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Impact of CRM on Sales Process Behaviors: Empirical Results from US, Europe, and Asia

Impact of CRM on Sales Process Behaviors: Empirical Results from US, Europe, and Asia. Robert M. Peterson, Michael Rodriguez, and Vijay Krishnan. CRM in Sales Organizations. Global sales organizations invest millions annually on CRM ( Tanner et. al 2005; Jelinek et al. 2006 )

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Impact of CRM on Sales Process Behaviors: Empirical Results from US, Europe, and Asia

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  1. Impact of CRM on Sales Process Behaviors: Empirical Results from US, Europe, and Asia Robert M. Peterson, Michael Rodriguez, and Vijay Krishnan

  2. CRM in Sales Organizations • Global sales organizations invest millions annually on CRM (Tanner et. al 2005; Jelinek et al. 2006) • Sales organizations demand to know how CRM can benefit the team • How can CRM meet the specific needs of a region’s sales process

  3. RQ: Does CRM effectiveness differ regionally? • CRMtechnology was introduced in • North America in 1998, • Europe in 1999, and the • Asia-Pacific region in 2004 (Kumar et al. 2011) • Given amount of time and $/£/¥/€ spent how CRM we still know little of its effects on the sales process. • The purpose of this research is to ascertain how CRM usage may differ in sales processes around the world.

  4. CRM is more than IT • “at the heart of CRM is the organization’s ability to leverage customer data creatively, effectively and efficiently to design and implement customer-focused strategies” (Hansotia 2002, p. 121), in order to increase the breadth, depth, and length of the relationship with the client. • Global CRM is “the processes and practices of CRM by firms operating in multiple countries …which incorporates relevant differences in business practices, competition, regulatory characteristics, country characteristics and consumer characteristics to CRM strategies to maximize customer value…” (Ramaseshan et al.2006, p. 195-6).

  5. Might CRM adoption differ regionally? • CRM adoption HIGH in North America, still emerging in Asia (Kumar, Sunder, and Ramaseshan 2011) • CRM conceptualized on three different levels (Buttle2004) • company-wide • functional usage • customer-facing • Regional differences are a distinct possibility • USA ~ CRM value proposition was found to be the greatest challenge. • Europe ~ customer data integration and process were firms’ biggest concerns.

  6. Differing customer behavior and CRM • From a customer perspective • buying habits • product preferences • depth of relationship • sales cycle, and • privacy levels differ (Cline 2005) • Notably, repeat purchase behavior differs • stronger relationship between customer service and repeat business for collectivistic cultures (i.e., Asia) versus individualistic cultures (Iacobucciet al. 2003) • Other target marketing activities such as direct mailing, advertising, and public relations also differ from region-to-region, or even country-to-country.

  7. Research questions • RQ1: Across the three selling regions of the world (US, Europe, Asia), are there differences in the use of CRM? • RQ2: Are there significant differences between the US, Europe, and Asia regarding CRM usage and creating opportunities, managing opportunities, and managing relationships?

  8. Sales Process - Opportunity Creation • Prospecting • Cold calling • Generating and qualifying leads • Analyze customer information, buyer profiles, and segmentation data to determine which markets and clients to pursue.

  9. Sales Process - Opportunity Management • Gaining deeper understanding of needs • Connecting with key influencers • Providing a solution that meets the prospect’s needs. • Maintain ongoing communication and collaboration with external buying influences and internal resources, to ensure the product/service is ideal for the customer.

  10. Sales Process - Managing Relationships • Create stronger customer relationships to increase up-selling and crossing-selling opportunities (Crosby, Evans, and Cowles 1990; Morgan and Hunt 1994). • Technology allows reps to better track customer conversationsand thus improve ability to communicate with customers more efficiently (Ahearne, Jelinek, and Rapp 2005). • Sales technology for communicating information increases ability to customized and integrative solutions (Hunter and Perreault (2007) .

