Download Managing Customer Relationships through Mobile

Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
Managing Customer Relationships through Mobile Medium
– Underlying Issues and Opportunities
Jaakko Sinisalo*, Jari Salo, Heikki Karjaluoto and Matti Leppäniemi
Faculty of Economics and Business Administration, University of Oulu,
P.O.Box 4600, FIN-90014 University of Oulu, Finland
[email protected], [email protected], [email protected] and [email protected]
* Please address correspondence to first author
Abstract
Although customer relationship management (CRM) is
currently gaining widespread popularity in several
disciplines and industries, mobile medium as an element
of CRM is rarely taken into consideration. The purpose of
this study is twofold. First, to guarantee a coherent
discussion
about
phenomenon,
a
preliminary
conceptualization of mobile customer relationship
management (mCRM) is presented. Second, the authors
illustrate the underlying issues of the initiation of mCRM.
A single case study method is used for the empirical
component of the study. In more detail, a major retailer
that implemented mCRM and use mobile medium to
promote CRM activities is investigated. The main results
of the study indicate that while there are a lot of
uncertainties related to adopting mCRM, the mobile
medium can be an effective complement to traditional
CRM. The paper finally presents contributions, limitations
and avenues for further research of this emerging topic.
1. Introduction
Customer relationship management (CRM) [e.g. 1, 2]
has gained lately widespread popularity in many
disciplines and industries. Relying on the proposition that
customer relationships are a true source of competitive
advantage [3], the objective of CRM is to build and
maintain customer relationships by encompassing the
sales, marketing, and customer service activities.
In order to build and maintain long-term relationships
with customers, companies should provide differentiated
relationship value and communicate continuously and
consistently with each of their customers [4]. For this
purpose, new digital marketing channels, such as the
Internet and mobile phones, are considered powerful
channels to reach customers because they allow
personalization and interactivity of the content and the
context of the message [e.g. 5, 6]. Moreover, digital
channels are seen to create unique and positive
experiences to customers by mixing aspects of products,
service, brand, and communication – not just transactions
[7], and making it possible for companies to develop
interactive and relationship-building contacts with their
potential and current customers [8]. Despite the potential
of digital channels, only the Internet as a channel to
manage customer relationships (eCRM) has attracted a lot
of attention among academics [9-11], whereas
understanding of managing customer relationships
through the mobile medium has gained far less attention
[12].
In practice, the possibilities created by the mobile
medium have lead to situation that several companies and
industries have started to utilize mobile medium to
promote CRM activities. By utilizing mobile medium,
companies aspire at advance activities with the customer
in the sense of saving time, cost and inconvenience. For
example, Finnair (the national airline of Finland) is the
first company in the world to adopt a mobile phone
service for their loyal customers that enables passengers to
check-in in advance for flights with SMS (short message
service) message. By using this service, passengers can go
directly to the departure gate without the hassle of waiting
in the check-in line. The advantage for the customer is, in
addition to saving time and being easy to use, that the
details of a flight are automatically stored on the mobile
phone and are accessible whenever needed.
In this light, relatively little is known about mobile
customer relationship management (hereafter referred to
as mCRM), and from marketing perspective we are still
dealing with an extremely unacknowledged phenomenon.
The purpose of this study is twofold. As the conceptual
agreement is necessary prerequisite for coherent
discussion about phenomenon, first a preliminary
conceptualization of mCRM is presented. Subsequently,
in order to increase our understanding of this, the present
0-7695-2507-5/06/$20.00 (C) 2006 IEEE
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Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
study deals with the underlying issues that companies
have to take into account when moving towards mCRM.
In order to do this, this study analyses the phenomena
from company’s i.e. retailer’s point of view.
The remainder of this study is structured as follows.
First, a preliminary conceptualization of mCRM is
presented. Second, the theoretical background of this
paper that motivates our research is discussed. Then,
based on the conceptualization and the theoretical
background, the possible implications of mCRM for the
business are evaluated. Fourth, the key aspects of
initiation of mCRM are described. Fifth, the data
collection method of this study is described. Sixth, the
underlying issues of initiation of mCRM based on the
results of the empirical analysis are presented. The paper
concludes by discussing the implications of the results for
both theory and practice, outlining the main limitations of
the work and identifying avenues for further research in
this emerging field.
