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Customer Relationship
Management: The Evolving Role of
Customer Data
Journal:
Marketing Intelligence and Planning
Manuscript ID:
MIP-05-2012-0055.R3
Manuscript Type:
Original Article
Keywords:
customer data, customer relationship management, service-dominant
logic, service logic
Abstract:
Marketing Intelligence and Planning
For Review Only
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Customer Relationship Management: The Evolving Role of Customer Data
Introduction
Since its introduction in the early 1990s, customer relationship management (CRM) has
developed a diverse set of identities. The lack of common conceptual ground and
fragmented research field have resulted in a domain that operates at multiple levels of
analysis: conceptually, empirically and practically (Zablah et al., 2005). In this setting,
customer data have been used first and foremost for the benefit of the firm, that is, as an
input resource for company processes. Through CRM activities such as cross-selling,
customised marketing communications or segmentation, the value potential of customer
data gets captured, because firms can sell more products and better manage their
customer relationships.
As firms increasingly shift their attention from selling products to serving customers
though, the traditional uses of customer data can prove unsatisfactory. Current methods
for using customer data are heavily product-centric: They target selling more things to
customers and fail to address the move toward facilitating processes that support
customers’ value creation, which constitutes the basic determinant of service as a
business logic (Grönroos, 2008). Firms’ CRM activities also may lead to customer data
misuses, often referred to as the ‘dark side’ of CRM (e.g. Boulding et al., 2005).
Furthermore, increasing numbers of private and public initiatives challenge
conventional CRM activities undertaken by companies and suggest novel, innovative
ways to use customer data, such as refining and giving their data back to customers.
Current research on CRM has not yet addressed this emerging reconfiguration of
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customer data, which is why its value-creating opportunities have remained unexplored.
Instead, most research has centred on accumulating knowledge about the existing CRM
domain, which has meant neglecting both theoretical and managerial opportunities related
to this increasingly emerging phenomenon (e.g. Nguyen and Mutum, 2012; Verhoef et
al., 2010).
The purpose of this study is to reconfigure the role of customer data within the CRM
framework. Accordingly, this article begins with a brief discussion of CRM literature,
along with the three CRM waves that characterise the evolving role of customer data in
current CRM frameworks. A case study serves to illustrate empirically the emerging shift
in customer data usage. After suggesting new directions for customer data usage,
including implications for the CRM framework, this article concludes with some
implications.
Customer Relationship Management
The origins of CRM: Wave 1
As a separate research and business area, CRM started to gain attention among scholars
and practitioners in the early 1990s. As a result of the explosion of customer data, firms
faced enormous challenges when they sought to organise these data for analysis
(Boulding et al., 2005). In response, vendors started to introduce commercial hardware
and software solutions to better manage the vast amounts of customer data. Sales force
automation (SFA) and customer service and support (Kumar and Reinartz, 2006) were
integral to firms’ CRM activities. With the help of these solutions, firms could better
collect, store and analyse customer behaviour and build long-term relationships.
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Eventually, vendors started to use the term ‘CRM’ to refer to the collection of customer
data and other activities related to the management of the customer–firm interface
(Boulding et al., 2005). Thus CRM was about empowering technology; different types of
technological solutions appeared as key keys for firms seeking to overcome the
dispersion of customer data.
Redefining CRM: Wave 2
As a consequence of increased interest in CRM, a diverse set of approaches and
definitions emerged to capture its central characteristics. There was soon common
interest in countering the impression that CRM offered merely technological or software
solutions to meet the growing challenges of customer data management. Rather CRM
came to be presented as a process, strategy, philosophy, capability or technology (Zablah
et al., 2005). In addition, CRM gradually extended to account for more than the
management of customer data; it came to be a holistic approach to the management of
customer relationships, and researchers started to stress differences among tactically,
operationally and strategically oriented approaches. Thus Payne and Frow (2005, p. 168),
after exploring a wide variety of definitions, identified three primary perspectives on
CRM: as narrowly defined and tactically oriented; as ‘the implementation of an
integrated series of customer-oriented technology solutions’; and as a more strategic
version, including a holistic approach to the management of customer relationships to
create shareholder value.
Theoretically, CRM developed a link to relationship marketing and the widely
accepted notion that building and maintaining customer relationships constituted the core
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of the marketing concept (Reinartz et al., 2005; see also Kandampully and Duddy, 1999).
