This paper, produced for the author’s e-CRM module in his MSc in eMarketing, explores the evolution of e-CRM. As such, it will be of interest to marketing students as well as practitioners who seek to introduce new, or enhance existing, organisational CRM systems.
The paper charts the development of customer relationship management from the ‘golden age’ of marketing in the 1950s – the era of mass marketing – through the era of transactional marketing in the 1960s to that of relationship marketing by the end of the 1990s.
It is recognised that the failure of database, loyalty and direct marketing to ‘operationalise’ relationship marketing led to the introduction of the concept of customer relationship marketing (CRM). But failures of this system’s ability to understand customer behaviour and response, and the growth of the internet as a medium, brought about the inception of e-CRM as its replacement system. At the core of this is the enhanced ability of the e-environment to enable organisations to engage with the customer and thus build relationships and increase profit.
But whilst the superiority of e-CRM over CRM is recognised, introducing it into organisations successfully presents problems. As a senior Honda executive once said, “I used to have 25 databases until I decided to consolidate them all into one. Now I have 26”. And it is not just the failure of technology integration that presents difficulties – various academics question the assumption that loyalty provides enhanced profitability. But the aim of e-CRM is not in question: To provide a source of competitive advantage for the organisation.