues do notallow a purely mathematical examination only a scoring procedure willbe practical and above all universally applicable Moore and Baker(1969 p 214) In respect of the absolutely justifiable criticism of scor-ing approaches3 Lucas and Moore (1976 p 4) for example stated thatsuch models support procedural rationality thereby making decisionsmore comprehensible and controllable The constructs are deconstructedinto several levels the main criteria are followed by various levels ofsub-criteria depending on the complexity and variety of an issue Finallyat an operational level indicators that are measurable ie items are usedfor observation purposes They are then assessed and aggregated at eachlevel using expert-approved weight factors Consequently the relativesignificance of the single factors can be examined in the participating au-tomobile manufacturersrsquo evaluation of CRM activities The level of ac-tivity can also be identified at any level of the catalogue of criteria Theweights of the various criteria were also validated by a secondary studyon the purchase of new cars in Germany (Zinnbauer and Eberl 2002)

To calculate the index weights derived from the measurement instru-ment the following approach will be adopted the sum of all weightedfactors within a channel or rather at each criterion level yields 100points as illustrated in Figure 1 All variablesndashmostly measured on aseven-point rating scalendashare standardized according to the applied scaleranging from 0 to 100 points


Operationalization of Customer Interaction

The following sections briefly describe the most significant featuresof our survey toolrsquos design

First the main criteria and the corresponding main communicationpossibilities which enable the measurement of a companyrsquos CRM activ-ities in the field of customer interaction will be investigated The com-munication media will be taken into account in keeping with the MediaRichness Theory (Daft and Lengel 1984) and the Social Presence The-ory (Short Williams and Christie 1976) that claim that the communi-cation media are capable of transporting the richness of information andguarantee sufficient social presence In March 2002 two focus groupsand two in-depth expert interviews were conducted leading to an evalu-ation scheme consisting of six channels publication (a commercial ad-vertisement and brochure) e-mailletter website newsletter telephoneand dealer visit

Through the most recent publications in practical journals as well astwo further focus groups and interviews with the two experts mentionedabove sublevels were identified and relevant fine criteria developed asshown below Subsequently seven expert interviews were conducted inorder to validate the produced catalogue of criteria and to determine therelative importance levels of the channels and their subordinate items asshown in Figure 1


Customerinteraction

Print

E-MailBrief

Website

Newsletter

Call Center

Dealer visit

10

5

18

5

12

50

Mfrrsquos Website

Dlrrsquos Website

75

25 General dsgn

Info offer

Info gain

20

40

40 Product pt

Product info

Interaction

Dealer search

40

30

10

20

Options

Qual of ad

Contact

33

33

34

FIGURE 1 Exemplary Section of the Weighted Criteria Catalogue

More often than not the first (time-wise) type of communication mediaa company utilizes is publication eg automobile manufacturers and deal-ersrsquo commercial advertisements and brochures The ldquocontact possibilityrdquo(interaction channels offered contact costs) ldquomotivation to contactrdquo andldquopossibility of responserdquo (coupons etc) will therefore be evaluated In thepilot study manufacturersrsquo commercial advertisements in newspapers anddealersrsquo advertisements in the local classified directories and daily newspa-pers were examined Brochures were requested from all the participatingmanufacturers via their respective Internet sites

E-mails and letters were treated as equivalents and analyzed identicallyan extra criterion called ldquoproactive follow-uprdquo (ie an offer by a dealer tomake contact in the future) was added All written communication sent outby manufacturers and dealers were considered equally important Theseactivities were evaluated by posing standardized questions to manufactur-ers and dealers (on both test drive possibilities and their products) We thenanalyzed the quality and swiftness of an automotive corporationrsquos reply orof its dealer networkrsquos reply to a consumerrsquos request

The evaluation of the (end customer) automobile manufacturers anddealersrsquo websites is sub-divided into three main criteria ldquogeneral de-signrdquo ldquoinformation offerrdquo (eg search for dealers car configurationand downloading possibilities) and ldquoinformation gainrdquo (generation ofpersonalized customer data eg via the request for a prospectus or anoffer of a test drive) The ratio of manufacturer to dealer website is 31because the latter has minimal significance with regards to an informa-tion search As known from the literature individual services like carpersonalization and configuration (Sorge 1999 p 5) offered to cus-tomers as well as the general appearance of the site known as the ldquochar-acterrdquo (Srinivasan Anderson and Ponnavolu 2002 p 46) are especiallyimportant We obtained comparable results in respect of our surveywhen structured search mechanisms were used on a test computer

The evaluation of newsletters as a communication channel is basedon three main criteria ldquoformal aspectsrdquo (eg registration process per-sonalization) ldquocontent aspectsrdquo (informative and motivational (to seekcontact) elements) and innovative ldquospecial characteristicsrdquo

In the case of call centers ldquoservice and technical aspectsrdquo (eg in-curred phone-bill business hours and waiting time) ldquosocial compe-tencerdquo possessed by the call center agents (eg conversational skillsconversational atmosphere and intelligibility) and the agentsrsquo ldquotechni-cal competencerdquo (which is especially relevant) (Hall 1992 p 141) wereassessed from a customerrsquos point of view since this is the only validmeasure for service quality (Miciak and Desmarais 2001 p 347)