Conceptually, one-to-one marketing (Peppers and Rogers, 1993, 2004; Peppers et al.,
1999) and mass customisation (Pine, 1993) shifted attention even further from technology
and toward customers, which also helped firms realise the value potential of customer
data and how it could be harnessed to serve company purposes.
Fragmentation of CRM: Wave 3
The CRM domain gradually diversified as researchers became interested in topics such as
customer lifetime value (Peppard, 2000; Reichheld, 1996), CRM adoption and
implementation (Hansotia, 2002; Hsieh, 2009; King and Burgess, 2008; Ko et al., 2008;
Krasnikov et al., 2009; Richard et al., 2007; Wilson et al., 2007), information systems
(Chalmeta, 2006; Chang, 2007; Roh et al., 2005; Teo et al., 2006; Torkzadeh et al., 2006)
and the interrelationship between CRM and efficient knowledge management (du Plessis
and Boon, 2004; see also Reychav and Weisberg, 2009). Despite efforts at redefinition
(e.g. Boulding et al., 2005), the CRM framework still operated at multiple levels. Thus
research became empirically inconsistent and conceptually complex. Some researchers
questioned whether CRM ultimately exerted a positive effect on firm performance (Ernst
et al., 2011; Fan and Ku, 2010; Reimann et al., 2010), even as others were illustrating
CRM’s strategic opportunities for building competitive advantages (Humby et al., 2003).
Consequently, customer data increasingly represented a company asset, used to predict
customer behaviour (e.g. Shankar and Winer, 2006; see also Homburg et al., 2009) and
gain competitive advantage (e.g. Chakravorti, 2009).
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Summarising the waves: CRM and the role of customer data
Customer relationship management developed a separate identity as a result of firms’
need to take advantage of customer data when managing their customer relationships.
Gradually, research evolved under multiple banners, resulting in a fragmented set of
perspectives, definitions and research results. Along the way, CRM became a heavily
firm-oriented construct. Customer data were used instrumentally to serve firms’ purposes.
With the help of supportive technology, firms used customer data to acquire new
customers, retain their current customers, and enhance customer relationships. Customer
data also were harnessed for firm purposes, such as customised communications, cross-
selling, or segmentation (Payne and Frow, 2005; Peppers et al., 1999; see also
Jayachandran et al., 2005).
Despite the diversification of CRM as a framework during the three ‘waves’, the role
of customer data in that evolution remained limited and narrow. Internally, customer data
supported firms’ processes and efforts to sell more products. Thus, they were first and
foremost input resources for firms that helped the firms address the fundamental
challenge of connecting market demand with supply.
However, both public and private initiatives recently have challenged this traditional
and limited use of customer data, by shifting attention toward sharing data with
customers rather than using it only for firm purposes (Thaler, 2011). This challenge in
turn has driven a re-evaluation of the role of customer data within the CRM framework.
To illustrate this reconfigured role and explore its implications, this study presents a case
study of the Internet-based service application Nutrition Code.
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Research methodology
Case study research setting
Case study research enables an in-depth exploration of the dynamics that mark a single
setting, which makes it particularly suitable for new research areas, areas in which
existing theory seems inadequate (Eisenhardt, 1989) or those for which existing research
is situated within the context of ‘discovery’ rather than the context of ‘justification’ (see
Yadav, 2010). Accordingly, case study research has been widely applied in disciplines as
varied as psychology, sociology, anthropology, history, economics, public policy and
management (Yin, 1994). As suggested by Gilmore and Carson (1996), at an early
exploration stage, qualitative methods in general are suitable for capturing the nature and
dimensions of a research phenomenon. Considering the novelty of the focal research
phenomenon, a case study research approach thus appears appropriate. The objective of
case study research is to learn from a particular case (Dubois and Gadde, 2002); it
investigates a contemporary phenomenon within its real-life contexts when the
boundaries between the context and the phenomenon are not clearly evident (Yin, 2009).
The focus is on gaining an in-depth understanding of the research phenomenon, in this
case, the reconfigured role of customer data.
Using the case study classifications established by Harre (1979), Yin (1994, 2009)
and Stake (2005), this case study is intensive, exploratory and instrumental. The aim is to
present the case study in a way that it can be read with interest toward the case itself but
also support another agenda (Stake, 2005). That is, the case itself can be regarded as a
tool, because it offers an empirical illustration for approaching a certain research
phenomenon.
