Miteshkumar Gajjar

Harrisburg University

GRAD 695

Prof. Richard

This study aims to investigate the effect of applying the concept of customer relationship management (CRM) on customer’s acquisition and decreasing customer’s loss in the Group of Summit Gas Station from customer’s perspectives. The city of Columbus and langrage has 18 summit Convenience and Gas Station.

Delivery and collection questionnaire was used, and responses from customers in the city of Columbus and langrage were retrieved. The customers were classified according to their visited to the store, and they were categorized into 3 groups, the Regular Customers’ FC, the Neighbor Customers NC, Last Minute Customer LMC and the Thrillseeker customers TSC. The study found that adopting CRM concept in the Summit Group was significantly correlated in positive direction with reaching customer acquisition, decreasing customer loss and increase in revenue.

The study recommend that the Summit Group should concentrate more on developing the provided services, dealing with customers’ complaints, and queries in efficient and proper ways ended with taking customer feedback and involving the customers in any future strategies, and establish continues communication with the customers using different communication channels, in order to reach the ultimate goal of CRM adoption.

Table of Contents

Abstract – 2 –

Introduction. – 4 –

Back Ground. – 5 –

Research Question. – 8 –

Objectives of the Study. – 10 –

Problem Statement – 11 –

Justification. – 12 –

Literature Review.. – 13 –

Proposed Solution Approach. – 20 –

The Research Worldview.. – 20 –

Research Design. – 20 –

Research Strategy. – 21 –

The Proposed Research Methodology. – 21 –

Data Collection Methods. – 22 –

Method of Data Analysis. – 22 –

Population and Sample. – 26 –

Ethical Considerations. – 27 –

Expected Results. – 27 –

References. – 28 –


For any organization, either it’s a public sector; private sector or semi public, there is a need to understand what kind of service or products it offers, and for whom. The traditional marketing approach concentrates on the first term (the kind of services or products). Questions such as “whether the products are relevant to the customers?” ”are the customers have the willingness to pay the amount of money stack on the products?”, “are the products or services meets the customer expectation?”, “what’s the value created to the customers?” as these have not come to the minds of producers or business managers. Over time there has been a gradual move in marketing thoughts and practices, from product centric approach to customer centric approach, and from concentrating on selling as much products as possible to acquiring, keeping, retaining and delighting as many customers as possible. This change in marketing prospective is taking place because of the high competition and the numerous alternatives provided to the customers. “The globally competitive marketplace provides today’s customers with choices never before imaginable by previous generations” (Hoots, 2005). Moreover, the customers in the new marketing approach moved toward the top of the pyramid with new terminologies like “customer is the king” and “customer always right” are intensively used by managers in today’s business environment. Hence, “the goal of every enterprise, once it strips away all the activities that keep everybody busy every day, is simply to get, keep and grow customers. Whether a business focuses its efforts on product innovation, operational efficiency and low price or customer’s intimacy, that firm must have customers or the enterprise isn’t a business”. (Peppers & Roggers 2004).

            “As more and more enterprises realize the importance of becoming customercentric in today’s competitive economy, they embrace Customer Relationship 3 Management (CRM) as core business strategy” (Wu, 2008). Where CRM is away of “developing a comprehensive picture of customers needs, expectation and behaviors and managing those factors to affect business performance” (Hoots 2005). It is also involves “continues use of refined information about current and potential customers in order to anticipate and respond to their needs and draws on a combination of business processes and information technology IT to discover knowledge about the customers and answer questions such as “who are the customers?”, “what do they do?”, and “what are they like?”. With such effective use of information and communication technology, organization can offer their customers a variety of products, lower prices and personalized services, at the same time in order to market effectively to the individual customers, companies gather information from both internal and external sources and use it to provide a unified view or profile of the customers for target marketing purposes” (Karakostas, et al., 2004).

            The scope of this research shall discuss the possibility of applying CRM in a private enterprise working in City of Lagrange and Columbus. Summit Group is a private entity financially independent, responsible for the providing the services as independent retail gas station. The Summit Group is a consolidation of 18 Gas Station working under one management Columbus Group Investment, LLC, and it seeks to become retail services in the city of LaGrange and Columbus.

            Based on the research seeks to investigate the possibility of achieving the market objectives in the Summit Group using the concept of customer relationship management, in hope that this concept will help the Other Gas Station to build a unique experience with its customers and change their mentality regarding spending on a daily basis.

