Customer Relationship Management (CRM) is regarded as a business strategy for acquisition and retention of the most valuable customers by a company. It has developed very rapidly in the past few years and its growth has been facilitated with the development of mobile communications, computerized software and analytics which enable companies to track and follow the customer enhancement processes. CRM is however not a technology oriented solution to a business problem but in effect a total strategy and process adopted by a company after holistic examination of the business environment.
In a saturated market as China’s telecommunication industry appears to be at present, it provides an ideal medium for growth. China joined the global telecommunications revolution relatively later in 1994, however thereafter its growth has been exponential to make China as the second largest telecommunications player in the World today. This growth has essentially been achieved by product introduction and development rather than customer focus.
In the initial stages the demand for telecommunication connectivity in China, both for fixed line and mobile services was so large that companies did not feel the necessity to survey the needs of the customer and then roll out the services. The aim was to utilize the vast capacities created effectively and the customer was satisfied with the services provided. However with saturation of the initial needs greater response from companies was expected particularly high end customers which have seen large scale migration by telecom customers in China denoting lack of CRM application even in a rudimentary form.
A survey of the relevance of CRM in the Chinese telecommunications environment has thus been undertaken through this research which has set the aim and objectives as follows :- Aims/Objectives. The aim of this research is to review the concept of CRM and analyze its need and impact on Chinese telecommunications companies. Research Objectives. The research objectives are as follows:- 1. Establish the efficacy of CRM as an appropriate strategy for growth of a business with specific relation to the telecom sector. 2. Provide an overall perspective of the Chinese telecommunication industry, its present status and future prospects.
3. Envisage the mode of implementation of CRM by China’s telecommunication companies and envisage its effect on their growth in the future. Keeping in view the nature of issues a rigorous deductive – inductive approach has been used for the research which has been considered appropriate given the diverse nature of the issue involved. A detailed survey of the literature on the subject has also been carried out to co relate the conclusions arrived at from primary research and establish their veracity or otherwise through existing knowledge on the subject.
A case study of implementation of CRM by Siemens in the telecommunications industry in China has also been carried out. The salient deductions that have emerged from the research indicate that the Chinese telecommunications industry is at an inflection point where its further growth is likely to depend on a focus on the customer. Since product development is reaching its saturation and will perhaps see a pause after introduction of 3 G technologies, it is only through strategies as CRM that accretions to the company’s customer and thus revenue base can be achieved.
CRM has adequate scope and the various methodologies of implementation including the phases have also been covered in detail in the paper. Chapter 1 – Introduction Customer Relationship Management (CRM) is a strategy and process employed to learn more about customers’ needs and behaviors in order to develop stronger relationships with them. There are many technological components to CRM, but thinking about CRM in primarily technical terms is a grave error. The more useful way to think about CRM is as a process that will help bring together information about customers, sales, marketing effectiveness, responsiveness and market trends.
CRM is combination of strategies and processes which can create value for the customers, build their preferences and provide a new impetus to the business by creating a long term relationship between the company and the customer. (Gordon, 2002). CRM has emerged from the discipline of relationship management. The idea that the company will be able to build on this relationship is what makes it extremely powerful. The level generally comes when product saturation has been reached and is unable to build any customer loyalty as well as growth for the company as well as the business.
The level of penetration of CRM in China at present is relatively low. It has not been considered as a key strategy for growth even by large retail customer oriented businesses as Chinese telecommunications companies. There appears to be thus adequate scope for adoption of CRM in China particularly in the telecom industry. China is emerging as the World leader in the telecommunication market. The sheer size and the speed with which the Chinese have taken to the communication revolution after it commenced in China in 1994 have been phenomenal. (Uria-Recio, 2005).
With a customer base of 380 million in fixed and 441 in mobile telephony, China’s telecommunication revolution has provided the lead to the World at large. In the beginning, Chinese market has been compared by the noted consulting agency, Accenture as a fisherman going into a lake to catch fish and finding the ship jumping into his boat (Accenture, 2006). Thus the growth in the Chinese telecom industry in relation to its GDP and turn over is represented as per Figure 1 below. (Source: University of Western Australia. Quoted in China, nd. ) Figure 1
China’s telecommunications industry is at a point where its growth has come down by almost half from its peak of 20 % from 1997 to 2002 to about 11 % in 2005. There is also a shake out between the four principals, China Telecom, Netcom, China Mobile and Unicom and that are now subject to the interests of the share holders and have to deliver value. Thus there is a need to identify and induct new strategies for telecommunications companies in China, for which CRM is considered ideal as this short survey of the Chinese telecommunication industry will reveal.
The Chinese telecommunications industry is essentially controlled by four big players, to include Chinese Telecom, China Netcom, Unicom and China Mobile. These are state controlled firms which are also listed on the New York and the Hong Kong stock exchanges. While in the early stages of growth of the telecommunication sector, there was adequate room for expansion, today these companies are facing increased pressure and are seeking a shift from product oriented to a customer oriented strategy for growth. The details of the key players in the market and their respective areas of interest are shown as per Table 1 below.