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Case description
Increasing service orientations and private and public initiatives are exerting pressure to
reconfigure the role of customer data in companies’ CRM activities. To illustrate this
emerging shift, this study considers Nutrition Code, an Internet-based service application
designed by a Finnish IT and health service provider and launched by a major Finnish
food retailer, targeting holders of the retailer’s loyalty card. The case study aim is to
illuminate empirically the central characteristics related to the new and emerging role of
customer data. The focal service combines point-of-sale data with the nutritional value of
the purchased groceries, compares this information against recommendations provided by
the National Nutrition Council and then offers the results to customers free of charge
through the service’s website. There are not that many metrics available for customers’
use to capture the multifaceted and complex nutritional playground. This was one reason
for developing such a service. Through the service Ccustomers can thus easily and
conveniently gain a detailed nutritional profile, based on their own grocery shopping,
which should help them better follow nutritional guidelines provided by authorities and
even get advice on how to enhance the quality of their diet.
Another reason for establishing such a service was the food retailer’s motivation to
increase the loyalty of existing customers and even attract new customers due to the new
and innovative service, and the fact that increasing amount of customers are interested in
issues related to food healthfulness. In this endeavour, reconfiguring the role of customer
data played a critically important role. Consequently, in the context of this study, the case
Formatted: Tab stops: 0.3", Left + Not at
5.38"
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study empirically illuminates the central characteristics related to the new and emerging
role of customer data.
s provided by authorities and even get advice on how to enhance the quality of their diet.
Data generation and analysis
Empirical data emerged from two distinct phases: in three structured interviews with the
representatives of the food retailer and the actual service provider (IT and health service
provider), and then in 16 unstructured interviews with customers (Table 1).
“Take in Table 1 approximately here”
The firm interviews were conducted prior to the customer interviews and the data
generation process as a whole was conducted within 10 months. The firm representatives
were chosen on the basis of their experience and understanding of the service as well as
their influence on developing the service further to better incorporate both customer and
firm needs. In the firm interviews, the overarching purpose was to generate in-depth
understanding of the process of the firm giving customer data back to customers and
uncovering the reasons behind it. Customer informants were contacted with the help of an
online surveyan targeted atto the users of the service. Following the guidelines of
theoretical sampling (see Corbin and Strauss, 2008, p. 143; Alvesson and Sköldberg,
2000, pp. 27–28), customer interviewees were selected in a way that could contribute to a
rich and diverse set of informants with different levels of, for example, user experience.
Formatted: Centered
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Furthermore, household size, age, and gender were considered when forming an
appropriate set of interviewees.
Both the structured and unstructured interviews served to produce a focused firm
perspective, such that the pre-determined questions pertained specifically to the topic of
giving customer data back to customers, while the open questions allowed service users
to describe their experiences more freely. Incorporating structured firm interviews and
unstructured customer interviews was considered as a suitable data generation strategy
given the novelty value of the phenomenon. On the one hand firm interviewees’ attention
was guided toward issues that were specifically linked to the reconfigured role of
customer data. On the other hand, customer interviewees were allowed to holistically
describe and discuss how that eventually influenced their behaviour; since it is the
customer who defines whether or not something is of value to him or her. Consequently,
Ththis combination is combination helped build a more versatile understanding of the
implications of the reconfigured role of the customer. Researcher immersion also
improved understanding of the context surrounding the research phenomenon. Due to the
open-ended, non-pre-ordained nature of some questions, the researchers became very
familiar with the research phenomenon (Gilmore and Carson, 1996). Specifically,
interviews with the firm representatives focused on clarifying the service delivery process
and the food retailer’s motivation for reconfiguring the role of customer data in its
business context. The focus in customer interviews was on building a customer
perspective and addressing how customers perceived the food retailers’ new uses of
customer data.
“Take in Table 1 approximately here”
Formatted: Indent: First line: 0.3"
Formatted: Justified, Indent: First line: 0.3"
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All the interviews were recorded for further analysis. Parts of the firm and customer
interviews also were transcribed, to enhance the quality of the data analysis and provide
illustrative examples of the primary aspects emphasised during the interviews. The
interviews were supplemented by secondary documentation about the food retailer’s
strategy and the Nutrition Code service.
