The Impact of Electronic Customer Relationship Management (E-CRM) on
achievement of Customer Satisfaction in Different Companies
RASHAD YAZDANIFARD1
Postgraduate Centre
Limkokwing University of Creative Technology
Cyberjaya Malaysia
rashad.y@limkokwing.edu.my
Abstract— The focus of this paper is to discuss about the
positive and negative impact of electronic customer
relationship management (E-CRM) towards different scale of
companies in order to achieve customer satisfaction. Customer
relationship management (CRM), as a marketing strategy, and
emerging of electronic commerce brought a drastically changes
towards business market. E-CRM, by facilitating company
customer relationship management with new information
system include the Internet, telemarketing and database
storage capabilities, overall performance of the company may
dramatically change over a long period. However, not many
companies were able to implement this software system into
their business model especially small-medium enterprises or
traditional business around vulnerable neighborhoods.
Negative impacts due to failure of implementation may bring
down the whole business. In addition, customer perspective
about the company’s business model may influence the result
of a succeeding process of E-CRM. Other factors that
influence the result of E-CRM implementation are available
there for other experts to recognize in future.
Keywords- Customer Relationship Management, Electronic-
Customer Relationship Management, Customer Satisfaction,
Achievement, Impact
I. INTRODUCTION
Many studies and practices related to traditional customer
relationship management (CRM) have been conducted over
the past decade in the academic marketing literature [4],
[23]. CRM has proved its existence, importance and
influence to almost all the industry nowadays since the born
of business itself. However, the implementation of CRM in
companies or organizations to retain long-term and profitable
relationships with their customers is tougher comparing with
other business related management system. Advancement of
technological development and rapid growth of the power of
customers had nurtured a more competitive, dynamic, and
complex environment for most enterprises [15].
Electronic-commerce or e-commerce has evolved
and became popular among most consumers. Mixture of e-
commerce with CRM may bring a new phenomenon for
most enterprises understand the effects of implementation of
electronic-CRM or E-CRM to their business revenue and its
KHOO CHENG LONG2
Faculty of Information & Communication Technology
Limkokwing University of Creative Technology
Cyberjaya Malaysia
khoo0131@hotmail.com
status in the market. Customer satisfaction, however, is a
method of measuring how a products or services offered by a
company will fulfill or outshine most customer expectations.
In a competitive business era, customer satisfaction has
emerged as a key success and boundaries between big and
small companies [12].
II. CRM
As definition described by Galbreath and Rogers [10],
CRM refer as: “… activities a business performs to identify,
qualify, acquire, develop and retain increasingly loyal and
profitable customers by delivering the right product or
service, to the right customer, through the right channel, at
the right time and the right cost. CRM integrates sales,
marketing, service, enterprise-resource planning and supply-
chain management functions through business process
automation, technology solutions, and information resources
to maximize each customer contact. CRM facilitates
relationship among enterprises, their customers, business
partners, suppliers, and employees.”
Similarity of definition by other experts, CRM, as a
marketing strategy, mainly focused on enhancing the market
competitiveness, by building right relationship between
businesses and customers include provide right products for
customers with different demands, at the right time, with
appropriate ways and determine the cost of providing the
win-win situation products or services [18]. Lim and Vincent
[5] defined that CRM is a management field that handles
with whatever a company needs to manage and maintain its
customer relationship. Examples of activities involved in
CRM include the capture and analysis of customer
information, and the execution of business analytics to
leverage the output towards better sales performance [11].
III. E-CRM
E-CRM, however, with the combination of hardware,
software, process, applications and management
commitment to improve customer service, retain customer,
and provide analytical capabilities, mainly focuses on
internet-based interaction between customer and service
provider [3], [6]. In Multimedia Victoria Research and
Development [9], they defined that E-CRM is an integrated
online sales, marketing and service strategy that is used to
identify, attract and retain an organization’s customers. They
also specified that E-CRM describes improved and increased
communication between an organization and its clients by
creating and enhancing customer interaction through
innovative technology [9].
