Global Conference on Business and Finance Proceedings ł Volume 4 + Number 1

SIGNIFICA1YCE OF FIELD FORCE FOR THE CRMIMPLEMEi\TATI oN I1T Al§ E1§TERPRI SE

Przemysław Deszczyński, Y oznań University of EconomicsB aricsz Deszczyń ski, P oznań University of Economics

ABsTRACT

The article briefly describes tlle evolutian oJ'the CRM perception, from the pure IT solution fashion to tlzemast recent viaa based on three CRM aspects: stratęgy-, techncłogl and chat,lge łnanagełuent procęss.One af the common malfunctions is CRM change mąfiagerł?ent process is lack of proper communicationand rnotivation stł,ategy designed for field furce taking part in t}ze implelnentatioł,, pracess. The authorspresent the principles of effecłive customer-oriented operative processes and seek tłle answer why theyare cammoruly negłected by field force. This leads to a definition af the 'margilląl łevel af self-involvełnent' and its impact on success o.f the CRh{ implementation. In ąddition, the ąuthors discussstrategies for q1uality ariented motivątion schemes.

INTRODUCTION

CRM strategy is sometimes accused of not contributing anything new to marketing 0r managęmenttheorięs and to ęconomic practice. It has been usbg knorłrn męchanisms and concepts and ręfęrs tosolutions that 1rave already been reachęd. The oniy significant point (according to its critics) isappiication of computer systęms processing customefs' data at an unprecedented scale. Therefore, CRMis perceived by them as an expensive toy which, instęad of irnproving a company's efficiency, wastes itsvaluablę financial assets and ęnęrgy of employees. This thesis seęmed to be confirmed by the firstattempts of implementing CRM at the end of the 20'h century. In most cases thosę attempts resulted inheały investment in hardwarę and software. and usually ęnded with faiiure, not bringing the expectedbusiness profits. It has been estimated that in a pioneering period of CRM, fram 55o/o b 7a%o of CRMimpi ementaii ons werę unsucces sfu l (Lovel ock & W irtz, 2aa7 }.

However, trying to combine practical experience with conclusions from publications of leadinginstilutions dealing with consultancy on CRM implemęntation and books devoted to strategic changemanagement (not only in the context of CRM implementation), the authors, in the course of thęirscientific research, camę to a conclusion that CR.M can bę understood as a healing process within an

organisation. This procęss is an outcomę of conscious decisions taken by mernbers of an organisation,which arę continued, controiled and adjusted to the changing conditions, with the most impońant critęrionof changes which is optimalisation of the cręation chain of benefits, attractivę from thę custorner's pointof view. Thę factor which has to be taken into consideration is the 1evel of profitabiliĘ which guarantees

the ownęrs of a company the expected ręfurn on the invested capital and its employees realisation of theirindividual needs within the full range of 'Maslov's pyramid'. Therefore, whęn undęlcaking attempts toimplement CRM, special attention should be paid to coruectly defining the role of iine persorrne1 and topreparing basic incęntives and tools which buiid their commitment to practicatr realisation of this strategy.The article is devoted to this problern.

RESPONSIBILITIES OF TI{E FIELD FORCE

New responsibiiities oi the field force, deciding about thęir efficiency in developing relations withcustomęr§ are, first of ali, their constąnt allempts to replace anonymous trade cantacts with a dialogue cfpartners who can be identified by their names and surnames. In this context, the number of contacts withcustomers is still important, which, taking into consideration even a certain level of probabili§ of

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purchase, should lead to a number of transacticns correlated with it. However, it is not of less importancewhęthęr thesę contacts end up with obtaining inforrnation about customęrs which enablęs

- their repeat identification,- making a contact on a salesperson's o\ł,n initiative,- better adjustment of a company's offer or more accwate highlighting of its strengths, thanks to

conscious collecting of information about customers' need§,- analysis of the reason of not concluding the transąction, o11 the bąsis of an interview with thę

cuStomer.

