Customer relationship management (CRM) is a comprehensive business and marketing strategy that integrates technology, process and business activities around the customer. CRM is assumed to lead to bottom line benefits for the organization. Advances in information and communication technologies have provided an effective platform to deliver electronic CRM functions. Despite widespread agreement that CRM can have a direct and indirect satisfaction, loyalty, sales and profit, the significance of CRM and its features in influencing customer satisfaction has not been well researched in construction firms. The thesis examines the critical success factor of CRM implementation by using a questionnaire survey to obtain data from 68 building material suppliers. Using a structural model and the evaluation technique of partial least squares the analysis revealed that CRM technological initiatives are successful when adequate top management support and accurate knowledge management capabilities, supported by a suitable information technology structure, measured by technological readiness are in place. Construction organizations who are considering the implementation of CRM technological initiatives. The need to justify the impact of CRM on organizational performance in the boardroom has never been more important. Shareholders expect value for their investments; organizations have invested large sums of money in people, processes and technology in order to imbibe the CRM culture. The promises of CRM are enormous. Yet, various organizations cry out for help over lost investments and damaged relationships. Is CRM promising too much or perhaps are the executives expecting more than they can get? Literature suggests that in order to justify the investments of CRM, there is the need to develop a universally accepted holistic framework for the measurement of CRM activities is the lack of a universally acceptable definition of CRM. The concept of CRM is multi faceted involving investments in people, processes and technology to various degrees.
1.1 BACKGROUND OF THE STUDY
Traditionally, `many organizations were structured around their products and service’. Emphasis was on the delivery of a good mist of the 4Ps – product, price, place and promotion. The focus was on exchange, once this was achieved, organizations were sure to remain in business. Needless to say, this was the era of transaction marketing.
In the late 1990s however, most organizations began to realize that the 4Ps were no longer sufficient to remain in business. Products were easily copied to desired standards, price and easily matched, Product accessibility was no longer an issue and mass Promotions were no longer as effective. In many cases, customers and consumers had become more sophisticated and less responsive to the traditional marketing pressures – particularly `advertising’. This as a result of the availability of more choice, partly as a result of globalization of markets and new sources of competition. Also, many markets had reached the matured stage of their lifecycle (Christopher, Payne and Ballantyne, 2002). The response to these changes in the business environment was that organizations began to transform themselves as well as adopt a more customer focused orientation. This lead to the emergence of relationship marketing.