CUSTOMER RELATIONSHIP MANAGEMENT IN ONLINE AND OFFLINE ENVIRONMENT: THE CASE STUDY OF ONLINE AND OFFLINE CUSTOMER MANAGEMENT STRATEGIES IN TURKMENISTAN

Starting from the 20th century, rapid development of services industry took place, which substantially changed the way consumers perceive personal satisfaction and value of the services they are provided with. The diversification of supply channels and operation strategies had a serious effect on customer preferences and opened a gap between determinants of an efficient customer relationship management for a specific product and service. The modern marketing strategies and solutions applied towards customers have become biased and might not work effectively without specific collaboration

The insights of CRM

One of the potential tools to create strong relationship in terms of customer engagement is known to be a “Customer Relationship Management” (CRM). As there are numerous studies that provide broad definition for the CRM, it was decided to provide consistently constructed definitions to provide clarified idea of the CRM.

The term “customer relationship management” emerged in the information technology (IT) vendor community and practitioner community in the mid-1990’s” [1, с. 167]. CRM is extracted from the relationship-marketing concept. CRM’s definition is also proposed as the technologies, methods and e-commerce capabilities that are used by companies to manage their relationship with consumers [2, с. 3]. Another idea is that “CRM is an enterprise approach to understanding and influencing customer behavior through meaningful communication to improve customer acquisition, customer retention, customer loyalty and customer profitability” [3]. Overall all definitions share the same aims, which are described as to “get (identify and acquire), keep (serve and retain) and grow best customers” [4, с. 584].

Potential issues in CRM

One of the disadvantages and risks arisen from the definition of CRM is the “lack of universally accepted definition of a CRM”, which “caused inconsistency in how academics define the concept, and even more inconsistency in how practitioners apply the concept” [5, с. 56]. Hence, the various ways in which CRM has been defined and conceptualized have led to a variety of applications and distinct perspectives of the model. The “concerns about privacy in the tracking systems, information-storing in customer databases, favoritism towards profitable customers, dynamic pricing and hidden surcharges” [5, с. 56]. Thus, CRM’s concept of gathering data in regards to customers could lead to certain advantage of companies over customers, which results in asymmetric relationship. Overall, in the long-run, customers may decide to change their behavior and limit, or over modify, the information that they share with the company if they feel that the relationship is not mutually beneficial and can lead to trust and privacy issues, which can result in a negative word of mouth from the customers [5, с. 56].

Another significant point is the issue of favoritism or that the company treats consumers variously. Therefore, there is an issue that by concentration on generating more revenues, companies could discourage the CRM concept. Hence, in order to make the implementation of a CRM successful, “firms should think with foresight about trust and privacy implications” [6, с. 155]. Finally, firms must make assurance that caterers are willing to build sincere and authentic relationship with their customers and they should always put fairness at the heart of their strategy.

CRM models

It was identified, that the CRM could be categorized into two terms, which are traditional CRM and CRM combined with social media. In case of traditional CRM strategy, relationship with customers was managed in order to maximize value for the firm, whereas “with social media, though, companies are no longer in control of the relationship” [7, с. 30]. Therefore, a major portion of online content is now tied to customers and managers are recommended to be taking themselves to where the customers are and hence, engage on their terms and preferred location rather than wait for the customers to attend by themselves [8]. Thus, the advantage of the new era is located in opportunity for companies to build relationship with customer in online terms by using their channels and being with customers while they work, play and travel.

There is a modernized concept of CRM called Social Customer Relationship Management or SCRM. Social CRM is identified as an emerging model that combines both the traditional CRM and social media data. The primary difference between SCRM and CRM is the aim of CRM on the management of customer (retention, acquisition and revitalization), whereas the SCRM is regarded as involvement and participation of potential, present and lost customers and other web-users in the era of “enlightened customers”. Social CRM bears two strategies, which are “values fusion” and “data-driven”. The value fusion strategy considers a joint-focus between the values that could be derived from customers and organizations. Such strategy or in other words, understanding the way consumers derive value from firms will help the latter to create experience for customer that are meaningful and engaging. On the other hand, data-driven strategy implies a provision of engaging content to users, which is about using data to personalize content for users. In other words, such strategy implies creating and delivering relevant and valuable content based on individual customer needs [9, с. 19]

Subsequently, various approaches started to be employed in order to enhance the CRM. The CRM has been diversified and according to recent studies with regards to customer relationship management, the term “social” and “CRM” are becoming indivisible from each other. The term social in CRM implies a two-way communication between the supplier and customer and based on social networking, social media would enable organization to be capable to increase brand exposure and customer acquisition [10, с. 164].

