St. Petersburg State University
Graduate School of Management
Master in International Business Program
Integration of CRM system with social networks as part of quality management
approach: case for a Russian regional company from beauty industry
Master's Thesis by the 2nd year student
Concentration: Master in Management
Konovalova Darya
Research advisor:
Zhukova K.V., Associate Professor
St. Petersburg
2016
ЗАЯВЛЕНИЕ О САМОСТОЯТЕЛЬНОМ ХАРАКТЕРЕ ВЫПОЛНЕНИЯ
ВЫПУСКНОЙ КВАЛИФИКАЦИОННОЙ РАБОТЫ
Я, Коновалова Дарья Васильевна, студент второго курса магистратуры
направления «Менеджмент», заявляю, что в моей магистерской диссертации на тему
«Интеграция ЦРМ системы и социальных сетей, как часть подхода управления качеством:
кейс российской региональной компании из индустрии красоты», представленной в
службу обеспечения программ магистратуры для последующей передачи в
государственную аттестационную комиссию для публичной защиты, не содержится
элементов плагиата.
Все прямые заимствования из печатных и электронных источников, а также из
защищенных ранее выпускных квалификационных работ, кандидатских и докторских
диссертаций имеют соответствующие ссылки.
Мне известно содержание п. 9.7.1 Правил обучения по основным образовательным
программам высшего и среднего профессионального образования в СПбГУ о том, что
«ВКР выполняется индивидуально каждым студентом под руководством назначенного
ему научного руководителя», и п. 51 Устава федерального государственного бюджетного
образовательного учреждения высшего профессионального образования «СанктПетербургский государственный университет» о том, что «студент подлежит отчислению
из Санкт-Петербургского университета за представление курсовой или выпускной
квалификационной работы, выполненной другим лицом (лицами)».
___________________________________________ (Подпись студента)
24.05.2016
___________________________________________
(Дата)
STATEMENT ABOUT THE INDEPENDENT CHARACTER
OF THE MASTER THESIS
I, Konovalova Darya, (second) year master student, program «Management», state that
my master thesis on the topic « Integration of CRM system with social networks as part of
quality management approach: case for a Russian regional company from beauty industry»,
which is presented to the Master Office to be submitted to the Official Defense Committee for
the public defense, does not contain any elements of plagiarism.
All direct borrowings from printed and electronic sources, as well as from master theses,
PhD and doctorate theses which were defended earlier, have appropriate references.
I am aware that according to paragraph 9.7.1. of Guidelines for instruction in major
curriculum programs of higher and secondary professional education at St.Petersburg University
«А master thesis must be completed by each of the degree candidates individually under the
supervision of his or her advisor», and according to paragraph 51 of Charter of the Federal State
Institution of Higher Professional Education Saint-Petersburg State University «a student can be
expelled from St. Petersburg University for submitting of the course or graduation qualification
work developed by other person (persons)».
___________________________________________ (Student's signature)
24.05.2016
___________________________________________ (Date)
2
АННОТАЦИЯ
Автор
Название
магистерской
диссертации
Факультет
Направление
подготовки
Год
Научный
руководитель
Описание
цели, задач и основных
результатов
Ключевые
слова
Коновалова Дарья Васильевна
Интеграция ЦРМ системы и социальных сетей, как
часть подхода управления качеством: кейс российской
региональной компании из индустрии красоты
Высшая школа менеджмента
Менеджмент
2016
Жукова Киран Витальевна
Активное развитие социальных сетей изменило
парадигму продвижения и маркетинговых коммуникация не
только для крупных компаний, но и стало платформой для
активного развития малого и среднего бизнеса. С другой
стороны существующие подходы к управлению компаниями
рынка бьюти индустрии не соответствуют текущим требованиям
рынка. Встает проблема: как адаптировать текущую «цепочку
ценностей» компании и интегрировать существующие
технологические решения для работы с социальными сетями в
управляемый бизнес процесс компании.
Цель магистерской диссертации состоит в актуализации
существующей «цепочки ценностей» описывающих работу
компаний выбранной индустрии, с учетом сильного тренда
торговли и продвижения в социальных сетях и технологических
решений, для интеграции.
Были исследованы аспекты менеджмента качества, а так
же характеристики и преимущества ЦРМ систем, и выявлена их
применимость в улучшении управления малыми и средними
предприятиями. Отдельно были рассмотрены аспекты екоммерции, изучены существующие методы описания
потребительских паттернов под влиянием феномена социальных
сетей. Далее была описана актуальная система ценностей, с
которой сравнивались типичные компании из индустрии на
предмет отличий и выявления ключевых функциональных
отличий. Рекомендуемая система интеграции была апробирована
на одной из исследуемых компаний
Результаты показали, что интеграция ЦРМ системы и
социальной сети повышает прозрачность процессов компании, и
позволяет наладить процессы планирования и оценки
эффективности сотрудников
Управление качеством, ЦРМ системы, индустрия
красоты, социальные сети, е-коммерция, интеграция ЦРМ
3
ABSTRACT
Master
Student's Name
Master
Title
Konovalova Darya
Thesis
Integration of CRM system with social networks as part of
quality management approach: case for a Russian regional company
from beauty industry
Faculty
Graduate School of Management
Main field of
Management
study
Year
2016
Academic
Zhukova Kiran V.
Advisor's Name
Description of
Active development of social networks has a significant
the goal, tasks and main impact on promotion and marketing strategies not only from
results
corporation, but also became a platform for rapid start for small size
companies. From other side, the current approach of control for
company from beauty industry is not satisfied the requirements of
market. There problem arises how to integrate the social networks
into manageable process within company infrastructure.
The aim of the masher thesis is the development is to make
actual the value chain, describing business processes of small
companies from beauty education and beauty service markets, taking
into consideration the strong trend of social networks e-commerce
perspectives and describe the main reasons of gap between existing
software solutions and its real business implementation The
Objectives is to increase the efficiency of planning system and
employees’ performance evaluation in small sized company from
beauty-education and beauty-service market.
It was observed the aspects of quality management approach
and the advantages of CRM system, the impact of CRM on service
companies. Separately were studied aspects of e-commerce and
existing patterns of customer behaviors under social networks
phenomenon. Further the current model of value chain was
described, and comparison analysis of chosen companies with this
model, as mini cases methodology
Results showed that integration of CRM system with social
networks into internal company infrastructure has positive impact on
planning system and make process more transparent. The
performance evaluation system became more efficient.
Key words
Quality management, social networks, e-commerce, beauty
industry, CRM system, integration of CRM
4
TABLE OF CONTENT
INTRODUCTION .............................................................................................................7
1. STATE OF THE ART OF INTEGRATION OF CRM SYSTEM WITH SOCIAL
NETWORKS AS PART OF QUALITY MANAGEMENT APPROACH ....................................9
2.
STUDY
1.1
Quality management approach ...........................................................................9
1.2
Customer relationship management system .....................................................14
1.3
Social networks in e-commerce approach ........................................................16
1.4
Beauty industry aspects under the social networks trend .................................18
1.5
Research gap and research goal .......................................................................21
RESEARCH DESIGN AND METHODOLOGY FOR MULTI DISCIPLINARY
23
2.1
Research design ................................................................................................ 23
2.2
Online questionnaire to obstacles revealing .....................................................24
2.2.1 Company and data selection process ...........................................................24
2.2.2 Questionnaires design ..................................................................................25
2.3
Case study of small sized company in beauty industry....................................28
2.3.1 Case study methodology description ...........................................................28
2.3.2 Detailed scheme of case study execution ....................................................30
2.4
Benchmarking approach for quality improvement implementation ................33
2.4.1 Benchmarking methodology description .....................................................33
2.4.2 Detailed scheme of benchmarking execution ..............................................34
3.
4.
EMPIRICAL RESULTS OF ONLINE QUESTIONNAIRE ..................................35
3.1
The respondents description .............................................................................35
3.2
The main obstacles for social media integration ..............................................37
3.3
Social networks implementation analysis ........................................................38
EMPIRICAL RESULTS OF CASE STUDY ANALYSIS .....................................41
4.1
Framework description for case study execution .............................................41
4.2
CASE 1: Novokuznetsk School of Style analysis ............................................42
4.2.1 Case description via quality dimensions......................................................42
4.2.2 Actualized company’s service-oriented model analysis .............................. 46
4.3
CASE2: Ekaterinburg School of Style analysis ...............................................48
4.3.1 Case description via quality dimensions......................................................48
4.3.2 Actualized company’s service-oriented model analysis .............................. 50
4.4
CASE 3: Novosibirsk School of Style analysis ...............................................52
4.4.1 Case description via quality dimensions......................................................52
5
4.4.2 Actualized company’s service-oriented model analysis .............................. 56
5.