Objective of Study

  • This study aims to investigate the effect of applying the concept of Customer Relationship Management (CRM) on customer’s satisfaction and decreasing customer’s loss in retail business from customer’s perspectives. Understanding customer requirements, meet customer expectations and deliver customer value.
  • Study aims to focuses on business performance from management point of view for revenue growth, share of customer and customer tenure.

Research Problem

Retail Convenience store services in Langrage and Columbus may not be perfect in appliance of CRM, or there is a doubt about the effectiveness of CRM and its contribution to long term success. The problem addressed by this research is, To what extent the adoption of CRM concept, could affect the Summit Group in terms of enhancing customer satisfaction and decreasing customer loss and increase revenue/growth?

Importance of study.

CRM study in a private organization providing retail services is believed to be a pioneer and important approach. The research results will provide assistance to the retail Convenience Store management to better satisfy its customers, respond to their needs efficiently and on timely manners. Further, adopting CRM in the Summit Group would be the platform for building a good partnership with customers which consequently leads to services development and improvement. Moreover, other private sector enterprises could benefit from the study as this study would highlight the importance of building a good relation with customers which could result in performance improvements and better decision making process.

Research Objectives

This research seeks to address the following objectives:

  • Stating the importance of CRM concept adoption for Summit group.
  • Explaining how CRM concept adoption could benefit Summit group in reaching customer satisfaction.
  • Addressing the influence of CRM concept adoption on customer loss.
  • Proposing suitable recommendations for improving revenue growth, share of customer and customer tenure.



The goal of this research is not just to acquaint the reader with the techniques and technology of customer relationship management CRM. The more ambitious goal of this research is to help the readers understand the essence of customer relationship management as necessary and important elements of managing every successful enterprise. Hence, “a firm most valuable asset is its customers, and given the new and unfolding technological capabilities to recognize, measure, and manage relationship with each of those customers in order to thrive, a firm must focus in deliberately increasing the value of the customer base” (Peppers & Rogers 2004). Therefore , ” the competitive advantage for any enterprise can be gained only by leveraging knowledge of customers expectations , preferences and behavior , which involve creating an ongoing dialog with customers and exploiting the information and insight obtained at every customers touch points” (Payne 2004). It’s worth mentioning that, building the right relation with customers is not a fleeting assignment of the marketing department rather than it’s an ongoing process which required the involvement of the entire organization. This is true for nonprofit (when the customers may be donors or volunteers), as well as for-profit, large or small, public or as well as for private enterprise” (Peppers 2004).

            The case can be more difficult when talking about adopting the concept of CRM and the new definition of Relationship marketing in the private retail sector. Hence, the private retail sector has different objectives and faces different challenges regarding customer management. Adding to this, the fact that, the private retail sector organization can’t choose the people they serve, they oblique to serve all the customers knocking their doors. Adopting CRM concept on the private retail sector shall be measured through this research when exploiting its effect on the customers of different types using services. Linking the working area of Summit Group with the new and developing practice of CRM, in order to measure the effect of adopting the concept on customer satisfaction, decreasing customer’s loss and increase revenue/growth, will be the main goal of this study.

Rise of relationship marketing:

The R in CRM stands for relationship. But what do we really mean by the expression relationship? What is a relationship between a customer and suppliers?. Thinking in terms of a dyadic relationship, that is a relationship between two parties, we can define a relationship as follows:

“A Relationship is composed of a series of episodes between dyadic parties over time”. Each episode in turn is composed of a series of interactions. Episode are time bound (they have a beginning and an end) and nameable. Episodes such making a purchase , enquiring about a product , putting together a quotation, making a sales call, dealing with a complaints and playing a round of golf make up a relationship. Business relationships are made up of task and social episodes. Task episodes are focused on the business side of the relationship, whereas social episodes are not. Within each episode, each participant will act towards, and interact with, the other. The content of each episode is a range of communicative behaviors including speech, actions and body language. The parties within the dyad may have very different ideas about whether they are in the relationship. Buyers may think they are being tough and transactional. Sellers may feel that they have built a relationship. (Buttle 2004).