2. A preliminary conceptualization of mCRM
The purpose of this section is to present a preliminary
conceptualization of the mCRM. Then, the proposed
conceptualization is used to examine the correspondence
between mCRM and CRM.
As mCRM has only recently aroused interest in
academic research, no formal conceptualization of mCRM
currently exists. Before any phenomenon can be
comprehensively understood, it must be concisely and
clearly defined. As mentioned before, without the
consensual definition of key concepts, there cannot be
coherent discussion about the phenomenon. Unless a
concept, such as mCRM, possesses a common meaning,
its economic, financial, behavioral, other boundaries will
be blurred [13].
When a concept is deeply embedded with technology,
as is the case with mCRM, there is a tendency to mistake
the technologies for the concept itself [14]. Therefore, it is
necessary to separate the concept from its underlying
technologies to accomplish the conceptualization without
the subject to the volatility of technological changes. On
this basis, mCRM is defined for the purpose of this study
as utilizing mobile medium (i.e. mobile phone, smart
phone or PDA) for the purpose of managing customer
relationships and activate customers to start dialogue
with company via mobile medium. Based on the definition,
the concept of mCRM is argued to involve of the
following characteristics:
•
It involves communication, either one-way or
interactive, for the purpose of build or maintain
customer relationships between company and its
customer
•
•
•
•
•
The communication refers to sales, marketing, and
customer service activities conducted through mobile
medium between the company and the customer
Communication can be initiated by either the
company or the customer
Communication refers to SMS (short message
service), MMS (multimedia service), JAVA
application and browsing – based communication,
making difference to the voice calls through mobile
or fixed-line phone
At least one of the parties engaged in communication
must be human and, naturally, communicate through
mobile medium
Mobile medium is seen as a complementary channel
for CRM activities, instead of seeing it as a substitute
of traditional ones
The characteristics states that communication has
vital role in mCRM. In order to provide value for the
customer, communication should be continuous,
consistent and based on individual customers’
preferences. In general, communication through mobile
medium can occur in the form of information, advertising,
promoting, feedback, shopping, ordering, alerts,
reminders, votes, competitions, lotteries to mention few.
However, for initiating this kind of communication with
customers, the necessary prerequisite for the company is
to get the permission from customers [15-17]. In other
words, customers have to be already registered or have
otherwise beforehand given their acceptance for the
communication through mobile medium.
When thinking about mCRM, the communication
form depends on the purpose of it. To build customer
relationships, competitions and lotteries are argued to be
most suitable. For the purpose of enhancing customer
maintenance, company can send any kinds of sales,
marketing, or customer service messages based on
individual preferences via mobile medium to customers
signed up to the loyalty program. In addition, like the
characteristics of mCRM stated communication can be
initiated by the customer as well. For example, the
customer may see an advertisement on a magazine, and
makes an order for the advertised product by using SMS
message without giving any contact information. The
company can identify the customer based on the phone
number and, consequently, respond to the order and send
a confirmation SMS to customer including details of the
purchase, order reference and contact number.
To further elaborate and to accurately define the
mCRM concept, it is also critical to establish how it
relates to CRM and why it is important to make the
distinction between these two terms.
Although mobile medium is just one channel to
manage customer relationships in the multi-channel
environment [18], the rules that companies will encounter
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Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
for utilizing it are different than in traditional channels.
These differences are mostly due to the unique features of
the mobile medium. Naturally, some of the customer
relationships management activities conducted through
mobile medium are similar to activities conducted through
traditional channels (e.g. fax, phone, letter, personal,
personal contact). Despite this, in most cases mCRM
activities are purely designed to utilize the unique features
of the mobile medium. For instance, check-in service of
Finnair (mentioned in introduction) is a good example of
personalized service designed for and useful only in the
mobile medium. In addition, the challenges of utilizing
mobile medium in managing customer relationships are
unique. The personal nature of mobile medium sets up
very high standards to communication in mCRM. As the
companies cannot afford to irritate the customers even
once [see e.g. 19, 20], finding the right way to
communicate with the customers is very challenging.