6.
4.5
Cross case analysis and comparisons via quality dimensions ..........................57
4.6
Actualized service-oriented model under social network trend .......................60
EMPIRICAL RESULTS OF CRM AND SOCIAL MEDIA INTEGRATION ......62
5.1
Benchmarking execution of process improvement ..........................................62
5.2
Procedures of changes implementation ............................................................ 66
5.3
Novosibirsk School of Style CRM integration results .....................................70
DISCUSSION AND CONCLUSION .....................................................................74
6.1
Discussion of the findings ................................................................................74
6.2
Theoretical implications ...................................................................................76
6.3
Managerial implications ...................................................................................77
6.4
Limitations of the study....................................................................................78
REFERENCES ................................................................................................................81
6
INTRODUCTION
The customer relationship management is important part for sustainable company
development. The CRM approach attempts to analyze data about customers' history with a
company, in order to better improve business relationships with customers, specifically focusing
on retaining customers, in order to drive sales growth. Nowadays the importance of social
networks is increasing significantly, which consequently has impact on customer behavior
patterns and markets requirements. From socio-cultural perspectives customer moved into social
networks, and the trustworthy phenomenon of social media information is observed. Due to this
trend many enterprises have to adapt their business processes under this phenomenon. This is
reflected in marketing and promotional strategizes, brand positioning, sales strategies and post
service production. Essentially, the industry plays a significant role of this adaptation process.
This master thesis focused on beauty industry, which could characterized as highly competitive
and heterogeneous. To specify the research the small sized, Russian regions origins companies
provides educational courses and salon services were selected to research. These companies
mostly actively use the social media for sales and marketing. Not only small sized company, but
also Internationals brand switched their marketing campaigns into social media. Especially for
small sized companies the challenge of integration the social media within internal CRM system
is becoming vitally important, because of strong dependences of their business process on social
networks. Additionally, companies belonged to selected industry’s sector are mostly have
service-oriented approach. Therefore the problem statement of the work is to make actual
service-oriented model, describing business processes of small companies from beauty education
and beauty service markets, taking into consideration the strong trend of social networks ecommerce perspectives and describe the main reasons of gap between existing software solutions
and its real business implementation. The aim of research is to increase the efficiency of
planning system and employees’ performance evaluation in small sized company from beautyeducation and beauty-service markets, through integration of CRM and Social Media.
The work is consists of 6 Chapters. First chapter is observed literature from 3 main
perspectives: quality management practices, and customer relationships management as one of
quality management approaches (both as management practice and technological solution),
social networks trend and e-commerce opportunities through social networks, and the last but not
least the industry aspects under the social medial trend. The result of this chapter is the research
gap revealing.
7
Second chapter is concerns research design and methodology. Despite of narrow focus of
research, the research objective is complicated. Taking into consideration the shortage of
scientific research on Russian beauty market companies, we have to implement multidisciplinary
study. To explore the first part of research the online questionnaire conducted. After main
obstacles, companies faced working with social networks, are clarified, to more detail
exploration of gap between existing software solutions and companies business process
descriptive analysis conducted. Following benchmarking approach is used to integrate social
media with internal CRM solutions, based on existing best practices and case results.
Following, in chapter 3, chapter 4 and chapter 5 empirical results are presented.
Questionnaire illustrates that companies firstly evaluated social networks as main sales tool,
secondly they faced troubles with data collection, analyzing from networks, due to technological
aspects and unsynchronized information flows. Case studies results provide information about
current service-oriented model, and the changes of business process under network trend. Cross
case results illustrates that process and approaches of typical companies are homogeneous,
consequently results could be generalized. And finally, the best practices of integration of CRM
and quality management approaches are implemented to one of the company from case study.
The integration process was running during one year, because changes concern many aspects and
almost all company process. The result of integration of CRM and social media has positive
impact on operational cycle time and planning efficiency, which were measured after integration.
The study contributes to the theory for new paradigm of customer relationship
management systems. Reveal the necessity of new approaches to sales department evaluation,
due to strong dependency on customer relationship management. Also study provides theoretical
recommendation for CRM launching process for small and medium sized company.
The managerial implications of the following study are aimed at the following groups of
managers: 1) management of beauty industry companies, who are going to use CRM system
software, 2) the sales department managers, who are going to implement measurable system of
performance evaluation, 3) management of CRM solutions development companies, by
clarifying customer needs and expectations.
Due to the homogeneity of business processes within this industry this
recommendations could be useful for all companies operating in social media in order to
improve process approach efficiency or improve measurement basis for employees’
performance.
8
1. STATE OF THE ART OF INTEGRATION OF CRM SYSTEM WITH SOCIAL
NETWORKS AS PART OF QUALITY MANAGEMENT APPROACH
In this chapter the analysis of literature from quality management, e-commerce
approaches and review on beauty industry market, customer preferences perspectives, existing
cases of successful marketing strategies via social media, and mostly the academic research of
existing and future trends of promotion and sales organization are presented. Additionally the
research gap is revealed and present master thesis work’s aims are set.
1.1 Quality management approach
The topic of this paper is concerning the quality management approach, it is essential to
identify the definition of what is quality, what drivers of this approach are exist, and find out the
results of last researches in implementation quality management practice in service industry.
Quality definition
There are many definitions of quality. According to Edwards Deming – pioneer in quality
approach, he claimed in 1944 that quality is a fitness for purpose (Bergman and Klefsjo, 2002).
Further for a long time quality was considered as an error ratio or the number of defective units.
Further investigation by P. Crosby (1979) which was interpreted in Zairi’s (Zairi M ,1997)
defines the reason of errors and defects. He found out two reasons: the lack of information and
lack of attention. The next step of revealing quality definition was done by the Japanese scientist
Noriaki Kano, because he took into consideration the customer, as the finish users of products.
Quality was suddenly an area needed to be specified in every situation (Karlof and Lovingsson
2007). According to the Noriaki Kano (1980) the quality has five dimensions to observe, and he
represented it in his model, named as Kano Model.
According to the Lars Lyberg (2004) quality is observed by three- level concept. The first
level product quality, the second is process quality and the third one is organizational quality. On
product level is important to manage the product characteristics and established them with main
users, on process level it is important to control and well-design the procedure of service or
production, and on organizational level the leadership, innovation and high competences are
vital.
9
Figure 1.1 Kano Model of service quality
Hereafter will be observed existing quality management practices and new results in this
sphere. There are many definition of “quality management” and it depends on the context.
Nowadays quality management gains to relevance, announcing quality as a strategy to gain
competitive advantage. (Dulce Gonçalves, 2010).
The lasts empirical research shows to us that quality management approach brings better
results when runs on all organizational levels. It is impossible to obtain quality from an isolated
effort in a single area. This is why the execution process should be carefully prepared. This
approach has a huge synergy effect with project management. Due to the Dulce Gonçalves’s
article the improvement of project’s quality bring changes not only on product’s level, but also at
the leadership and project management levels. It was empirically proved that only 15% of a
quality problem concerns the “project level”, everything about production activities or
manufactures cons. It could be conclude such as the rest 85% of problems originate from
leadership and strategical organizational level. (Dulce Gonçalves, 2010).
According to Deming the top management plays the key role in a process of obtaining
the efficient quality. The project manager should transmit the values of company and enhance
the structural approach, transfer the customer oriented service, integrate the workflows between
the employees. It’s essential to be concentrated on each person in a team, and bring the idea that
each person is valuable and accountable for whole company performance. (Kerzner, H, 2001).
10
Quality management system could be presented as selection of business processes to
continuously meet customer expectations and increase the level of customer satisfaction. This is
why, quality management system required changes in all companies level: structure, procedure
and processes. Today’s reality required to satisfy both investor and customer, via perceived
quality. Quality management system is regulated mostly by the ISO 9000 family of standards.
According to Poksinska (2002) the ISO 9000 is a detailed and useful tool, which
descried quality management system addressing the processes surroundings, innovation
development and the added value process of a general product or service. ISO was designed as a
recommendation tool for organizations how to meet the stakeholders interests while meeting
legally effective and regulatory requirements related to a product.
ISO standards are reviewed every five years and revised if needed. ISO 9000 – 2008
have eight dimension – principles, and according to them manage changes in all organization
levels. (ISO standards, 2008)
1. Customer focus. Companies’ performance depends on final consumer, on their needs and
expectations. Therefore it is significant understand current needs and predict future trends.
Company should be able to adopt for customer expectations and strive to do it fast.