Channel management in CRM

Although, the CRM concept provides clarified idea of effective customer management, it is not identified individually. More precise attribute to SCRM is determined as multichannel customer management, which is defined as the design, evaluation and deployment of channels (TV, radio, social media etc.) in order to improve consumer value via effective customer acquisition, development and retention [11, с. 70]. The proactive channels are generalized as online and offline and the collaboration between online and offline mediums generated by the integration between the two channels enhances customers’ experience with the firms, strengthens the brand image of a firm and increases customer loyalty in both channels.

Managing channels in isolation often results in customer confusion and frustration, reducing the value offered to customers [12, с. 309]. Regarding the latter point, customer confusion is caused by prices, promotions, assortments etc. that differ in various channels. Moreover, with the development of new supply channels, an omni-channel customer management updated a multichannel customer management. An omni-channel proposes better channel management by means of even and consistent information distribution via each channel, hence, allowing customers to receive maximum and equal information via both the online and the offline channels. Thus, both channels (physical store and digital store) play significant role for the development of an omni-channel strategy [13, с. 18].

O2O model

Regarding the catering or food industry, the “online to offline” or “offline to online” model has been adopted by managers. The catering industry has seen its ups and downs since the beginning of the 21^st century or during the rapid activity in the process of globalization. Thus, the concept of O2O was first introduced in 2010, which attracted a vast attention of entrepreneurs and academics. As mentioned before in the research, such concept is categorized as a multi-channel supply. The diversification gap was created with an added choice of online ordering [14, с. 272].

CRM in Turkmenistan and primary research

The local population of Turkmenistan consists of Turkmen, Russian, Ukrainian and South Asian nationalities. In total, the population of Ashgabat is equal to one million people, with two major religions, which are Muslim and Christian (Orthodox), consisting of both the online and the offline users. The total number of respondents were equal to 150 customers 10 managers. The sample includes different age-groups and 10 restaurants with various servicing.

The primary data concluded that 70 % of the respondents are represented by young generation of 18 – 34 years old. The superior number of customers (68 respondents) visit restaurants 2-3 times a week and 132 respondents have experience in utilization of online services, which significantly added a value to the purpose of the questionnaire. The share of multi-channel users is represented by 43 respondents, whereas the other share belongs to “only online” service users. The only limitation in terms of online services, was identified to be privacy issues, which is exclusively related to “two-way” interaction highlighted by potential issues of SCRM. In terms of profitability of restaurants, the managers responded in favor of the young generation, which is the age group 18-25 and 26-33 representing 70% of the income from the overall sample. Moreover, it was discovered that the older age group having higher income makes less contribution to the income of the caterers and therefore, superior weight of the analysis belongs to more “effective customers”, which tend to be proactive in regards to the research questions. Concerning the channel management, 20% of managers responded that the online channel represents less than 10% of the income. It must be noted that only half of the sample has adapted an online channel, which is 5 respondents out of 10 managers.

Thus, the age group of 18-25 found to be the most effective in terms of online supply channel application, but the least effective compared with traditional supply channel from the point of managers. Moreover, there are managers who did not mention the age groups of 34-40 and 41-older in terms of online supply channel, and that produces a suggestion that online supply channel is not as effective as traditional from the point of view of the surveyed managers.

Results and conclusion

The research yielded significantly important results, which identified already existing and possibly potential issues in available operation strategies with regards to customer relationship management. Although the primary data shows that online channel is effective in comparison to traditional, that statement is identified to be controversial to the definition of CRM and omni-channel management. The latter implies equal distribution and attitude towards the customers, whereas most of the restaurants are concentrated on specific age-group, thus, losing potential and already existing customers. The study produced results, that confirm inefficient customer relationship management, as although the restaurants’ management employs modern operation strategies, they are emphasizing separate techniques, which disregards the efficient CRM. Such results suggest presence of issues related to favoritism. Thus, one of the dominant issues lies in providing two-way interaction between the customer and the caterer. It was found that individually the CRM does not provide such perspective and with the birth of “enlightened customers”, who were identified to be driving determinants in terms of the management operation strategies, it became hard to provide mutually beneficial relationship. Indeed, with the help of primary research, it was determined that customers’ preferences vary not only by age group but also information consumption. One of the potential issues of CRM is that it does not consider the design of omni-channel management, but only concentrated on customer retention. Most of the customers had an intention to influence the management of the restaurant, if there was an opportunity.

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