The analysis of the interviews started with the researchers listening to the interviews
several times and writing detailed summaries. These data were thematically analysed
using NVivo software. Through coding, categorising and thematising steps, the data also
were investigated for similarities and interesting features related to the research
phenomenon. No predetermined coding scheme was used; the focus was on letting the
data speak in broad terms.
During the data analysis, it was vital to note when the informants were talking about
themselves and their actual experience and when the focus was on general observations
about the case context. Furthermore, it was important to distinguish whether informants
spoke in conditional terms, not based on personal experiences, or about their imagined
experiences of others. The empirical focus was to tease out experiential knowledge from
simply opinion or preferences (Stake, 2004). After the analysis, the researchers listened to
the interviews once more, to ensure all important insights had been included in the final
analysis.
Results
Formatted: Left
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Four themes emerged from the data that characterise the reconfigured role of customer
data in the context of the Nutrition Code (Table 2): customer loyalty, firm differentiation,
firm values and firm image. They comprise constellations of characteristics brought up by
both customer and firm informants. Themes operate at multiple levels of firms’ processes
and uncover the diverse implications of the reconfigured role of customer data. When
considering their interrelations, it should be noticed that the themes operate at multiple
levels of firms’ processes and uncover diverse implications of the reconfigured role of
customer data. For example, firm image can be regarded as a somewhat more intangible
and hard to measure construct than customer loyalty, which in turn is more closely linked
to the firm’s value creation in terms of increased future revenue. The themes have
different roles regarding how and at which point they contribute to supporting the firm’s
value creation. Furthermore, they illuminate both strategic and operational aspects of a
firm’s value creation, as discussed in more detail next.
“Take in Table 2 approximately here”
Customer loyalty
The reason for establishing the Nutrition Code in the first place was to provide a new
service targeted at the food retailer’s loyal customers. Loyal customers wanted a service
that would be genuinely beneficial to them. The reconfigured role of customer data thus
appeared first and foremost as a means to increase the loyalty of existing customers:
This is a service for our loyal customers, and the idea is to create such benefit to our loyal
customers that it’s worthwhile for them to be our customers and therefore they will shop at our
stores. (Firm representative)
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From the customer’s perspective, being provided with information about the nutritive
substance of their groceries offered such a benefit that many customers were willing to
buy more from the food retailer’s stores. Customers described how they became more
loyal to the food retailer as a result of being provided with information about the nutrition
exemplified by their groceries:
I tend to shop a lot more at the food retailer…. I used to go the food retailer something like 75 per
cent of the time but now I’d have to say it’s more like 90 per cent just because of this. (Clerical
employee, 30 years)
In addition to the shopping levels as the food retailer, the service encouraged customers’
loyalty intentions. Customers were more willing to concentrate more of their shopping at
the food retailer, as illuminated in the following comment:
Well yeah, sure if I’ve got a competitor’s and the food retailer’s stores side by side I’ll go to this food
retailer, if not for any other reason than just because what I’ve bought will be registered in the
Nutrition Code. (Sales assistant, 21 years)
Furthermore, providing customers with interesting and useful information, resulting
from the reconfigured role of customer data, was regarded as going beyond conventional
customer loyalty rewards, which tend to be characterised by monetary forms of
compensation. In that respect, the Nutrition Code was perceived as an additional service,
among the existing set of customer loyalty benefits:
Well with these customer loyalty cards it’s only a monetary benefit that you receive, so the Nutrition
Code service is significant precisely because you can see your shopping list in front of you and think
about it and then it hopefully guides you toward a better lifestyle, so it’s not the monetary benefit but
the health benefit, that’s how I would see it. (Practical nurse, 55 years)
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In particular, the service seemed very beneficial to the increasing group of customers who
were interested in monitoring the nutritive substance of their groceries:
I have to say that when I first heard of this me and my husband always went to the competitor’s
supermarket … but when this service came up I thought this is such a good idea that you can get
information about what you buy and what you should eat, so it was because of that really that we
moved over to being the food retailer’s customers. (Secretary, 64 years)
In this respect, sharing data with customers even led some customers to reassess their
current customer loyalty entirely and switch from one retailer to another.