The evolution of relationship marketing has been one of the most significant developments in marketing since the 1990’. (Chattananon et al., 2008). RM emerged as a popular new paradigm in the 1980s , this happened , in part , as a result of a shift in focus from customer acquisition to customer retention (Chakravorti 2006). Relationship marketing proposes that closer attention is paid to long term financial growth and other benefits or retained customers, (Heffernan et al., 2008). Although, relationship marketing has been heralded as an effective strategy to attract, maintains and enhances customer relationship (Robert et al., 2003). While transactional marketing tries to make the sale and find new customers (Zineldein et al., 2007), or it’s about acquiring customers, rather that retaining them, (Ward et al., 2005). Gronroos (1994) defines relationship marketing as follows: “Marketing is to establish, maintain, and enhance 10 relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by mutual exchange and fulfillment of promises”. While, Zinkhan (2002) defines relationship marketing, “as an approach to establish, maintain, and enhance long-term associations with customers and other stakeholders.” On the other hand, Copulinsky and Wolf (1990) define relationship marketing from a different prospective with emphasis on the role of the IT as a “process where the main activities are to create a database including existing and potential customers, to approach these customers using differentiated and customer-specific information about them, and to evaluate the life-term value of every single customer relationship and the costs of creating and maintaining them.”

Referring to the above definitions, RM can also be called “one-to-one marketing, which shifts the focus of marketing exchange from transactions to relation with individual customers. (Chakravorti 2006)

 Figure: The evoultion of Marketing

Therefore, In order to put the concept of relationship marketing into practice, firms need to identify the customers they want to enhance and maintain relationship with, differentiate each customer as to their unique needs and preferences , interact with 11 those customers to enhance customers learning and finally customized product and services for each customer. This process of customer relationship management requires information and communication process to be in place, as well as technology and data repositories of customer data. The better and more sophisticated these are the more they will enable relationship. (Chakravorti 2006).

Customer Relationship Management – CRM

Customer relationship management has attracted the attention of both marketing practitioners and researchers over the last decade. Despite, or maybe due to, the attention drawn to the subject, a clear agreement on what CRM is and especially how CRM should be developed remains lacking. CRM is the values and strategies or relationship marketing with particular emphasis on customer relationships turned into practical application. (Peelen et al., 2006). CRM is a strategy view of how to handle customer relationship from a company perspective. “The strategy deals with how to establish developed and increase customer relation from profitability perspective, based upon the individual customer needs and potentials. The basic underlying CRM is that the basis of all marketing and management activities should be the establishment of mutually beneficial partnership relation with customers and other partners in order to become successful and profitable”. (Ghavami et al., 2006). “CRM is the integration of customer focuses in marketing, sales, logistics, accounting .i.e in all parts of the organization operation and structure. Those are the activities a business performs to identify, qualify, acquire, develop and retain increasingly loyal and profitable customers by delivering the right products or services to the right customer through the right channel at the right time and the right cost” (Johansson & Storm, 2002). CRM can be best describes as an evolution of marketing from product or brand management to customer management. (Peelen 2006).

Before positioning and investigating the components and the business philosophy of CRM. We must first develop our perspective of CRM for the purpose of this research. Hence, several researches have made attempts to define CRM. The definition 12 of CRM adopted from different sources ranges from narrowing IT enabling solutions to a broadly and strategically approach to managing customer relationship. Fig(2.2)