2. Leadership. Leaders choose the way how to obtain companies goals, form and maintain the
productive atmosphere within company to help people be involved into company processes,
to reach the organization’s objectives.
3. Involvement of people. People are the main assets of each company. When company provide
necessary conditions for their full involvement it allow transfer stuff abilities into
companies’ benefit.
4. Process approach. A desired result is achieved more efficiently when activities and related
resources are managed as a process.
5. System approach to management. It order to achieve companies objectives, all
interdependent process should be identify, understand and manage as one system.
6. Continual improvement. The permanent objective of company is a regular improvement of
the companies’ overall performance.
7. Factual approach to decision making. To make decision-making process more efficient it
should be based on the data and information analysis.
8. Mutually beneficial supplier relationships. Productive relationship between interconnected
company and their supplier create value for both of them.
11
ISO standards are one of the most extensively used approaches worldwide (Clifford 2005).
There is new version of ISO 9000: 2015, and it has several significant changes in
comparison with 2008 year version. There is lack of articles concerning the managerial
application or cases based on new standards, but some useful information is provided by the
International Organization of Standardization.
The new version of the standards emphasizes:
Attention on leadership development.
Attention on risk diversification and provide information how do it in systematic way.
Provide well structural and easy to use terminology, which are particularly useful to
multiple management systems.
Provide more user friendly structure for service and knowledge-based organizations.
Quality management implication
Hereafter will be observed empirical researches on the topic of quality management
implication and methodologies of business process approach evaluation.
The main goal of business process management is in integration different methodologies
and instruments, which will result in increasing efficiency and effectiveness of business
processes. Even if this approach is popular, the empirical studies regarding its value contribution
is few and far between. (Hung 2006).
Business process management (BPM) gains new opportunities though development of IT
infrastructure. There are interesting group of researches about implementation of serviceoriented business process architecture. Below, it is presented the model of service-oriented
approach construct with ISO 9000:2015 in the Figure 1.2. Service-oriented model is a
combination of all aspect of process within company. This framework is constructed under
quality management approach, and illustrates how the planning, support and operation,
performance evaluation, improvement and leadership are connected. One of the main aspects of
quality management is continual improvement and this framework allows implementing it to the
process within company on all management levels. Initially this modeling used for IT
infrastructure development, further it was transfer to business architecture, which provides a
comprehensive view of the analysis, design, and architecture of all in an organization
12
Figure 1.2 Process oriented model of quality management ISO 9000:2015
In Daniel Beimborn article studied the opposite question: the impact of service-oriented
architecture business process on business quality management, and describe the influence of
service-oriented business process in achieving high quality efficiency. In this paper was provided
the empirical study of 157 German companies (from service industry). The main result is that
service-oriented architecture has strong positive impact on business process quality. The
importance of interaction of all process in one IT infrastructure and ability to continually track
their performance is emphasized in this paper. “The majority of the firms (84%) agreed that
using the joint impact of SOA and BPM on business process quality IT-based BPM tools is
important or very important” (Daniel Beimborn, 2011).
According to the Stephan Poelmans´s work business process management systems
(BPMS) is the informational system of organization with strong dependence on ability to clear
modeled process logic. This system provides a relatively easy way to track and manage the items
along business process.
It was emphasized in Sarkis article (Sarkis 2004) empirical results showed that
companies obtained better results when quality management standards are properly executed.
Specifically, a project has a higher probability of success when a careful quality management is
carried out.
It was deeply studied the sphere of software decisions for business process management,
and the results which are obtained by such technological solutions.( Negash, S., Ryan, T., &
13
Igbaria, M. 2003) For example, in Lewis W.E. work (Lewis 2004) described a system that
characterized by its reliance on explicitly modelled process logic in updatable schemes.
1.2 Customer relationship management system
Customer relationship management is one of the useful tools, integrating both trends:
quality management approach, with it systematic view on processes, collecting and information
analysis paradigms, with software solutions. Usually CRM is used for organizing sales
department. There are a lot of researches concerning this topic. Generally they could be
structured as CRM (customer relationship management) system as a part of ERP( enterprise
resource planning) system for a large company, CRM decision for small and medium sized
enterprises, observation of social customer relationship management.
CRM system tools for a large company are not so interesting for this paper, because our
aim is fined a recommendation for small and medium sized enterprises. IT solutions for large
companies are much more complicated and have lot peculiarities due to company size, IT
infrastructure and etc.
Also the main difference is the way of gathering and analyzing
information.
International companies have a developed system for gathering all necessary customer
information and make a prediction due to these data. The influence of integrating technological
system into business process could have ambivalent results: for already efficient companies will
make even more efficient, for inefficient just intensify the problems and bottlenecks. (Natti, S.,
& Still, J. 2007, Klie, 2015)
Integrating the different information flow from sales, marketing and customer interaction,
connecting the ERP system with databases such as CRM allow to progressive company
maximizing efficiency. If the ERP and CRM tend to be separate, it will be difficult to integrate
them in future, while company growth. Nevertheless, “both systems independently offer
substantial benefits to bossiness” (Klie, 2015)
Additionally, in Klie’s work was analyzed the influence of “customer-centric ERP” on
customer retention rate, revenue growth and profit margins. “Companies that have adopted what
it calls “customer-centric ERP” have 15 percent higher customer retention rates than those that
haven’t; 27.8 percent higher year-over-year revenue growth; 27.5 percent higher year-over14
year profit margins; a 3 percent higher rate of complete and on-time deliveries; and 10 percent
greater improvement in time-to-decision” (Klie, 2015). These results were taken from a research
of Canadian companies. According to the results of the article we could make a hypothesis that
the same results could be obtain in small and medium sized companies via integrating “customer
centric ERP”. Significant part of this research is concerning the integration of CRM system into
ERP. The authors argued that integration is always a good idea if companies have repeat
transaction with customer. “Integration is definitely a good idea. Nick Castellina, director of
Aberdeen research group said, that it became easier to make decisions into organization, because
people can align supply chain and demand planning with realistic information from customer,
and finally it will make company a more cost-efficient.
Another group of academic researches develop the question about influence on CRM
system into new product development. It is obvious that in modern environment company should
hurry to satisfy market changes and customer preferences. One of the ways to be in market’s
trend is creating more customized new product, so continuous product development is necessary
tool for company growth. Large companies from one side have more resources to be fast in
production, but from another side they couldn’t launch decisions fast because of the bureaucracy
process entire the organization.
Knowledge sharing among development team, suppliers and customers result in
decreasing the defects in new product development and costs, improve customer satisfaction.
(Salman Nazari-Shirkouhi, 2015). The Salman’s paper provides a framework for new product
development using simultaneously both concepts: customer relationship management and
supplier relationship management.
CRM should be not just a tool or part of IT infrastructure. If CRM system is used only
like a database it makes almost impossible use it efficiently to obtain financial goals. CRM
should be a part of long-term strategy, involving all relative activities and be mutually beneficial
with customer. . (Chen, I.J., & Popvich, K. 2003). Reinartz consider “CRM as a process for
customer interaction management to build, develop, and maintenance long-term and beneficial
relationships with customers.” Systematically collected information from customer could be
efficiently used in NPD process. As it was mentioned in Salman’s paper, this capability is one of
the key factors for successful NPD. When company change the paradigm of CRM in case of
database to mutually beneficial, customer start play a role as a resource: source of idea
generation, innovation, co-creation of product design and development. (Lin, Y.C., & Su, H.Y.,
2003).
15
Turbulent environment not only push company find a way to decrease a time of new
product development, customer preferences, but mostly customer attitude in general, which
essentially result in how company organized the relationship marketing. The next group of
researchers studied the role of CRM in relationship marketing based on touristic companies.
(Nadeem, M.M., 2006). According to the Agnieszka Gawlik’s paper we could find out what kind
of criteria (information flow) small and medium sized company used for making decisions.
Companies able to identify customer needs and satisfy them, will make greater profits than those
which fail to do this. (Barsky and Nash, 2003). Implementation of CRM system
like an
instrument render probable to build a sustainable competitive advantage in a changing
environment (Jones et al., 2007; Vogt, 2011).
Observed Poland companies in Agnieszka Gawlik’s paper mostly used CRM for analysis
sales levels (52%). “Only 2 of 50 surveyed hotels (4%) make analysis showing loss of customers
to competitors. It is surprising, as long as such studies provide information about existing
problems in satisfying the needs of customers and help prevent such situations in the future.”
(Agnieszka Gawli, 2014).