Small screen size, differences in devices, slow download
times with current telecommunications networks, and
different technological standards are other issues making
communication even more challenging. To highlight the
different nature of mCRM and clarify the discussion
among practitioners and academics, it is suggested to
make a difference between the terms mCRM and CRM.
The relevant theoretical background for mCRM stems
from CRM literature evolving from marketing tradition.
Therefore, the next section is dedicated to the review of
CRM literature and state-of-art review of mCRM.
3. Theoretical background of mCRM
Several authors have clearly pointed towards a high
level of association between CRM and relationship
marketing [21, 22], and some authors do not even make
any distinction between the terms [8, 23]. The term
relationship marketing (RM) was initially coined by Berry
[24] who defined it as attracting, maintaining and – in
multiservice organizations – enhancing customer
relationships. This emphasis on relationships is redefining
how companies are interacting with their customers [25,
26]. On the other hand, elements common to all
definitions of CRM include leveraging technology to
engage individual customers in a meaningful dialogue so
that firms can customize their products and services to
attract new customers, develop relationships, and retain
existing customers [27]. While RM does not acknowledge
the technology underlying the management of customers,
CRM is described in this study as using information
technology (IT) in implementing relationship marketing
strategies [28]. As such, CRM unites the potential new
technologies and RM thinking to deliver profitable, longterm relationships [29].
The main reason underlying the adoption of CRM
among most of the companies is an attempt to achieve a
competitive advantage by offering more value to
customers. The customer value is striven by an approach
to differentiating the management of individual customer
relationships. But implementing a software tool alone to
manage customer relationships does not guarantee such
results [27]. Although the role of IT is seen crucial in
accomplishing this objective, CRM is much more than a
pure technology [30].
So, basically CRM enables a company to become
familiar with its customers. Acquiring a better
understanding of customers allows companies to interact,
respond, and communicate more effectively with them
[2]. Enabled by advanced technologies, companies can
gather up an unprecented amount of data about their
customers; demographics, psychographics, buying
behavior and history. The existence of customer data does
not merely lead to understanding of customers. To be
useful, the companies have to turn this data into customer
information and, subsequently, know how to utilize this
information for CRM purposes. In other words, CRM is
about how customer information is used to create more
personal interaction with the customers by taking
advantage of technology.
Accordingly, CRM requires information from all
relevant departments to be centralized to customer
database so that customer information can be used
intelligently to develop relationships with customers. In
addition, the central database in which the customers’
information is stored should be available for responsible
for the CRM activities company widely. By accessing the
central customer database, responsible personnel have an
opportunity to “know” each individual customer [31].
Moreover, customer databases enable companies to
provide more satisfying and consistent relationship with
customers, regardless of the channel the customer chooses
to interact with.
By utilizing the CRM in the right manner, companies
can move closer to their customers, and use more effort in
finding new ways to create value for their customers. By
the aid of CRM solutions, companies can have up-to-date
information of customers gained directly from customer
interaction. Based on the understanding of customers,
CRM allows for more targeted campaigns and tracking of
campaign effectiveness [32]. In the long-term, it produces
a method of continuous analysis and refinement in order
to enhance customers’ lifetime value with the company
[33].
For customers, CRM offers better value based on
customization, simplicity, and convenience for completing
transactions [34]. In other words, customers may benefit
from the belief that they are saving time and money as
well as receiving better information and special treatment.
In addition the customer support is strengthened, because
all customer contact from sales, support, field service and
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Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
marketing are centralized increasing customer satisfaction
and retention [31].
CRM requires that the company manages and
coordinates the customer interactions across different
customer touch-points. For a relatively long time,
customers have expected to interact with companies for
example via phone, fax, e-mail, and Internet. As the
uppermost purpose of CRM is the ability to communicate
with customers on an individual basis, mobile medium
represent an appealing additional channel that can
complement the existing channels [19, 35]. Since mobile
technologies have become ubiquitous, customers have
begun to expect to interact with companies via mobile
medium on anytime and anywhere basis as well.
Several industries have attracted to the potential of
utilizing mobile medium and used it to activities which
can be classified as being part of mCRM. In Finland,
mCRM has attained a substantial number of industries.