  11. Creating Opportunities • Managing Opportunities Conceptual model of CRM effectiveness influence on sales process • Managing Relationships • CRM Effectiveness

  12. Data • Data was gathered in conjunction with Miller Heiman • Participants who responded to email invitations • business executives in revenue-generating roles across job functions, notably different levels in sales and marketing including vice presidents and CEOs. • Data was collected using an emailed link • 15,110 individuals clicked on the link • 1,699 respondents completed the 130+ item survey yielding an 11.2% response rate. • Relevant sample size shown lower (n=1207), from the three regions under study

  13. Sample profile by industry

  14. Sample – Global diversity • Respondents from forty different countries, • United States (n=853, 56.3%) • Europe (n=351, 23.37%) • Asia (n=114, 7.59%) • Males 77.5% of respondents • Job descriptions of the respondents • Sales vice presidents and sales directors (25.7%) • Sales managers (18.2%) • Business development managers (11.2 %) • Sales representatives (9.1%) • Presidents (8.1 %) • C-Level executives (8.4%) • Account managers (7.9%)

  15. Data Analysis • Data strong face validity and robust Cronbachalphas. • Confirmatory factor analysis was used to distill the measures, and to assess validity. • Opportunity creation (Cronbach’s alpha =.80) • Opportunity management (Cronbach’s alpha =.83) • Managing relationships (Cronbach’s alpha =.84) • Operationalizedas a 5-item measure • CRM effectiveness (Cronbach’s alpha =.93) was operationalized as a 3-item measure • CRM effectiveness scores showed considerable variability ranging from 3 to 21, with a median score of 12. • High-Low on CRM effectiveness via a median split

  16. Results • Differences between US(n=853, usable 789), • Europeanrespondents (n=351, usable 327), and • Asianrespondents (n=114, usable 91) explored. • MANOVA • Creating Opportunity, Managing Opportunity, and Managing Relationships • Dichotomized CRM effectiveness and geography (US/Europe/Asia) as factors.

  17. Results • Significantinfluence of CRM effectiveness • (Wilk’s lambda =.928, F (3, 1201) = 30.78, p < .001) • Non-significant for geography • (Wilk’s lambda =.996, F (6, 2398) =.72, p >.63) • Non-significant for interaction CRM Effectiveness X geography • (Wilk’s lambda =.994, F (6, 2398) = 1.16, p >.33) • CRM effectiveness leads to significant differences in sales processes • However, world geography is not significant

  18. Creating Opportunities • Managing Opportunities Conceptual model of CRM effectiveness influence on sales process • Managing Relationships • CRM Effectiveness

  19. Results – ANOVAs • Significant influence of CRM effectiveness on • Creating Opportunity (F (1, 1201) =67.25, p < .001), • Managing Opportunity (F (1, 1201) =57.22, p < .001) • Managing Relationships (F (1, 1201) =63.70, p < .001) • Not for firm-geography, or its interaction with CRM effectiveness.

  20. Post-hoc tests • Firms high on CRM effectiveness better at • Creating Opportunity (t =11.72, p < .001) • Managing Opportunity (t =9.77, p < .001) • Managing Relationships (t =10.72, p < .001). • RQ1: Across the three selling regions of the world (US, Europe, Asia), are there differences in the use of CRM? • Differences in CRM effectiveness lead to significant differences in sales processes; however, these influences are not qualified by the geography to which the firms belong.

  21. Discussion • Globalization may help standardized CRM use and process across regions and cultures. • From a CRM perspective, Creating Opportunities, Managing Opportunities, and Managing Relationships appears to be more standardized. • Firms in different countries follow similar CRM activities as pertains to managing the sales process and relationships. • Management may consider standardizing CRM when possible if operating in multiple areas. • In general, no differences between the regions across the world, but can account for individual firm CRM prowess.

  22. Questions? Robert M. Peterson, Michael Rodriguez, and Vijay Krishnan

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