Another group of researchers proved the important of information synchronization lead to
company sustainable development. Social CRM have enormous business sense, especially for
companies operating in the Internet. (Ku, Edward C. 2012, O’Connor, P. 2003)
The successful implementation of CRM requires the use of appropriate instruments for
better market segmentation, customizing products and services, obtaining higher quality
products, gaining access to information and employee satisfaction, and above all, ensuring
long lasting customer-retention and loyalty (Alomtairi, 2009; Ozgener and Iraz, 2006;
Stockdale, 2007; Verma and Chandhuri, 2009).
1.3 Social networks in e-commerce approach
The fact of social reality nesting widely in the realm of the Web creates certain
challenges for the researcher to investigate important events of social life of large scale.
The existing instruments, even with already existing breakthrough semantic technologies and
models of complex systems, often are either underexploited for social phenomena analysis or the
results of such exploitation is under analyzed.
16
However, there are certain phenomena which need such modeling and instruments
application. One of those is the smart mobs, which have highly active essence and potentially
influential character, as outlined in the Rheingold, H. (2007). The initial impulse for such mob
formation is often spread through communicating means of social networks, therefore semantic
detection of concepts and ontologies may help to investigate whether there is a smart
mob emerging and what characterizes it.
Emerging smart systems, as mentioned in Rheingold, H. (2007) possess the following
characteristics: no centralized control, autonomous but highly connected sub-units of the system,
web-like causal peer-to-peer influence. These characteristics may be analyzed through gathering
social, conceptual and ontological information on the three levels of the semantic network,
building of which will be based on the profiling semantic network similar to Jung and Euzenat
(2007).
In turn, semantics of the social networks has been studied with various purposes:
for internet of things construction facilitation (as in Atzori et al. 2012), search through
social networks facilitation with the help of Semantic Web (Yu L., 2014), or provision of
personalized academic recommendations (Xu Y. et al. 2012). The modeling of semantic social
network using several levels of meaning above social relationships, analyzed as network
consisting of people, was applied by Cantador, I. & Castells, P. (2006), Mika P. (2005), and
Jung, J. J., & Euzenat, J.(2007).
According to Velichko (2015) it was suggested to implement this technique to make
comparison of subscribers of public pages, belonging to one community. Researches took for the
purposes of global community investigation followers for certain groups and public pages,
and build an integrated graph of relationships between all the subscribers of analyzed
communities. Thus reveal semantically similar groups which potentially may not be personally
acquainted, but nevertheless using such method the ontologies were identified and go beyond to
the concept level. This potentially could help to identify semantically common groups of
person pages. Due the fact, that all such pages share several interests we could confirm that
these objects are close to each other on concept level. The model is presented in figure 1.3. The
work is summarized the available semantic networks analysis tools for vivid construction of
present prototypes of smart mobs: tightly organized communities' aggregates, forming
relevant ontologies, defining the particular interests of common subscribers of defined public
pages and groups. The proposed method would be especially applicable together with
community readiness model, which would allow for each certain investigated case study
17
to determine, on which stage towards particular action, is the aggregated community and how
this action is probably is going to be undertaken, according to the thorough analysis of
the corresponding concept level
Figure 1.3 Example of the semantic network: social, ontology and concept layers.
Another group of researchers are concerning the usage of social networks pattern into
sales procedure. According to the Baird and G. Parasnis (2011) empirical research there are
strong correlation between promotion in social networks and financial performance of company.
They conducted survey for 1056 customer from the United States, Canada, the United Kingdom,
France, Germany, India, China, Australia and Brazil. The second stage of research was survey
for 351 business executives in the same countries (except Canada). They collected data from
Social Media program within the companies by conducting deep interview. In partnership with
Oxford Economics, a Social CRM blog was established to solicit feedback on Social CRM topics
from SM and CRM specialists and other interested individuals (Wereda, 2013).
The same results were provided by Fotopoulos (Fotopoulos, 2010). According to
International Data Corporation, that revenue in this sector has grown 191 percent.
1.4 Beauty industry aspects under the social networks trend
For efficient usage of Social Media organization should provide values which brings
mutual benefits through specific services, customer time allocation, break the pragmatic
approach by designing series of experiences. It is a challenge to manage services and brings
mutual benefits for customer where netizens play the main role. Organization should go to
18
cooperation, be on the same level with customer, be ready to open dialogue and share experience
with their target audience. The sustainable development and goals achievement are led by
synchronization of all activities. (Miguel del Fresno García, 2016)
To keep meaningful insight into CRM customer profiles organization should build selfsustaining public and provide social communities. Hence, the customer engagement is obtained
by these social communities. (Nakata, C., & Zhu, Z. 2006)). It is a long process, which required
at least one year establishing the opinion leaders and bloggers within you community. Opinion
leaders are extremely important in terms of trust and engagement client within you social
profiles. According to Zhiquan Liu research social media have affected many aspects of daily
life, and mostly he reveals the correlation between customer trust patterns and social media
opinion leaders. Trust management plays important role in service-oriented social networks. In
terms of trustworthy it is the best way to service oriented networks when services meet
functional and personal requirements. In Zhiquan Liu paper provides a model, which integrates
two types of evaluation: local trust-based and reputation based, which proposed integrated
scheme for trust evaluation. The model is analyzed from four dimensions: quality of service,
maximum local trust, reputation-based algorithms and aggregative trust evaluation. Local-trust
evaluation algorithm is presented to identify all the trustworthy service witnesses and only the
service ratings from them are considered in this module. The scheme is presented in figure 4.
(Zhiquan Liu, 2016)
Figure
1.4
Integrating
Reputation
and
Local
Trust for Trustworthy
Service
Recommendation in Service-Oriented Social Networks model
19
The correlation between user’s social media profiles and their e-commerce behavior were
deeply analyzed in Yongzheng Zhang article (2014).
During last years it became popular among many e-commerce companies move to social
media networks. For example, such company like Amazon and E-bay allow to their users
register on their web-sites via their profiles in social networks. It is strategic way to collect
meaningful information about clients, for further investigation and for analyzing social
experience of customer. Also, company try to rejuvenate clients, thus moving to social networks
attract younger users (McKinney, V., Yoon, K., & Zahedi, F.M. 2012).
Yongzheng Zhang’s research is concerning purchase behaviors and Facebook
information more then 13 700 users. Scientist reveals the statistically significant correlation
between some Facebook subset’s and purchase preferences. Also in article it is provided the
model and machine learning algorithms, which allow predict a category of product from which
user will buy. Hypothesis were proved, the results based on eBay users datasets who connected
with Facebook.
Digital promotion within social networks provides an opportunity to beauty industry
companies for additional customer engagement. The social networks play an important role for
service and product testing, People use official them to research the information about quality of
service. According to the “From social media to Social CRM” research Facebook and Twitter
educate to purchase for 34% of buyers. Almost four from ten clients which equal 37% or 15
million customers have interacted with brand online through social network. (Baird and G.
Parasnis, 2015)
According to the “BusinessCreator Inc” report, the increase of salons and beauty
education centers social network’s usage is mentioned. For example, the number of beauty
salons who actively promoted in Facebook is increased by 46%. (Halevy, A. Y, 2015).
Currently the beauty brand has been evaluated as the most digitally. Beauty brands have
long process of e-commerce legacy and have been selling online much longer than many brand
categories as fashion or jewelry.
Despite of classical advertising methods, Facebook and other social networks have been
playing a significant role for beauty companies marketing, e-commerce and customer service
strategies.
20
Companies as Lancôme and MAC became a leaders in the social networks sphere
because of theirs powerful advertising campaigns within social media. These integrated
campaigns have to recognize Facebook as the main powerful tool for customer relationship
management. (Business Creator Inc., 2015)
1.5 Research gap and research goal
It was analyzed more than 35 articles which cover 3 main academic spheres relevant to
this master thesis.
Firstly, it was analyzed quality management approach. Identify what is quality, what
standards are regulated this approach, and successful practice was observed. Mostly, it was
observed the academic investigation of the CRM system as a part of quality management
approach. The empirical study is about correlation between implementation CRM and financial
or customer satisfaction parameters. The next step was researches are about IT solutions for
integrating CRM system into manageable business process. It was defined that there is a lack of
information how connect social promotion and sales via social network through CRM system.
Secondly, it was analyzed e-commerce sphere: current investigation of social network
phenomenon, semantic and ontological layout. In this perspective of view articles provide the
importance of social networks for sustainable development of e-commerce organization. There is
lack information about how to collect and organize the information of customer profile to predict
and to offer better product solution.
