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Development and Diffusion of Customer Relationship Management Across Disciplines: Fad Or Fashion?

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Development and Diffusion of Customer Relationship Management Across Disciplines: Fad Or Fashion? https://doi.org/10.48009/1_iis_2010_1-8 DEVELOPMENT AND DIFFUSION OF CUSTOMER RELATIONSHIP MANAGEMENT ACROSS DISCIPLINES: FAD OR FASHION? Maria E. Barua, University of Texas at El Paso, [email protected] Godwin J. Udo, University of Texas at El Paso, [email protected] ================================================================================== ABSTRACT practices. CRM started to be noticed by both industry and academics in the early 1990’s [15]. Although While the popularity of Customer Relationship CRM’s popularity grew across different business Management has grown over the years and across areas such as information systems (IS), marketing disciplines, there is no clear consensus on how to and business management, there is still no consensus define it. It also appears that different lifecycles exist on its operational definition; not even within each of CRM depending on the discipline. This paper discipline. The CRM literature is inconsistent and proposes a comprehensive definition of CRM that can highly fragmented mostly due to the lack of a be used across disciplines and uses bibliometirc common conceptualization [16, 29]. CRM is also technique to analyze the lifecycles of CRM in the criticized for having its programs failing seventy Marketing and Information Systems disciplines for percent of the time [9], that is, not achieving the the purpose determining whether it is a fad or business objectives established. Researchers in fashion. Results from a bibliometric technique, using information systems [20] and in the marketing data from 2000-2009, show the lifecycle of CRM disciplines [21] have tried to explain the factors that appears to be a fad in the information systems and lead to CRM success or failure. Results find that fashion in marketing fields. More study is needed to failure has been associated with no clear objective for ascertain the popularity of the topic going forward. the tool or the lack of practical and technical competence to implement CRM properly [27]. Keywords: CRM, CRM Definition, Lifecycles, Fad Objectives cannot be clear if the understanding of or Fashion, Bibliometric Technique CRM itself is not clear. The purpose of this paper is two folds: (1) to come up INTRODUCTION with a common definition that can be applicable for research in the information systems (IS) and Challenging economic times and advances in marketing disciplines, and allow the concept to grow technology have made today’s consumer a different then on from a common understanding of what it is one. Consumers use online shopping, price and what is to be expected of it and (2) to investigate comparison, coupons, and product reviews, to find whether CRM is just another fad in research or if it is the best products available, and they do not even a fashion that will last. The first purpose is achieved think twice before switching brands. We see it in the using the guidelines by Gerring [10], which states communications industry where cell-phone providers that minimal definition can be formed from existing engage in price-wars and heavy promotion, ones to allow the definition to be used across desperately trying to allure customers to switch disciplines. The second purpose is achieved by companies only to see them leave when the next applying Abrahamson’s Management Fashion calling plan comes by. New strategies and processes Theory, and bibliographic research model [2]. are being employed to help the firm build long term relationships with each client and have their loyalty THEORETICAL BACKGROUND [25]. For companies to build long term relationships with consumers they must clearly understand the Customer Relationship Management Defined who, what, where and why of their customers and Economists were the first to propose the concept of evaluate which customers are profitable and which value maximization where the firm can maximize customers are actually costing the company money. profits and the customer can maximize utility. Today A business strategy that claims to aid in doing just CRM is perceived as a value maximizing concept. that is Customer Relationship Management (CRM). CRM theorists define it as a tool for increasing firm While CRM has delivered benefits for many firms, performance and creating customer value [22]. Being there are those that see it as an unfulfilled promise a complex concept, CRM is often identified with a that came and went like so many other management change in the corporate culture, that is, a shift from a Volume XI, No. 1, 2010 1 Issues in Information Systems Development and Diffusion of Customer Relationship Management Across Disciplines transaction-focus to a relationship, customer-centered On top of not having a common agreed-upon dimension directed at the individual rather than the definition, CRM’s other problem is having ups and group. CRM is based on relationship theory and downs in academic and practitioner interest. satisfaction [21, 27] and hence defined as a shift in Regardless of who leads