The quality was assessed by three standard telephone scenarios thatreflect three different levels of (technical) difficulty The difficulty lev-els were taken into consideration during the evaluation of this studyrsquosempirical findings Since for example waiting times tend be perceivedas double as long when one is queuing (Cleveland and Harne 2003) await of more than three minutes is graded as unsatisfactory

Personal conversations conducted during dealer visits ie visits tothe dealer were evaluated according to the following main criterialdquotechniqueservicerdquo (opening times waiting times) ldquoexternal appear-ancerdquo of sales room and sales person ldquosocial and technical competenceof sales personrdquo (analogous to a call center) and ldquosales person seekingcontact after the visitrdquo

A particularly important criterion is the documentation of customerdata This makes it possible to approach a (still undecided) customerwith a renewed offer later if the customer data are captured initially

In order to examine this aspect two different scenarios depicting short-term intentions to purchase were developed for each of the dealers in thevolume and premium segments of the automotive industry These scenar-ios were role played by test persons (silent shoppers) on comparable week-days with regard to two independent dealers of every car brand investigatedin this study The scenarios tested the salespeoplersquos ability to identify theprospective clientrsquos social style which is widely recognized as a key skill(eg Spiro and Weitz 1990 or Rich and Smith 2000) as well as the sales-personrsquos self-efficacy (Srivastava Pelton and Strutton 2001 p 15) Theresults were immediately registered at the end of the visits4

Operationalization of Customer Offer

An offerrsquos potential degree of individualization was also measuredThe main criteriandashldquocore productrdquo ldquodirectrdquo and ldquoindirect auxiliary of-fersrdquondashserved as the basis of this evaluation

The car itself and its primary design fall under the heading core prod-uct Vehicle-related offers like services accessories and individualizedfinancial offers like leasing and insurance dealersrsquo network and deliv-ery possibilities were classified under the main criterion direct auxiliaryoffer Other than the possibilities for complaint and feedback the maincriterion indirect auxiliary offer includes instruments for nurturing cus-tomer loyalty such as the existence and composition of a customer clubcustomer magazines and online offers

In the area of customer offer most of the relevant data are of a techni-cal nature for example the number of possible configurations This in-


formation was required for the pilot study and could mostly be obtainedfrom the manufacturersrsquo information brochures To acquire survey in-formation on the dealer network information was sought from the callcenters Some informationndashlike the service efficiency and capacity forexamplendashwas acquired during anonymous dealer visits

Operationalization of the Information Channelsrsquo Consistency

The final core capability to be evaluated was the consistency of the in-formation channels We assume that consistent communication from thecustomer to the firm is mostly achieved and in general unproblematic (ex-cept for cases of intransitivities etc that are not covered here) Consis-tent communication from the firm to the customer is more problematic asit assumes that the firm has a customer knowledge base at its disposalOne may also call this knowledge base the quantity of ldquocustomer insightrdquoon which the firm can draw

This ldquocustomer insightrdquo was evaluated in our study by the consistencywithin a channel or between multiple parties An efficient CRM is onlypossible when data are organized and transmitted in a loss-free and struc-tured manner (eg from the original equipment manufacturer (OEM) tothe dealer) An additional essential condition is the provision of a soft-ware-technical reflection of CRM within the dealerrsquos operations (Holt2002 p 33) This is a prerequisite for the creation of a comprehensiveprofile of the customer and his needs which in turn enables the develop-ment of successful product innovations and adaptations (Davenport Har-ris and Kohli 2001 p 67) The network connecting all the points ofcontact is critical because the customer should always be able to choosethe medium that is most readily available and most preferable in terms ofprice and service

The evaluation of the overt and therefore measurable customer in-sights can be achieved by means of diverse and realistic scenarios thatutilize a combination of channels (cf Table 2) We started with all theo-retically possible combinations of first and second contacts and devel-oped plausible settings for typical customer inquiries for all of themAgain experts from the automotive industry evaluated the scenarioswith regard to validity and typical appearance in corporate practice Thesettings were analyzed by means of the criteria ldquodata integrationrdquo andldquoconsistency in contentrdquo and the results of all the scenarios were equallyweighted


IMPLEMENTATION AND RESULTSOF THE PILOT STUDY

The results collected in the pilot study with the instrument developedin this paper were next evaluated The pilot study assessed 12 automobilemanufacturers and their dealers in the Munich region Since the manufac-turers follow a regional dealer monopoly policy one or two dealers ofeach brand were available for evaluation In order to control for the differ-ent corporate strategies manufacturers with plants in Germany were dif-ferentiated from importers while volume providers were distinguishedfrom premium brands The individual manufacturers were categorized byexperts from the automotive domain

This research strategy is also supported by the data which confirmthat volume and premium providers show significant variances in theirCRM activities From this one can infer that only the manufacturers be-longing to the same segment are comparable with one another Table 3provides an overview of the research objects ie the brands and the carmodels that were used in the mystery shopping scenarios A comparablestandard configuration was chosen for every model


