Week 9 Strategic Relationships and CRM Strategies

Hi friends, I am sorry as I could not post posts timely as I promised. "No excuses". Its been long time since we talked last time. Today's topic is Strategic Relationships and CRM strategies. Understanding of both.

Relationship involving Strategies:

Business is all about relationship and adopting and developing different strategies to maintain and enhance those relationships. But this is business so the main focus to have strategies is to increase profits and growth. There are many theories by which we can learn about business strategies. But I think most important theories are social/relational exchange theory and interaction theory among other theories such as Agency, Transaction Cost theory, Resource Dependency theory.

1) Social-Relational Exchange Theory
Main Base Thinking: Relationship is the social exchange. We are human beings, organizations are run by us. We do business. and thus we create social structure which is very dynamic and complex. Both parties are involving in business because they have some interest and something to exchange and its not just money or transaction. We act as actors, agents and perform some actions to change the social structure. It is both way interaction and influence is imposed on both parties. Effect can be negative or positive in terms of whole social interaction. There are number of examples we can take.

I) eBay product review forum, blog, feedback community: Today eBay is becoming more popular among online buyers/shoppers. With the help of Blog technology, customers having same interest in some products leave feedback for that products on forum, leave feedback for the seller, and it is available to every registered person. and thus the e-commerce strcutre has been changed. Between customers relationships (base: common interest) is basis for forming the business strcutre. while with seller they form both transaction and relationship based strcture. Thus if seller having positive ratings have potential to do more profitable business than negative rating. and remember these ratings are given by users not by eBay company. so sellers main focus is to get higher positive ratings rather than just focusing on profits. Thus it helps in understanding and in improvement in customer relationships.

2) The negative effect can be seen of having community, social, culture relationship structures. Think about a new company wants to sell (gay, lesbian toys, sexual pleasure toys) in Indian (Gujarat state local market). Here customers are different, they have their unique background, culture (i.e. not to accept such gay, lesbian structure and toys). Here there will change from both side. Company might totally fail in first attempt and lost the business. but it creates new relationship structure, change the old relationships with such business. Those consumers might start accepting such things and in long term companies can do long term profitable business. Thus in that environment transaction (money) is not very much important but relationships, cultural exchange is more important and in long term it can benefit company.

Thus those theories are very important to understand business strategies. But question is do companies really follow or adopt such strategy to implement CRM strategies or CRM systems? If they would have followed the path, many CRM projects could have been saved. Those theories help companies to understand their business strategies, explore their CRM strategies based on their Business strategies and gain profits. I think without considering from initial phase, companies can never follow such theory and successfully implement CRM.
In the second example, if companies do market surveys, culture understanding, in understanding customers needs using social-relational exchange theory, they might start with campaign which first change the social structure of Indian consumers, set specific target marketing campaign and then start selling those products. Thus in that case CRM and Business strategies are aligned and beneficial to both customer and company. But today most companies are following other three theories specially agency and resource theory.

Please do leave comments as they are my lifeline for my posts.

Cheers,

"Anki"