For example, the customers of all major mobile operators,
Finnish national airline and banks can perform various
activities through mobile medium. The passengers in the
public transport in the capital area of Finland can order
and buy their tickets as SMS-message. In addition, some
retailers and restaurants are among one of the first to
promote services and activities through mobile medium.
Indeed, the potential of mCRM is acknowledged also
among academics [15, 35, 36] although the empirical
research is still quite scarce. Therefore, mCRM systems
will be a requisite to compete and retain customers who
are mobile users [37].
Now that we have discussed about the theoretical
background of mCRM, it is time to take a closer look at
the possible implications mCRM for the business in B2Ccontext.
Although utilization of mobile medium to promote
CRM activities is a relatively new area, it enables novel
ways for managing customer relationships which were not
possible before. There are several reasons behind high
expectations laid to mobile medium in using it for CRM
purposes. For example, mobile medium is considered to
be powerful opportunity to reach customers [5, 6],
offering various opportunities for the company to plan and
implement more advanced ways to communicate with the
customers. Especially, the SMS is seen as immediate,
automated, reliable, personal, discreet and customized
channel making allowing an efficient way to reach
customers directly. Additionally, mobile medium allows
high speed message delivery, relatively low cost and high
retention rates [40, 41]. Because of these characteristics,
mCRM is likely to be suitable also for the industries, such
as retailing, involving a lot of customers to communicate
with.
To further elaborate mobile medium, the most
essential characteristic that differentiates the mobile from
traditional media is the concept of interactivity [42, 43].
Interactivity means two-way communication enabling
real-time dialogue between company and its customers as
well as the opportunity to the instant response for both of
the parties [15]. In other words, mobile medium transcend
traditional communication by incorporating interactivity.
In that sense, it seems that mobile medium may not have a
comparative alternative when building a continuing
dialogue between the company and the customer [42, 44].
Before the presentation of the case study and
methodology related to it, the key aspects about the
initiation of mCRM are described and briefly discussed in
the next section
5. Key aspects for initiation of mCRM
4. Possible implications of mCRM for the
business
The essence of convergence between CRM and
mobile medium is to make both the customers’ and
companies’ “life” easier for doing business with each
other. In this study, it is argued that the utilization of
mobile medium may offer several benefits to both the
companies and the customers. The benefits may include
learning from and about customers, revealing their needs
and interests, and on this basis, making it possible to
provide customers with better and more personalized
service. For example, the Internet has given power for the
customers to get up-to-date information, ability to more
easily compare products and services, and to get in touch
with companies [38, 39]. In other words, mCRM aims at
finding ways to make customers’ interaction and
relationship with the company more positive by saving
time, frustration, costs and inconvenience.
As mentioned earlier, technology plays the substantial
role in CRM [45]. Because this kind of information
system development often includes major uncertainties
[46], the technological issues have an even more vital role
in the initiation of mCRM. In addition, customers will not
begin using their mobile phones for new functions simply
because new technology exists. Despite, the key challenge
is to get the customers to open and use the company’s
mobile portal [47]. To sum up, in order to start the mCRM
companies have to build the technology underlying
mCRM and, accordingly, solve the technological
uncertainties related to it. Subsequently, companies have
to find the marketing means to attract customers’ attention
and gain them to initiate customer dialogue over a mobile
phone. So, at the initiation of mCRM, there are two
aspects to consider: (1) technology and (2) marketing.
In the next section, the methodology that helped us to
gain an understanding of the subject phenomenon and to
further evaluate these key aspects is described.
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Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
6. Methodology
The present study pursues a deep understanding of the
subject phenomenon in a specific setting. Retailing in
Finland forms the empirical context. Because this study is
focusing on underlying technology and marketing related
issues of mCRM in real-life context, the case study
method is regarded as suitable for this study [48, 49]. Case
selection is a crucial phase in case research and therefore
literature is full of advice on how to select cases [50-54].