TABLE 2 Scenarios Used to Verify Consistency

Secondcontact

Firstcontact

Assessment of thereply via

lettere-mail fromthe manufacturer

Call to thecall center

Visit to dealeror calling the dealer

Input on thewebsite

Enquiry via theInternet (for moredetail on thelettere-mail seeunder headingOperationalization ofcustomer interaction)

Complaint about notreceiving prospectuswhich had beenrequested via theInternet Questionedcall center onwhether the previouscontact had beenlogged

Complaint that theprospectus whichwas requested via themanufacturerrsquoshomepage did notarrive Questioneddealer on whetherpreviously logged datacan be accessed

Visit to dealeror write-up bythe dealer

Enquiry at the dealer(for more detail onthe lettere-mail seeunder headingOperationalization ofcustomer interaction)

Test enquiry to callcenter to checkwhether enquiry withdealer could beaccessed

Not applicable

Call to the callcenter

Technical enquirywith request for areply by letter ore-mail

Test call with respectto previous com-plaint call

Recorded if dealerfollowed up requestfor test drive throughthe manufacturer

Since the automotive industry is very active in terms of productlaunches advertising and back office processes the risk of this studywas that changes over time could lead to biased results To avoid thisall evaluations were conducted from April 23rd until May 11th 2002

Customer interaction and consistency between channels were analyzedby 24 graduate students in order to provide unified backgrounds during themystery shopping scenarios within the channels ldquocall centerrdquo and ldquovisit tothe dealerrdquo We selected students with a low level of knowledge of the in-dustry rejecting those with personal experience of or family bonds to theautomotive industry and gave them a joint in-depth briefing of the studyand evaluation criteriarsquos goals They received course credits for their par-ticipation and in regular reviewing sessions during the fieldwork they re-ported and discussed their findings and evaluations During the play actingthe students adopted the role of young professionals with a high buying in-terest since in Germany this is a typical group of potential buyers of thevolume- and premium-segment models selected for our survey

For reasons of comparability every team covered only one specificchannel as a medium of first contact Each team comprised of two stu-dents had to arrive at a mutual evaluation Consensus was achieved in re-spect of all evaluations

This method had the advantage that grading within a channel was doneas consistently as possible throughout the brands However it was impos-sible to control interpersonal differences regarding grading and biases re-garding brands at this stage of the pilot study but they were evened out tosome degree by the mean evaluation of the various teams per channel Forthe measurement of interaction capabilities in the publication channel re-gional and national newspapers and magazines published during the fieldwork were analyzed


TABLE 3 Segment-Specific Classification of Manufacturer and Types of Stan-dard Models

Domestic German Importer

Volume segment Ford (Focus)Opel (GM) (Astra)Volkswagen (Golf)

Fiat (Stilo)Peugeot (307)

Renault (Meacutegane)Toyota (Corolla)

Premium segment Audi (A4)BMW (3-series)

Mercedes-Benz (C-Class)

Jaguar (X-Type)Volvo (S40)


Table 4 illustrates the values allocated to the individual automobilemanufacturers at the main criteria level their aggregated totals for thecore capability ldquocustomer interactionrdquo are also included An examina-tion of the aggregations of manufacturer-specific score values revealsthat only one of the 12 manufacturers achieved more than 50 points Justas interesting is the fact that the defined groups did not demonstrate anydifferences This implies a general relatively low level of exhaustion ofthe possible measures of interaction

The low total values are without doubt largely attributable to the uni-versally low scores in the domains ldquopublicationrdquo lsquobrochurerdquo and ldquonewslet-terrdquo which is true for all the examined manufacturers

The publication (commercial advertisements) criterion ranged from11 to 23 and from 10 to 18 for the volume providers and the premiumsegment respectively However this criterion has a particularly specialposition which has to be considered in the interpretation of results It islikely that commercial advertisements especially those presented bythe manufacturers do not just target a behavioral response in the formof contact seeking from the recipients The advertisements are rather in-tended to have an effect in respect of engagement especially in this caseas automobiles are high involvement products This assumption is sup-ported by the survey outcomes an investigation of the dealersrsquo adver-tisements consistently revealed more possibilities for the customers to


TABLE 4 Measurement Results of Customer Interaction

Premium provider Volume provider

Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32

seek contact thereby largely making use of the mediumrsquos interactionpotential other than telephone numbers and contact addresses e-mailcontacts were also usually provided

While none of the researched commercial advertisements utilized thepossibility of a response element one of the brochures provided by thepremium provider Volvo did do so Other manufacturers excluded boththe response element and other contact possibilities in their brochuresBoth the volume and premium providersrsquo brochures only rarely providedthe features studied in this paper Offers of interaction were sometimesconfined to a link on the website or a telephone number that was nottoll-free thus leading to a low score rating The mean of the examinedbrands is 228 points

Only four manufacturersdealers offered newsletters as an interac-tion channel Their low score values are universally attributable to a lowlevel realization of both the contents of interaction possibilities andpersonalization

