The emotional side of CRM: results from an empirical study in Switzerland for business-to-business companies.

AuthorSiems, Florian
PositionCustomer relationship management
  1. HOW CRM CAME INTO BEING

    Customer relationship management (CRM) has been an important topic in both research and everyday business for a number of years (see e.g. McKay 2010; Ernst et al. 2010; Labus/Stone 2010, 155). Over the course of this time, it has experienced a number of different phases.

    The notion of CRM has spread widely since the 1990s (see e.g. Xu et al. 2002, 444; Gummesson 2004, 137; Keramati/Mehrabi/Mojir 2010, 1171; Labus/Stone 2010, 155). During this time, CRM has been addressed and expanded by both the business as well as (information) technology realms (see e.g. Schultz 2000; Dowling 2002, 87; Agarwal/Harding/Schumacher 2004, 4; Keramati/Mehrabi/Mojir 2010, 1171).

    A boom period that saw the topic soar was then followed by a phase

    where it came back down to earth after a series of CRM projects turned out to be failures (see e.g. McKim 2002; Agarwal/Harding/Schumacher 2004, 1; Kale 2004, 44; Lovelock/Wirtz 2004, 377; Petouhoff 2006, 48; Foss/Stone/Ekinci 2008; Hannich/Rueger/Jenni 2009, 5).

    But since the middle of 2003, the market for CRM consulting and software has found itself back on the pathway towards growth. Recent years have continually seen new fields of CRM thinking addressed by both research and business, indicating a "healthy" growth that continues to this day, even in spite of a brief, not surprising slump that resulted from the economic crisis of 2008/2009 (Hannich/Rueger/Jenni 2009, 45). Current CRM approaches include its application to an increasing amount of industries (this now even includes e.g. universities, Musico 2008), the integration of CRM into new product planning (Ernst et al. 2010), new life cycle tools (e.g. Siems 2010; Siems/Lackus 2010), and new measurement approaches to determine effective CRM and its success factors (see e.g. Chen et al. 2009; Peelen et al. 2009).

    Additional developments (even very challenging ones (Goldenberg 2010)) are without a doubt on their way, it's simply a question of exactly how they will emerge to further continue this field.

    A general depiction of this CRM development is presented in Figure 1, borrowing closely from the hype curve by Rueger/Hannich (Rueger and Hannich 2007; also see Hannich/Rueger/Jenni 2009, 5; Xu et al. 2002, 445; Rigby/Ledingham 2004, 118).

    Against this background of CRM development, the idea emerged among a research group in Switzerland to conduct an annual study on the state of CRM (for more, as well as for general comments on the study, see Hannich/Rueger/Jenni 2009). To investigate the status quo of CRM in Switzerland and identify the most important trends found within it, in 2007 a Swiss university began a survey of managers regarding the topic of CRM that was to be conducted on a yearly basis. The study's annual nature allows not only a snapshot of the current state of CRM in Switzerland, but a chance to look at its development and see what the other CRM issues are as well.

    This study had three objectives:

    * Objective 1: A comprehensive, precise, realistic overview of the status quo of CRM and how it's developing in Switzerland

    * Objective 2: Identifying and observing the most important trends found within CRM

    * Objective 3: A closer insight into selected, current CRM issues

    The insight into individual issues (Objective 3) allows a number of statements to be made on current topics that are of interest for those involved in the field of CRM. These are then absorbed year-by-year into current CRM research and thinking. For instance, 2009 saw an in-depth look at the emotionalization of CRM.

    This will be the starting point for the following paper. The specialized focus on CRM emotionalization coming from the study done in 2009 will be separately presented and applied here for the first time to a specific group: B2B companies. The paper is structured as follows: Section 2 will make clear the importance of this investigative focus by discussing the connection between CRM and emotions, as well as the distinct characteristics of B2B companies. Section 3 will present the results of the empirical investigation, while Section 4 will close with a conclusion and outlook.

  2. CRM: EMOTIONS AND B2B

    2.1 CRM and emotions

    As mentioned above, CRM is characterized by both a technical and economic perspective (see above, also see Labus/Stone 2010, 159). The economic perspective has been accessed most of all by marketing, which in some cases includes the issue of "relationship marketing" (see e.g. Gronroos 1994; Gummesson 1997; Hennig-Thurau/Hansen 2000; Gummesson 2002; Bruhn 2003).

