i

Editorial Preface

Closing the Gap Between the

Expectations of Relationship
Marketing and the Reality of E-CRM
Neil F. Doherty,Guest Editor
Nigel J. Lockett, Guest Editor

Marketing is no longer simply about developing, selling, and delivering products. It is progressively more concerned with the development
and maintenance of mutually satisfying long-term
relationships with customers (Buttle, 1996, p. vii).
To this end, organisations are seeking to adopt
relationship marketing (RM) with the expectation
that it will help them retain customers and in so
doing deliver long-term and value-added customer
relationships. The economic case for RM is clear:
It is far cheaper to retain an existing customer than
it is to win a new one, and RM has an important
role to play in customer retention (Buttle, 1996,
p. vii). For example, Payne (2000a, p. 110) notes
that: many researchers have suggested that it costs
around five times more to get a new customer,
than it does to retain an existing one. Moreover,
the literature (e.g., Grnroos, 1999; Gruen, 1995;
Morris, Brunyee, & Page, 1998; Payne, 2000b)
identifies a range of further benefits that should
be realised from a RM strategy, including: longer-term relationships; more frequent customer
contact; heightened focus upon customer service;
and the tailoring of products and services. While
the anticipated outcomes of RM may be highly
desirable, their realisation is not readily achieved.
More specifically, it has been proposed that RM
success will be predicated upon: a supportive
culture; internal marketing; a deeper understanding of customer expectations and motivations;

an organisational reward scheme; and, above

all, a significant level of organisational redesign
(e.g., Buttle, 1996; Grnroos, 1999; Gummesson, 1996). Moreover, given that RM is, above
all, a philosophy, rather than a well-defined way
of working, it is not readily apparent how it can
best be operationalised, and its benefits realised,
within the organisational context. However, many
practitioners and academics argue that the solution
can be found through the adoption of customer
relationship management (CRM).
CRM is promoted as the ideal mechanism
for implementing RM on a company-wide basis
(Ryals & Knox, 2001). CRM has been defined
as a business process that addresses all aspects
of identifying customers, creating knowledge,
building customer relationships and shaping their
perceptions of the organisation and its products
(Srivastava, Shervani, & Fahey, 1999, p. 169). As
one might surmise from this definition, CRM is
very firmly rooted in the principles and practices
of relationship management. As Zablah, Bellenger,
and Johnston (2004) note relationship marketing is often cited as the philosophical basis of
CRM (p. 480), while Ryals and Knox (2001) go
somewhat further when they argue that: CRM
provides management with the opportunity to
implement relationship marketing on a companywide basis (p. 535).

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There are a wide variety of views as to the underlying nature of CRM: is it a process, a strategy,
a philosophy, or a technology? (Greenberg, 2001).
Indeed, these multiple perspectives are often
reflected within its definition: a comprehensive
business and marketing strategy that integrates
technology, process and all business activities
around the customer (Anton & Hoeck, 2002).
However, in recent years, it is the technological
perspective that has gained the ascendancy, and
for most organisations, the adoption of CRM is
achieved through the implementation of software,
which typically comes with the label electronic
customer relationship managementor as it is
increasingly termed e-CRM.
The annual global expenditure on CRM
technology, in general, and e-CRM, in particular,
is already huge and growing year after year. The
term e-CRM is typically used to describe a broad
range of technologies that might helpfully support
and facilitate a companys CRM strategy. Such
technologies are likely to include: web-sites,
email, data capture, data warehousing and data
mining (Lee-Kelley, Gilbert, & Mannicom,
2003). Dyche (2001) makes the useful distinction
between two main classes of e-CRM technology: operational e-CRM and analytical e-CRM:
Operational e-CRM uses telecommunications
technology to establish and manage the interface
between the host organisation and their customers, and analytical e-CRM uses data management
technologies to build and maintain a more coherent
picture of their customers. While a whole variety
of database and telecommunications technologies
might play important roles in an integrated e-CRM
implementation, most discussions and definitions
of e-CRM highlight the overarching importance of
the Internet. As Dussart (2001) notes: the Internet
is the ideal platform for practising relationship
marketing (p. 633).
Having established a strong logical link
between RM and e-CRM, it is important to pose
the following question: to what extent does eCRM technology deliver the expected returns
of RM? Put another way, does a typical e-CRM
implementation enable organisations to successfully practise RM, or is it more usually applied as
a simple tool to more effectively manage the sales
process. The problem seems to be that while the
RM literature promises a vast array of significant
benefits, thus far there is little evidence that e-CRM

technology is able to deliver on these promises.

