Outsourcing Customer Relations Management: A Case Study

Introduction

The article entails a research done on various companies to analyze the effect of outsourcing Customer Relations Management (CRM) to other companies and the effect it causes on the shareholder value of the outsourcing company. CRM is the usage and correlations of a company’s technological capacities and its marketing strategies to facilitate customer satisfaction and profitability. The management of a company’s’ customer relations is therefore crucial to the companies’ stock value as good customer relations guarantees growth and profits in business. This is because the customers control the demand scale of every company, without inflow of customers the business will lack functionality and closure is inevitable. Customer satisfaction

Companies with a strong marketing capability are less likely to outsource its CRM system because customer satisfaction is a major reason for their dominance in the market (Kartik et al 748-769). A lot of resources are put in research and methodology to facilitate more utility for their customers and increase their efficiency in satisfying their demands and needs. Similarly, companies with less marketing capabilities are more likely to outsource their CRM system in trying to offer better services to their customers. The effect of outsourcing therefore has more drastic impacts on higher marketing companies than low marketing companies as the risks are more favorable to the low marketing company. In essence therefore, companies with less marketing capabilities increase their shareholder value by outsourcing than companies with higher marketing

These differences can be caused by variations of locality and nationality between the two companies. An outsourcing company should therefore try to locate a partnering company that is from the same locality if possible. This will significantly reduce cultural differences that the two companies might have. Since customer care is a direct interaction service given to a company’s customers, the customer care staff should more or less be conversant with the customers’ culture and practices. This will increase efficiency of the service as a result of similarities in language, religion and practices. Misunderstanding and differences in nature between the staff and the company’s customers will have a negative impact on the company’s shareholder value as a result of poor customer care services (Kartik et al