In contrast to the automobile manufacturersrsquo rather minimal usageof the classic communication mediarsquos CRM potential the possibili-ties of customer interaction via website were better utilized A no-ticeable difference between premium and volume providers wasagain observed while the former has been awarded a mean of 532points volume providers achieved 483 points on average Differ-ences are especially visible in the ldquoinformation offerrdquo aspectndashan itemheavily weighted in the measurement instrument With the exceptionof Jaguar and Toyota this aspect demonstrates a relatively narrowrange of evaluation outcomes In this dynamic medium the risk of apermanent competitive disadvantage is particularly real for latecom-ers (Clemons 1991 pp 26) Moreover at first the (financial) costsoutweigh the saving potentials and usage (Alford Sackett andNelder 2000) The high scores in the ldquoinformation gainrdquo aspect wereinterpreted with caution a theoretical maximization of informationgain would not necessarily lead to better relationships with custom-ers This applies particularly to the acquiring of personal data Thistrade-off with which the manufacturers have to contend is also re-flected in the score values In this context the score values are inter-preted as completely satisfactory

The majority of manufacturers was awarded more than 50 (out of atotal of 100) points for one of the research variables the direct interac-tion channel call center The mean of the investigated brands is 555points It is once again interesting to note that the group forming the sixmost active providers consisted of three premium and three volume pro-


viders However individual manufacturers exhibit very clear differ-ences in single aspects as reflected by the manufacturers Peugeot andAudi which were awarded more than 70 points each for their call cen-tersrsquo CRM activities these values being more than twice that of Renaultand Jaguar The identified differences can be traced back to technicalissues covered by the evaluation criteria for example a 24-hour ser-vice a toll-free telephone number or the waiting time before an agent isreached There is a tendency for providers with national plants to ex-hibit a higher level of activity than importers the former obtained a rela-tively high mean of 60 points while the latter achieved a mere averagevalue of 48 points An exception is Peugeot whose activities havealready been mentioned

In contrast manufacturersrsquo call centers demonstrate little variancein social competence when dealing with general information enqui-ries The mean of this aggregated criterion is 65 points which high-lights the fact that most of the manufacturers undoubtedly recognizethe importance of the social competence factor for customer relation-ship Although room for improvement does exist the employeeshave been well trained Only manufacturers who ascribe little overallsignificance to call centers also scored low on social-competence-re-lated activities

In the event of a complaint call the main criterionndashdocumentation ofcustomer data and recognitionndashis of particular significance Almost allthe manufacturers achieved 100 points for this aspect These results im-ply that manufacturers appreciate the important role often (and legiti-mately so) played by complaint management in customer relationshipThe agents at the telephone center have permanent access to the contacthistory and to a large degree meet the social competence demandedfrom them

Contrary to the call centers dealer visit meets only a few of CRMrsquosdemands With the exception of Audi which achieved 71 points noneof the other research participants obtained more than 54 points Yet theresult findings show the sales personsrsquo social competence to be a rela-tively highly evaluated factor the scores are comparable to the corre-sponding evaluations obtained for the respective call centers In thecontext of dealer visits all the manufacturers performed unimpressivelyon the critical factors namely documentation of data and re-seekingcontact All the researched participants documented less than half of thedata that could have been recorded Eventually only Audi and VW deal-ers made telephone calls to follow up on sales


Customer Offer

Both the values of the main criteria and the aggregated total scores ofthe core capability ldquocustomer offerrdquo are presented in Table 5 The re-sults reflect clear differences between the national manufacturers andimporters groups It can thus be claimed that in the context of the maincriterion core product national manufacturers offer a wider range ofmodels and car variants than importers This also applies to premiumand volume providers National manufacturers consistently achievevalues of over 50 points while none of the importers obtained morethan 50 This finding supports the assumption of there being differencesin the strategies adopted by manufacturers with respect to the breadth ofthe product palette offered within the country

The criteria direct and indirect auxiliary offers yielded a similarpicture However there is a tendency for national providers from thepremium segment to be awarded higher index values (ranging from 64to 75 points) while the corresponding national volume providers onlymanaged a range of 45 to 68 points Consequently it can be said thatpremium providers offer a broader spectrum of auxiliary services Thesame applies to the importers However this finding is not surprisingbecause differentiation by means of auxiliary services can be regardedas a constituent component of premium positioning In this case it isnot only the qualitiesndashwhich were not measured in the context of thisstudyndashthat are important rather it is the quantity and the concomitantfreedom of choice (with respect to the auxiliary features) which aremore significant


TABLE 5 Measurement Results of Customer Offer


Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48

Direct auxiliary offer 25 64 68 75 40 44 48 45 68 54 42 34 39

Indirect auxiliary offer 15 47 40 53 0 30 20 33 47 40 27 20 0

Total (100) 57 64 63 24 46 56 48 64 41 45 38 38


Table 6 illustrates the aggregated and weighted total scores of thecore capability ldquocustomer insightrdquo It is striking that as a rule of thumball the volume providers had higher evaluations than their premium coun-terparts The only exception is Mercedes which like Renault achieved 81points thereby reflecting its achievement of the greatest degree (rela-tive to the other participating companies) of data integration as mea-sured by the formulated scenarios listed in Table 2

