Using CRM data : Modeling and measuring the effect of sales force knowledge on customer decision making Othman BOUJENA– Wesley JOHNSTON & Dwight MERUNKA

Research context  Increasing investments in CRM (Forester research report 2011 on CRM trends)  Objective : value creation and customer equity valorization through a 360° view of the customer  Each customer interaction/touch point : an opportunity for improving satisfaction and maximizing relationship profitability  The crucial role of sales force in conveying market information  One main challenge : an effective usage of CRM generated knowledge

Previous main studies Engle and Barnes 2000; Ahearne et al. 2008; Widmier et al. 2002; Keillor, Bashaw and Pettijohn 1997; Speier and Venkatesh 2002; Zablah, Bellenger and Johnston 2004… CRM adoption by organizations Adoption of CRM/SFA by salespeople The impact of SFA/CRM usage on individual performance

Research issue If and how CRM usage by sales force improves their knowledge and then customer decision making ?

Research development process Literature review Exploratory qualitative study Conceptual model

Literature review: CRM and sales force performance  Sales force : one of the main users of CRM  CRM is first ‘’a company philosophy and strategy that aims at aligning all processes to improve customer satisfaction and loyalty’’ (Zablah, Bellenger and Johnston 2004)  CRM definition: ‘’ CRM unites the potential of relationship marketing strategies and IT to create profitable, long-term relationships with customers and other key stakeholders. CRM provides enhanced opportunities to use data and information to both understand customers and cocreate value with them’’ - Payne and Frow (2005)

Literature review: CRM and sales force performance… CRM/SFA Usage Leveraging opportunity and leads intelligence (Grant and Schlesinger 1995; Jayachandran et al. 2005) Formulating alternatives, effective decisions & relationships (Hill and Swenson 1994) Customer communication (Hunter and Perreault 2007; Rice & Blair 1984; Sproull and Kiesler 1986; Ahearne et al. 2008, Khandpur and Wevers 1998) Prospecting, development & customer profiling (Pullig et al. 2002)

Exploratory qualitative study o Semi-structured in depth interviews o Matched sample : CRM editors, sales managers, salespeople, customers o Double coding process with meta-categorization (Miles & Huberman 1994) – manual and with NVIVO o Agreement based coding : Cohen’s Kappa = 80 % Thematic content analysis Lexical analysis Cognitive mapping

Main qualitative findings

Conceptual model : The impact of CRM usage on customer decision making

Salesperson competence  ‘’Customer perception that a salesperson is knowledgeable in important areas such as specific needs, product knowledge, industry trends, and competitive products’’ (Behrman & Perreault 1982; Narver & Slater 1990; Day 1994; Sinkula 1994)  Knowledge contributes in sales effectiveness (Behrman et Perreault 1982 ; Leigh et McGraw 1989 ; Sujan et al ; Weitz 1978 ; Weitz et al. 1986)  Technology and CRM capacities for information gathering, storage aznd diffusion (Glazer 1991 ; Fletcher 1990 ; Huber 1991; Marshall, Moncrief and Lassk 1999)  The impact of IT/SFA on market and technical knowledge (Ahearne et al. 2008)

Customer decision making  ‘’Process based on information requirements, decision making time, people involving in buying decisions, and buying criteria’’ (Sharma and Pillai 1996)  The role of sales force in optimizing the decision process : providing critical information and showing the capacity of meeting expectations and integrating customer’s constraints (Atkinson and Koprowski 2006)  Two critical components : decision making assistance and empathy (Marks 1988)

Empirical study  Online survey questionnaire  Customers’ sample : 249 valid respondents  68% know their referent salesperson for at least two years  Measures : established/adapted scales (Likert) – exploratory and confirmatory tests (SEM)

Hypotheses test : Main results  A positive effect of CRM applications usage on salesperson competence  CRM usage is significantly related to market knowledge (H1; =0.408, R²=0.163, p<0.05).  CRM usage influences positively product knowledge (H2; =0.322, R²=0.1, p<0.05)  CRM usage influences positively customer knowledge (H3; =0.388, R²=0.147, p<0.05).  The effect of salesperson’s competence on customer’s decision making  Only product knowledge (H5; =0.460, p<0.05) and customer knowledge (H6; =0.137, p<0.05) have significant effect on customer decision assistance  The hypothesis related to market knowledge was not supported (H4; =-0.162, p<0.05)  Only product knowledge and customer knowledge have significant effect on empathy

Results analysis  Knowledge capacities show through interactions, sales calls and critical moments for specific needs or information  The role of sales presentation  Differences in explained variance of knowledge levels : information sourcing balance  Behavioral conditioning due to established performance criteria  The importance of the quality, updating and exhaustiveness of the database as perceived by sales force

Results analysis…  No (significative) impact of market knowledge on customer decision making :  Customers tend to focus more on the ability of the salesperson to master the offer and capacity to adapt to specific needs and constraints  Market knowledge is generally a domain that the customer knows and that can also be mentioned during other different sales presentations  This result can be related to the maturity level of database content or usage that sometimes doesn’t integrate yet market aspects  Empathy drivers

Research contributions  Contributing to better evaluate CRM effectiveness and customer centricity  Adoption of the customer’s perspective (customer based metrics !)  Methodological triangulation and sampling  Revealing value creation ‘’intangible’’ mechanisms  Providing insights on :  data usage issue (balancing data collection, analytics and relationship monitoring)  the capacity of capturing effective information  perspectives about channeling CRM data  Facilitating CRM adoption by showing the importance of the impact on customer

Future research directions  Testing an integrated model linking the improvement of customer decision making with key relationship variables : satisfaction, loyalty, commitment or predisposition to recommend the supplier  Adopting a dyadic approach that combines different perspectives  Consider moderating variables like : customer attitude toward IT or salesperson familiarity