Nevertheless, the decision, as to how many, and which
cases are selected, is left to the researcher [53]. Here, our
empirical strategy is a single-case study i.e. one central
company forms the case. Taking into account the purpose
of this study, the single-case study is seen as appropriate
choice for two reasons. First, the aim is to gain an indepth understanding from this complex subject under
investigation. Hence, choosing a single-case study allows
to taking a holistic and thorough view of the case. Second,
as the information of this kind of issues is often latent and
confldential, the researcher must have access to an
organization to be able to identify them [49]. The choice
undoubtedly influences the generalizability of the results
of the study [50]. Therefore, the choice of single case
study means that this study does not aim at statistical
generalization based on hypothesis testing.
The empirical part of this study consists of various
kinds of data. The objective of data collection was to get
rich primary data from the studied phenomenon by
interviewing people who have been actively involved in
developing the mCRM in a particular company.
Therefore, two in-depth-interviews of retailer’s key
informants form the main data source through which the
issues in the initiation of mCRM are identified [55, 56].
Both interviews were conducted with the CEO, the
marketing manager and key technology officers of the
company. By using multiple informants the authors has
increased both reliability and validity of the research [56,
57]. In addition, using key informants inside cases
enhances the understanding of the companies and the
cases [58]. CEO of the case company was chosen to be
interviewed because of his ability of giving a holistic
picture of the business surrounding the phenomenon under
investigation. By the aid of the interview of marketing
manager, the authors could take a closer look at the
marketing related issues, while the key technology
officers gave us viewpoint from the technology related
issues of the studied phenomenon.
In addition, participant observation, company reports,
presentations and other documents were used to validate
the findings obtained from the interviews [for data
triangulation see e.g. 59]. Finally, the key aspects and the
underlying issues related to them was presented to on
industry expert, i.e. chief technology officer for the
leading mobile marketing and mCRM technology
company in the Europe, to be evaluated and commented
on. The result is presented in the next section. The
identities of the respondents and the company are not
revealed due to confidentiality issues.
7. Initiation of mCRM: a case study
The key aspects presented in chapter 5 were further
evaluated in the context of retailing. Because SMS
messaging is the most successful mobile service in the
world, it is chosen to be focus of the investigated
phenomenon. In Finland, over 2.2 billion SMS messages
were sent in 2004 and the figure is estimated to grow
steadily in the years 2005 and 2006 [60].
The company of this single-case study has two nonfood department stores in two different cities and is one of
the biggest retailers in Finland (in terms of annual
turnover). The process of the initiation of mCRM was
followed from August until December 2004 in this
particular company. In the light of the case study we
propose that the initiation of mCRM is based on several
technological and marketing related issues as shown in
Figure 1.
7.1. Technological level
At the technological level, there are five critical issues
to discuss. These revolve around the sourcing and
implementation of mCRM technology enabling
communication through mobile medium. The first issue is
that the company had to acquire mCRM server, to be
capable of handle, i.e. send, receive and store,
unprecented amount of SMS and MMS messages. The
company has to decide either to build in-house expertise
or rely on partner, and whether to use a managed or a
hosted solution. In this case, the company decided to start
mCRM with a hosted mobile marketing platform provided
by one of leading companies in the mobile marketing and
mCRM applications market.
The second issue is that the company had to decide
how to acquire a short message service number (the
number which directs SMS messages from mobile phones
to mCRM server). In Finland, the user applies for the
number from the Finnish Communications Regulatory
Authority (FICORA). To avoid this application procedure,
the company can also rent a short message service number
from some mobile marketing service provider. Basically,
all of them have short message service numbers which can
be used when company do not have the short message
service number on their own or have no interest to apply
the number at the very beginning of the mCRM process.
In this case, the company decided to rent the number.
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Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
Server
Permission
database
Number
Gateways
Technology
Marketing
Media
mix
Campaign
Logic
Pricing
Figure 1: Issues underlying the initiation of mCRM
The third issue at the technological level concerns the
total number of service operators needed to reach target
audience i.e. connections opened to operator’s messaging
network. Basically, the target audience for every
campaign will span all major networks of a particular
country. Consequently, the campaign must connect to all
networks. In Finland, there are approximately seventeen
service operators. The complexity of connecting to each
network directly is significant and has led to situation
where marketers are in troubled waters when deciding to
start mCRM in-house. However, major service operators
are providing service for connecting their messaging
network. The service is often called messaging interface,
which enables sending and receiving SMS- and MMSmessages between mobile devices and companies’
information systems. Basically, this service includes three
different connections: content gateway, short dial number
/ SMS number, and pricing service. The set-up expenses
of mCRM are considerably high, because of all above
mentioned connection charges have to be paid for every
service operator connected to the mobile marketing server.