Thirdly, it was observed the customer behavior pattern in context of social media. The
importance of opinion leaders, the phenomenon of conformism for purchases process was
observed. Trust management approach role in service-oriented social networks was studied. In
terms of trustworthy, service oriented networks when services meet functional and personal
requirements was observed. Additionally, the beauty industry peculiarities and specification of
promotional and customer engagement strategizes in context of social network have been
revealed. The empirical results of customer education by the social engagement were observed.
To sum up, there research gap is in intersection of this three academic spheres (Figure 1.5).
21
Quality
management
Ecommerce
trends
Customer
behaviour
patterns
Figure 1.5 Research gap scheme
Research gap
Research gap is how integrate sales department via customer relationship management
system in manageable process. There is lack information about CRM solutions for SME, lack
information about integration sales department and CRM solutions in context of social media.
Problem statement
To make actual service-oriented model, describing business processes of small companies
from beauty education and beauty service markets, taking into consideration the strong trend of
social networks e-commerce perspectives and describe the main reasons of gap between existing
software solutions and its real business implementation.
Objectives
To increase the efficiency of planning system and employees’ performance evaluation
in small sized company from beauty-education and beauty-service markets
Research questions
1. What is the main obstacles which company faced actively working with social networks?
2. Why there is a gap between companies’ needs and technological solutions?
3. How do companies operate in social network? How do they integrate this operation with
companies’ infrastructure?
4. How companies can use existing CRM solutions for social networks in order to improve
business process efficiency?
22
2. RESEARCH DESIGN AND METHODOLOGY FOR MULTI DISCIPLINARY
STUDY
In this chapter the main methodology, necessary for answering on research question, will
be observed. Research methodology could make a supposition for the result of a given study, this
is way it is important describe what methods will be used, and how data will be collected.
2.1 Research design
The overview of the literature in the previous chapter has demonstrated a research gap
between the publications dedicated to importance of social networks in e-commerce, customer
engagement perspectives for beauty-brand in social networks and software solutions integrating
the information flows about clients from social media into the manageable process.
To contribute in order to fulfill the research gap it is important to reveal the main
obstacles of active social media customer relationship management, to research the changes in
companies’ business process under this trend, and explore best practices of integration to provide
a practical guide for small sized companies about CRM and social networks integration.
On the one hand, social network integration is a highly innovative topic in research, yet
on the other hand several Russian companies have already started adopting this technology, and
that is why this study is a subject of both exploratory and explanatory research which will be
based on the analysis of real-life evidence.
To research the defined research gap, we set the four research questions.
1. What is the main obstacles which company faced actively working with social networks?
2. Why there is a gap between companies’ needs and technological solutions?
3. How do companies operate in social network? How do they integrate this operation with
companies’ infrastructure?
4. How companies can use existing CRM solutions for social networks in order to improve
business process efficiency?
To answer on first research question the online survey methods will be used. This method allows
obtaining more representative and not-biased results if sample is big enough. Data will be
23
collected through online questionnaire. Companies sample will be collected from open source
information, based on criteria’s such as: industry, company location, size, presence in social
media. The aim of this questionnaire is to analyze the distribution of problems within industry
and distribution of social networks usage as sales tool.
To reveal changes in business process, through answering on second and third research
questions, the case study methodology will be used. The case study will have descriptive nature
to study the business process of small sized companies. As a goal of our research is concerned
the quality management approach, to run case study the quality dimensions will be used as a
basis. To fix and compare the business process the service-oriented model will be used. Business
process modeling is the activity of representing processes of an enterprise, so that the current
process may be analyzed or improved. Descriptive studies refer to collect information, which
will demonstrate the relationships and delineate the real-life context and phenomenon as it exists.
To obtain the external validity of research results multiple case studies will be used.
The business objective is often to increase process speed or reduce cycle time; to increase
quality; or to reduce costs, such as labor, materials, scrap, or capital costs, which will be in the
last research questions. “How companies can use existing CRM solutions for social networks in
order to improve business process efficiency?” As drivers for research the planning efficiency
and process time reduction will be used. Benchmarking will help us to bridge the gap, which was
demonstrated during the literature review and supported by the empirical data collected from the
interviews, to approbate recommendation to companies by implanting it tor one company.
2.2
Online questionnaire to obstacles revealing
To answer on RQ1: “What is the main obstacles which company faced actively working
with social networks?” the online questionnaire will be used. In this paragraph the sample
collection process and questionnaire design will be observed. Further, the theoretical paradigms
of results interpretation discussed.
2.2.1
Company and data selection process
24
According to ESOMAR online survey research accounted for 20% of global datacollection expenditure in 2006. They offer capabilities beyond those available for any other type
of self-administered questionnaire. (Vehovar, V.; Lozar Manfreda, K., 2008 ).
The aim of research is to reveal the obstacles of small sized companies form beauty industry.
Consequently the criteria’s for respondent will be:
1. Small sized company
2. Operating in regions of Russia
3. Providing education or service in beauty industry
4. Actively presented in Social Media
5. Russians origins and not operating under International franchising
Companies will be selected from open source information: participants of Moscow
Beauty Day, Saint Petersburg Beauty Day, and Wedding Conferences and from social media
reports. Additionally, the partnerships of well-known of beauty brand will be used. For example,
international brand as TomFord and Becca have regional representatives. Through the regional
representatives companies will be selected.
After we clarify how the companies will be selected, it is necessary to understand the
sample size. According to the recommendations to provide sample size with 10% of statistically
significance should be more than 100 respondents if population is big enough. For example,
according to Kalpana Chandrasekhar, if the 10% of error is compline with research aim and
population is bigger than 1000, than sample size should be bigger than 100. (Kalpana
Chandrasekhar, 2014) After rough estimation, through summarizing participants of thematic
events, it is clear that population more than 10 000, because we are going to study companies in
all Russian regions.
Consequently, to assure at least 100 respondents we need to send
questionnaire more than 750 companies, because according to MonkeySurvey research the
expectable rate of answers is approximately equal 25%. (Kalpana Chandrasekhar, 2014).
2.2.2
Questionnaires design
Design of the questionnaire divides in to three main aspects
To determine the questions to be asked,
To select the question type for each question and specify the wording
25
To design the question sequence and overall questionnaire layout.
Different types of questions can be used, e.g. open vs. closed, single vs. multiple responses,
ranking, and rating.
Questionnaire should present itself a structured set of questions, where each of them is reflecting
to research procedures and aims. Questionnaire should include introduction, where the aim of
research and short characteristics of results expectation are explaining to the respondent. Also
the potential benefits of research should be explaining in introduction, because it could have
positive impact on amount of responses. The anonymous of data and responses should be
mentioned also in introduction. (Gummesson, 2003)
The questions should be classified by dependence on research aim. It is recommended to put the
more important questions in the beginner.
1. Put the full name of your company here below
2. How long does company exist on the market?
3. How many people work in your company?
4. Classify the directions of your business (multiple choices)
a. Education programs for professionals
b. Education programs for ordinary users
c. Beauty salon
d. SPA
e. Own cosmetic brand
f. Sales of cosmetic product from other brands
5. In what extend do you agree with statements?
(Disagree, Undecided, Agree, Strongly agree)
a. We try to implement planning system, but factual results always differ
significantly
b. We don’t know how evaluate the manager’s performance
c. We have KPI system for managers
d. We have instructions, but they don’t work (formal, but unpractical)
e. We have system control of sales manager’s performance, but couldn’t implement
it
6. How do you evaluate the different source of lead’s generation?
(Unimportant, Rarely use, Important, The most important)
a. Instagram
26
b. Vkontakte
c. Facebook
d. Direct contacts via conferences/events
e. Advertising in non-social media sources
7. How do you evaluate the different sales instrument?
a. Instagram
b. Vkontakte
c. Facebook
d. Direct sales
e. Messengers (viber, whatsapp etc.)
8. In what extend do you agree with statements?
a. We have separate sales department/ persons who fully responsible for sales
procedure
b. We use special software for data analysis
c. We used scripts for calls and messages
d. We use the sales funnel
9. In what extend do you agree with statements?
a. The main problem with client’s data collection is incomprehension of the criteria
basis of data
b. The main problem with client’s data collection is incomprehension of future
usage of this data
c. The main problem with client’s data collection is incomprehension of software
product which could be used
d. The main problem with client’s data collection is in transfer all data from social
networks to internal databases
10. What sales instruments do you use mostly?
a. Social Networks
b. E-mail/calls
c. Direct sales
11. How you collect data from clients
a. Via special software (Bitrix, amoCRM, megaplan, Jira, mango-office, salesforce)
b. Use excel spreadsheets
c. Keep temporary data in paper based system
d. Keep mostly in dialogues in Social networks
27
This questionnaire includes different types of questions: open, close, multiple choices a
combination of
2.3 Case study of small sized company in beauty industry
2.3.1
Case study methodology description
Case study research methodology helps described and understand complex object, which
called “case”. The case should satisfy several requirements: be a complex functional unit, be
investigated in its natural context with a multitude of methods, be contemporary. (Rule, P 2015).