The manufacturers have to a large extent realized the centralizationof customer data The call centers of the brands BMW Peugeot Volvoand VW were unable to access customer data that had already been pro-vided online Of all the dealers only the Renault dealer could accessdata that had been entered on the manufacturerrsquos website The consis-tency of the data flowing from manufacturer to dealer appears largelyhealthy however none of the researched brands had a data integrationmechanism that emanated from the dealer These results point to thedealerrsquos needs with respect to the technical requirements for an inte-grated CRM however the results are plausible in the context of anintra-brand competition between dealers

The criterion of consistency between the requested information ob-tained from different sourcesndashcall centers and dealersndashwas verified bymeans of the delivery data of the investigated standard models This cri-terion was fulfilled in all the cases in which it could be researched Inother cases the problem was overcome by assuming that call centers arebasically an indication of their respective dealersrsquo competence

In comparison to other criteria the partial criterion ldquotest drive viaInternetrdquo presented problems The interest in a test drive was expressed viathe manufacturersrsquo website However only four dealers followed throughwith the promised telephone call In three follow-up calls by importers a


TABLE 6 Measurement Results of Customer Insight


Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Customer Insight 50 44 81 25 44 75 75 63 69 63 81 69

smoothly functioning data flow between the various interaction channelsas well as between manufacturers and dealers was demonstrated

SUMMARY AND OUTLOOK

In this paper we have shown that customer relationship managementactivities should not only be evaluated from an internal process-drivenstandpoint but also from the customersrsquo perspective since the successof CRM activities can only be judged by considering the target grouprsquosevaluations

As existing evaluation systems for CRM activities mostly draw onefficiency measures like ROI we propose a new approach by control-ling CRM with a scoring model therefore allowing for a more efficientallocation of a companyrsquos CRM budget One could therefore considerthis instrument as a measure of ldquomarket outcomerdquo in contrast to the fi-nancial ldquoinput-orientedrdquo measures that have been used to date

The natural affinity between the selected theoretical concepts derivedfrom the customer-interaction offer the information-consistency triadand the chosen-point evaluation model are highly suitable for researchpurposes due to the associated transparency and relatively smooth ap-plication Our concept therefore contributes to current research effortsby delivering a more rational controlling tool for CRM activities whichis particularly needed for qualitative aspects

To provide management with a quicker overview as well as for sum-marizing purposes we propose to deploy a specialized score card whichdisplays all the main criteria analyzed within the survey concept (Zinnbauerand Eberl 2003 p 47) Figure 2 presents an exemplary score card for oneof the evaluated brands in our study It shows the scores for interactionand offer on both overall and more detailed sublevels Note that for clar-ityrsquos sake consistency is depicted as only a total value

The results of the pilot study within the automotive industry have con-firmed that both premium and volume providers have yet to fully exhaustthe CRM possibilities This is true whether the company is an automobilemanufacturer located in Germany or an importer As expected premiumand volume providers excelled in the ldquoindividual offersrdquo dimension butsurprisingly not in the ldquocustomer interactionrdquo dimension volume provid-ers also strove for a deeper understanding of their customersrsquo needs

Fundamentally a lower score can be regarded as completely congruentwith the company strategy after all CRM activities have to be planned ac-cording to specific target groups and budget restrictions (Rigby Reichheld


and Schefter 2002 p 103) It is merely a question of what importance asingle CRM activity is allocated in a manufacturerrsquos portfolio not one ofperformance The latter can be easily judged through objective criteria asfound in our instrument while the former has to be determined in respect ofthe consumersrsquo habits For example why is the Internet less relevant to cer-tain groups than to others (Novak Hoffman and Yung 2000 p 34) Onlyas far as soft variables like competence and friendliness are concerned doesit not make sense to argue why ldquomorerdquo does not necessarily mean ldquobetterrdquo

Irrespective of the industry in which the tool is implemented a cross-industry comparison of CRM efforts is recommended Industries likebanking and insurance could for example serve as benchmarks for theautomotive sector These industries share the opinion that the relation-ship with the customer is an indicator of company success and the prod-ucts that they offer are also high-involvement goods Companies couldtherefore procedurally benefit from CRM strategies adopted by similarlystructured non-competitors

For further research we suggest developing a unique tool with which tocontrol CRM within non-profit organizations since Arnett German andHunt (2003) found that in this context different relationship characteristicsapply


E-mail

buying

FIGURE 2 Exemplary Score Card

NOTES

1 For a summary on early relationship and channel management research cfRosenbloom and Anderson (1985)

2 The relevant criteria of empirical research namely objectivity reliability and va-lidity were of course taken into account (cf in extenso in eg Malhotra 2002 orBagozzi 1994)

3 Weber Eisenfuumlhr and von Winterfeldt (1988) have criticized the complexity ofthe definition of weight factors regarding scoring-models and also cited the splitting-effect

4 For general comparisons to this procedure cf Bromage (2000) p 21 For specificreferences to mystery shopping in the automotive industry cf Wilson (1998) p 414-420

REFERENCES

Alford D Sackett P amp Nelder G (2000) Mass customisationndashAn automotive per-spective International Journal of Production economics 65(1) 99

