SATURNO EN ASPECTO CON VENUS

Coltman (2007) and Keramati et al. (2010) argue that capabilities are ‗intermediate transformation ability‘ between all the resources (technological and infrastructural) and the organization's mission. Capabilities measure the organization's ability in effective combination of resources to meet its goal; therefore, they approximately reflect the concept of efficiency. The same authors believe that since capabilities have mediating effect between firm's resources and performance, they are not observable; therefore they become hard to imitate.

Process capabilities can also be regarded in the context of CRM. Keramati et al. (2010, p. 1177) define the CRM process capabilities as: "the process abilities that are gained by effectively applying CRM resources to CRM processes and that enable firms to create superior value for their organization as well as their customers.". Regarding this definition, we can conclude that the best level to assess the CRM process capabilities is the process level. Like CRM processes, these capabilities are classified as management CRM process capabilities such as new product development capabilities and operational CRM process capabilities such as customer support capabilities.

Keramati et al. (2010, p. 1176) summarize the relationship between CRM resources, CRM processes, CRM process capabilities, and organizational performance in figure 2.3.

Fig. 2.3 CRM value generation process

Reference: Keramati et al., (2010, p. 1176)

As previously mentioned, process capabilities have mediating effect between firm's resources and performance to meet a specific objective. This study investigates the impact of CRM resources and processes on customer retention (as the organizational performance); therefore, to attain this objective, firms should implement a comprehensive set of relationship programs with their customers as their process capability. Winer (2001) calls these programs as 'customer retention programs of CRM'.

2.5.1. Customer retention programs of CRM

As it has been discussed before, the overall objective of relationship programs is delivering a higher level of customer satisfaction than similar companies do. Therefore, companies must measure their customers' satisfaction levels and improve their relationship programs which help to deliver products and services beyond the customer expectation (Winer, 2001; Farquhar, 2004; Arbore & Busacca, 2009) and therefore contribute to retain the customers.

Winer (2001) believes that if firms want to efficiently retain their profitable customers, they need to implement a comprehensive set of relationship programs including: frequency/loyalty programs, customer service, customization, and community building. He states these programs are determinants of customer satisfaction which finally leads to customer retention (figure 2.4).

Fig. 2.4 Customer Retention Programs

Reference: Winer (2001, p. 98)

Loyalty/Frequency Programs

Loyalty program which is also called frequency program provides rewards to targeted consumers in order to encourage them to buy products repeatedly. These programs have become competitive necessities for the firms in the marketplace especially those with a decreasing rate of customer retention. Recent studies have also shown that the most successful retailers in the top sectors such as department stores, grocery, drugstores category, and mass merchandisers design these programs (Winer, 2001; Verhoef, 2003; Juan & Yan, 2009).

Customer loyalty in service industry consists of three main dimensions including affective loyalty, behavioral loyalty, and cognitive loyalty. Behavioral and affective loyalties are formed based on cognitive loyalty which itself is influenced by company's reputation, brand recognition, its public image and most importantly, corporate social responsibilities. On the other hand, in the intermittent service industry, customer satisfaction, service quality and customer perceived value (CPV)

Customer Relationship Management: Satisfaction Frequency/ Loyalty Programs Customization Customer Service Community Building Rewards Program

are the main factors affecting customer loyalty. Through the moderation of customer satisfaction, both of CPV and service quality affect Customer loyalty indirectly (Farquhar & Panther, 2008; Juan & Yan, 2009).

In descending order of significance, affective loyalty is influenced by customer satisfaction, cognitive loyalty, customer perceived value, and service quality. Moreover, determinants of behavioral loyalty include customer satisfaction, service quality, affective loyalty, customer perceived value, and cognitive loyalty. And finally, the only influencing factor of cognitive loyalty is the service quality (Juan & Yan, 2009). Figure 2.5 illustrates the influencing factors of customer loyalty in service industry.

Fig. 2.5 Influencing factors of customer loyalty

Adapted from: Juan & Yan (2009, p. 68)

Many academicians believe that there are some considerable problems with loyalty programs such as the need for high investments and the difficulty to correct mistakes. There is confusion about whether these programs improve the customer retention or average spending behavior, and most considerably, it is not easy to gain competitive advantage by these programs. However, loyalty programs can work effectively if firms increase the switching costs and build barriers to entry (Winer, 2001; Deng et al., 2009; Juan & Yan, 2009).

Service Quality

Customer Satisfaction

Customer Perceived Value

Customer Loyalty Cognitive Loyalty Affective Loyalty Behavior Loyalty

Customer Service

Generally, a customer service encounter is defined as the contact or "touch points" that a customer has with a company. It has the potential to improve customer strategy or to have the opposite effect. Because the targeted customers are most valuable customers to the companies and they are able to choose their favorite item among a variety of products in the marketplace, customer service must be the first priority within each company (Winer, 2001, p. 99; Venetis & Ghauri, 2004; Smith, 2006).

There are two types of services including Reactive and Proactive services by which companies can enhance their customer service (Winer, 2001; Smith, 2006).

Reactive services are applied when a customer faces problem such as product failure

or question about a bill and contacts the firm to solve it or get more information about it. Today, most organizations especially the banks have used the technology and also trained their employee to deal with these situations through e-mails, faxback systems, telephone, etc. Proactive services are the situations where the firms do not wait for customers to contact them and are determined to hold a dialogue with their customers prior to use reactive solutions such as complaint handling. This can be done well where the sales force or other employees dealing with the customers are trained and interested to realize customers' expectations (Winer, 2001; Venetis & Ghauri, 2004; Smith, 2006; Arbore & Busacca, 2009).

A number of systems leveraging the Internet assist both of these two types of services. For example, some Web-based service providers such as HumanCIick provide their customers with the ability of real time interactions with service representatives (Winer, 2001; Smith, 2006).

Community

Using the Web, both online and offline companies can build online networks of customers in which they are able to exchange information about the products and also can interact between themselves and the company easier and more personally. This network of customers is called community. In this situation, the customer is committed to the company and therefore he or she is less likely to leave the family of customers. In addition, by creating these communities, companies can gain more accurate information about specific products in a market and then make it with the

characteristics or the quality that customers expect (Stauss et al., 2001; Winer, 2001; Guo et al., 2009).

Customization

Customization goes beyond communicating with customers and is also about the creation of products for individuals. For example, some companies such as Dell and Nike have established online processes for creation of customized and personal products and services based on individual customer's taste. In this way, each customer is able to choose a product from a list or order the item he or she really wants (Winer, 2001; Ahmad & Buttle, 2002; Farquhar, 2004).

Academicians call such customization, "versioning" which is easy and cheap to do. The point that should be noticed is that versioning is easier to do for services and intangible products than for physical products; however companies can use the additional information gained from customers to tailor at least the appearance of products (Winer, 2001; Farquhar, 2004; Smith, 2006).