who, or who really sets the mindset from a product-centric to a customer-centric next business model, we see in both academic approach to business [21. So what is CRM? Due to research and business practice the arrival of the complexity of CRM, researchers and practitioners management practices that become either fads or have defined CRM in terms of 1) software packages, fashions. Abrahamson [2] suggests in his Theory of processes, systems and technologies, 2) data systems, Management Fashion that management fashions are storage and analysis, 3) a change in corporate culture not necessarily created to fill the gaps in industry that from a transactional focus to a relationship, are due to a change in the environment or technology. customer-centered focus, that is, a new way of doing Instead, management fashions are created by socio- business with a powerful technology base useful for psychological forces such as managers collective working with any and all relationships of the tastes [1], excitement for a new practice, or mass business, 4) a concept of managing demand, and 5) conformity. In Baskerville’s [6] study, findings new strategy development for working with reveal that information system research and practice, customers and others (identification, selection, just as management research and practice, is indeed acquisition, development, retention, etc.) [5]. Tanner characterized by fads and fashions. [26] questions whether CRM is technology and software, a business strategy or a philosophy. Management fashions have rapid bell-shaped swings Urbanskiene, et al. [27] consider it a business in popularity [2]. The theory of management fashion strategy and a multi-media device that integrates is seen as largely a cultural phenomenon, “shaped by technology resources with customer-related business norms of rationality and progress” [2, p. 261].These activities. Reinartz, Krafft and Hoyer [21] claim norms of rationality suppose the development of a multiple definitions and dimensions including business technique that will be better than the one functional, firm-wide and customer facing. before it [6]. However, Abrahamson says that not all Kincaid [13, p. 41] viewed CRM as “the strategic use innovations are useful. In fact, some fashion of information, processes, technology, and people to innovations could damage a business [6]. Some manage the customer’s relationship with your exaggerated claims by a new “unique” management company (Marketing, Sales, Services, and Support) technique can result in fads that quickly go away and across the whole customer life cycle”. Parvatiyar and are evaluated as failures. Fads and fashions have Sheth [17, p. 5] defined CRM as “a comprehensive been evaluated at times as useful, useless, trivial, strategy and process of acquiring, retaining, and with mass appeal or adopted by only a few [8]. partnering with selective customers to create superior value for the company and the customer. It involves Besides using neo-institutional theory (norms of the integration of marketing, sales, customer service, rationality and progress), Abrahamson [1] also and the supply-chain functions of the organization to supports his theory on Roger’s [23] theories of achieve greater efficiencies and effectiveness in innovation and diffusion. The most well-known delivering customer value”. lifecycle shape is an S-curve, depicting an ideal From IS and marketing perspectives, we combine and representation for the emergence, growth, maturity, integrate various definitions and come up with a and decline of an idea or product [18]. Rogers [24] multi-facet definition of CRM similar to that of states however, that not all ideas and products exhibit Zablah et al. [29]. CRM can be defined as (a) a an S-shaped lifecycle. Rogers [23] proposes that the business process that creates and leverages adoption curve of innovations follows a normal relationships with customers and other external distribution; however, fads and fashions have much marketplace entities; (b) a business strategy that shorter lifecycles. Fads become known quickly and invests in valuable customers; (c) a business are adopted with enthusiasm, sometimes fanaticism. philosophy that is customer-focus; (d) a business The decline occurs just as fast [19]. Fashions on the capability to understand the customers enough other hand, are fads that show signs of maturity and anticipate their future needs; and (e) a technology- later on end up declining [28]. based system for integrating sales, marketing, and services to build partnerships between the firm and Abrahamson and Fairchild [3] propose that its customers. downswings and upswings in management fashions in one research area remain independent of other Is CRM a Management Fad or Fashion? management fashions coming into that area; that exogenous triggers affect management fashions Volume XI, No. 1, 2010 2 Issues in Information Systems Development and Diffusion of Customer Relationship Management Across Disciplines independently. However, could it be that someone’s and Ponzi and Koenig [18] analyzed lifecycles and fad is someone else’s fashion? Could it be that diffusion of innovations using bibliometric CRM’s lifecycle is different in IS than in marketing? techniques.
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