Firm differentiation
By establishing a service that provides customers with information about the
healthfulness of the goods being purchased, the firm can differentiate itself from
competitors and adjust its role in customer value creation. In addition to goods, customers
receive information about the healthfulness of those goods, and this service offers added
value to customers. Customers receive additional resources for their use, which also
repositions the retailer as a resource provider, supporting the customer’s value creation.
The focus shifts from goods to a more holistic perspective on customers’ value creation,
which consists of goods and information that helps customers in their everyday activities
(i.e. monitoring the healthfulness of their eating). This aspect of the reconfigured role of
customer data was noted by both firm representatives and customers:
Well it’s that, by being a loyal customer you get a service like this, which you can’t get anywhere else.
(Firm representative)
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If I shop somewhere else then I wouldn’t know how healthfully I eat, I want to go there to register my
purchases in the service and then I can keep track of how healthful my diet is. (Instrument caretaker,
53 years)
Thus, the reconfigured role of customer data helps firms differentiate themselves from
other market actors. The harsh competition among food retailers requires firms to seek
ways to strengthen their existing customer base, as well as attract new customers by
distinguishing their offer from competitors’ and positioning themselves more favourably
in customers’ minds. Establishing a service that is based on the reconfigured role of
customer data may help firms do just so, such that they position themselves as service
firms by harnessing the potential of customer data in the shift from goods to services.
…but now going to the store doesn’t end with me getting a product from there and me giving my
money to the retailer, but the retailer offers me something for which they won’t get any money,
they give me information, they gather information for me. (Teacher, 30 years)
Providing customers with information about the healthfulness of their groceries was
genuinely an innovative service, not just locally or nationally but also at an international
level. Consequently, customers accessed an online service Internet-based service
application that literally was not available anywhere else or from any other retailers.
Firm values
Providing a service such as the Nutrition Code provided a concrete example of how the
reconfigured role of customer data helped the implementation of firm values (e.g. bearing
corporate responsibility, exceeding customer expectations) in practice.
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Responsibility is a truly important issue for us … and it creates something positive, which
probably wasn’t the first viewpoint to this, but people within the firm like the idea that we’re
taking part in an undertaking such as this one and that we’re involved in responsible projects. And
then of course on the outside too, we hope that people will see that we are really looking for
solutions that will benefit our customers. And oftentimes the discussion about responsibility
revolves around how a firm is this or that and a firm is highly energy-efficient or something, bu t
quire rarely do you see responsibility being truly about helping your customers lead a more
healthful or more responsible life. (Firm representative)
Nutrition Code thus offered a practical means to practice corporate responsibility. First, it
helped customers manage their increasingly topical concerns about food healthfulness
and thereby potentially decrease problems related to national health, such as diabetes and
obesity, such that it offered benefits for the whole society as well. Second, the service
facilitated customers’ interest in health-related topics, because customers became more
interested in and informed about their own health as a result of using the Nutrition Code.
Being provided with such information triggered customers’ interest in the increasingly
important food healthfulness phenomenon:
I’ve become more interested in getting more information about what kind of an effect my purchases
will have. Like what I get too much of and what I lack and from where I might get what I’m missing
and what I could, what I should hive up because I’m getting something too much…. It has kind of
sparked my interest in finding out more about it. When you see those green dots and red dots and what
you have bought in a concrete way. So that has sparked my interest even more. (Acquisition engineer,
61 years)
Furthermore, in line with the corporate responsibility notion, the service was offered free
of charge. Customers only needed to apply for the loyalty card of the food retailer and
Formatted: Indent: First line: 0"
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register with the service, which was not limited or cost-based for any customer. All
customers had the chance to gain access to the information about the healthfulness of
their own groceries and use that information to improve the quality of their diets.
In addition to corporate responsibility, the reconfigured role of customer data was
closely linked to another core value of the firm, namely, exceeding customer
expectations. Because the Nutrition Code was among the first attempts by a retailer to
provide customers with information about the healthfulness of their groceries, customers
were not used being offered such a service. In this sense, customers’ expectations were
exceeded by the offering of a truly unique service:
So I think they are ahead of their time. It’s like really something positive. They care about what
we, or what the people want and what they eat. That they really consider what’s going on with us.
Anyhow, I think it’s big deal coming from a big institution like this that they have a service like
that. On one else has the same thing anyway. So I think it’s a really positive thing. (Cosmetician,
34 years)
Through the service, the firm was able to make its core values more visible and concrete.