Detailed analysis of conditions, their correlations and relationships are fully describes via case
study analysis, and it could bring extend understandings of context. Case study extensively used
in social science and other disciplines. According to the K.Yin the case study is empirical
investigation of current situation within its real-life context when there is not clear the
boundaries between phenomenon and context. (Yin, 1984).
According to Yin (2003) a case study design could be used when:
1.
Focus of the study on answering “how” and “why” questions;
2.
It is impossible to handle the behavior of those involved in the study;
3.
The contextual conditions are relevant to the phenomenon under study
4.
The boundaries are not clear between the phenomenon and context.
According to Yin (1994) the case study design must have five components: the research
question(s), its propositions, its unit(s) of analysis, a determination of how the data are linked to
the propositions and criteria to interpret the findings. The purposes of case study research may be
exploratory, descriptive, interpretive and explanatory (Mariano, 1993). Following this definition
second and third research questions could be studied under this methodology.
RQ2 Why there is a gap between companies’ needs and technological solutions?
RQ3 How do companies operate in social network? How do they integrate this operation with
companies’ infrastructure?
28
Specifically because:
1.
Questions are explanatory: “why” and “how” types, and for them methods suits the best
2.
The context is important, and there is no ability to manipulate the behavior, because study
has descriptive approach
3.
Question is concerning a contemporary phenomenon, this is why case study is most
appropriative methods.
4.
There is no clear boundaries under studying phenomenon, because social networks itself
are phenomenon, and it is unclear where is the end of within company process according to
usage of social networks and where social networks itself begun.
The purpose to answer on this research question is descriptive, this is why there is no any
study propositions in order to predict obtaining biased results. Descriptive studies refer to collect
information, which will demonstrate the relationships and delineate the real-life context and
phenomenon as it exists.
To obtain the external validity of research results multiple case studies will be used. It
enables to explore differences within and between cases. The goal is to replicate findings across
cases. “Because comparisons will be drawn, it is imperative that the cases are chosen carefully so
that the researcher can predict similar results across cases, or predict contrasting results based on
a theory” (Yin, 2003). In a multiple case study, we are examining several cases to understand the
similarities and differences between the cases.
Necessary criteria’s to run descriptive research correctly
1.
To analyze only small sized Russian companies actively used social networks for
business purposes;
2.
To analyze all aspects of company performance irrespective of the fact do they use
software solutions, do they have internal database or do not.
3.
To focus on the beauty education centers and beauty service of new formation (beauty-
bars and etc.)
4.
To focus on potential gains of integration solutions for company benefits in term of
improving control system, process efficiency.
29
5.
To reveal company-specific, industry- and region-specific factors which influence
organizations’ decisions whether to resort to CRM integration or not.
As it was mentioned above, this paper is focused on small sized company; this is why the
most appropriative defined unit will be company itself.
Limitations of the unit of analysis are defined by the limit for scientific generation to
reveal how this phenomenon could be described in slightly different industry (ordinary salons, ecommerce of cosmetic) or bigger company size.
Based on criteria for case study’s findings interpretation and descriptive nature of
research will be used for comparison the model of quality management for service oriented
companies, which were described previously in Chapter 1 during the literature review.
According to Yin (2003) multiple case studies can be used to either, “(a) predicts similar
results (a literal replication) or (b) predicts contrasting results but for predictable reasons (a
theoretical replication)”. In this paper both approaches will be used, because this technology has
rare adoption and at the same time being quite innovative.
2.3.2
Detailed scheme of case study execution
The detailed scheme of research is presented below:
Stage1 Describing Experience
-
Relevant
literature
Stage2 Describing Meaning
-
Running
data
observation
collection from deep
-
Case selection
interviews and open-
-
Design data collection
sources
procedure
-
Case
Stage3 Focus of the Analysis
-
conclusions
-
execution
(4 regional companies)
-
Report preparation for
each case separately
Analysis of cross-case
Development of policy
implications
and
recommendations
for
the companies
-
Preparation of a crosscase report
Table 2.1 Research scheme
30
Data collection
After regional companies were selected for case investigation, next step is data collection.
Both Yin and Stake recognize the importance of effectively organizing data (Yin, 2003). To
increase construct validity will be used different sources of information: deep interviews,
companies’ reports, and open-source information. (Saunders, 2003)
Data collection questions
The purpose is to collect real business data of obstacles, gains and perspectives which
they obtained using social networks, and reveal internal process how they operate, use and
analyze data within the company. The process oriented model of quality management ISO
9000:2015 (was detailed observed in Chapter 1 during literature review) will be used as a
benchmark to reveal the differences between real-business situation and “ideal” model.
(Wilkinson, 2002)
The planned list of questions for an interviewee is demonstrated below:
1.
How do you organize work with social networks?
2.
Who is responsible to profiles and publics infrastructure?
3.
How do you evaluate different source of lead’s generation? What of them are more
efficient?
4.
How do you measure the conversion rate from you social networks?
5.
How do you organize the client’s database? Is it unique for all clients’ group or different?
6.
Do you use CRM system? What sources do you use for collecting clients information?
7.
Do you use clients’ information to specify the product/service?
8.
How do you measure clients’ satisfaction rate?
9.
What actions do you take to increase customer service?
10.
Do you have loyalty system/loyalty card?
11.
Who is responsible for sales organization in you company?
12.
What sales instrument do you use?
13.
Do you use sales funnel? If yes, how do you integrate it with social networks?
31
14.
How do you measure the efficiency of sales managers?
15.
Do you know about integration solutions between social networks and within company
infrastructure?
16.
What are the main obstacles for you to use it?
17.
Do you have training or development system for employees?
18.
Do you have transparent control system?
19.
What information do you use to develop the plan for next period of time?
20.
How do you evaluate time efficiency of process within company?
21.
Do you have KP system? Is it practical to use?
22.
What is the main peculiarities did you faced working online?
23.
What would you like to learn from other companies and implement in your organization
regarding CRM solutions and planning efficiency?
Focus of the Analysis
Describing 3 different cases by the same scheme of interviews and open source
information will positively result in convergence of evidence. (Pauwels, 2004). In order to
provide meaningful result of case study we are going to provide multiple measures for the same
phenomenon. The report of company will include key information about organization, the
comparison with process oriented model (what company do in terms of leadership, customer
service, process orientation and etc.) analysis of the interview data and demonstration the
possibility for further development. The report of common analysis will be explanatory by
nature, and consist of comparison of companies; theirs approaches and rival the observed
literature and scientific explanation.
32
2.4 Benchmarking approach for quality improvement implementation
2.4.1
Benchmarking methodology description
The last research question: RQ4 “How companies can use existing CRM solutions for
social networks in order to improve business process efficiency?” will be explored by
benchmarking methodology.
Benchmarking will help us to bridge the gap, which was demonstrated during the
literature review and supported by the empirical data collected from the interviews, to approbate
recommendation to companies by implanting it tor one company.
Benchmarking itself is the process of comparing and measuring one organization
against others, to benefit from insights into measures, performance, and practices in a way that
can rapidly improve the company performance. Benchmarking has several forms; it could be
internal: studies the performance within organizations, or external: studies performance of others
preferably world-class companies. Also the different approach could be taken under specific
studies. To answer on research question mentioned above the process benchmarking approach
will be used.
According to the report of “Consortium Benchmarking Methodology guide” (2003)
process benchmarking is focused on firstly identifying the concrete process or procedure to be
improved through detailed process mapping and secondly on implementing external examples of
excellence and it emulation within studied company. Process benchmarking provides
information how top companies realized distinct processes. After identifying how others perform
the same functional procedure observed company gain insights, which supported by quality
decisions making could be achieve. Through realizing recommendation, company gets all
benefits of process benchmarking. It means that company tries to duplicate a specific process
design expecting to get the same results, from a study that had been conducted.
As with any methodology, this approach also has its limitations. The process models
that support it can be very complicated, and the structure of the one process is concerning the
context and allied process, so sometimes it became almost impossible to fix and improve one
33
separate process without context, and process relationships can be obscured through a set of
assumed coefficients used in the process
2.4.2
Detailed scheme of benchmarking execution
In general benchmarking approach will be executed according to the following scheme:
1.Planning:
-Identification of parameters which need benchmarking. According to the problem
statement it is planning efficiency, performance measurement practice and transparency of
process within company
-Identification of comparative companies. One of the selected companies from multicases research and practices described in literature from other industries
- Choosing on data collection methods. Mostly secondary data, but also the data
collected from interviews.
