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Customer Knowledge Management Competence:

Towards a Theoretical Framework

Source: Proceedings of the 38th Hawaii International

Conference on System Sciences - 2005

Authors: Rollins, Minna & Halinen, Aino

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Outline

Introduction

Customer data, information and knowledge

Comparing CRM, KM and CKM

Customer Knowledge Management

Competence

Conclusions

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Introduction

Customer knowledge has been increasingly

recognized as a key strategic resource in any

company's success.

Knowledge Management and Customer

Relationship Management have proposed that

the two approaches can have great synergies.

In this paper, provide an understanding of


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Customer data, information

and knowledge

Data => Briefly, observations and facts

Information => Data is placed in some

meaningful context

Knowledge => Information is transformed into

capabilities for an effective action.

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and knowledge

Knowledge Explicit knowledge

Tacit knowledge

Explicit knowledge, also known as formal or codified

knowledge, can be expressed by words and numbers.

Tacit knowledge can be also viewed as intuition, beliefs

and values that reside in human mind, behavior, and

perceptions

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and knowledge

Customer information converted from an

organization's databases provides only detailed

information on past customer behavior.

In managing individual customer relationships,

particularly in business markets, an organization

needs relationship-specific knowledge.

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and knowledge

Therefore, propose that customer

knowledge needs to include the concept ofrelationship-specific knowledge.

Relationship-specific knowledge is created

based on past relational experiences ininteraction and in dialogue between customer

and organization.

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Comparing CRM, KM and CKM

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Customer Relationship

Management Customer Relationship Management (CRM),also known as relationship marketing orcustomer management.

The goal of CRM is to help organizations inbetterunderstanding each customer's value tothe company, while improving the efficiency and

effectiveness of communication.

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Management CRM is a combination ofrelationship marketing andmanagement theories and approaches.

CRM is concerned about managing relationshipsbetween a company and its customers.

The perspective of CRM is outside of an organization, inthe market place and in customer interface.

CRM communication can be seen as marketingcommunication.

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Management CRM systems captures, analyzes, and distributes allrelevant data from customer and prospect interactions toeveryone in the organization.

By being too functionally-based, traditional marketingtechniques neglected the customer in the after-salesprocess and failed to meet customers' desires.

CRM emphasizes customer retention over customer

acquisition.

CRM is recognized as one of the most viable tools usedto further a company's success in the highly competitivebusiness world.

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Management

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Knowledge Management

Knowledge has become a fundamental factor

behind an organizations success and all its

activities in many businesses.

KM approach draws from different disciplinary

backgrounds and approaches such as cognitive

sciences, artificial intelligence, computer-supported collaborative work, library and

information sciences and organizational science.

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The objective of KM is to make an organization act as

intelligently as possible to secure its viability and overall

success and to otherwise realize the best value of its

knowledge assets.

Some scholars define KM as the process ofcapturing

collective expertise and intelligence of organization and

using them to foster innovation.

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In KM, the focus is on capturing employees'knowledge about customers, competitors,products and services produced in an

organization.

The perspective of KM is inside of theorganization.

KM communication is organizationalcommunication.

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outside of an organization inside of the organization

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Organization can obtain the knowledge of the customers

various needs and their experiences in purchasing, using

or maintaining products.

This information is usually essential ofpredicting market

development trend, identifying the new market

opportunity, improving product or service and

determining organizations goal.

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Through frequent interaction with the customer,

organization can use and incorporate the

customer knowledge, cooperate in using

knowledge, and learning by doing.

For service supplier, customer is the most

important knowledge source and assistant in

developing knowledge in the organization.

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In CKM, KM is the service provider, who offers

the tools and procedures forknowledge

exchange.

In CKM, CRM the service buyer, who

determines what knowledge is needed and who

generates and uses the knowledge in

customer interaction.

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Customer Knowledge

Management Competence

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Customer Knowledge

Management Competence CKM competence as the ability to integrate customerinformation and knowledge into an organizations CRM

processes and operations.

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Customer Knowledge

Management Competence Organizational culture that supportsorganizational learning and customer

orientation

can be seen as a platform for CKM competence.

Inter-functional cooperation

In order to manage individual customer

relationships, customer information and

knowledge should be available everywhere and

to everyone in an organization dealing with

customers and everyone who uses customer

knowledge in decision making.

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Customer Knowledge

Management Competence Supportive organizational systems In this paper, we discuss only senior

management and employee reward and

evaluation systems.

Senior management has an important role in

communicating the value of customerknowledge for an organization and it can also

work as a driving force for seeing customers

as a valuable source of knowledge and

partners as well.

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Customer Knowledge

Management Competence In order to encourage employees to capturecustomer data and, moreover, share it with

each other and use it, the reward and

evaluation system should be linked tomeasures of customer satisfaction and

knowledge sharing.

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Customer Knowledge

Management Competence Cooperation with customers Customers can provide theirexperience and

knowledge about a companys products and

services and, moreover, competitors products

and services.

Customers have become more active parties

in many businesses due to development ofITtechnology, especially due to Internet and e-

commerce, and changes in business

environment.

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Customer Knowledge

Management Competence Supportive IT systems These are such as Internet, Intranet, and

Extranet, email, customer communities and

customer contact centers that are designed to

conduct customer dialogue.

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Customer Knowledge

Management Competence

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Conclusion

In this paper, we have aimed to create

understanding ofCKM as an integrated

management approach and CKM competence as a

necessary organizational resource in implementingCKM in a company.

Further empirical research is required for instance

on: What elements the CKM competence includes.

How CKM competence affects the performance

of CRM efforts.

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Q&A

Documents

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