Synthesizing the CRM framework of the research

CRM is widely recognized as an important research area, especially in the context of retailing. In order to remain competitive, retailers must succeed in leveraging their customer data asset. This is traditionally achieved through different information processes that have been discussed above, which result in supporting the firm’s value creation, for example, through being able to identify the most profitable customers. Through customer data usage firms develop resources to be incorporated into their own value creation, to their resource integration processes. It can be argued that these processes, such as mass customization, sales force automation or database marketing, are more or less firm centric, focusing on

enhancing first and foremost the firm’s value creation. This means increasing customer understanding and developing more suitable offerings to meet customer preferences and thus, increasing sales volume. Customer data is used to make customers buy more goods or services. Therefore, it is argued that the CRM framework is largely based on goods-dominant or product-centric thinking characterized by value-in-exchange rather than value-in-use.

Driven by real-world examples where the role of customer data is adjusted to better serve customers, there is increasing pressure to revitalize the CRM framework. Service applications are established that have a fundamentally different agenda in terms of customer data usage than described within the contemporary CRM framework. These examples – such as the public MyData initiative by the UK government in which major businesses are engaged in providing their customers with an opportunity to reclaim their data for their own use – are characterized by customer data being refined and given back to customers. Customers themselves are increasingly put in charge of their own data, which naturally holds major implications for the CRM framework as well.

This fundamental shift from firms’ internal use of customer data toward external use of customer data is a natural consequence of the changing role of customer data;

CRM has evolved through data dispersion (empowering technology), data organization (empowering data) and data ownership (empowering firms), and is now entering the phase of data sharing (empowering customers) (Table 3). Refining and giving customer data back to customers for their support is well in tune with firms moving their locus of exchange from goods to service and from selling to supporting. The evolution of CRM, as discussed in this chapter, was briefly reviewed in order to reflect and capture this paradigmatic change taking place in customer data usage. Research has been abundant and versatile in terms of the first three phases (i.e. data dispersion, dat organization, data ownership). However, the recent shift toward empowering customers has yet remained as an unexplored area of research, which is why it offers a good opportunity for theory development within the CRM framework.

Table 3. Evolution of CRM; from empowering technology toward empowering

This research is focused on the fourth phase of CRM evolution; it extends the CRM framework by shifting attention to reverse use of customer data; using customer data for the support of the customer’s value creation. Today, the CRM framework is an overly firm-oriented construct and fails to identify ways in which customer data can be used for the support of the customer’s value creation. It does not recognize the potential of converting customer data into information that can support the customer’s value creation.

The CRM framework provides the basic understanding of data usage within the firm, including the information processes that support first and foremost the firm’s value creation. This type of one-way use of customer data results in supporting the firm’s value creation, but the degree to which it eventually results in supporting the customer’s value creation is questionable. Customer data usage is driven first and foremost by the firm’s value creation (see Figure 3).

Figure 3. Simplified illustration of customer data usage within a firm

The current CRM literature does not offer adequate tools to understand or address the possibilities of reverse use of customer data; it does not discuss the opportunities of refining and giving customer data back to customers. In that respect, this research agrees with Alvesson and Kärreman (2007, 1265), who emphasize the role of empirical data (or empirical material) in developing theoretical ideas and challenging existing frameworks; it is used as a dialogue partner to question, doubt and develop:

In particular, we point to the ways empirical material can be used to facilitate and encourage critical reflection: to enhance our ability to challenge, rethink, and illustrate theory.

The CRM framework is characterized by the “market to” -philosophy (Lusch, 2007) and it fails to recognize the possibilities for value creation from the customer perspective. Perceiving the data usage from the point of view of the customer’s value creation introduces a new perspective not only to CRM, but more specifically to the central construct of dual creation of value. However, in order to understand the possibilities of reverse use of customer data – to understand it as a possible provider of additional input resources to the customer’s value creation – more theoretical insight must be generated. Consequently, exploring developments of the recent service literature and service-related concepts offers complementary support for building a theoretical framework for the research. This is done in the third chapter.

3. UNDERSTANDING VALUE