Thę last situation is the best proof that even contacts with those customers who eventually did not decideto purchase are not a wa§te * from the point of view of an organisation - time, it is so if tlre organisationwas able to collect sufficient amount of information about characteristic featuręs of such a customer andabout the reasons why the offer was rejected by him. This sęt of data will permit to determinę whether aclięnt was inrportant for a company, for example, becarrse of his potential for concluding transactions,declaręd levels of orders, key preferences Srice, product, extęnded product) and which ęlernents of theoffer węre so unallractive for hirn that he rejected it totally. In this way an organisation wili be able todetętmine if the wholę offęr is properly adjusted to the needs of customers from its target group andwhere modifications should be introduced.

This Ępe of complex analyses will rather not be conducted by employees having diręct contact withcustomers. Those employees do not have enough time, research experience and their influence on thefinal shape of an offer is relatively small. Nonetheiess. ręsults of such analyses may be soon introducedto kainings for fięld forcę. Horveveą active exploitation of information about customers does not have toand should not take thę form of only analytical processing.

Operational exploitation of this information plays an equally imporlant role and starts affbcting fieldforce. Every successivę meeting or conversation can bę basęd on tŁre formerly acquired knowiedge.Therefore, it is not necessary to come back to the matters that have already been settled, and a salespersonlęanrs more and more about needs and motives of ą customer. In that way, a customęr can bę offeredsolutions which, in given circumstances, have better chancęs of success. It is also affęctęd by the fact thatsubsequent contacts are characterised by higher and higher level of mutuai trust. Due to experience,customęr's ręactions become more predictable for a salesperson, and in tułt, information received from awould-be customer can be used for winning ordęrs from him in the future. Knowing his needs, reasonsfor rejecting the curreni offer, contact data and having information about his purchase cycle of productsand services, a salesperson may, in a duę time, contact him again and try to convincę him to tlrecompany's offer.

Even higher probability of concluding (in this casę a repeat) kansaction occufs whęn thęre are regularcontacts with this customer who has already once trusted the salesperson and the company represented byhim. Thanks to continuous supplementing of information about a customer, gathered during realisation ofa transaction and iater, it is possible to:

- update contact data,- identify tendencięs and changes in customer'§ needs,- locate łhęm in a time context,- superuise his satisfaction (and if possible) solve the identified problems.

Such aftęr-sales assistance gives a customęr the leeling of being the centrę of attęntion, although hę hasalready concluded a transaction, At the same time, a custonręr is not lęft alone with a product or service(which may not meet his expectations fully) during the period betwęen successive transactions. Then asalesperson may be sure that his strength wil1 effectively neutralise the influence of competitive suppliers,especiatrly whęn in their contacts with customers they har,ę to rely orrly on mass communication, which, in

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its nature, is adapted to the needs of the so called 'typical customer'. This sofi of communication isseparated from individu a| cy cle of product/services exchange.

In order to make a dialogue with a customer an effectivę tool of building competitive advantage, it has tobe a continuou§ proce§s. Effects can not be expected immediateiy. Even concluding a vęry complexfi,ansaction, drrring which mutual contacts of a salesperson and a buyer are vęry intensive, is not sufficientto deepen the knowiedge about a customer to the extent that customer's motives and decision takingcriteria can be fuily understood. On thę other hand, each infonnation becomes out of date after sometimę. For example, product exchange cycle, which has beęn stable so far, can bę accęleratęd due toimprovement in customer's financiai situation and related increase in his nęęds. External factors. such aschanges in legislation which affect a given market, or aggressive activity of competitors may also bringabout redefining which has an impact on a customęr's dęcision taking system.

A11 thosę arguments prove that a professionally operating salesperson does not ęnd his contacts with acustomer tlre moment a salęs transaction has been concluded. It is just the beginning of the whole seriesof mutual interactions which should contribute to deepening the relationships between both pańners, Fora salesperson, apart from a męthod of gaining cuffęnt information about customef's needs, rnotives andcriteria for taking a decision, they give a possibility of quick recognition and cottnteracting of thosephenomena which ęxet a negative impact on customer's satisfaction and value of a mutually builtrelationship. Taking into considęration the increasing complexity of offers available on thę market(enriching them by added values) and the tendency to perceive products and sęrvices as an inseparablewhole, these are thę values that a customer buys, a salesperson should not forget about customer'ssatisfaction with those elemęnts rvhich were addęd to the basic offer (Zeitham1 & Bitner, 199ó).