For example, Feinberg and Kadam (2002) contend that there is no proven link between the
implementation of e-CRM technology and the
delivery of significant improvements in terms of
profits, sales or customer satisfaction. Indeed,
there is a growing body of literature that raises
serious questions about the success of CRM, in
general, and e-CRM technology, in particular (e.g.,
Adebanjo, 2003; Fjermestad & Romano, 2003;
Rheault & Sheridan, 2002; Rigby, Reichfield, &
Scheffer, 2002; Yu, 2001). One highly plausible
reason for the high levels of disillusionment, with
regard to e-CRM technology, is that it simply is not
fulfilling the promise of RM. As Trembly (2002)
reported, there is the unrealistic expectation,
within many organisations, that the implementation of CRM technology will deliver the full suite
of benefits associated with RM. This potentially
significant expectations gap, can probably best
be explained by returning to the success factors
for relationship management. RM is an enterpriselevel strategy, whose success is predicated upon:
significant process redesign, a supportive culture,
and enterprise-wide participation in marketing. A
technological solution, such as e-CRM, no matter
how good it is, cannot automatically deliver or
trigger wide-scale organisational redesign.
Based upon our critical review of the literature, we would argue that for any organisation to
stand a realistic chance of attaining its benefits, the
organisation would need to adopt a holistic view
of relationship management, as reflected in Figure
1. Adopting such a view means recognising that
while e-CRM technology may well be a necessary
condition for effectively tackling the challenges
of RM, it is very unlikely to be sufficient on its
own. More specifically, e-CRM technology is
an important conduit that facilitates the capture
of high quality preference-related data from the
customer, while simultaneously directing tailored,
marketing-oriented information to the customer.
However, to be successful this critical interface
has to be supported by a raft of customer-focused,
organisational changes to ensure that the promises
of customer value, such as those offered by e-commerce, are delivered in practice. Moreover, there
are also many technological challenges that the
aspiring RM organisation will need to overcome
before it can hope to enjoy the benefits of an eCRM initiative. More specifically, the following

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Figure 1. A holistic view of relationship management

Internal
Marketing

Alternative
Marketing
channels

Supportive
culture

e-CRM
interface

Reward
Scheme
Re-designed
Processes
Understand
customers

Customer

e-CRM
databases

Adapted from Doherty & Lockett, 2005

is a list of some of the more pressing challenges

that will need to be addressed:

It can be argued that layers of technology,

whether Internet or phone based, often make
customers feel isolated and confused. Which
one of us has not felt frustrated when faced
with an automated call centre, or Web-based
interface that does not readily address our
needs, as customers. Kotorov (2002) argues
that the solution to this problem lies in redesigning the organisational processes and
structures and aligning these with the technological interfaces, so that the customers
needs are always well served, irrespective of
the time and location at which they arise.
The Internet provides an important new
channel through which organisations can
trade with their business partners. However,
this channel will only deliver long-term relationships, in an era of increased customer
mobility, if the technological interface can
be used to facilitate strong customer involvement with the retailer (Dussart, 2001).
Peppard (2000) argues that the development of mutually rewarding, long-term

relationships between organisations and

their customers is primarily predicated upon
information richness, rather than information reach. Consequently, to be successful,
e-CRM applications must facilitate highly
tailored and rich interactions with individual
customers, rather than simply relying upon
the reach of the Internet to increase the
volume of interactions.
The design of an e-CRM customer interface
is critical to the operational success of the
application. As Fjermestad & Romano
(2003) point out, by understanding and applying the basic design principles associated
with usability and resistance, many of the
typical pitfalls of e-CRM initiatives can be
avoided.
Internet-based e-CRM may not be the only
channel through which an organisation
will attempt to facilitate RM. For example,
e-commerce sales will be supported by a
range of complementary channels, such as
a call centre, off-line marketing, postal, and
potentially mobile computing interfaces.
Consequently, it is important that these
complementary customer-facing channels

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are also well integrated with any wider

organisational changes relating to the RM
initiative.
It is important to note that while an e-CRM
interface with customers will not deliver
value unless it is very tightly integrated with
powerful and highly sophisticated e-CRM
database technology, to ensure that all the
customer-related data is effectively analysed
and translated into customer-focused information (Scullin, Fjermestad, & Romano,
2004). While data storage and processing
technologies should be an integral part of
e-CRM technology, the increasing focus on
the Web-based elements of eCRM means
that this is by no means certain.
A further important component of the technological infrastructure will need to come
in the form of a communications network to
effectively interconnect all of the constituent
parts of the organisation. As Payne and Frow
(2005) note, effective CRM is predicated
upon: the cross-functional integration of
processes, people, operations and marketing
capabilities, that is enabled through information, technology and applications.

However, while providing the technology to facilitate interconnectivity is a necessary

condition for cross-functional integration, it may
not be sufficient, as working practices, business
processes, and perhaps above all, organisational
culture may need to be modified to ensure that
the communications technology delivers value
(Grnroos, 1999).

OMalley and Prothero (2004) report that

customers are savvy exchange participants, who appear to: recognise relational
strategies as shallow and potentially divisive
in nature. Consequently, it is important
that retailers find ways of building trust in
their brands, by demonstrating to customers
that win-win outcomes are possible, from
a well-designed relationship.

