The importance and benefits of m-marketing

Mobile CRM: Business benefits mobile marketing

The capacity observed by companies in the fact that a mobile phone is a such a personal object, has enable mobile technology to enter the business world primarily as a marketing tool. Mobile marketing (m-marketing) is defined as the use of mobile devices to facilitate consumers with first-hand information and based on their location, with the main objective of promoting goods, services and ideas.

When we talk about customer relationship management (CRM), we specifically refer to the business strategy that we identify as the systematic process to manage initial, maintenance, and ending relationship with the customer through all windows of contact in order to maximise the value of the relationship. The importance of m-marketing is to better the management of relationships with clients, for both offering products and services as well as for identifying specific clients’ needs. This fact represents a strategy companies must take advantage of in order to “collocate their brand in the pockets of consumers” at any time and at any place, and characterise it by an interactive communication. In 2013, 23% of Spanish companies used a given kind of software to analyse customer information for marketing purposes, percentage that was not far from the leading countries (Finland and Austria) where 31% and 26% of the companies used similar software for CRM purposes.

Mobile CRM: Business benefits mobile marketing

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Mobile CRM: Successful m-CRM results influence through technological, economic and human ones

From a marketing perspective, the success of relationships with customers begins with properly identifying customers and their needs continuously. It is currently necessary to analyse information on each of the clients and making it essential to use sophisticated computer CRM tools.

The CRM has been approached from different theoretical perspectives in literature, without a clear consensus to the conceptual framework that is most appropriate for its study. CRM can be understood as a business strategy focused on the consumer and the value of relationships with clients for the company. The main objective of CRM is to maximise the value of the relationship with clients throughout the duration of the same relationship.

In respect of the paradigm of relationship marketing, CRM would be the implementation of a strategy to maintain a positive relationship with customers and generate commitment and loyalty to increase the lifecycle of customers. Relationship marketing suggests the importance of identifying the best customers in order to know their needs, satisfy these needs and establish a relationship that makes them be loyal to the company, recognising that getting new customers is more expensive than retaining the existing ones.

The smartphone has become much more than just a means to communicate – to call, to message, to link socially or in business – it has become the personal remote for life and the consumer is in control…for now.

Companies establish reciprocal and successful relationships when investing on relationship marketing and focusing business on the relationship with the customer, rather than strictly focusing on transactions. As a result of this philosophy, the company expects to obtain benefits both for the client and the company.

Marketing literature states that a beneficial or successful m-CRM can be influenced by different company resources, such as technological, economic, and human ones (e.g. employees and managers), as well as by its capacity and/or competence. According to the innovation diffusion theory, the decisions to adopt new technology are preceded by the will to reach a comparative advantage, own acceptable complexity and usability, be compatible with the activities and resources of the company and provide observable results.

Mobile CRM: Technology–Organisation–Environment and factors that affect the adoption of new technology

The TOE model (Technology–Organisation–Environment) is to explain the factors that affect the adoption of new technology. This model does not concretely propose the constructs applied to each of the three contexts that affect the adoption of technology, but it is considered a good starting point to understand the decision-making process that affects the adoption of technological innovation, such as a mobile phone.

The TOE model identifies three contextual groups related to the adoption of a complex technology by a firm: the technological, the organisational and the environmental. The technological context refers to technologies (internal and external) to the company. The organisational context considers all the factors related to the company. Finally, the environmental context refers to the industrial framework, the relationship of the company with its stakeholders and/or competitors. The three contextual groups of the TOE model have been mentioned in the literature to determine factors that influence the benefits of CRM to adopt technology (Internet or mobile) in business activity.

Previous literature on CRM emphasises the degree of integration of technology in companies as a factor of the technological context, the role of employee support in the adoption of new technologies and the innovativeness as organisational factors in the adoption of m-marketing.

In short, previous literature has highlighted the positive influence of the adoption of m-marketing over a CRM strategy and has pointed out a contextual framework for studying the factors involved in its adoption. . Continuing with this line of argument, the following sections will discuss the perception of the benefits of m-CRM and the technological, organisational, and environmental factors that cause it.