Andersen P H (2001) Relationship development and marketing communication Anintegrative model Journal of Business amp Industrial Marketing 16(3) 167-187

Anderson E W Fornell C amp Lehmann D R (1994) Customer Satisfaction Mar-ket Share and Profitability Findings from Sweden Journal of Marketing 58(July)53-66

Arnett D B German S D amp Hunt S D (2003) The Identity Salience Model of Re-lationship Marketing Success The Case of Nonprofit Marketing Journal of Mar-keting 67(April) 89-105

Bagozzi R P (1994) Principles of marketing research Cambridge BlackwellBauer H H Grether M amp Leach M (2002) Building customer relations over the

Internet Industrial Marketing Management 31(2) 155-163Berry L (1983) Relationship Marketing In L Berry G Shostack amp G Upah (Eds)

Emerging Perspectives On Service Marketing (pp 25-38) Chicago American Mar-keting Association

Blois K J (1996) Relationship marketing When is it appropriate Journal of Market-ing Management 12(1) 161-1733

Bromage N (2000) Mystery Shopping Management AccountingndashLondon 78(4) 30-31Clemons E K (1991) Corporate Strategies for Information Technology A Re-

source-Based Approach IEEE Computer 24(11) 23-32Cleveland B amp Harne D (2003) Call Center Customer Relationship Management

Handbook and Study Guide (2nd ed) Annapolis ICMICornette G amp Pontier S (2002) Transactional marketing versus relationship mar-

keting The US automobile market evolution International Journal of AutomotiveTechnology and Management 2 177

Cuthbertson R amp Laine A (2004) The role of CRM within retail loyalty marketingJournal of Targeting Measurement and Analysis for Marketing 12(3) 290-304


Daft R L amp Lengel R H (1984) Information Richness A New Approach to Mana-gerial Behavior and Organization Design Research in Organization Behavior191-233

Davenport T H Harris J G amp Kohli A K (2001) How do they know their custom-ers so well MIT Sloan Management Review 42(2) 63-73

Day G S (2000) MSI Working Paper Vols 00-118 Capabilities for Forging Cus-tomer Relationships Cambridge Marketing Science Institute

Day G S (2003) Creating a Superior Customer-Relating Capability MIT Sloan Man-agement Review 44(Spring) 77-82

Dwyer F Schurr P amp Oh S (1987) Developing buyer-seller relationships Journalof Marketing 51(4) 11-27

Fill C (2001) Essentially a Matter of Consistency Integrated Marketing Communi-cations The Marketing Review 1(4) 409-425

Fleischer J Hersch W S amp Hollman L (2001) Embodying CRM Call CenterMagazine 14(9) 50-62

Foss B Stone M amp Woodcock N (2003) The Customer Management ScorecardManaging CRM for Profit London Kogan Page

Garvin D A (1984) What Does ldquoProduct Qualityrdquo Really Mean Sloan ManagementReview 25(Fall) 25-43

Groumlnroos C (1990) Relationship Approach to Marketing in Service Contexts TheMarketing an Organizational Behavior Interface Journal of Business Research13(2) 135-144

Gummesson E (1987) The New MarketingndashDeveloping Long Term Interactive Rela-tionships Long Range Planning 20(4) 10-20

Hall R (1992) The Strategic Analysis of Intangible Resources Strategic Manage-ment Journal 13(2) 135-144

Hirschowitz A (2002) Closing the CRM loop The 21st century marketerrsquos chal-lenge Transforming customer insight into customer value Journal of TargetingMeasurement and Analysis for Marketing 10(2) 168-178

Holt J (2002) A dealership success story Wardrsquos Dealer Business 36(9) 33Jackson K (1997) Chrysler revamps dealer evaluations Automotive News 71(5703)

1-2Jiang J J Klein G amp Carr C L (2002) Measuring information system service

quality SERVQUAL from the other side MIS Quarterly 26(2) 145-167Landmann R Wolters H Bernhart W amp Harsten H (2001) The Future of the Au-

tomotive Industry Challenges and Concepts for the 21st Century Warrendale So-ciety of Automotive Engineers Inc

Lin Y amp Su H-Y (2003) Strategic analysis of customer relationship managementndashafield study on hotel enterprises TQM amp Business Excellence 14(6) 715-731

Ling R amp Yen D C (2001) Customer Relationship Management An AnalysisFramework and Implementation Strategies Journal of Computer Information Sys-tems 41(3) 82-97

Lucas H C amp Moore J R (1976) A Multiple-Criterion Scoring Approach to Infor-mation System Project Selection INFOR 14(February) 1-12

Malhotra N K (2002) Basic Marketing ResearchndashApplications to Contemporary Is-sues Upper Saddle River Prentice Hall


Malhotra N K amp Agarwal J (2002) A Stakeholder Perspective on RelationshipMarketing Framework and Propositions Journal of Relationship Marketing 1(2)3-38

Malhotra N K Jain A K amp Lagakos S W (1982) The Information Overload Con-troversy An Alternative Viewpoint Journal of Marketing 46(Spring) 27-37

Mehta R Dubinsky A J amp Anderson R E (2002) Marketing Channel Manage-ment and the Sales Manager Industrial Marketing Management 31(5) 429-439