    In line with this technical and economic delineation, the CRM literature also discerns between a "Cognitive model X" and a "Cognitive model Y" (Rueger/Hannich/Sauer 2010, pp. 60). Cognitive model X stands for "data technology optimizers." In research and business, this perspective is particularly seen in areas such as customer intelligence, data mining, and corresponding software solutions (Rueger/Hannich/Sauer 2010, 60).

    Cognitive model Y on the other hand stands for the "emotional innovator" who is characterized by exciting innovations and services, as well as a particularly solid relationship between employees and customers (Rueger/Hannich/Sauer 2010, 60). Emotions are a central CRM factor with this cognitive model, but not with the other.

    The purely technical perspective of CRM has been heavily criticized in the last 10-15 years (see e.g. Hunter/Tietyen 1997, 138; Fluss 2001; Bruhn 2003, XV; Allen 2004, 97 and 100; Lovelock/Wirtz 2004, 377). Boiling CRM down to mere "software solutions" does no justice whatsoever to the true thinking behind it, and possesses the danger of leading CRM down a pathway to failure.

    A CRM that deliberately places its focus on consumer emotions on the other hand possesses a great deal of promise (Rueger/Hannich/Sauer 2010). There's no question that technology can play its own valuable role with this form of CRM. But this approach absolutely requires a foundation that includes economics thinking and, in particular, marketing strategies.

    This idea brings to the forefront the thinking of Evert Gummesson, one of the pioneers of the field who individually defined relationship marketing and CRM, while at the same time interweaving these definitions with one another:

    "My definition of relationship marketing (RM) is as follows: Relationship Marketing is marketing based on interaction within networks of relationships. (...) My definition of CRM follows from the RM definition: CRM is the values and strategies of relationship marketing--with particular emphasis on customer relationships--turned into practical applications" (Gummesson 2002, 3).

    Gummesson suggests an even further expansion at another point in his paper. Here, he mentions how CRM can be broken down into the components of "eCRM" (electronic) and "hCRM" (human)--and that there is a need for a good balance between both (Gummesson 2001; Gummesson 2004, 137). The human factor here once again makes clear the importance of emotions.

    When it comes to the importance of emotions in CRM, it also needs to be stated that emotions in general have increased in importance in marketing over the past years. This has also been the case outside the area of relationship marketing as well (see e.g. O'Neill/Lambert 2001; Robinette/Brand/Lenz 2001; O'Shaughnessy/O'Shaughnessy 2003; Scroggs 2008; Boatwright/Cagan 2010; Rueger/Hannich/Sauer 2010, 58). This trend is also seen within relationship marketing. With customer loyalty for instance--a central objective of relationship marketing (especially with B2B companies, see e.g. Homburg/Kuester/Krohmer 2009, 344)--there's continual reminders of the importance of an emotional connection and explicit warnings against other kinds of customer "loyalties" such as a purely economic connection (also known as "cold loyalty") (see Siems 2009, pp. 387; also see Eggert 2000).

    2.2 CRM, emotions and B2B

    The thinking that CRM can be usefully applied for products, services, and B2C as well as B2B is now well-established (see e.g. Bruhn 2003, 228; Gummesson 2004; Harrison-Walker/Neeley 2004, 20; Homburg/Kuester/Krohmer 2009, 344).

    In terms of whether emotions are as important for B2B as they are for B2C, the current understanding on this issue at the very least allows the statement that emotions can be important for both of them. In business, there's no doubt that an "economic leaning" on the part of decision makers can be assumed to a certain extent. But in line with Armstrong et al. (2009) and Kotler/Armstrong (2010), these people too are ultimately human beings. And so as a result, emotions as a human characteristic are significant: "However, business buyers actually respond to both economic and personal factors. Far from being cold, calculating, and impersonal, business buyers are human and social as well. They react to both reason and emotion. Today, most business-to-business marketers recognise that emotion plays an important role in [the] business buying decisions" (Armstrong et al. 2009, 175; Kotler/Armstrong 2010, 199).

    Lynch/de Chernatony (2004, 403) come to a similar conclusion: "(...) it is argued that organisational buyers can be influenced by both rational and emotional brand values and that B2B brands can surmount functional capabilities to create an emotional connection with buyers." Mudambi (2002) brings a similar argument (although with some variation in the details), also seeing an "emotional benefit" in the B2B realm as it relates to brand names (Mudambi 2002, 527), and...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT