Keywords
Citation
Dietz, J. (2005), "Collaborative Customer Relationship Management: Taking CRM to the Next Level", Journal of Consumer Marketing, Vol. 22 No. 2, pp. 106-107. https://doi.org/10.1108/07363760510589262
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited
Although not for the faint of heart, this is a book that offers much educational benefit to practitioners and academics alike. As someone whose former career included a great deal of time pursuing good collaborative relationships with customers like Home Depot, I can see how this book offers suppliers the tools to cope with industry changes; it can also give students a good background in the necessity of doing one's homework in the area of customer relationship management.
Collaborative Customer Relationship Management consists of six parts and 13 chapters, each contributed by experts in the field of customer relationships, many of whom are the editors of this book:
Part 1: “Customer relationship management: the basics”
“Manufacturers and retailers learned from companies like Wal‐Mart and Procter & Gamble that cooperation is the cornerstone of value creation, and that collaboration in the supply chain could open up new opportunities for profitability” (p. 2). This observation sets the stage for the various techniques and cases presented throughout the book.
Chapter 1: “Customer management as the origin of collaborative customer relationship management”
The basic components of customer management are outlined, from customer identification through development and retention.
Chapter 2: “What have we learned so far? Making CRM make money – technology alone won't create value”
Readers will not be surprised to read “a confluence of market forces has steadily eroded the ability of companies to generate sustainable profits from ongoing customer relationships” (p. 7). This chapter outlines some of the ways companies can avoid the mistake of picking the wrong tools for the purpose of customer relationship management.
Part 2: “Collaborative customer relationship management – how to win in the market with joint forces”
This section focuses on joint customer retention management and knowledge of customer needs in order to choose appropriate logistical support activities.
Chapter 3: “Collaborative customer relationship management”
While earlier chapters discussed the difficulty of sustaining profit because of increasingly changeable consumer behavior, this chapter focuses on developing relationships with profitable target customers. An important point is “numerous studies prove that consumers are prepared to pay premium prices if the product or service satisfies their needs in a particularly convincing way” (p. 27). Included is a diagram of the integration of collaborative customer retention management (p. 28).
Chapter 4: “The integration of supply chain management and customer relationship management”
“The realization of frictionless product and information flows are central to quick, flexible, and reliable coverage of demand at a reasonable price in order to respond to customer demands and market forces” (p. 58). New concepts are developed to transform the traditional value chain, such as “Collaborative Planning, Forecasting and Replenishment” (p. 60). The traditional relationship between retailer and suppler must be transformed into a closer partnership.
Chapter 5: “The future of collaborative customer relationship management: integrating demand and supply chains”
“Consumer businesses that link their customer management and supply chain operations to boost customer satisfaction and profitability are twice as profitable as competitors that do not do so” (p. 78). The authors point out the necessity for the creation of a “culture of customer loyalty by changing values, performance measures and reward systems” (p. 98).
Part 3: “The demand side: collaborative customer relationship and category management”
For retailers and their suppliers, this section is one of the most important as it supports the benefits and requirements of category management.
Chapter 6: “Collaboration in CRM: potentials and challenges of an individualization‐based approach”
Moving from product marketer to solution provider is necessary for full benefit in an era of mass customization. The issue of who owns the customer data becomes important as more partners enter the relationship. Also, “customer loyalty … does not represent a goal in its own right, but it is rather a means of achieving economic targets” (p. 115). The book continues to apply the intertwined concepts of customer management, customer loyalty, and profit.
Chapter 7: “Building customer loyalty with collaboration nets: four models of individualization‐based CCRM”
The authors address the demand for continuous input from both sides in collaborative customer management. “One of the most important tasks of the supplier is to ensure that the customer's expenditure is kept as small as possible … ” (p. 137). Examples are given of companies, such as Mattel, Levi Strauss, and Nike, who use several channels to sell to their customers, including customized products directly sold to the customer via the internet.
Chapter 8: “Collaborative customer relationship management from a market research viewpoint”
This chapter discusses the goals of category management and how knowing customers’ mental shopping processes are critical. The analysis in this chapter is particularly important.
Chapter 9: “Category management: why now?”
Although the authors acknowledge the dangers to category management participants of the elimination of products in their own areas, “category management helps companies focus on both profits and growth. It is grounded in a deep understanding of the attitudes, expectations, motivations, and behavior patterns of both existing and potential customers, and as such, enables a company to design a product offering that truly maximizes value to them” (p. 174).
Part 4: “The supply side: collaborative planning, forecasting and replenishment (CPFR) as a tool to support CCRM”
Collaboration in the entire value chain is the only way to maximize both productivity and profitable relationships.
Chapter 10: “CPFR – views and experiences at Procter & Gamble”
The expertise of Procter & Gamble adds value to the importance of understanding the supply chain, and of comprehending the inefficiencies, such as unsatisfactory delivery service and deficient communication between participants, that create problems in meeting company goals.
Chapter 11: “How to scale your CPFR‐pilot”
The prerequisites for collaborative agreement support the benefits that can be achieved, such as increased sales, inventory reduction, increased forecast accuracy, and reduction of supply chain costs. However, the benefits are not possible without strong knowledge exchange, resource sharing, and collaboration partner selection.
Part 5: “What's next? The future of collaborative customer relationship management”
New and sophisticated solutions for customer attraction will evolve.
Chapter 12: “New ways of category management”
“The structure and segmentation of categories reflects typical buying decisions within the category. Restructuring of a category, therefore, can lead to new perspectives and approaches for winning customers” (p. 220).
The discussion of target groups and the classification of their buying habits is critical to category management, but “what is not measured will also not be attained” (p. 223).
Chapter 13: “Collaborative category management on the internet‐basics to create and manage consumer‐focuses assortments in online‐shops”
Online retailing allows improved access to targeted consumer groups. In addition, customer needs must now “be met via multiple channels and the buyer's decision process must be seamlessly supported” (p. 233).
Part 6: “Conclusions and key takeaways”
The fact that technology alone cannot produce results is repeated, as is the necessity for mutual confidence between trade and manufacturer.
Collaborative customer relationship management “can be an excellent tool for consistently exploiting potential synergies in supply chain partnerships” (p. 260).
Although the use of acronyms can get a little confusing, the way the concepts build on each other make this the book's forgivable flaw.
I found the most useful parts of the book as follows:
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There are many helpful charts that outline strategies.
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The examples and case studies solidify the concepts covered in the book.
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The authors presented in this book make good use of models and “balanced scorecards.” Although there are too many for one project, the extensive use of charts and models gives the reader wide choices for his/her own applications.
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The main objective of the book is to help strengthen customer loyalty, and collaborative customer relationships are a key to that objective. The editors have chosen readings that continually hammer that point home..
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The readings stress the use of multi‐functional teams.
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The acknowledgement of the challenge that different reward systems create.
For industrial companies, it is also useful because it analyzes customer relationships that apply to all forms of industry. Collaborative Customer Relationship Management is an excellent book for use in large consumer products firms as it has something for everyone engaged in commerce.
Janis Dietz
The University of La Verne, La Verne, California, USA