Miciak A amp Desmarais M (2001) Benchmarking service quality performance atbusiness-to-business and business-to-consumer call centers Journal of Business ampIndustrial Marketing 16(5) 340-353

Moore J R amp Baker N R (1969) Computational Analysis of Scoring Models for Rand D Project Selection Management Science 16(December) 212-232

Morgan R M amp Hunt S D (1994) The Commitment-Trust Theory of RelationshipMarketing Journal of Marketing 58(July) 20-38

Novak T P Hoffman S L amp Yung Y-F (2000) Measuring the customer experi-ence in online environments A structural modeling approach Marketing Science19(1) 22-42

Palmer A (1994) Relationship Marketing Back to Basics Journal of MarketingManagement 10(7) 571-579

Parvatiyar A amp Sheth J N (1994) Paradigm Shift in Marketing Theory and Ap-proachndashThe Emergence of Relationship Marketing In J N Sheth amp A Parvatiyar(Eds) Relationship Marketing Theory Methods and Applications Second Re-search Conference Proceedings Center for Relationship Marketing Emory Uni-versity

Parvatiyar A amp Sheth J N (2001) Customer Relationship Management EmergingPractice Process and Discipline Journal of Economic and Social Research 3(2)1-34

Picot A Reichwald R amp Wigand R T (1997) Information Organization andManagement Chichester Wiley

Pine B (1993) Mass Customization Boston Harvard Business School PressPlakoyiannaki E amp Tzokas N (2002) Customer Relationship Management A capa-

bilities portfolio perspective Journal of Database Marketing 9(3) 228-237Reinartz W Krafft M amp Hoyer W D (2004) The Customer Relationship Manage-

ment Process Its Measurement and Impact on Performance Journal of MarketingResearch 41(3) 293-305

Rich M K amp Smith D C (2000) Determining relationship skills of prospectivesalespeople Journal of Business amp Industrial Marketing 15(4) 242-259

Rigby D K Reichheld F F amp Schefter P (2002) Avoid the Four Perils of CRMHarvard Business Review 80(2) 101-109

Rosenbloom B (1978) Marketing Channels Hinsdale IL Dryden PressRosenbloom B amp Anderson R (1985) Channel Management and Sales Manage-

ment Some Key Interfaces Journal of the Academy of Marketing Science 13(3)97-106

Sharp D E (2003) Customer Relationship Management Systems Handbook BocaRaton et al Auerbach


Short J Williams E amp Christie B (1976) The Social Psychology of Telecommuni-cations London Wiley

Sorge M (1999) Mass customization meets the Jetsons Automotive Industries 17(5) 5Spiro R L amp Weitz B A (1990) Adaptive selling Conceptualization measure-

ment and nomological validity Journal of Marketing Research 27(1) 61-69Srinivasan S S Anderson R amp Ponnavolu K (2002) Customer Loyalty in E-Com-

merce An Exploration of Its Antecedents and Consequences Journal of Retailing78(1) 41-50

Srivastava R K Shervani T A amp Fahey L (1998) Market Based Assets and Share-holder Value A Framework for Analysis Journal of Marketing 62(1) 2-18

Srivastava R Pelton L E amp Strutton D (2001) The Will to Win An Investigationof How Sales Managers Can Improve the Quantitative Aspects of Their SalesForcersquos Effort Journal of Marketing Theory amp Practice 9(Spring) 11-26

Starkey M Williams D amp Stone M (2002) The state of customer management per-formance in Malaysia Marketing Intelligence amp Planning 20(6) 378-385

Stern L W amp El-Ansary A I (1977) Marketing Channels Englewood Cliffs NJPrentice-Hall

Weber M Eisenfuumlhr F amp von Winterfeldt D (1988) The effect of splitting attrib-utes on weights in multiattribute utility measurement Management Science 34(4)431-445

Wilson A M (1998) The role of mystery shopping in the measurement of service per-formance Managing Service Quality 8(6) 414-420

Winter D (1999) Ford launches lsquomass customizationrsquo Wardrsquos Auto World 35(12) 21Younker E (2001) Financial Metrics for Measuring CRM Return on Investment In-

side Gartner This Week 17(14) 1-5Zeithaml V (1988) Consumer Perceptions of Price Quality and Value A Means-

End Model and Synthesis of Evidence Journal of Marketing 52(July) 2-22Zinnbauer M A amp Eberl M (2002) Evaluating CRM Activities from a Customer

Perspective Working Paper Series on Empirical ResearchZinnbauer M A amp Eberl M (2003) The CRM-Scorecard Thexis 20(1) 45-48


services faced by business It is therefore no wonder that the mainte-nance and management of customer relationships currently pose a fun-damental challenge to companies Simultaneously customersndashespeciallythose in the end customer marketsndashare exposed to increasing levels ofstimuli culminating in an information overload (Malhotra Jain andLagakos 1982 pp 27-29) In turn the latter makes mass communica-tionndashoften the lifeblood of client communicationndashmore difficult