PROBLEM OF MOTIVATION FORACTrVE PARTICIPATION IN II!{PLEMENTATION

It would seem that ręalisation of CRM strategy should be perceived by the field force as a complex recipefor iong-term success. Wlry do not so many of them see it in this way? As it has been prnved byresearch, in almost evęry s§cond case, thę main reason for failure in implementing CRM is lack ofcommitment and conviction of line employees about implementing the changes (Greenberg, 2004). Thereare at least a few reasons for such a situation and their negative impact is very strong because they usuallycoincide. It can not be expected that when the CRM idęa wins support of a company's management, itwill be automaticałly accepted łiy others, Employees accept CRM skategy only when it really changestheir working place and when they are adequatel;l paid for additional responsibilities, moreover whenthey are ęarlięr prepared for thęsę changes and trainęd in such away that they feel co-participants (Gentle,żaaq. Succęss of companies in interrrational business is very closely related to ręcruitment, and first ofa11, training, moiivating and planning development ol their staff, who is capable of performing ail thetasks corrnected with ręalisation of the CRM programmę.

Continuous coilęction and making use of customers' data is an investmęnt madę by field force every day.Its main cost is ęxtęndęd time devoted to serving a customer, v/ithout any guarantee of irnmediate result -purchase. Especially at the early stage of applying CRM sirategy saies people can perceive, for exampłe,after-sales service from the angle of ęconomic costs of those activities, that is a bigger number of quicktransacticns tlieoreticałly 1ost. Until a salesperson starts to gain notable material benefits &om hisprofessionalism, in the form of loyal customers, his engagement into realisation of the strategy wii1depend on training ancl motivating programs, and pressure of the organisation. Unfortunately, the authorsknołv it from his experience, that companies usually exploit only the iast of those factors.

The situation becomes additionally complicated in those branches where product replacementcycle/frequency of using a service is long/small, It may, however, turn out that in some specificconditions (for example, a company reducęs costs during a difficult situation on thę labour market) the

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index of employee retention is so low that, in practice, none of thę employees can count on concluding thenext transaction with thę same customęr. Then therę is a case of only dęclarative implementation of CRMstrategy and such implementation is reflected only by presentations given by members of a companymanagement, and in fact, it is limited to installation of CRM class comprrter systęm (B. Deszczyński2005).

As it has been already mentioned, acceptance of CRM system by sales people is highiy influenced bypreparing a proper training programme. It should embrace the following ęlements:

- explaining the theoretical basis of profitability of CRM stratęgy implementation,- referring to basic elements of the strategy in the context of company's mission, vision and its

main objectives,- operationalisation of tlre sirategy elements in the form of reałisation of processes connected with

a widely understood customer service,- combining company's bęnęfits resulting from implementation and application of thę strategy with

personal benęfits ofsales force,- training how to operate the CRM system,

In order to make trainings ęffective, they should be organised bęforę i:rtroducing any changes so that salesforce have timę to assimilatę thę knowledge and could fęe1 that they are an important link in the chain ofchanges in their organisation. In companies which inplement CRM system &om scratch, it would beadvisable to separate trainings concerning the stlategy from trainings on CRM application. Preparing asystem, especially a targeted one, is a long-term pfocess, therefore at least some organisational changesshould be implemented bęforę tłrę whole system starls operating. This, in tunr, requires suppor1 of allmembers of the organisation first of all of salęs people or, more broadly, of front-line personnel.

Another imporlant element of the implementation process are trainings for immediate supervisors of salęsforcę, In theory the process may be implemented when sales employees are ręsistant to it but supervisorsare fully comnritted, however, any undertakings which are against the will of thę lowest managementlevel are bound to fail.

