APPLICATION OF CUSTOMER RELATIONSHIP MANAGEMENT ( ?· APPLICATION OF CUSTOMER RELATIONSHIP MANAGEMENT…

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POLISH JOURNAL OF MANAGEMENT STUDIES Milovic B.

2012 vol.6

151

APPLICATION OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM) IN AGRICULTURE

Milovic B. Abstract: Business decisions supported by strategy of customer relationship management CRM are interesting for: retail networks, telecom operators, banks, insurance companies, travel agencies, but also for agricultural organizations. This paper highlights the importance of IT development of customer relationship management strategy. The development of information technology in agricultural organizations and easier and cheaper access to it, enables the development of electronic relationships with customers (e-CRM) which simplifies and automates the dialogue with customers and provides an answer to their requests in real time, which leads to increase of customer loyalty and satisfaction. This business strategy helps agricultural organizations to adapt their products and services for each client. Keywords: Agriculture, agribusiness, CRM, CRM strategies, eCRM

Introduction

Management Today, under the impact of crisis, agricultural businesses are facing the question of how to increase sales. Competitive environment in which agricultural organizations are operating, forces them to lower the prices of their products or add new services to retain their customers. Sometimes that's not enough to keep the customer because customers become more demanding and harder to meet. This raises the question of what customers really need to conduct their businesses and how can they be helped, and the question who are the best (most loyal) customers. Finally, communication towards customers is expensive and organizations are facing the question of how to effectively spend the money intended for communication with customers. Customers relationship management represents marketing transactions in which the vital components are product, price, promotion and place. Since agricultural organizations have a large number of customers, effectively managing relations with them is the key of maintaining the business. CRM connects IT and marketing strategy to create a long-term relationship with valuable customers and to improve customer service, which leads to increased profitability of company. By combining the right software and analytical tools, CRM [1] helps organization to integrate customer data from different sources, to analyze it and gain a comprehensive view on customer relationship. Agricultural organization that have experience in implementing CRM systems know that this is not just technology and software solution but CRM can be referred to as an integral part of the overall customer relationship strategy. Systematic use of CRM applications is well established for the purpose of providing benefits for organizations who want to automate their sales, marketing Phd. Boris Milovic, Faculty of Economy Subotica, University of Novi Sad, Serbia, corresponding author: boris.milovic@gmail.com

2012 vol.6

POLISH JOURNAL OF MANAGEMENT STUDIES Milovic B.

152

and customer service functions. Its estimated that the cost of acquiring new customer is about five times the cost of maintaining the existing customer [2]. That stands for a reason to pay close attention on needs of todays customers. CRM is a business strategy for agricultural organizations oriented on customers, that is used across the company. Companies that choose organized CRM should provide the right technology that will lead to the improvement of business processes, provide timely information to employees and will be easy enough to use [3]. Measures of CRM include analysis, planning and control, initiation, stabilization, solidification and revival relations with customers.

Information systems and agriculture The contribution of ICT to agriculture is rapidly changing due to the new technologies, new applications and new business models, and their wider availability and affordability, that are enabling widespread innovation in addressing the needs in agriculture [4]. FAO points out five basic categories through which ICT is used in the agricultural sector. These categories include: technical and economic development, community development, research and development, development of small and medium sized (SME) enterprises and networks [5]. Technical and economic development for farmers - Like with any change in technology, economic impact of ICT occurs through improvements in efficiency and increased productivity. This improvement is manifested in: improving efficiency in the allocation of resources, reduction of transaction costs, and technical improvements. ICT can contribute in reducing of uncertainty in the activities and transactions, reducing the incompleteness of the market and reducing the volume of incomplete information that may arise from the relatively informed person. There are many examples in which you can see how the improved production and market information are relevant to farmers who are often vulnerable group in this process. This may include extension and research on the adoption of new sorts of crops, machinery, control of pests and weeds, treatment and care of livestock. Community development - In addition to the use of ICT that can be of direct usefulness in agricultural organizations, its application affects the development of local communities. Some of the priority areas for ICT and community development include reducing communications costs, as well as universal access to human resource development, including health and education. The development of media centers is an important innovation, which is supported by the fact that they are becoming a central place where the public can obtain and use information. This may include information about the services provided by government, private sector, society and others, as well as the way to approach this type of support. Also, this can include an assistance for small businesses, the ways to access public subsidies, advice on health and education, employment opportunities and constitutional rights.

POLISH JOURNAL OF MANAGEMENT STUDIES Milovic B.

2012 vol.6

153

Research and development - third use of ICT is related to its potential to contribute to the transformation in agriculture through improved education and research through an innovation system of agricultural science and technology. Expansion of traditional training and learning is comparatively expensive approach that requires preparation, printing and dissemination of training materials, a large number of trained/educated employees who carry messages to be transmitted and the risk to twist the message after possible transmission. Employees who are connected through ICT will be able to renew their knowledge to more continuous manner than the case was earlier, avoiding the criticism that the information gained from these services are obsolete or irrelevant. Media networks - marketing systems absorb surpluses through e-commerce, improving the efficiency of agricultural products circulation. Through agricultural e-commerce transaction facilities of this information allow users to submit and edit on-line orders, perform on-line payments and receive automatic notification about the status of their order. Also, the companies can provide useful information to suppliers on their web site, such as user reviews, information on inventory, production schedules, information about product demand (actual and forecast) on-line. Effective adoption of Information and Communication Technologies (ICT) now has a proven record in many parts of the world and a demonstrated potential to attain significant economic, social and environmental benefits at local, national and global levels [6].

CRM for agricultural organizations CRM is the alignment of business strategies, organizational structure and business culture, based on customer information and information technology, in order that all contacts with clients meet their needs and achieve business benefit or profit [7]. The success of organization depends on the elements necessary for the proper functioning of marketing in general. These elements include [8]: basic strategic directions of development of the organization, and good knowledge of business and competition, knowledge of final customers and business customers, their needs and desires, characteristics, the impact of certain factors on their behavior, the actual marketing or market way of thinking, understanding the role and importance of all persons involved in the process of creating and delivering the value (customers, business partners and employees i.e. organization), organization acting as a whole - an integrated approach to managing individual channels of communication and sales, and monitoring of key data. A lot of attention is focused on CRM as a process of management in order to enhance performance of the organization. However, to reach high enterprise performance based on various types of benchmarking and other techniques, it is necessary to develop a system of motivation, without which actions to improve efficiency will not be sustainable with long-term nature [9]. Also it need to be paid attention on the way how the

2012 vol.6

POLISH JOURNAL OF MANAGEMENT STUDIES Milovic B.

154

CRM programs are implemented and managed, and what influence they have on the performance of agricultural organization. Six activities to include CRM program for agricultural business are as follows [10]: CRM objectives; Types of accessible data about customers; Use of customer data for management decision-making; Market approach; Tactics used to develop and maintain relationship with customers; Assessment of the technological infrastructure that is currently used. CRM objectives - Some of the main g

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