2. Analysis:
-Determination of the current competitive gap;
3. Integration:
-Presentation of benchmark findings;
4. Action:
-Development of action plans and it approbation on company.
Measurement of performance after approbation period.
To sum up, benchmarking methodology is allowing analyzing existing best practices
within industry, and transferring experience from aligned industries. Further implement it to
selected company’s business processes, and measure the improvement by selected parameters.
34
3. EMPIRICAL RESULTS OF ONLINE QUESTIONNAIRE
The empirical results will be presented in this chapter. This chapter is subdivided into 3
main parts. First part is concerning survey results, which describes the general companies
information, second part is about current situation in chosen industry and the evaluation of social
media as sales and leads generation by companies perspectives of view. The last but not least
part is concerning results of the main obstacles revealing of running sales and marketing
strategies within social media.
3.1 The respondents description
The online survey was conducted among small companies from beauty industry who
mostly provide saloons and education services, have active social accounts. Mostly there are
beauty schools named by well-known makeup and hairdresser specialist, which grew up around
one specialist, also modern educated centers and fashion school for hair-design, and fast service
beauty-bars. All of them are actively presented in social networks, promote their service, and
create new trends. Typical salons or hairdressing salons were not observed. Here by “typical”
salons we mean the business model when the location plays the main role, and all masters
provide the same service according to the current trends, and there is no education.
Among 120 sent survey 87 responses was collected (42% of response). The questionnaire
consists of 3 main aspects:
1.
Company description
2.
Management problems
3.
Usage of social networks evaluation
It was 87 responses collected. According to analyze all observed companies are small
sized. There is almost half (43%) companies working on the market 2-3 years, than almost the
same groups of companies who works less than 1 year, 1-2 and 3-4 years : 16%, 18%, 16%
correspondingly. The smallest group is company who works more than 4 years (7%).
The companies’ analysis of business diversity mostly provides educational service: for
professionals and for individual users. Types of education are not mutually exclusive. Also, the
sales of cosmetics products are additional business almost for 70% of respondents. It is
35
interesting that more than half companies are going or planning to start their own brand
production. It is strongly correlated with mentioned in literature review trend that small and
medium sized company easy to start production of cosmetics product, which rapidly satisfies
current customer expectation, while corporations needs more time to change their production
lines to produce new products, colors or texture. For example, the small brands of lipsticks on
USA market, which became very popular among internet users, are a good case of this trend.
Nevertheless, only 3% respondents have their own brand. Among them are brushes, eyelashes,
and eye-shadows. More detailed picture is presented in figure 3.1
Bussines diversity
don’t have
will start it soon
core business
additional business
1%
9%
2%
11%
33%
39%
59%
53%
69%
0%
14%
70%
43%
20%
47%
17%
18%
Education
programs for
professionals
5%
38%
14%
7%
6%
Education
programs for
ordinary users
Beauty salon
20%
6%
SPA
Own cosmetic Sales of cosmetic
brand
product from
other brands
Figure 3.1 Business diversity
To sum up, the sample representatives mostly focused on providing the beauty salons
services and education programs as core business. Additionally, the selling the cosmetic products
are the predominantly estimated as additional source by companies. The structure of services is
quite homogeneous in terms of the similarity of business activities within sample.
36
3.2
The main obstacles for social media integration
In this paragraph the main management problems of actively usage of social media as
sales tool were analyzed. According to the business model of chosen company, they mostly used
social networks for marketing, brands promotion, sales, for customer engagement, almost for
everything. It results in enormous data flow from social networks, which is unsystematic but
important. Due to this fact it was necessary to reveal main peculiarities to manage efficiently the
business processes. The survey results are shown that company faced problems with planning
system and almost half of companies complain on impractical approach of instructions. More
detailed information in figure 3.2. One of the potential reasons for these peculiarities is incorrect
usage of information. Without data collection it is impossible to provide realistic plans, without
understanding how runs the sales process, how many time and work-force it required it
impossible to evaluate the manager’s efficiency. Also, the 32% don’t know how to implement
system of control means that process itself is unclear.
Main prolems of control
Disagree
Undecided
Agree
Strongly agree
17%
18%
44%
34%
48%
32%
32%
22%
41%
22%
24%
36%
36%
17%
6%
9%
20%
We try to
We don’t know
implement
how evaluate the
planning system,
manager’s
but factual results performance
are always differ
significantly
14%
We have KPI
system for
managers
13%
15%
We have
We have system
instructions, but control of sales
they don’t work
manager’s
(formal, but performance, but
unpractical)
couldn’t
implement it
Figure 3.2 Comparison of problems from SM point of view
37
To sum up, the structure of problems which companies faced actively using social
networks is variegated and heterogeneous. There is no unambiguous predominance of one
problem. According to survey analyzed we could generalized that the social network has
influence in business process within different aspects, because company mentioned problems
with planning, control, efficiency measurement and etc. To provide more detailed scheme of
correlation between company performance and business process adaptation the descriptive case
study will be presented in chapter 4.
3.3 Social networks implementation analysis
According to fact that companies operated mostly with social networks, the data
collection and analysis process is important. The detailed information is presented in figure 3.3.
Firstly, there is a strong influence on process of transferring data from social networks to internal
data-base. It is quite essential, if all customer communication is in private dialogues in social
profiles, it require too much time to move this data into internal system. Within special software
solutions it means that manager at least should duplicated twice information. The gap between
existing technological solution and its real implementation is proven by survey. More than half
or respondent have doubts about software solutions. 22% of respondent mentioned that they
strongly agree that incomprehension of software solution is one of the main problems. On the
other hand respondents don’t have doubts about necessity of data collection and it future usage.
In comparison with planning problems company understands the importance of data analysis, but
some other obstacles like how to structure and collect the information from potential clients’
profiles are faced.
It was mentioned in literature review that there is a dispute how to evaluate the social
networks as only marketing tool or sales also. This is why, it is important to reveal how company
evaluates efficiency of social networks. It is quite clear, that company accurately could calculate
the conversion and leads via web-site, but how to do it through social media is unclear, there is
no methodology for accurate calculations. Nevertheless, it is possible comparatively evaluate the
efficiency of social media, especially for lead generation. But firstly, the sources of lead
generation should be prioritized.
38
Different group of clients presented in different social networks. More detailed
information is in figure 4.4 The obtained results slightly different from literature review, as we
studied Russian market Vkontakte is more popular then Facebook, and 51% of respondent
mentioned it as main instrument for leads generation. Even bigger proportion belongs to
Instagram: 55% thought is the most important instrument.
The main problem with client’s data collection
Disagree
6%
Undecided
Agree
Strongly agree
9%
22%
20%
16%
55%
39%
47%
28%
45%
30%
16%
25%
23%
14%
6%
incomprehension of incomprehension of incomprehension of transfer all data from
the criteria basis of future usage of this
software product
social networks to
data
data
which could be used internal databases
Figure 3.3 Data collection peculiarities.
39
Sources of lead’s generation evaluation
Unimportant
Rarely use
Important
The most important
3%
13%
13%
30%
21%
55%
28%
51%
66%
44%
41%
34%
20%
33%
17%
14%
40%
25%
8%
14%
13%
2%
0%
Instagram
Vkontakte
Facebook
13%
Company web- Direct contacts Advertising in
site
non-social
media sources
Figure 3.4 Sources of lead’s generation
To sum up, survey shows that company expected social networks as main instrument to
client’s attraction and lead’s generation. At the same time, it is not clear what kind of
technologies solutions use and it is not popular to use it in this sphere. All of these results in
management problems, such as: how to tune the process, what evaluation approach use to control
mangers performance, and what instrument is necessary to make adequate planning system, how
to increase the internal efficiency mostly will be researched in Chapter 4.
40
4. EMPIRICAL RESULTS OF CASE STUDY ANALYSIS
4.1 Framework description for case study execution
To conduct a case study will follow the methodology, fully described in Chapter 2. As it
was mentioned in Chapter 2 Methodology, empirical results of case studies are divided on three
main steps.
Step 1. Company selection. It based on criteria’s as company size, usage of social networks,
industry.
Step 2. Data collection. The internal data mostly collected through deep interviews and
companies reports, external information collected through open source information, social media
profiles, bloggers articles and etc.
Step 3. Case studies description. The companies will be described by quality management
approaches from 8 components, which were fully described within literature review.
