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The role of CRM systems

The role of CRM systems

The role of CRM systems

The services market, including the specialized information services market, has been changing rapidly in recent years. The availability of a wide range of offerings gives customers more freedom to choose a provider, which in turn motivates companies to intensively nurture good customer relationships. Organizations are working hard to attract new customers and build deeper relationships with existing ones. In these efforts, various strategies and tools are used, for example, relationship marketing and CRM (Customer Relationship Management) systems, which help manage customer contacts and personalize offerings.

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table of contents:

Management and marketing in recent years

The model of management and marketing in the service sector has undergone significant changes compared to the traditional approaches that dominated the Polish economy until the early 1990s. The development of marketing concepts over the decades, beginning in the 1950s, was characterized by a gradual shift in emphasis: from consumer product marketing, through marketing aimed at the activities of trade and service enterprises, to the formation of relationship marketing. Today, the customer plays a key role in marketing strategies, treated as the focal point of all activities and initiatives. It has become a priority not only to acquire new customers, but first and foremost to build long-term, trusting relationships with them, to win their loyalty, and to take an individual approach that treats customers as unique individuals instead of an anonymous mass. It is with them in mind that relationship marketing began to be formulated, involving the creation and nurturing of permanent, mutually beneficial ties. The changes being made in marketing practices emphasize the difference between transactional and relational approaches, which is reflected in the strategies of companies operating in today's service market.

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The role of CRM systems

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Relationship marketing

The term “relationship marketing” was first introduced into the discourse in the 1970s thanks to Barbara Bund Jackson, while the development of the concept is attributed to Leonard Berry in the 1980s. According to Berry, relationship marketing focuses on building, maintaining and developing customer relationships, where acquiring a new buyer is only the beginning of the whole process. A different view is presented by J. Copulsky and M. Wolf, defining relationship marketing as the process of creating a database of current and potential customers and connecting with them through customized information. They also emphasize the importance of analyzing the cost of acquiring and retaining customers and valuing the relationships built with them. This definition emphasizes consumer information management as the main goal of CRM systems. There is also an approach that considers relationship marketing as the process of planning and developing relationships that foster dialogue between the company and customers, aimed at building mutual understanding, trust and acceptance of the capabilities of both parties in accordance with their market and social roles. These definitions indicate that there is no uniform definition of relationship marketing, interpreted both in the broad context of marketing activities aimed at strengthening ties with customers and in the narrower context of managing information about customers, their preferences and expectations.

Sometimes the term “partnership marketing” is used interchangeably, but in the Polish context it is viewed more narrowly, since partnership is understood as one form of relationship between parties. Relationship marketing is a key element in service sectors, where services are provided on a continuous, regular or cyclical basis. Such sectors include, for example, organizations in the information market, including libraries.

A variety of strategies can be used in relationship marketing to intensify and deepen customer relationships. These strategies include:

  • A strategy focused on a key service that emphasizes the importance of a specific offering to customers;
  • Personalization of customer relationships, enabling customization of offers to meet individual needs and preferences;
  • A strategy to expand service offerings to increase the range of options available to the customer;
  • Strengthen ties with customers through pricing policies, such as special offers or discounts;
  • Internal marketing, which focuses on increasing employee engagement and satisfaction, which has a positive impact on customer service.

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Important issues in building customer relationships

The key aspects that play a significant role in building customer relationships are delivered value and customer satisfaction, leading to customer loyalty and building positive relationships. Delivered value is defined as the difference between the total value of an offering to the customer and the cost the customer must pay to obtain it. Expected value is the sum of the benefits the customer expects from the product or service. The degree of customer satisfaction depends on how the services offered meet the customer's expectations. Dissatisfaction arises when services do not meet expectations, while meeting expectations with the offerings results in satisfaction and positive feedback. When services not only meet but exceed expectations, customer satisfaction can reach a high level, which, with continued high quality service, can turn into loyalty.

Customer loyalty is built on the quality of services provided and mutual cooperation, where the customer, by providing feedback, helps shape the offer. Loyalty means a deep attachment to the brand, based on trust and acceptance of the terms of services offered, which makes the customer resistant to the actions of competitors.

In the context of library services, user loyalty is characterized by an emotional relationship with the library, repeated visits over a longer period of time, conscious choice of the services of a particular library over other offers, reflecting trust and acceptance of the library's offerings.

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The phenomenon of satisfaction


The phenomenon of customer satisfaction, considered a key element in building loyalty, is described as an emotional state of satisfaction that occurs when expectations and desires are fully met. Satisfaction can take a transactional form, associated with single, short-lived interactions with a service provider, where the emotional aspect prevails and the user's previous experience is less important. Cumulative satisfaction, on the other hand, refers to an enduring state that is shaped by repeated interactions with a service provider and accumulated experiences.

In the context of relationship marketing, the goal is not only to provide customers with satisfaction at the transactional level, but more importantly to convert it into cumulative satisfaction, which fosters the strengthening of long-term relationships. However, research shows that satisfaction alone does not always translate into loyalty - it is estimated that 65-85% of customers who decided to switch service providers were satisfied with their previous provider. That's why loyalty programs focus on exceeding customer expectations to increase customer engagement and loyalty.