Kennedy [16] says that E-CRM is strategic
technology-centric relationship marketing business
framework. Benefit of E-CRM is to retain the existing
customers, improve customer service, and to assist in
analytical capabilities [8]. Dyche [8] also mentioned that E-
CRM is an infrastructure which provides support to valuable
customers to remain loyal, E-CRM comprises of hardware,
software, processes and applications to manage all company
issues. It is very important that measuring the performance of
E-CRM in an organization in order to assist the companies to
increase the revenue and enhance customer loyalty [20]. As
mentioned above, E-CRM requires implementation of
conventional CRM using Internet and web technology;
hence, there will be different influence to different type of
companies or organizations.
IV. CUSTOMER SATISFACTION
E-CRM, however, with the combination of hardware,
software, process, applications and management
commitment to improve customer service, retain customer,
and provide analytical capabilities, mainly focuses on
internet-based interaction between customer and service
provider [3], [6]. In Multimedia Victoria Research and
Development [9], they defined that E-CRM is an integrated
online sales, marketing and service strategy that is used to
identify, attract and retain an organization’s customers. They
also specified that E-CRM describes improved and increased
communication between an organization and its clients by
creating and enhancing customer interaction through
innovative technology [9].
Kennedy [16] says that E-CRM is strategic
technology-centric relationship marketing business
framework. Benefit of E-CRM is to retain the existing
customers, improve customer service, and to assist in
analytical capabilities [8]. Dyche [8] also mentioned that E-
CRM is an infrastructure which provides support to valuable
customers to remain loyal, E-CRM comprises of hardware,
software, processes and applications to manage all company
issues. It is very important that measuring the performance of
E-CRM in an organization in order to assist the companies to
increase the revenue and enhance customer loyalty [20]. As
mentioned above, E-CRM requires implementation of
conventional CRM using Internet and web technology;
hence, there will be different influence to different type of
companies or organizations.
V. E-CRM IMPLEMENTATION LITERATURE REVIEW
Elements of successful implementation of E-CRM have
been proposed by experts from various fields. Theories,
models and related E-CRM methodologies have been
suggested and implemented by different scale of business
models. For example, Cunningham et al. define taxonomy of
required CRM analyses into five categories which include
customer analysis, customer service analysis, profitability
analysis, sales and marketing analysis, and product analysis.
These analyses are still useful for the E-CRM
implementation process nowadays.
Many researches showing that cross-selling or up-selling
for existing customers can generate twice much gross
revenue than new customers [25]. Besides, acquiring new
customers require five times more than the costs of retain
current customers [18]. This relationships demand longer
period of monitoring, updating and maintaining comparing
to conventional CRM system.
As mentioned in the first paragraph, customer analysis in
Cunningham et al. [7] taxonomy for CRM analyses
involving customer segmentation analysis, customer
retention analysis, customer attrition analysis and customer
satisfaction analysis. In this paper, customer satisfaction is
the main goal to achieve after implementation of E-CRM.
Customer satisfaction analysis is a study to build up long-
term relationships between customers and the company by
observing the customers’ perception and analyzing
customers’ survey responses about the company and its
products and services [7].
Elements of an E-CRM system have been concluded by
Jelassi and Enders [16] where four criteria need to be taken
into consideration during the process implementation.
Customer selection, customer acquisition, customer retention
and customer extension, which are the four elements of E-
CRM system, mainly focus on improving customer loyalty to
the company’s products and services.
Customer selection as discussed by Ahmed [2], refers to
customer targeting, segmenting, and mass customization
which fulfills the individual needs and maintains a low-cost
position via mass-market operations. Customer acquisition
focuses on promotion and other incentives to acquire new
customers and to serve existing customers to come online
while customer retention change one-time customers to
regular customers and keeps them as long as possible in
online environment [2]. Lastly, customer extension emphasis
on maximization of customer lifetime value (CLV) [2].
VI. DISCUSSION
Through the surveys conducted by most experts, we
conclude that E-CRM system requires customer’s detailed
information include age, financial status, occupation,
personal interest and other profile that describe the customer
daily activities and leisure activities to the company. By
collecting customer data and information, company can
easily design customizable products or services that fit
different expectation of different customers.
E-CRM system features that include customer
management help company to store and provide access to all
customer information from each level of organization.
