Establishing and maintaining long-term relations with customers lead to multiple benefits for business firms. Having a sustainable customer base reduces costs in constantly trying to draw a new set of customers. A firm’s customer base also contributes to savings through voluntary advertising or recommendation of the firm to expand its market.
A pool of regular customers also ensures sales. (Agarwal et al., 2004) By implementing strategies aligned with the demands of a particular market segment, this not only establishes relations with customers but also facilitate customer satisfaction to minimise attrition (Chen & Popovich, 2003). Technological developments provided ways of developing and keeping relations with customers. The overwhelming benefits of building customer relationship and technological tools support great potential for achieving competitive advantage by business firms. (Sharp, 2004)
Business firms in Saudi Arabia appear fragmented when it comes to the importance and effort accorded to building customer relations as well as utilisation of customer relations management strategies to gain the benefits. The large firms in Saudi Arabia, especially those with websites and provide online services manage customer relations. However, there are also large firms operating through traditional practices that do not incorporate formal customer relations strategies in their operations.
The small firms in Saudi Arabia that engage in technology do not necessarily implement customer relations strategies or experience problems in managing IT-based customer relations while the small firms without online presence are likely not have any formal customer relationship strategy. (Abdul-Muhmin & Alzamel, 2001) These reflect on the extent of adoption of customer relationship management in Saudi Arabia. The state of customer relations in Saudi Arabia would likely follow the fragmented adoption of customer relationship management because of the differing situations across industries, scale of operations, and technological exposure.
Aim & Objectives
The research aims to investigate and uncover the extent of adoption of customer relationship management in the context of Saudi Arabia to determine the factors underlying the degree of CRM adoption and identify the areas for improvement as well as the appropriate solutions. To achieve this aim, the research focus is on the following specific objectives:
§ To provide a comprehensive overview of the adoption of CRM in Saudi Arabia
§ To identify the factors influencing the adoption of CRM in Saudi Arabia
§ To analyse the critical success factors in the adoption of CRM in Saudi Arabia
§ To determine the implications on the improvement of CRM adoption in Saudi Arabia
Statement of the Problem & Research Questions
The extent of adoption of customer relationship management determines how well industries and firms would benefit from this initiative. However, even with the recognition of the range of long-term benefits of CRM adoption, the extent of adoption of CRM in Saudi Arabia is fragmented or scattered across industries and business firms. Investigating the factors affecting the extent of adoption, critical success factors in CRM adoption, and implications on improving CRM adoption in the contexts of Saudi Arabia industries and firms would explain the situation and point to ways of facilitating better CRM adoption and optimised utilisation of CRM in Saudi Arabia.
The study seeks to answer the following questions:
§ What is the extent of CRM adoption in Saudi Arabia’s major industries?
§ What factors account for the extent of CRM adoption in Saudi Arabia’s major industries?
§ What factors would ensure the effective adoption of CRM in Saudi Arabia’s major industries?
§ What are benefits and downsides of CRM adoption in Saudi Arabia’s major industries?
§ What are the problems arising from CRM adoption in Saudi Arabia’s major industries?
§ How can CRM adoption improve in Saudi Arabia’s major industries?
Significance of the Study
The results of the study should contribute to filling gaps in CRM research and supporting awareness of CRM in Saudi Arabia’s industries. First is to contribute to empirical studies on the adoption of CRM in different country contexts to identify similarities and differences in emerging issues. Second is to contribute empirical data on the context-based factors affecting the adoption of CRM by a country whose biggest industry is engaged in oil processing and export.
Third is to contribute to knowledge on the CRM initiative in Saudi Arabia especially in the context of the widening use of the Internet in the country. Last is to provide guidelines or recommendations on how industries and individual firms in Saudi Arabia can effectively adopt and utilise to gain the benefits from CRM.
Brief Literature Review
There are a few studies covering the research on the adoption of CRM in different country contexts. Karakostas et al. (2005) studied the how the financial services sector in the United Kingdom are adopting CRM. The study focused on expectations of firms towards CRM, reason for adoption, and current practices. Sangle and Verma (2008) also studied the adoption of CRM but in the context of the service sector in India. The study revolved around the motives for adoption and experiences of firms with CRM. While these studies focus on other countries, these provide a framework for conducting the study on the extent of adoption of CRM in Saudi Arabia.
The studies focusing on the industries and firms in Saudi Arabia tackle the problem of CRM adoption indirectly and in a fragmented manner. These studied contribute to the framework of the study as well as point to the research gap that this study should fill.
Bjerke and Al-Meer (1993) considered the cultural factors affecting management decisions in Saudi Arabia, with the areas of decision-making including the adoption of CRM. Leadership and organisational culture are important in the adoption of CRM. Bhuian (1997) explored the market orientation of Saudi Arabian firms, which have implications on the perception and behaviour of firms towards customer relations.
Jannadi and Al-Saggaf (2000) studied the measurement of service quality in Saudi Arabia with quality encompassing the considering of customer requirements and fulfilment of consumer demand. These necessitate customer relations achieved through CRM adoption.
Al-Tawil (2001) the state of Internet use in Saudi Arabia together with the problems in connectivity and use by firms to reach out to online consumers. The results explain the difficulties encountered by firms in adopting and using CRM technology. Al Ashban and Burney (2001) focused on the customer side by determining the perception of customers towards the tele-banking services.
The data showed the extent of disparity between the expectations of consumers towards electronic services and the use of banks of electronic tools to service its customers and build customer relations. Abdul-Muhmin and Alzamel (2001) investigated perceptions of retailers towards the system of electronic payment and its related services in Saudi Arabia and found that large firms widely use the system when compared to small firms and the large firms report lesser problems relative to small firms. The study explains differences in technology adoption and use by large and small firms with implications on the adoption of CRM technology.
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