In response to these developments companies have for some timeadopted an approach that focuses on relationships with customers Cus-tomer relationship management (CRM) is based on the notion that suc-cessful customer relationships are a prerequisite to better fulfillment ofcustomer requirements which in turn translates into a strategic gain incompetitive advantage The customerndashas a scarce resourcendashhas becomethe main element of long-term company success

From a review of the relevant marketing literature which is oftenconcerned with theoretical applications and practical implementationsof CRM concepts the following research question arises To what ex-tent are such customer-oriented processes implemented in the corpo-rate reality In general the quality of CRM measures implementationand in particular the issue of identifying a valid corresponding analy-sis have until now remained largely unexplored That is why todayrsquosCRM research is also concerned with the performance measurementof CRM activities and data integration aspects (Cuthbertson and Laine2004 p 291)

Existing concepts of CRM control usually stem from consultingpractices and are heavily slanted towards an investment theory perspec-tivendasha concomitant rate-of-return orientationndashor evaluate from an inter-nal point of view only (Examples are scorecard systems by Foss Stoneand Woodcock (2003) or CRM metrics by Younker (2001)) We on theother hand will make the point that it is the customersrsquo perspective thatcounts one cannot judge the implementation of CRM from a technicalinternal perspective Active or potential customers never evaluate theinternal perspective of the firmrsquos CRM systemrsquos conceptualization orset-up but rather assess how they actually behave towards them thecustomers And yet most existing CRM measures do not focus on thisdimension of CRM implementation

As far as the lack of precedents allows this paper will develop a mea-suring instrument capable of assessing relationship managementrsquos ob-servable key dimensions Since customer orientation is by nature adynamic process the tool should also be suitable for regular applicationin time-series studies In addition the results of a pilot study conducted




























Day(20002003)




Gummesson(1987)


Hirschowitz(2001)
























Customer Offer

















Customerinteraction

Print

E-MailBrief

Website

Newsletter

Call Center

Dealer visit

10

5

18

5

12

50

Mfrrsquos Website

Dlrrsquos Website

75

25 General dsgn

Info offer

Info gain

20

40

40 Product pt

Product info

Interaction

Dealer search

40

30

10

20

Options

Qual of ad

Contact

33

33

34




























Secondcontact

Firstcontact





Input on thewebsite







Not applicable

























Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32












Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES


































































































Day(20002003)




Gummesson(1987)


Hirschowitz(2001)
























Customer Offer

















Customerinteraction

Print

E-MailBrief

Website

Newsletter

Call Center

Dealer visit

10

5

18

5

12

50

Mfrrsquos Website

Dlrrsquos Website

75

25 General dsgn

Info offer

Info gain

20

40

40 Product pt

Product info

Interaction

Dealer search

40

30

10

20

Options

Qual of ad

Contact

33

33

34




























Secondcontact

Firstcontact





Input on thewebsite







Not applicable

























Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32












Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES



















































































Customer Offer

















Customerinteraction

Print

E-MailBrief

Website

Newsletter

Call Center

Dealer visit

10

5

18

5

12

50

Mfrrsquos Website

Dlrrsquos Website

75

25 General dsgn

Info offer

Info gain

20

40

40 Product pt

Product info

Interaction

Dealer search

40

30

10

20

Options

Qual of ad

Contact

33

33

34




























Secondcontact

Firstcontact





Input on thewebsite







Not applicable

























Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32












Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES



















































































Customerinteraction

Print

E-MailBrief

Website

Newsletter

Call Center

Dealer visit

10

5

18

5

12

50

Mfrrsquos Website

Dlrrsquos Website

75

25 General dsgn

Info offer

Info gain

20

40

40 Product pt

Product info

Interaction

Dealer search

40

30

10

20

Options

Qual of ad

Contact

33

33

34




























Secondcontact

Firstcontact





Input on thewebsite







Not applicable

























Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32












Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES


































































































Secondcontact

Firstcontact





Input on thewebsite







Not applicable

























Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32












Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES




























































































Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Call center 12 70 60 63 31 62 49 63 56 63 70 32 48

Visit 50 71 46 47 33 40 40 46 54 34 48 36 32

Internet 18 55 53 64 33 61 53 50 55 47 52 48 33

Publication 5 18 16 10 13 18 23 20 11 11 19 14 15

Brochure 5 23 18 32 8 40 9 25 19 27 20 20 34

Lettere-mail 5 29 53 39 23 23 23 32 37 29 57 49 40

Newsletter 5 33 0 0 0 15 0 0 0 0 35 35 0

Total (100) 59 44 46 28 43 38 43 47 36 48 36 32












Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES



















































































Customer Offer






Criterion Weight

Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota

Core product 60 56 68 60 24 50 67 53 66 36 50 44 48



Total (100) 57 64 63 24 46 56 48 64 41 45 38 38









Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES
















































































Aud

i

BM

W

Mer

cede

s

Jagu

ar

Vol

vo

For

d

Ope

l

VW

Fia

t

Peu

geot

Ren

ault

Toy

ota



SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES









































































SUMMARY AND OUTLOOK












E-mail

buying


NOTES





REFERENCES












































































E-mail

buying


NOTES





REFERENCES








































































NOTES





REFERENCES








































































20_measuring customer relationship management performance a consumer-centric approach

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