Using customer data in an innovative way, for the benefit of the customer, was perceived
as something surprisingly positive and yet not linked to the traditional role of food
retailers.
Firm image
The Nutrition Code, as an innovative, new service, improved customers’ image of the
firm. First, the data sharing offered real benefits to customers, which led them to view the
firm as a pioneer:
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Well from my point of view a store like this that develops or offers services like this, I see them as
forerunners and that it really benefits me as a customer. (Sales manager, 40 years)
Second, customer data traditionally has been used solely for the benefit of the firm, such
that customers might receive only information about how much money they have spent in
the retailers’ food stores or how many ‘loyalty points’ they have earned. In the case of the
Nutrition Code, the customer point-of-sale data had been refined (i.e. complemented with
information about the nutritive substances of the groceries) and returned to customers for
their own use:
So what the store takes from me except for the money, it gives something back to me. I think this is
one of those, even though it’s not that functional yet that it would give me as much benefit as I would
hope, then still I think it’s a smart move, it gives you the feeling that they aim at something good.
(Spokesperson, 48 years)
Because these customer data were used not just for firm purposes but for the benefit of
the customer, customers perceived that they were receiving something useful in return for
their customer loyalty card usage, which influenced their perceptions of the firm’s image.
Introducing new directions of customer data usage: Toward wave 4
The results of the case study illustrate the implications of the shift toward using customer
data for the benefit of the customer. Instead of using customer data merely to suit
company purposes, such as segmentation or cross-selling goals, customer data took on a
reconfigured role:
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Many customers perceive that customer data is used against them, to manipulate them. But here,
customer data is used directly for the benefit of the customer. It’s a totally different starting point,
or perspective on customer data usage. (Representative of the service provider)
As a result, customers were able to monitor the nutritional value of their groceries and get
advice on how to improve the quality of their diet—increasingly important objectives in
food retailing today. This expanded role eventually had implications for customer loyalty,
the firm’s ability to differentiate itself from competitors, the firm’s implementation of
corporate values and its image. Furthermore, the information resulting from the
combination of point-of-sale data with nutritional values could not be used to support the
food retailer’s internal processes, due to data protection laws, so these customer data had
a fundamentally different role than serving the purposes of the company. Attention
shifted to how customer data might be used externally to support various value-creating
processes undertaken by customers and how customer data might better serve customers.
Consequently, the role of customer data became not to supply the firm’s information
needs but to be shared with customers; the role of customer data was further reconfigured
when it was refined and given back to customers to support their value-creating
processes, which is a central characteristic of the proposed wave 4.
“Take in Table 3 approximately here”
Table 3 illustrates how the role of customer data within the CRM framework has
evolved through data dispersion, data organisation and data ownership, toward data
sharing. During its evolution, customer data were long considered an input resource for
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firms’ processes. However, the increasing service orientation moved the locus of
attention toward exploring the value potential of customer data as an input resource for
the customer’s—not the company’s—value-creating process. Customer data evolve into
the customer’s data.
Conclusions
The current CRM framework is inherently firm-centric—as suggested by Thaler (2011),
the perspective on customer data usage is narrow and limited, and customer data have
been used nearly exclusively for the benefit of the company (see also Thaler, 2013). As
companies shift their attention toward serving customers, the role of customer data must
be reconfigured as well to better address these strategic purposes. The traditional role of
customer data simply is not in tune with the orientation toward serving customers,
because of its inherent focus on selling more products. Despite recent initiatives in both
private and public sectors, no prior research has addressed the opportunities of using
customer data as an input resource for customers’ value-creating processes.
To address this gap, this study has sought to reconfigure the role of customer data
within the CRM framework by first identifying three ‘CRM waves’, on the basis of a
literature review. A case study provided an empirical illustration of the reconfigured role
of customer data, resulting in the conclusion that the role of customer data within CRM is
entering a phase of customer data sharing, as companies seek to introduce ways to refine
and give customer data back to customers, to support their value-creating processes.
The evolution from data dispersion through data organisation and data ownership
toward data sharing is well in tune with the shift from viewing customers as passive to
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reconsidering them as active partners (e.g. Prahalad and Ramaswamy, 2004a, 2004b).