Figure 2.2: The CRM continuum, payne & Frow 2005

  • “CRM involves using existing customer information to improve company profitability and customer services”( Couldwell 1999).
  •  “CRM is a management approach that enables organization to identify, attract, and increase retention of profitable customers by managing relationship with them” (Hobby 1999).
  •   ” CRM can be viewed as application of one to one marketing and relationship marketing. Responding to an individual customer one the basis of what the customer says and what else is known about the customers”( Peppers, Rogers, and Dorf 1999).
  •  “CRM includes numerous aspects, but the basic theme is for the company to become more customers centric. Methods are primarily web-based tools and internet presence”(Gosney and Boehem 2000).
  •  “CRM comprises the business processes and organization performs to identify, select, acquired, develop, retain and better services customers. (Bondenberg 2001).
  •  “CRM as those process that address all aspects of identifying customers, creating customer knowledge, building customer relationship and shaping their perception of the organization and its products”( Kotler 2001).
  •  ” CRM is the technology used to blend sales, marketing, and serivce information system to build partnership with customers”(Shoemaker 2001).
  •  “Defines CRM as enterprise approach to understanding and influencing customer behavior through meaningful communications in order to improve customer acquisition, customer retention, customer loyalty and customer profitability”( Swift 2001).
  • “CRM is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customers”( Parvitiyar and Sheth 2001).
  • “CRM is about the development and maintenance of long term mutually relationship with strategically significant customers”( Buttle 2001).
  •  “CRM is an enterprise wide mindset, mantra, and set of business process and policies that are designed to acquired, retain and services customers. CRM include the customer facing business process of marketing, sales and customer services” (Greenberg 2002).
  • “CRM is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the “voice” of the customers in order to deliver long-term superior customer value, at a profit, to well identify existing and potential customer segments.” (Starkey 2002)
  •  “CRM aligns business processes with customer strategies to build customer loyalty and to increase profits over time.” (Reichheld and Schefter 2002)
  •  “CRM means obtaining customer information, understanding what different customers are worth, treating different customers differently and improving efficiency” (Newell, 2003).
  • “Customer relationship management is the initiation, enhancement, and maintenance of the mutually beneficial customer and partner long-term 14 relationship through business intelligence-generated strategies based on the capture, storing and analyzing of information gathered from all customer and partner touch points and transaction processing system”. (Brana 2008).
  •  “The strategic use of information, process, technology, and people to manage the customer relationship with the company across the whole customer life cycle”.( Kim and Woo, 2008).

In reviewing of the illustrated definitions, we can find that most of definitions concentrate on the terms related to customer’s satisfaction, profitability and loyalty. As a result, the following can be stated in this regard:

1. CRM is not the target, it’s only a tool used to make the entity more customers centric and to develop the concept of relationship marketing.

2. Customer management in the twentieth century is no longer the responsibilities of customer services department only. It’s a complimentary process within all various parts of the organization.

3. The customer’s data base can be considered as corporate assets. The sufficient use of these assets leads to increase profitability and establish revenue growth.

4. CRM can be used for support management decisions for better segmentation and targeting for the most profitable customers. Moreover, it helps the organization to avoid the unprofitable customers and turn them into competitors.

5. CRM is a comprehensive tool helps the companies build mutual beneficial relationship with its customers.

This research deal with CRM as a business philosophy rather than just a technology.” It is believed that in order to reach a successful CRM implementation, one would need to do much more than just plug in a new technology and assume that it is going to be functional. CRM is not just about call center solutions, direct mail, web pages, or sales force automation, or viewing CRM as an internal activity emphasizing on establishing, maintaining, and enhancing relationships with customers and partners at a profit. ”(Hazobon 2006).

Therefore, in this study, technology is seen as a supportive tool that facilitates the activities needed to achieve successful customer relationship management implementation.


“CRM is the enterprise approach to understanding and influencing customer behavior through meaningful communications in order to improve customer satisfaction, customer acquisition, customer retention and decrees customer loss”. Modified definition of CRM by the researcher.

Why CRM Is Valuable

The main question remains, is how the substantial effort needed to create the CRM actually pays off? In other words, how does the CRM create value in an organization? In fact, “CRM is not just a technology; it’s a philosophy for survival in the customer-centric economy” (Helm, 2002). Successful CRM implementation influences how much customers spend and how loyal they remain. According to Freeland (2003), “CRM is still one of the best strategies for growing revenue and increasing market share, and that CRM offers richer opportunities for developing the customer franchise and increasing brand value than most companies have realized. In fact, for companies that seek to keep customer relationships strong and profitable, acquiring the right mix of CRM processes, workforce management approaches and technologies is critical.” (Hazbon 2006) Xu & Walton (2005), illustrated that, “the motivating factors for companies moving toward CRM technology are to improve customer satisfaction level, to retain existing customers, to improve customer lifetime value, to provide strategic information from the CRM system and to attract new customers”. (Zavareh 2008). The real value to a company lies in the value they create for their customers and in the value the customers deliver back to the company. Accordingly, it is important at mark that the value doesn’t lies in more information and in more advanced technology. The value lies in the customer knowledge and in how the companies use that knowledge to manage their relationship. Knowledge is according to Newell 2000 the sole of CRM. Unfortunately, few companies are transforming the information to customer knowledge and therefore they miss the opportunities to provide value to their customers. However, applied in the right way, CRM is the tool that contributes to profit. If companies transforming the customer data into knowledge and then uses that knowledge to build relationship it will create customer satisfaction, acquisition, retention, loyalty, and decrease customer’s loss. (Rahimi 2008).