Achieving customer satisfaction and measuring it, introducing tools to improve service quality, and developing quality management and CRM systems are therefore important components in the management of institutions that provide services of an informational nature, such as libraries. These components support not only building and maintaining high levels of satisfaction, but also strengthening customer loyalty.

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What is CRM

CRM, or customer relationship management, is an information system designed to support and develop an organization's customer relationships. The definition extends to a business strategy that focuses on building customer loyalty and satisfaction through individualized attention to customer needs and expectations. The concept of CRM emerged in the 1990s and is a response to declining customer loyalty, increasing competition, increased consumer demands, declining effectiveness of traditional advertising methods, rising costs of acquiring new customers and advances in information technology.

CRM systems are designed to strengthen the bond between a company and its customers by focusing on meeting their individual needs and increasing satisfaction with the services offered. They are a key component of quality management in libraries and business in general, as they combine a number of customer-focused quality methods. CRM can be considered a management philosophy that involves understanding core customer values and delivering those values to the customer, potentially going beyond traditional services. In library practice, CRM involves identifying a target market, building a database of users, informing them of offerings, providing quality services, maintaining relationships, and monitoring customer satisfaction and new needs.

Customer relationship management (CRM) systems are used in both traditional and digital operations. For digital services, it is often referred to as Knowledge-enabled Customer Relationship Management (KCRM), which combines knowledge management with building relationships with customers and partners to support the digital economy. Communicating with customers electronically includes various channels, such as telephone, email, websites, SMS, and instant messaging.

However, CRM is not just a technology, but more importantly a business strategy based on deep collaboration, understanding and a personalized approach to the customer. CRM combines a business strategy based on understanding and meeting individual customer needs, and software that enables the collection, analysis and use of customer data to build lasting relationships. Inappropriately viewing CRM as solely an information system can lead to implementation errors and disappointment with the results.

Successful CRM implementation depends on proper management of service quality and customer satisfaction, reorganization of business processes, and a change in employee attitudes. A key role in CRM is played by employees at various levels of the organization, from those directly interacting with customers, to those supporting and assisting, to management, who must accept and promote CRM principles and goals. Full implementation of the CRM philosophy requires not only technological commitment, but above all cultural and organizational commitment, ensuring quality service and customer satisfaction.

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Diagnostic questions when implementing a CRM system


The introduction of a customer relationship management (CRM) system is just the beginning of the process of building and maintaining customer relationships in the library. Regular audits are key to assessing the effectiveness and progress of the initiatives put in place. To conduct a thorough assessment, it is useful to ask diagnostic questions such as:

  • Does the library have mechanisms to recognize individual users?
  • Does it collect user interaction data?
  • Is information about user preferences collected and analyzed?
  • What information does the library have about its users and is it readily available to all departments?
  • Is it possible to combine data from different departments into one database?
  • Does the library use the collected data for further analysis?
  • Does the library identify its most loyal users?
  • How does it manage user relationships and anticipate new opportunities to gain and lose customers?
  • Is the library able to determine which users are loyal, regular or occasional?
  • What communication channels are preferred by users and how often are they used?
  • Does the library offer personalized services and is the relationship with users adequately rewarded?
  • Are organizational culture and information systems geared to meet user needs?
  • Does the library have tools to integrate data from different channels?
  • Are the reasons for infrequent use of library services and the motives of those who frequently use information but rarely use library services analyzed?
  • Are staff trained in customer relationship management and are decisions about user interactions made as a team?

These questions can help determine a course of action to build strong and positive relationships with users.

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Factors affecting the success of CRM implementation

Customer Relationship Management (CRM) systems, although they bring many benefits such as improved service quality and increased customer satisfaction, come at a significant cost. CRM implementation requires significant financial investment and time spent on training. According to the Gartner Group, in 2000 sales of CRM systems reached $20 billion and implementation costs totaled $30 billion, with sales projected to increase to $64 billion in 2005.

Despite these investments, the success of CRM implementation is not guaranteed. Gartner Group research indicates that about 50% of CRM projects fail. Additional research, conducted by Mark Boslet among 226 employees using CRM, showed that 25% of them did not experience significant performance improvement, and about half saw only minimal improvement. Analyses by A. Stachowicz-Stanusch and M. Stanusch confirm these observations, indicating that 50-70% of CRM implementations fail to deliver the expected results, and only 46% of companies achieve their goals through successful implementation of the system.

The low effectiveness of CRM in some cases is mainly due to a lack of conviction that such activities make sense, insufficient knowledge, lack of adequate training and experience. It is important, therefore, that before implementing a CRM system, organizations think carefully about their goals, resources and readiness for the changes that the introduction of new solutions in customer relationship management brings.

In conclusion, the concept of customer relationship management (CRM) presents itself as an attractive solution for institutions engaged in providing information services. Libraries, information centers and infobroker companies that provide services on a regular or seasonal basis will find CRM an effective support for building long-term relationships with customers. In an environment where competition for access to information is intense and not always based on solid sources, cementing customer loyalty becomes a priority. CRM, being a natural complement to quality management strategies and focusing on improving customer service and communication with customers, promises to be an indispensable tool in the future activities of libraries and similar institutions. It seems only a matter of time before CRM systems are widely implemented in these organizations to meet today's market challenges and user expectations.

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