In this case, altogether seven major service operators were
connected to the mCRM server. Basically, all mobile
subscribers were able to start SMS dialogue with the
company.
The fourth issue for the company to consider is that
the campaign logic has to built into mCRM server,
because mCRM campaign can not be run before that.
Campaign logic refers the details that customers are
supposed to answer i.e. the details that are asked from the
customers during the campaign. Without the campaign
logic, the server can not receive and store messages sent
by the service users. In addition, the data received from
customers is almost impossible to turn into customer
information without the logic. To be sure that relevant
information will be saved to the database, accurate plan
have to be made. All these logic related issues has to be
implemented to the server before a launch of a mCRM
campaign. In this case, the campaign logic consists of
keyword, age, gender, and interest areas. By the aid of the
keyword, mobile marketing server can identify received
messages to be belonged to the particular campaign. Age,
gender and interest areas were asked, and will be used in
the future to send personalized communication to
customers.
The fifth issue is pricing i.e. the price collected from
the subscriber has to be decided. Basically, there are three
options for setting up the price per message sent by
service user. The first option is a normal SMS price,
which is a price according to the pricelist of the operator
in question charged from the service user. The second
option is a free SMS message, which means that the
service is free of charge for the service user. The last
option is a premium-rate SMS message, which means that
the price collected from the service user is determined on
the basis of the premium rate price categories provided by
the operator in question. In this case, the customers were
charged the normal SMS price (cost per send message for
the customer was from 2 to 14 cents).
In the light of the above, the company can, basically,
rely to the partner i.e. some mobile marketing service
provider that take care of all issues related to
technological side of initiation or solve them on in-house
basis. Neither approach - building in-house or relying on
partners - is inherently better than the other. It depends
entirely on the position, ambitions and resources of the
company in question.
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Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
7.2. Marketing level
Since technically implemented, the key challenge is to
find marketing means to attract customers’ attention and
gain them to initiate dialogue with the company in
question. At this marketing level, there are two issues to
discuss. The first issue at the marketing level to consider
is how to attract the attention of the potential customers to
use mobile medium in communication. Because the
attraction is pursued by the aid of the other mediums, the
initiation of mCRM for the very first time has, therefore,
the same basic principles as any other traditional
marketing campaign. The company must identify the
target audience, determine communication objectives,
design the message, choose the medium through which to
lure customers’ attention, and finally collect feedback to
measure the promotion’s results. When considering
mCRM after the initiation, a concept should be
incorporated into the overall marketing strategy. To
undertake a new series of campaigns based merely on the
mobile medium or integration mobile medium to existing
marketing channels. The latter option, where the mobile
medium is integrated to existing marketing campaigns on
other media has proven to be the most effective and
efficient [61]. In other words, mCRM campaigns
complement other media, such as television, print and
Internet, and vice versa. In this case, the newspaper was
used to attract the customer to join into the mCRM
campaign.
The second issue is to think carefully about where
they obtained the details of the target group from and
whether they are in fact able to send mCRM messages to
these people because of legal constraints. Basically, there
are three different ways to obtain a database of opt-in
mobile numbers; purchasing, renting or developing the
database of your own. The company in question decided
to develop or collect the database independently, in order
to get prior permission to start mobile dialogue with its
customers. The collection of the database was organized
around a marketing campaign, where the company was
asking customers to send their personal information, such
as mobile phone numbers, as well as names and addresses,
preferences and a permission to send messages to end
user’s mobile phone via SMS to the retailer. The
customers could also sign up to the loyalty program. By
signing in for the loyalty program, customers
automatically opt-in to the company’s permission based
mCRM database. The campaign was successful as almost
18 000 out of over 22 000 respondents (approximately
over 80 percent) signed up to the loyalty program and
gave their permission. The incentive for the customers to
give their personal information was a chance to win a
brand new car in a lottery. In addition, valuable
information and special offers promised to send via SMS
those, who gave permission.