Our analysis of the relationship between

RM and e-CRM suggests that there are many
organisational and technological challenges that
will need to be addressed before organisations can
reap the full potential of e-CRM initiatives. Con-

sequently, the underlying motivation for producing

this special edition was to provide new insights
into how these challenges can most effectively be
overcome, and the gap between the promise of RM
and the reality of e-CRM could best be closed.
In particular, we were looking for significant new
contributions into how e-CRM is being applied
and integrated within business organisations, and
the impacts that this is having on their operational
and financial performance and the design of their
business structures and processes.
The call for papers attracted a very encouraging and enthusiastic response from all corners
of the globe, which following a very rigorous
two-phase review process, were filtered down to
the six papers that ultimately form this special
edition. Together these papers provide a variety
of perspectives and viewpoints as they try to illuminate different aspects of this complex and
highly dynamic area of academic discourse.
Ranging from careful statistical analyses, which
deliver new insights into the behaviour of customers and retailers, through to thought-provoking
conceptual contributions, each of the following
papers makes an important contribution to the
on-going debate:
1.

2.

3.

4.

Integration of E-CRM in Healthcare

Services: A Framework for Analysis
Burr, Patterson, Rolland, and Ward propose
an analytical framework, which can be used
by healthcare providers to develop a competitive advantage through implementing
e-CRM systems to create value for their
patients.
The Impact of E-CRM on Organizational and Individual BehaviorsLetaifa and Perrien empirically explore how
e-CRM initiatives must be accompanied by
changes to organisational and individual
behaviours, if they are to deliver improved
customer value.
Do Mobile CRM Services Appeal to Loyalty Program Customers?Liljander,
Polsa, and Forsberg present an empirical
study that was designed to investigate the
appeal of new mobile CRM services to
airline customers.
E-CRM and Managerial Discretion
Coltman and Dolnicar empirically investigate the importance and role of managerial

5.

6.

discretion, with respect to the adoption of

e-CRM. In particular, they show that the
heterogeneity of beliefs held by managers
about e-CRM execution matter when
explaining e-CRM success.
Multi-Channel Retailing and Customer
Satisfaction: Implications for E-CRM
Warrington, Gangstad, Feinberg, and De
Ruyter examine the influence of shopping
experience on customers future purchase
intentions, both for the retailer and for the
channel. In so doing, they review the implications of their study for the uptake and
adoption of e-CRM.
Developing a Global CRM Strategy
Shumanov and Ewing critically examine
the complexities of global CRM strategy
using the case of a leading financial services
company.

Finally, the guest editors would like to

thank Professor In Leethe editor-in-chief of
the International Journal of Electronic Business
Researchfor all the help, support, and guidance
he provided throughout the preparation for, and
publication of, this special edition. Moreover, it
is important to acknowledge the very substantial
contribution of the 30 plus individuals who helped
out by reviewing papers for us.

References

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e-CRM applications: An analysis-based
proposal. Management Decision, 41(6),
570-577.
Anton, J., & Hoeck, M. (2002). Ebusiness
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Anton Press.
Buttle, F. (1996). Relationship marketing theory
and practice. London: Paul Chapman
Publishing Ltd.
Doherty, N. F., & Lockett, N. (2005). Are the expectations of relationship marketing being
met by the reality of e-CRM? Proceeding
of the ISBE 28th National Conference,
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Dussart, C. (2001). The transformative power of
e-business over consumer brands. European
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Dyche, J. (2001). The CRM handbook: A business
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Boston: Addison-Wesley.
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Peppard, J. (2000). Customer relationship management (CRM) in financial services. European

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Neil Doherty is currently professor of information management in the Business School at Loughborough University. In addition to electronic CRM, his research interests include the interaction between organisational
issues and technical factors in information systems development, understanding the reasons for failures of
information systems projects, strategic information systems planning and e-commerce. Neil has had papers
published in a range of academic journals, including: European Journal of Information Systems, Journal of
Information Technology, Journal of Strategic Information Systems, Information Resources Management Journal,
IEEE Transactions in Engineering Management, Journal of Business Research, Journal of End User Computing,
Information Technology & People, Behaviour and IT and Information & Management.
Nigel Lockett is business development manager for InfoLab21 Knowledge Business Centre (KBC) at Lancaster
University, which involves managing a small team whose primary objective is supporting engagement between
academic staff and businesses. He holds a PhD in management science and his current research interests include
e-business, in particular by SMEs, and knowledge transfer. Recent EPSRC-funded research projects include
the 'Lancaster Centre for e-Management and e-Science' and the 'InfoLab21 Knowledge Transfer Study'. He is
a knowledge transfer and information management specialist with experience gained in both leading academic
and dynamic commercial environments. He has a proven track record in managing enterprises, with 15 years
senior management experience.