In the sections that follow, we define what CRM is and what it
promises to offer. We also identify the forces impacting on the marketing
environment in recent years that have led to the rapid development of CRM
strategies, tools, and technologies. A typology of CRM programs is
presented to provide a parsimonious view of the various terms and
terminologies that are used to refer to different activities. We then describe
a process model of CRM to better delineate the challenges of customer
relationship formation, its governance, its performance evaluation, and its
evolution. Finally, we examine the research issues related to CRM.
2. What is Customer Relationship Management (CRM)?
Before we begin to examine the conceptual foundations of CRM, defining
what CRM is would be useful. In the marketing literature the terms
customer relationship management and relationship marketing are used
interchangeably. As Nevin (1995) points out, these terms have been used to
reflect a variety of themes and perspectives. Some of these themes offer a
narrow functional marketing perspective while others offer a perspective that
is broad and somewhat paradigmatic in approach and orientation. A narrow
perspective of customer relationship management is database marketing
emphasizing the promotional aspects of marketing linked to database efforts
(Bickert, 1992).
Another narrow, yet relevant, viewpoint is to consider CRM only as
seeking customer retention by using a variety of after marketing tactics that
lead to customer bonding or staying in touch with the customer after a sale is
made (Vavra, 1992). A more popular approach with the recent application
of information technology is to focus on individual or one-to-one
relationships with customers that integrate database knowledge with a longterm
customer retention and growth strategy (Peppers & Rogers, 1993).
Thus, Shani and Chalasani (1992) have defined relationship marketing as
“an integrated effort to identify, maintain, and build up a network with
individual consumers and to continuously strengthen the network for the
mutual benefit of both sides, through interactive, individualized and valueadded
contacts over a long period of time” (p. 44). Jackson (1985) applies
the individual