While dęaling with sales force motivation, at lęast a few very imporlant principles of effective motivationprogralnmes siroułd bę mentioned:

- combining individual interests of motivatęd employees with the interest of the motivating,- adjusting incentives to the fęatures and qualifications of motivated employees,- using understandable, real and attractive, from the point of view of employees, rewards,- excęeding the usual, but possible to achieve, objectives which entitie employees for receiving

those rewards,- creating motivation systems which are continuous and encourage employees to systematic

improvement in a long term.

MARGII\AL LE\IEL oF sELF-Il{voLvEMENT

The first condition of an ęffęctive motivation systęm looks so obvious th,at it seemingly does not need anycomment. The simplest way of defining it worrid be a staternent that an employer given tasks to anemployee, which he has to compleie in order to receive the agreed remuneration. Thus it rnay seem thattriggering offthe required effect, i.e. empioyee's activity, has been sęcured because it is guaranteed by avely severe sanction of not recęiving remuneration if tlrę employee fails to carry out lris responsibilities.In this case wę can talk about a cliręct effect of organisational pressure. Such approach, however, doesnot automatically mean that work done for an employer will be of the quality required by him. In case offield force, or people employed in trading, the basic factor determining work quality is, the so called,1evel of customer seivice. Behind this general coilcept, from the point of view of a customer, there is thewhole experience hę had before, during and after a transaction. Leaving asidę thę quałity of a product

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itsel{ which a salęsperson has no influencę on, it is his behaviour, personal involvemęnt, knowledge,readines to help a customer, ability to soivę problems and communication skills that determine the way a

customęr perceives both the offęr and the company. In services this intęrdependance is even §tronger

because tlre quality of service which a customer buys depends directly on the salesperson (or a personproviding this services} {Zeitharń & Bitner, 1996), Moreover, loyalĘ canbę more easiiy found betweęntwo people rathęr than betwęęn a per§on and a more or less anon}rynous company (Schiiler, 2005).

In order to illustratę the importance of this probienr it is enough to go to a few shops" Why were someshop assistants so keęn on our purchase in their shops and others seemęd not to noticę our interests oreven showed their displeasurę? Aftęr ail each of them łvas receiving remuneration for thęir work. andemployers cared about the possibly highest ievę1 of customer service. Does it mean that "bad" salesassistants are mórę lazy by nafure? Maybe they have just prcperly assęssed the relation (or rather its 1ack)

between their behaviour and personatr benęfits.

The result of this Ępe of caiculation is affected by two essential factors, Thę first one is diręct financialmotivation, If a saies assistant ręceives the same remuneration for a routine service as for work with fullęngagement which resuits in a large numlrer of salęs and satisfaction of his customers, an employercanrrot expect that this shop assistant wiil do anl,thing above a given minimum, This minimum can będefined as a marginal level of shop assistant's involvement which is created within thę framęwork of hisway of thinking. Thus the marginal level is tbę lowest ięvel of the required eifects of his work, expressedin his income, benefits and quality of customer service, which guarantee his further employment. Apartfrom thosę factors which affect a particular employee's judgement and his personal standard of diligence,the marginal level is influęnced by the leve1 of control of job standards and by atlraction of remunęrationfor this job, The less etTective the control and the lęss attractive the remuneration, ceteris paribus, the ięssan empioyee requires from himself.

Evęn if a paymęnt scheme i,s closely connected with the sales ievel, it doęs not automatically guarantee

high quality of an employee's work. Frequentiy, in a shor1 term, it is even profitable to cheat crrstomersin ordęr to reach high revenue and incomę. It is obvious that long-ter-rn actiyity and development of acompany, in the context of law loyalty lęvel of cheated customers and a1l negative aspects of word-of,mouth advertising, are not of the same importance for the owner of a company and for his employee.Thereforę, in order to effectively combinę his intęrest with the intęręst of an employee, the employer mustalso take into considęration one mofę aspect of his ręlations with an employee - atmosphere at work. Theconcept of marginal level of involvement embracęs two theorięs concerning people's attitude to workwhich węrę fonrrulated by Douglas McGregcr. Theory X - assumęs that work is unpleasant by natureand therefore empioyees should be nrotivatęd by power, control and money. Theory Y says that peopleby nature are motivated to work and proper realisation of tasks (McGregor, i960),