Besides, E-CRM requires knowledge management that act as
a centralized knowledge base to handles and shares customer
information with the assistance of new information system
[9]. Other management system needed such as account
management, case management, back-end integration,
reporting and analysis.
 Analyzing customer data and history of purchasing
power is an important step to measure the effectiveness of E-
CRM to the overall performance of a company [23].
Estimation process always needed during the process of E-
CRM strategy implementation. Before estimation started,
personal interest and preferences of customers will be
recorded based on the history of communication between
employees and customers. Price centricity and defining
purchasing pattern of a customer on certain type of products
or services will provide company with deeper understanding
about their existing customers’ point of view over a new
products or services.
Based on the outcome of the analysis, new marketing
strategy is designed to further cross-selling or up-selling to
existing customers [23]. New breed of gross revenue will
soon arrived just by promoting company’s new products or
services through various communication channels, especially
when existing customers request for help via email, online
chatting, phone calls and other telecommunication media.
Most companies paying attention on after sales services and
follow-up for latest companies’ activities or products.
Evaluation of E-CRM system including the effects of current
promotion plan and alternatives to neutralize the negative
influences towards company’s overall performance will help
measuring the level of customer satisfaction toward company
and its products or services.
VII. IMPACTS OF E-CRM
Integrating the new technology such as Internet,
telemarketing, e-mail or direct mail with customer
relationship management system has built up electronic
customer relationship management (E-CRM) system for the
business and marketing industry. Obviously, most
companies with a proper E-CRM implementation deal with
more positive impacts than negative impacts.
Communication with customers and accessing to the same
transaction history and information about customers in an
organization with E-CRM software system will lead to an
increment of customer loyalty implicitly. Chances of
understanding the customer expectations level concerning
quality will provide organization with deeper look at the
level of customer satisfaction. Time and resources allocation
for most profitable customers can help company to find the
best customer and treat them as a premium group.
Other positive impacts of companies with E-CRM software
system are improving the customer service and support,
efficient and cost reduction [2]. E-CRM system helps to
collect, update and fulfill orders remotely and accurately.
Achievement of customer satisfaction requires long-term of
maintaining, monitoring and updating process to retain
existing customers and recruit new customers. E-CRM
system provides as a tool that centralized all the customer
data into single database storage and allow each department
in the company to exchange customer profile.
Undeniably, E-CRM system has brought more benefits to
most companies. However, there are still some unsolved
constraints for small-scale companies after implementation
of E-CRM system. Most conventional business companies
are encouraged to transform their business model into more
technology-centricity and customer-centricity. Due to the
transformation of business process, changes of quality of
service may lead to more customer disloyalty within the
perspective of existing customers. Traditional processes of
communicating with customers provide clearer view for
customer to understand the company and its products or
services.
Customer satisfaction involved tracking, detecting and
solving customer enquiries and problems upon the company
and its products or services. To achieve better customer
satisfaction level, process implementation of E-CRM
system in a company should carefully plan to avoid
unnecessary mistakes and affect company overall
performance.
Advancement of technology and information system
provides most companies with off-the-shelf software to
leverage their customer relationship department with a
better electronic system. Qualitative and quantitative
research towards company and its products or services
should be conducted thoroughly in both employees and
customer perspective. Better understanding of how
employees communicating with customer and the reaction
of customers when facing a problem related to the products
or services.
VIII. CONCLUSION
E-CRM, integrating with new information system
including Internet, telemarketing and e-mail, plays a role as
a software system that connects between customers and
company’s department. E-CRM, in future, with sufficient
empirical data for different industries, provides a reference
works for most companies to outline the plan and
procedures for the implementation of E-CRM system.
Defining the importance of increasing the level of
customer satisfaction provides a clearer view of purchasing
pattern for companies to evaluate their business model.
Other analyses include customer retention rate are vital to
increase the overall performance of the company.
Traditional business model companies should seek for
advice about implementation of E-CRM system.
Other factors during the process of E-CRM implementation
that may influence the outcome or change the fate of a
company should be defined so as to provide better
guidelines for small-medium enterprises and traditional
business in future.
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