The reconfigured role of customer data, together with both public and private initiatives
to give customers more access to their own data, have major implications for public
policy as well. Consumers and governments are increasingly interested in finding ways to
enhance the quality of life for both the individual and society, by harnessing the power of
the vast amount of data accumulated, for example, by energy providers, retailers,
insurance companies and tax authorities.
Moving toward customer data sharing opens new business and service opportunities.
For example, healthcare actors should return data about customers (i.e. patients) back for
customers’ own use, and local authorities can provide geographical data to customers to
modify, refine and apply in their own processes. An increasing number of social media
applications harness the power of customer data to support customers’ processes. Gaining
an in-depth understanding of this evolution might help not only capture the nature of this
emerging phenomenon but also influence public attitudes and general opinion. As a
framework, CRM must adapt to market dynamics and new forms of interaction, exchange
and value co-creation that emerge in relationships between customers and companies. In
that respect, understanding the opportunities involved with the reconfigured role of
customer data has major implications for practice; it suggests a variety of ways to serve
customers better, which eventually should result in equal benefits for the firm.
Theoretical implications
Instead of the one-sided customer data usage that was apparent in the data dispersion,
data organisation and data ownership waves, data sharing opens up great value-creating
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opportunities for firms and customers. As illustrated in the interviews, customer data take
on redefined meaning when they are used for the benefit of customers. The very notion
that customers increasingly are being offered access to their own data has several major
implications for the development of the CRM framework.
First, as a framework, CRM should better address the possible uses of customer data
for the benefit of the customer, as suggested in the emerging data sharing wave. The
current CRM framework is heavily influenced by the market to philosophy (Lusch, 2007)
and fails to recognise the opportunities arising from using customer data in customers’
value creation. Customer data should never be viewed as solely owned by or solely useful
for the company. They should be considered a way to provide customers with additional
resources, for the purpose of better serving those customers. Notwithstanding context
dependability, customer data can be developed into information that is shared—not with
other actors in the supply chain to decrease the bullwhip effect or save costs (e.g. Ryu et
al., 2009), but with customers. This shift in thinking is well in tune with the
transformation from strategies focused on transactions to strategies that incorporate both
transactions and interactions, often referred to as social CRM (Greenberg, 2010a, 2010b).
Second, the reconfigured role of customer data does not exclude traditional CRM
activities, such as segmentation and identification of the most profitable customers.
Instead, it extends the current CRM framework and provides new opportunities for
developing customer relationships. With the help of innovative uses of customer data,
firms can establish new ways to interact with customers, in terms of social CRM but also
in broader terms. Receiving information about their transactions or consumption can be a
great support to customers’ value-creating processes. In that respect, by shifting the focus
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from internal to external uses of customer data, the CRM framework can find theoretical
support in recent discussions about various service logics (e.g. Grönroos, 2008; Maglio
and Spohrer, 2008; Vargo and Lusch, 2004, 2008). Integrating CRM with recent
theoretical discussions about service may contribute synergistic outcomes that can better
identify and delineate the potential of the reconfigured role of customer data within the
CRM framework.
Third, the reconfigured role of customer data contributes to avoiding the dark side of
CRM (Boulding et al., 2005; Humby et al., 2003; Ngai, 2005). Customers have grown
suspicious about customer data usage because of the unethical behaviour of some
companies that misuse information, invade privacy and operate different customer lock-in
strategies (Frow et al., 2011). Converting customer data into a customer resource that is
available for use in customers’ resource integration processes, where the value potential
is eventually actualised, can be considered ‘an enlightened CRM strategy’ (Frow et al.,
2011) and a way to develop customer relationships at a whole new level.
Managerial implications
As Thaler (2011) recommends, ‘Not only should our data be secure; it should also be
available for our own purposes. After all, it is our data’. The same logic applies in other
contexts. For example, Fiat has established a service application, EcoDrive, that helps
customers drive economically and save money while reducing their environmental
impact. This service application collects every single piece of data generated while the
customer drives. Therefore, the resulting data are not point-of-sale data but rather vehicle
usage information. This well-designed service application refines the data to be easily
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accessible for customers. Energy suppliers, such as the Finnish Fortum, also are
providing customers with appliances that help them determine their levels of energy
consumption conveniently and in real time. Customers also can set targets for daily
consumption and learn how to save energy and money and support the environment. In
all these examples, customer data are used not just for company purposes but rather are
refined and given back to customers, in support of their value-creating processes. The
trend toward data sharing is evident in the public sector too. A recent initiative by the
British government challenges businesses in key sectors, such as banking or
telecommunications, to provide customers with an opportunity to reclaim their data for
their own use.