The higher the level of employee's identification i,vith the owner, the company and its products, the higherthe probabiliĘ that he wil1 diligently catry out his duties. In somę circumstances, an employee can, onhis own initiative, exceęd the standard set by an employer, for example, giving a customęf rfioreinformation about products or services, staying at work 'until the last customer leaveso, helping lessexperienced colleagues, devoting his time to self-education. Especiaily in the contęxt of work quaiity,triggering off cęrtain types of employees' bęhaviour is very difficult bęcause these Ępes arę too iooselyconnected lł,ith the effęcts that can be effęctively control1ed. For example, how to reward with money anemployee who sęlls cars for every sifuation when hę shows interest in the client many times within twominutes - from the moment thę clięnt entered? As a matter of fact thęrę is a possibility of combiningsimilar activities with tlrose that arę ęasięr to control. However, tlris §pe of motivaticn can be appliedonly when the connection between two activities is relatively clear. Therefore it sęems that a smart blendof motivation payment schemę and proper atmosphere at work can bring about the effect required by anemployer.

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It should be noticed that the role of atmosphere which individualises employees will bę reiatively srnall incompanies which concęntrate on quick, mass sales of simple, low quality, cheap products to notdemanding custcmers whereas the role of such atmosphere will grow in casę of luxury goods soldindividually to demanding customers (Yukl, 2002). In thę first case, a customer either does not expect orcannot afford to pay for a sęrvicę 1evel ęxceęding a ceilain minimum, howet er, thę level of sęrwice shouldgrow proportionally to the increasing neęds of customers. Higher quaiity level, declared andcommunicated to customers ąlso means a higher threat that negative atmosphere at work may betransferted consciously or unconsciously by saies people onto thęir customęrs. Unforlunately,atmosphere at work as a derivative of corporate culture may either hinder ręalisation of quality objectivesor support it (B. Deszczyński, 2007).

BA§IC AND MOTIVATING REMU|{ERATION oF,F,IELD FORCE

Attifudę of sales people to their work and quality of customer sęrvicę is very highly influęnced alsc by thelęve1 of remuneration and opporfunity to raisę it when quality of their performance is above the sętstandard. Determining an appropriate level of remunęration is a basic diiemma that a company has tosolve when it employs a new workęr, ln order to makę a payment policy an effective tool of humanresoufces management (the policy which contributes to thę succęss cf the CRM strategy) it must 1ead toachieving such objectives as attracting propęr candidates, retaining them in a company and motivating towork and development.

lt can be generally claimed that too law ręrrrrrneration will bring about the situation when a company willnot be abie to at7ract andlor retain people with a propęr potential, even if this company offered extremelymotivating atmosphere at work. It is very common that worse atmosphere is usually accornpanied bylower basic remuneration asd, at the same time, with a 1orvęr minimum quality of work tolerated by anenrployer. In some markęt situations such a systęm may be jrrstified but not whęn a company aims atbuilding long-term reiations with customers, Orr the other hand, it may also turn out that basicremuneration is dęmotivatingly high, at 1east fgr some empłoyees, By analogy, one of the conclusions ofthę neoclassical theory of unemployment could be quoted hęre. lt combinęs the increasing ievel of socialbenefits (here basic remrrneration) with decreasing activity of a beneflciary of such a transfer. Togetherwith growing level of basic remuneration there is a dęcreasę in probabiiity of reaching objectivesconnected with motivational remuneration system at a given level of marginal self-involvęmęnt of anemployee. Therefore, it seems that whęn determining the level of basic remuneration, a company whichapplies thę CRM skategy should analyse thę links among the following factors:

- atmosphere at work,- diligence of employees,- possibiliĘ of work control,- scarcenęss ofhuman resources.