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m-CRM and its benefits from the point of view of relationship marketing

m-CRM has been defined as the communication, bilateral or unilateral, that is related to marketing activities via mobile phone in order to build and maintain relationships between the consumer and the company. For this purpose, a combination of strategy, technology, and human resources is required. The literature clearly recognises the business benefits of m-CRM and highlights the crucial role of technological, organisational and market factors. However, knowledge of the determinants of success in the use of m-CRM is still scarce; furthermore, the studies that stand out are those that indicate the absence of previous work that establish the determinants of success in the implementation of CRM in companies. Consider CRM beyond a technological tool, and integrate diverse theoretical perspectives to determine what factors allow the company to benefit from the management of the relationships with its customers.

There are two perspectives to understand CRM in the context of new technologies. On the one hand, from the perspective of technology, m-CRM is seen as a technological tool applied to marketing in order to reduce costs and increase the efficiency of the processing information between buyer and seller. On the other hand, from the strategic perspective and relationship marketing, m-CRM is seen as a long-term management approach that companies or organisations carry out via mobile channels in order to get very different benefits (i.e. financial, social or market).

Mobile CRM: Business benefits mobile marketing

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The use of CRM has multiple impacts on the company and there is little evidence yet that allows to determine all the possible benefits of using this strategic marketing activity. However, previous literature has pointed out that in addition to the traditional financial benefits, we must also take into account the benefits generated by the loyalty and commitment of customers during their lifecycle with the company. In fact, when companies learn how to build relationships with customers, many benefits are generated in terms of brand awareness, loyalty, increased sales, cost reduction, word-of-mouth effect, lower price sensitivity, increase in revenue, more lasting relationships with customers, greater control of the activities of marketing and improvement in rates of retention of employees.

For millions of Australian consumers, the smartphone has become the most personal, most coveted of relationships across their growing number of digital devices. The smartphone is the one device where there is a 1-to-1 ownership, rather than having to share access with other members of the household.

Suggesting that the benefits of CRM increase brand capital, customer capital, the value of information and the future value of the company (i.e. CRM generates benefits for the company). For this, we have considered the perceived financial and marketing benefits of CRM for the company, considering that the literature highlights them as the main signs of improving business results by using a strategy of management of relations with clients.

Mobile CRM: Perceived benefits from CRM and mobile marketing contribution:

• Improving the profit of the firm.
• To decrease the marketing cost.
• To facilitate the segmentation.
• To improve the channels of communication.
• Increasing the market notoriety.
• To reinforce brand image through the mobile channel.
• Refining the personalisation.
• One-to-one marketing.
• Location-based service.
• Improving customer attention and service.
• Interactivity in relationships.
• To increase the satisfaction.
• To increase the customer loyalty.
• To make easier the repurchase, the maintenance of clients and constant attention trough electronic channels.

We identify the mobile phone retail channel as a powerful relationship marketing tool which enables the creation of a link with the customer through personalisation (services based on location, applications capable of designing the product interactively through the device); and it allows to increase sales (reaching new customers thanks to mobile advertising through BIDI, RFID, bluetooth, QR codes, or loyalty of newcomers through mobile applications that provide access to products and services from mobile phones).

This link facilitates to improve service, reinforce the reputation in the market, contribute to generate customer loyalty, promote an increase in sales, and improve the overall profitability of the business. Due to these facts, we have studied the value provided by the use of mobile phones in the management of relations with customers, as well as four factors that are considered essential, from the point of view of the TOE model, to achieve benefits of CRM (technological competence, employee support, innovativeness and customer information management).