Limitations and future research
Considering the novelty value of this research phenomenon, this study is necessarily
preliminary; it represents one of the first attempts to address the reconfigured role of
customer data in the CRM framework. Therefore, additional empirical research is needed
to illustrate and understand this shift in customer data usage. Empirical evidence about
the problems and obstacles associated with the reconfigured role of customer data might
contribute to a better understanding of the emerging phenomenon as a whole. These
challenges include, for example, poor firm motivation to give customer data back to
customers or a firm’s inability to refine customer data into meaningful information.
Therefore, further research should address the reconfigured role of customer data in all its
diversity. Moreover, understanding how themes such as those identified in this case study
relate to one another would provide a deeper understanding of the reconfigured role of
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customer data within the CRM framework. Finally, identifying innovative, real-world
applications and business concepts in which the traditional role of customer data is being
challenged contributes to an enhanced understanding overall of the central characteristics
related to customer data sharing. Further research along these lines ultimately will help
unlock the full potential of customer data.
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Gender and age Occupation Household
size
Female, 55 years Practical nurse 2
Female, 61 years
Acquisition engineer
1
Female, 21 years
Student
1
Male, 37 years
IT
-
engineer
4
Female, 34 years
Cosmetician
3
Male, 48 years
Librarian
4
Female, 42 years
Career planner
2
Female, 53 years
Instrument caretaker
2
Female, 48 years Spokesperson 4
Female, 30 years Clerical employee 2
Female, 55 years Practical nurse 2
Female, 40 years Sales manager 2
Male, 19 years Sales assistant 2
Female, 64 years Secretary 2
Female, 30 years Teacher 2
Female, 47 years Designer 2
Table 1. Details of the customer interviews.
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Customer
loyalty
Due to customer data reconfiguration the firm is able to increase the
loyalty of those customers that find the information provided by the
service relevant and interesting.
Firm
differentiation
Due to customer data reconfiguration the firm is able to differentiate
itself from the competition and even attract new customers. In
addition, while the firm provides customers with additional resources
(food healthfulness information), the firm positions itself more as a
service firm.
Firm values Due to customer data reconfiguration the firm can put its values and
strategy into practice, for example, by emphasizing customer
orientation by providing customers with access to their own data.
Firm image Due to customer data reconfiguration customers perceive the firm in a
more positive light. For example, customers perceived the food
retailer as a pioneer because it provided such a service and give
customer data back to customers.
Table 2. Central characteristics of the themes
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I) DATA
DISPERSION
II) DATA
ORGANISATION
III) DATA
OWNERSHIP
IV) DATA
SHARING
Evolution phase
CRM Wave 1
- Early 1990s
Companies faced with
overwhelming amounts
of data; a focus on
developing
technological solutions
to better manage the
company-customer
interface
CRM Wave 2
- Mid 1990s
Customer data
organised to better
serve company
purposes; concepts
such as mass
customisation and
one-to-one marketing
established
CRM Wave 3
- 2000–2010
Customer data as a
company asset;
customer loyalty
programmes used to
better manage
customer
relationships
CRM Wave 4
- 2010–
Customer data
refined and given
back to customers;
external use of
customer data;
customer data as
customer resource
Characteristics
Service automation;
call-centre management;
customer service
support; sales force
automation
Mass customisation;
one-to-one marketing;
service and sales
Entire organisation;
integrated
communications
Social CRM; CRM
leveraged outside the
organisation;
customer-to-
customer
interactions
Focus
CRM as a technology
solution
CRM as tactical and
operational
CRM as strategy and
philosophy
CRM as value co-
creation;
experiences;
interaction;
conversation
Goal
Improved service
operations; increased
sales efficiency;
empowering technology
Reduced cost of
interaction; increased
customer retention;
improved customer
experience;
empowering data
Cost reduction and
revenue growth;
predicting customer
behaviour;
competitive
advantage;
empowering firms
Serving customers;
supporting
customers’ value
creation;
empowering
customers
Table 3. The evolving role of customer data
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