Good atmosphere at work raises the athaction of a working place. Diligence of employees andeffęctiveness of control increase, in turn, marginal level of self-involvement. Relatively high availabilityofjobs creates the possibilify of access to better qualifications for relatively low rernrrnęration and quickfilling of vacancies. Thus, if the atmosphere at work and diligence of workers are better, control of workhigher and scarceness of human resources smaller ceteris paribus basic remuneration can bę lowęr,

Determining the proper level of basic remuneration is a starling point for preparing a payrnent motivationscheme. At this point, great impofiance should be paid to setting targets whose reaching entitles anemployee to receiving a ręward. Those targets are usuaily connected with increased sales, revenue orincomę within a given period which for a sompany męans a lowęr level of storęd goods and improvement

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in financial liquidiĘ. To prevent a motivation system from becomirrg a tool for lowering customerservice quality, thę volume criteria should be accompanied by quality critęria. They wili protect a

company from periodical lowering of customer servicę quality connęcted rvith excessive transfcr ofattention to immędiate effęct of sales.

Another aspect which should bę taken into considęration whęn setting goals in a motivation system, is thelevel of difficulty in achieving them. Setting too difficult goals may lead to the situation when rationallythinking employees comę to thę conclusion that meeting those requirements is not within their reach or apotential reward does not justify such big effort. By increasing atlractiveness of a reward this bordęr canbe shifted but not ad infinitum. If, on the other hand, the probabiiity of receiving a reward is very low,employees may be indifferent or try to cheat, far example, by working together for onę employee's ręsultsand then sharing the reward unoffrcially.

SUMMARY

Despite its unquestionable advantages. the CRM strategy cannot be applied in every company, Onę of thęmajor factors deterrnining effectiveness in customer ręlation management is maturity of an organisationand thę role played by its employees. Whiie sełting CRM implementations goals, it should bęremembered that it is a slow process and its effects appear in the iong perspective. Its benefits will bedirectly proportional to employees' involvement and thęir idęntification with thę total vision of the CRMstrategy, This, in turn, can be achięved by defining properiy employees' role in the implementationprocęss and by activitięs directed at raising their marginal 1eveł of sęlf-involvement. The appropriatelevel of basic remuneration, supporting not only volume but also quality targets of a motivationręmunęration scheme, and corporate culfure, supporling deveiopment relationships with customers,constitute basic conditions for successful implementation of CRM stratęgy.

REFERENCES

Deszczyński B, (2007), Uwarunkowania wdtażania CRM w przedsiębiorstwie. Ruch Prawniczy,Ekonomiczny i Socjologiczny, LXIX(ż), 17 5-180.

Deszczyński B. (2007), Zarządzanie Reiacjami z Klientami (CRM) w przedsiębiorstwie - Istota strategii iuwarunkowania jej wdrazania. ln W. Jarmołowicz (Ed.) Fwrukcjonowąnie gospodarki rynkowej w Polsce,Aspelct.v malło- i mikroekonamiczne Ęp.396-397), Poznań, Wydawnictwo Akadęmii Ekonomicznej wPoznaniu.

Gentle, M. (2004). CkM project management handbook - building realistic expectations and managingrlsł, London, Kogan Page.

Greenberg P. (2004). CRM rłt speed of light.International edition, McGraw-Hi11/Osborne.

Lovelock Ch., Wirtz I. (20aT, Services marketing - people, teclłnolagl, strqteg)l. lnternational edition,Pearson Prentice Hail.

McGregor D. (1960). The hułnan side of tlle enterprise. New York, McGraw-Hill.

Schiiler A. M, (2005). Zukunftstręnd Kundenloyalitót, Endlich el,folgreich * durch layale Kunden,Góttingen, BusinessVillage.

Yukl G. {ZaaĄ. Leadership in arganizatiołus. Nęw Jersey, Pręnticę-Hall.

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Zeithaml V. A., Bitner M. J. (1996}. Services marketing. New York, McGraw-Hill.

BIOGRAPHY

P . Deszczynski is Profęssor at the Poznań Universi§l of Economics, Departmęnt of Economic Joumalismand Public Relations. Key research areas: international businęss and politics, public relations.

B. Deszczyński sincę 2003 has been working for Volkswagen AG concefil in Poland with respcnsibilityfor impłementation of CRM strategy and its supporting tools. He is at the col}rse of Ph.D. at the PoznańUniversity of Economics.

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