Mobile CRM: Technological context the TOE model applied to m-CRM

Technological competence. When a company assesses the benefits generated by particular technology (such as mobile technology), technological competence plays a very important role. In fact, several authors have highlighted the importance of the technological orientation by the company in order to successfully adopt e-commerce. Technological competence encompasses both the preparation of the company in terms of infrastructure, as well as level of knowledge relating to such technology, in addition to companies’ willingness to get involved in the familiarisation of such activity. In the field of mobile commerce (m-commerce), it is the expected performance of mobile commerce activities is higher in companies with greater technological competence. Therefore, companies with a greater technological competence and knowledge of m-marketing are expected to be in a better position to assess the benefits of CRM.

Mobile CRM: Organisational context introduction of new processes applied to m-CRM

Innovativeness. The propensity for innovation is defined as “the ability of a firm to undertake an innovation, that is, the introduction of new processes, products, or ideas within the organisation”. A high propensity to innovate in the field of new technologies leads to experimenting with these technologies, and it is an important determinant of the perceived performance of the company. Specifically in the context of m-marketing suggesting that mobile technology is a means to increase the perceived benefits of CRM for companies, enabling them to offer customised services to better identified segments. A relationship between companies market orientation and the innovativeness that precede the expected performance of the company. It is expected, therefore, that innovative firms perceive that innovation is a source of benefits for the company in CRM.

Mobile CRM: Employee support employees are those who build the relationship with the customer

The success of the implementation of a CRM strategy does not depend exclusively on the technological competence of the company, or on the strategy or processes involved in the project. As in the implementation of all information systems, employee support, their interest and involvement with the project, in addition to the knowledge of the technology involved in it, are key elements for a project to be successful; and on the contrary, the main reason for failure in the implementation of information systems is the lack of employee support, as in cases of resistance to change. In the same sense, indicating that the greatest difficulty in achieving success in a CRM model is not the technology, but the people. Truly, employees are those who build the relationship with the customer.

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Mobile CRM: Environmental context is characterised by continuous and massive data generation

Customer information management. Nowadays many consumers use different channels to contact companies and make purchases. Both offline, and more than ever, online contacts generate a large amount of customer data. This “multi-channel” information, used properly, makes it possible to track the customers, establish a dialog with them and monitor possible changes in order to adapt to customer needs. CRM provides benefits to those organisations that obtain and process a lot of information about their customers.

For companies competing in industries that incorporate new technologies in the process of marketing their products and services, the industrial environment is characterised by continuous and massive data generation. The information generated in each of the activities done by individuals (including searches for products or services, purchase processes, what they like or what they share) are part of the massive amount of data generated through devices connected to the Internet, including mobile phones. These data provide information on consumers, their likes, their purchases, their location, their lifestyle or their personality.

CRM is an instrument to build long-term relationships with customers; and an appropriate database allows using CRM to offer personalised attention adapted to each customer, which, in turn, motivates reciprocal behaviours favourable to the company and the customer. M-marketing fosters relationships with customers through customisation and adaptation of messages to the customers.

It is expected that companies that base their decision-making processes on customer information and that use the database as an essential business tool, have a marked orientation toward customers. For this reason, we understand that these companies will notice that m-marketing, as a tool capable of recording personalised customer information (e.g. hours of connection, geo-referencing, personalised advertising, location-based services), improves CRM, as it will enrich the value of customer data, which are an essential factor in the mobile phone business. Therefore, we propose the following hypothesis:

Mobile CRM: Business benefits mobile marketing conclusion

Companies perceive that the better the technological competence is, the more willingness to innovate, the more employee support, and the better management of customer information, the larger the benefits derived from a m-CRM strategy will be. The perception of the companies in our sample on the contextual factors that improve outcomes of m-CRM are similar to those found in previous studies. First, our study confirms that the technological competence of the company (infrastructure and available technological knowledge) is key for perceiving benefits derived from the implementation of an m-CRM strategy, as it has been suggested in previous studies in the context of electronic commerce.

Opportunities for future is to analyse how the use of data in a m-CRM strategy for companies may narrow the B2C relationship and how it affects the perception of benefits in m-marketing and the management of unstructured data from the environment of the company and the consumer (e.g. data coming from social networks).

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