Customer Satisfaction :

Satisfaction is derived from the Latin satis (enough) and facere (to do or make). Thus, satisfying products and services have the capacity to provide what is being sought to the point of being “enough.” Two related words are satiation, which loosely means enough up to the point of excess, and satiety, which can mean a surfeit or too much of 17 enough, as if to say that too much is necessarily undesirable. These terms illustrate the point that satisfaction implies a filling or fulfillment. (Masrujeh 2009). Clearly defining and understanding customer satisfaction can help any company identify opportunities for product and service innovation and also serve as a basis for performance appraisal and reward systems. It can also serve as the basis for a customer satisfaction surveying program that can ensure that quality improvement efforts are properly focused on issues that are most important to the customer. (LI 2002).

Concept of customer satisfaction is referring to a pleasurable fulfillment response, while dissatisfaction is an un pleasurable fulfillment response. The experience of some part of it component of the definitions allows the satisfaction evaluation to be directed at any or all elements of the customers experiences. This can include product, service, process and any other component of the experiences.

Customer satisfaction is a state of mind that a customer has about a company when their expectations have been met or exceeded over the lifetime of the product or service. The achievement of customer satisfaction leads to company loyalty and product repurchase. However, customers who are merely satisfied are only at the first stage and they can easily switch to other companies. At Most Customers range from being moderately satisfied to moderately dissatisfied, which means that most customer are essentially ambivalent in their loyalty to a particular business. These customers would likely defect in the presence of even a modest motivator; such as getting a better price or finding a more convenient store location. (Masrujeh 2009).

Figure 2.3

Customer Satisfaction, loyalty and business performance (Buttle 2004)

Customer loss rate:

CRM Integration:

Customer relationship management (CRM) is a combination of people, process and technology that seeks to understand a company’s customer. It is an integrated approach to managing relationships by focusing on customer retention and relationship development. CRM has evolved from advanced in information technology and organizational changes in customer –centric process. Companies that successfully 26 implement CRM will reap the reward in customer loyalty and long run profitability. However, successful implementation is elusive to many companies mostly because they do not understand that CRM requires company – wide cross-functional customerfocused business process re-engineering. Although a large portion of CRM is technology, viewing CRM as technology – only solution is likely to fail. Managing a successful CRM implementation requires an integrated and balanced approach to technology, process and people. (Chen & Povich 2003).Fig(2.4)

Figure 2.4 A CRM implementation Model, Chen & Provch 2007

CRM Model :

A review of CRM literature shows that there is a variety of different representations of CRM. Eechambadi describes it as “CRM space where CRM programs may emphasize operation or analytics”. He argues that operation CRM is a purely tactical aspect that focuses on increasing the efficiency of an individual business unit when it is implemented. While analytic CRM is strategy oriented and focuses on increasing effectiveness through behavior modeling and customer evaluation, and it needs analysis when it is implemented. The argument is based on the fact that, as Eechambadi explains, organization regularly focuses on operational CRM, obsessed by customer demand and marketplace challenges. On the other hand, analytic CRM pursues the demand for new infrastructure and processes to build knowledge about customer needs and then use that information in order to perform. Figure(2.6) shows an overlapping between analytical and operational CRM. As Eechambadi concludes, “Companies need to have good quality information, the appropriate processes in place, and the ability to bring everything together in harmony in order to have intelligent dialogue and long lasting relationships with their customers.” (Hazbon 2006).

In addition, the International Data Consultancy (1999) advises another comprehensive CRM model, as shown in Figure(2.7). The model describes CRM as a process divided into four main activities:

• Analyzing data contained in the organization data warehouse,

• Modeling the data through data mining techniques,

• Adjusting the model into an operational field, and

• Tracking the results and closing the circle of CRM strategy.

Figure 2.6 : CRM Model

Figure 2.7: International Data Consultancy  CRM Model

Proposed Solution Approach

The Research Worldview

Research Design

Research Strategy

The Proposed Research Methodology

Data Collection Methods

Method of Data Analysis

Population and Sample

Ethical Considerations

Expected Results