In addition to these technology and marketing related
issues discussed above, mCRM has to integrate with
existing CRM system, as the mCRM solution chosen must
have ability to provide complete integration with the
existing CRM system. This system integration is
necessary condition for achieving effective management
of interactions across and information coordination
between different customer touch points (e.g., Internet,
direct mail, sales call, mobile medium). Naturally, the
integration is necessary prerequisite for mCRM in that
case that mCRM relies upon the existing CRM database.
As shown in this case, permission database can be
gathered also purely for mCRM purposes. Nowadays,
extending CRM to mobile medium is not as complicated
and many CRM systems already support the extension of
CRM to mobile medium.
To summarize, to initiate mCRM the companies have
several issues to consider. We found that acquiring or rent
hosting of a mobile marketing server, sourcing and setting
up a short number to handle inbound and outbound
messages, connections to the networks, the development
of campaign logic, and setting the message price are the
key technological issues at the initiation stage of mCRM.
From marketing perspective, a database of mobile
numbers for the desired target audience, and the
integration of mobile marketing in companies’ overall
promotion mix should be taken in consideration when
designing a mCRM campaign.
8. Conclusion and future research directions
This paper sheds a light on the emerging phenomenon
called mCRM stemmed from the convergence between
CRM evolving from marketing tradition and mobile
medium. The goal of this study was twofold. First, to
assure a coherent discussion about phenomenon, a
preliminary conceptualization of this phenomenon was
presented in chapter 2. Second, the issues that companies
have to take into account when moving towards mCRM
were illustrated in order to increase our understanding
about the phenomenon. On the grounds of the case study,
contributions of this paper are further discussed in the
following. The theoretical contribution of this article lies
on outlining the critical issues affecting the initiation of
mCRM. Furthermore, the key aspects of the initiation of
mCRM were presented and further verified and tested
with empirical data. In a nutshell, the aspects of initiation
of mCRM consist of technology and marketing related
issues.
The technology based issues of initiation of mCRM
were:
• acquiring server,
• setting up a short number,
• building gateways to service operators,
• development of campaign logic and
7
Proceedings of the 39th Hawaii International Conference on System Sciences - 2006
•
setting the message price charged from customers
The marketing based issues were:
• gathering the customer database, and
• choosing the right media mix.
Because mCRM is becoming an issue of major
importance across different lines of business, this paper
provides significant insights for marketing managers as
well. Based on this study we argue, that as customers
increasingly expect to be able to choose which channel
they use for interacting with company, companies should
take advantage of these emerging channels as well. By
utilizing this mobile technology, customers are always
reachable and companies therefore have, the opportunity
to manage these customers involved in mCRM in an
effective manner. On the other hand, customers can
always be interrupted as well by the companies.
Therefore, to succeed in developing mCRM strategies for
customers, companies need to understand how to
communicate with them on their terms [47].
In addition, as the mobile medium allows
personalized and interactive marketing messages which
are almost impossible through other mediums, it is seen as
a powerful medium to complement traditional CRM based
on traditional marketing channels. For companies to be
innovative in engaging with customers, mobile medium is
seen as an effective way to communicate with the
customer continuously and consistently providing
opportunities almost impossible through other media.
However, approaching mobile medium as a separate
project may result in an inconsistent and unsatisfactory
customer experience. Therefore, the greatest challenge for
companies is how to integrate mobile medium with
traditional media effectively.
The findings of our study should be interpreted in the
light of certain limitations. Because our empirical results
are based on a single-case study in one country only, we
should not draw far reaching conclusions from the data.
Given the early stage of the market and lack of profound
empirical evidence on mCRM, the results do suggest
avenues for future studies. First of all, further research is
needed of this emerging topic to conceptualize and define
mCRM in more precise manner. Second, the natural
extension of the study would be to look at how mCRM is
utilized in different kinds of companies ranging from B2B
to B2C markets. In addition, future studies could also test
and further develop the presented conceptual model to
understand how to effectively utilize means of mobile
marketing in CRM.
Acknowledgements: The financial support of the
National Technology Agency of Finland is gratefully
acknowledged. The authors also wish to thank the
organizations whose invaluable collaboration has made
this work possible.
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