CRM Reading Lounge: CRM & General Articles


There are three key CRM concepts to remember for the 21st century, according to CRM experts.

Updated November 2022

Key words: Customer Relationship Management (CRM), touch points, fragmentation, change management, business and or enterprise resource building

CRM emerged in the 1990’s as an information technology solution for managing a customer database and today sits at a senior management strategy or executive level to deliver shareholder value to organisations.

Wendy van Schalkwyk, international business consultant says, “CRM is vital to organisations as it creates lifelong relationships with clients, extracting customer value from data integration to create business intelligence. It is multi-channelled and re-organises the business to focus on particular market segments and manage its customer relationships effectively with efficiency.” Perry Norgarb from SmallBizCRM has been working with CRM software for over two decades. Norgarb states, “the right CRM system can help a small business monetize their site, but only if the right solution for a specific business is implemented.”

But how did a simple customer tracking tool, become so important and how do companies avoid spending millions on CRM without it leading to failure?

  • Get the CRM definition right

Over the past 20 years the definition of CRM has changed significantly. Academic research confirms that hundreds of definitions exist and even marketing guru Kotler’s definition of CRM is different today to what is was ten years ago. Today Kotler (2014) defines CRM as a process of carefully managing detailed information of individual customers and all customer touch points to maximize customer loyalty. The lack of a clear definition of CRM will result in CRM being fragmented within the organization and value being difficult to monitor or track.

  • Get the organisation involved

Successful CRM projects are implemented against the CRM objectives derived from the corporate objectives and support the overall business strategy. Payne and Frow (2005) argue that successful implementation of CRM Programme depends upon four critical factors which include

  • (1) CRM readiness assessment,
  • (2) CRM change management,
  • (3) CRM project management, and
  • (4) employee engagement. A CRM readiness assessment provides and overview audit which helps management assess the overall position in terms of environmental readiness to progress with CRM implementation and to identify how well developed their organization is relative to other companies.

The CRM change management process involves strategic decisions to be taken which will impact the company resources, time and costs but if the right investment made can have significant return on investment. Senior level understanding, support and leadership is critical in a complex CRM implementation project as it affects the company cross functionally and re-organizes the business’s work flow operation and activities. This requires key skills, but for smaller organizations the CRM systems can grow as the organization grows as long as the right tool is invested in that allow for scalability. Various arguments have been put forward for the failure of CRM systems. It is suggested that the main reason for CRM project failure is the lack of strategic planning prior to the implementation of CRM. And according to Norgarb, the failure rate proves how important it is for a business to take the time to investigate CRM systems and to opt for the best fit for the individual business.

  • Get the CRM model right

Grabner-Kraeuter and Moedritscher (2002) advocates that without a strategic framework or model for CRM, it is difficult for CRM to define its success and is one of the reasons CRM initiatives fail. While various models exists and continue to emerge, CRM must be tailored to its respective business needs for real value to be created. Winer (2001, p. 91) identified a 7 step model for customer relationship management. This included:

  • A database of customer activity
  • Analyses of the database
  • Given the analyses decisions about which customers to target
  • Tools for targeting the customers
  • How to build relationships with the targeted customers
  • Privacy issues
  • Metrics for measuring the success of the CRM program.Then the Journal of Marketing Management (2005) defines CRM into three perspectives.
    • 1. narrowly and tactically as a particular technology solution – Perspective 1
    • 2. wide-ranging technology – Perspective 2
    • 3. and customer centric – Perspective 3

The Journal of Management, 2005

The Frow and Payne CRM Model, 2005 Paraphrase: The CRM Model of Payne and Frow, 2005 The Payne idea of CRM describes the complex strategy process that starts with a review of an organization’s strategy and ends with improved business performance and increased shareholder value. The competitive advantage is created for this model by value for the customer and for the business and associated co-creation activities.

The Payne and Frow’s CRM Model, 2005

Kale (2004) believed that CRM required identifying all the strategic processes that occur between an organization and its customers.

The key to achieving customer value lies in determining how customers’ profitability varies across different customers and segments and in estimating the economics of acquisition and retention. In addition, cross-selling, up-selling, and the creation of customer loyalty can be determined.

The contribution of these elements to value creation and customer retention research is vital to value creation and customer retention is a significant portion of the research process.

Van Schalkwyk states that it is critical to keep in mind that organization CRM is continuous because data and information flow across the world as data and information are globalized, new knowledge is produced and creativity for innovators emerges, informing new trends and promoting innovation. These conditions have an immediate impact on customer behavior, as they influence customer purchasing patterns and habits. Therefore, investing in a CRM system that better understands and responds to customer needs and wants is critical to business survival in the future. Businesses are ineffective and inefficient when they don’t have a functioning CRM system to understand and respond to their customer’s changing needs and desires.

According to van Schalkwyk, “There is no single solution to CRM. Virtually every organization believes it understands CRM when the experts come to the table to perform the gap analysis assessment and find out that they do not fully comprehend the function, definition, and value of CRM in the twenty-first century of business. We must work together to select the most appropriate CRM strategy.” CRM is driven by the need for customer-oriented dealing and the creation of value and relevance in the market. What’s critical is that CRM is about the customer rather than the business. With CRM, customers receive insights that enable them to recognize their needs and have them met in a timely and responsive way.

About Wendy van Schalkwyk

Wendy van Schalkwyk is a researcher and writer in the field of artificial intelligence.

Wendy van Schalkwyk, an International Masters of Business Administration student at Business School in the Netherlands (BSN) is researching how to reduce the failure rate of start-up entrepreneurship in the 21st Century. She is the CEO of MI-Ashanti International (Pty) Ltd, a 21st-century high-performance company and training consulting firm, a director of Armorong (Pty) Ltd, a new renewable energy corporation, a Paul Harris Fellow of Rotary International, and a trustee of Living Hope NGO in the Western Cape. Her desire to contribute to the success of start-up entrepreneurship and foster good leadership in the 21st century is motivated by people, the environment, and business.

Issued by: MI-Ashanti International (Pty) Ltd.
Chief Executive Officer (CEO)
Wendy van Schalkwyk
Cell: 081 333 2802

About SmallBizCRM (Pty) Ltd.

Perry Norgarb, the CRM expert with 28 years of experience, developed SmallBizCRM to help small businesses negotiate their CRM path. Because of this, SmallBIZCRM created a CRM finder and CRM needs analysis tools as well as in-depth CRM reviews. These tools provide the best five CRM solutions available according to the questionnaire responses and a longer report to motivate the decision. We provide an objective and honest review of CRM systems. Our reviews are objective and provide an honest overview of the CRM options available. We assist small businesses in choosing a CRM system.