1. Customer focus
2. Leadership
3. Involvement of people
4. Process approach
5. System approach to management
6. Continual improvement
7. Factual approach to decision making
8. Mutually beneficial supplier relationships
After summarizing all data the service oriented model will be used. According to the literature
review this framework could show the connection of all procedures for service-oriented
companies.
Step 4. Cases comparison from CRM perspectives of view.
The collected data will be compared in terms of usage of social networks, similarities and
inequalities of data collection and managing process.
41
Figure 4.1 Service -oriented framework
4.2 CASE 1: Novokuznetsk School of Style analysis
4.2.1
Case description via quality dimensions
Company was opened in 2011 in Novokuznetsk city, after in 2012 subdivision in
Novosibirsk and Belovo cities, and then in 2015 in Saint-Petersburg. Interview was conducted
with owner and director of company.
General company information
First Studio was opened in 2011 as new format of makeup educational center and fastbeauty salon. Studio provides qualification improvement courses for professional makeup artists,
educational programs for beginners, organize huge beauty events, provide beauty workshop over
all Russia and Europe. Also they have all specter hair saloon services, and finally have own
brand of brushes and official sales representative of well-known brands as Becca cosmetics and
etc.
Company is small sized, 59 employees are working there. The owner and director, SMM
mangers, administrators, team of makeup artists, sales management department, marketing
managers, operational director, IT manager, and copyrighters. According to open source
42
information Studio is unique case for Russia, due to successful brushes brand and highly
promoted workshops.
Social networks usage.
Company has a web-site, but it mostly promoted online education programs. “… the main
brand promotion instrument for us was YouTube channel” said studios’ director. “Nowadays, we
actively used Instagram for advertising our products and service, but for sales we used
messengers. We firstly sold only by web-site, but the efficiency was low. We compared the
conversion rate and it was surprised that we lost almost half client by the way from social
networks to web-site. Then we go completely into social media, it is harder for us, because we
have less control there, but generally the sales rate is higher”.
Company has active social profiles, with more than 100 thousands followers in Instagram
(the sum value for all profiles) and 15 thousands followers for salon official page in Vkontakte.
Company has strict market and content plan, which conformed by marketing managers
and director of company. Content plan is created according to sales plan and partnership
programs with cosmetic brands. SMM manager is responsible of official account and official
public in Vkontakte. Administrators use official pages, with same naming to answer on all
questions and comments.
Sales managers use the profile information and follower’s data to make customize offers,
but it runs by hand without any special software.
Company uses special software to measure the efficiency of social media, use Yandex
Direct and Google AdWords metrics to measure conversion rate and analyze efficiency of
context advertising. Company actively used target advertising in Vkontakte.
The main problems with social networks are overload of information, work-duplication,
and difficulties of integration with internal CRM system was mentioned by companies.
Customer relationship management and customer loyalty system
Company has developed customer relationship management’s system. Firstly, they have
clear loyalty system for customer, discounts for regular customers, has special program for
brushes sales representatives. They put attention for repeat orders, and try to increase the level of
repeat sales by customized price of special orders. “…we put efforts to make our service as much
as possible perfect. We work on each complains from our clients with delays or long-answering,
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our goal is to be at the all dimension with our clients. For us it is a tricky task, because the
information flow rapidly increased and to analyze it we need time and people. We have more
than 200 hundreds dialogues every day, and manger should answer on it, and duplicate this
information into CRM”.
Secondly, company uses special software solution to collect all information from partners and
clients. “Before we have been implemented CRM it was a chaos. We were losing money every
day, just because we couldn’t be fast, as this industry required. The implementation of CRM
system was painful for us, and required investment, trainings and time, but finally it allows
scaling the business.”
They use ATS (automatic telephone station), connecting with CRM. The main dialogue with
client runs into social networks, but company has developed algorithms to collect all data from
client, than duplicate this information into CRM. “We spent half- year by testing different
drivers of our client, and now we have system how to classify them” said director. Company
emphasized that the main current problem is to reduce the amount of loses information from
dialogues to CRM. “Sometimes administrators forgot to transfer client into CRM. This means,
that we loosed this client, because our social profiles too active and sales manager work only
with CRM”.
Sales procedure
Company have separate sales department. “We knew, that brand recognition and
marketing in general are important, but it is very competitive market, therefore we attract
specialist for sales”. “…I want them work better, we just did our first step in tinning sales
department, and there is a lot of problem. We are working on them” said director.
Company follows analytical approach and used all sales data for future prediction. Sales
mangers work with CRM data-base and sales plan. They had developed system of rewards and
bonuses and special system for sales representatives.
As it was mentioned above, company has their own production and actively sale
cosmetics product. “Orders mostly run in social networks platform, and due to the information
overload some orders are lost.”
They have KPI’s system for sales efficiency, but it is not the transparent within subdivisions.
Company has different KPI’s and evaluation system for each subdivision.
Leadership and employees trainings
44
“..When we start to growth, we faced too much complains on our service, it was a signal
for us to switch on leadership development program” mentioned director of the Studio.
Company provides trainings for employees: sales, orator skills, personal development,
phycology and management.
Despite of trainings and clear bonus system, company faced significant stuff turnover,
and explain it by attraction of industry and real market peculiarities. “To connect the people from
different subdivision is our main goal. We always need to keep the team-work atmosphere” said
director.
Concerning to specialist, company faced troubles; there is no regular basis education
system for makeup team. Only personal brand of the owner of company is well know, there is no
personal brands under the company. “It is our strategy. We decide to work by one brand, and
company doesn’t interesting in personal band development. We are growing specialist, but not
brands. ”
Integration solutions
Company doesn’t know anything about possibility to integrate theirs social networks
profile with internal data base system, and about optimization. “Our IT specialist works on
optimization process, but we just tuning the CRM’ work and educate managers to work with it
instrument. I don’t believe in any integration solution and couldn’t imagine how it will work. I
will reduce my expenses twice if the automatic system will answer on each order” said director.
Company has a quality manager, responsible for controlling the quality of work and
service. Sometimes clients complain on long answering time sometimes we forgot to inform
about changes in schedule. “Integration will help make a transparent system, easy to scale” said
studio director.
Process management
“…to be honest, it is chaos. We growth too fast and have different processes from
production to international workshops. We have a strong partnership networks, and
simultaneously involved in hundred processes. We put efforts to optimize it, to control
deadliness and spheres of responsibilities, but it is still difficult for us. We expect to improve
internal management system during this year and ready to invest time and money on this” said
owner.
45
Company uses CRM software to allocate task and control realization. “We start each
process in CRM, but then all moved to dialogues into social networks dialogues, because
everybody used to them.” Company has instructions and regulations norms for repeat processes.
Experience adoption
“We are shaping the industry and leaders in the market, because of the first starting
produce own brand, makes strong partnership with international brands. It is interesting to study
from different industries, for example from private health-care centers” said director of studio.
Company prefers to take experience from other industries and implement in to beauty
companies. Also, they mentioned about franchising experience, because potentially will
implement it.
4.2.2
Actualized company’s service-oriented model analysis
Case 1 has customer focus, but they oriented more for market requirements and trend
then to customer satisfaction. They provide modern product in-time, shaping industry but not
care too much about customer preferences.
Figure 4.2 Service oriented model of Case 1
46
They don’t have system of customer feedbacks analyzing and customer complains weakly uses
for improvement business processes. It should be taken into consideration, that company is
flexible for rapid market changes and could satisfy current customer needs. Leadership as a
system of employees’ involvement is not implemented; nevertheless some different steps in this
direction have been successfully implemented: trainings, development programs and etc. The
high level of employees’ turnover proved low level of employees’ involvement. Process
approach is strength of company, because almost all activities are observed as process with
efficiency measurement and resource evaluation. Company partially implemented the system
approach, because of form one hand they observed all processes as one system, but from another
hand due to segmental information flows it brings troubles to do it successfully. Company on
regular basis implements new technologies into work and tries to improve their service and
overall performance. Factual approach to decision making is strength and competitive
advantages of the company. All decision is taken based on statistical analysis and customer
preferences are taken into consideration.
To sum up, the case 1 actively use social networks for sales and brand promotion. They
defined the YouTube as the main instrument for their brand promotion, and Instagram as main
sales tool. Company use CRM system, and has approach for categorize client database. This
allows them to get customer requirement from the market and use it for planning process.
Currently, company has separate business process management system and CRM system, which
brings to them work duplication, and difficulties with scaling. This highly correlated with Kile’s
(Klie, 2015) result, observed in first chapter. It was mentioned in the paper, that integrating the
different information flows into one platform allows maximizing efficiency, but if company has
different platform for process management and CRM it tend to difficulties with future
integration, while company growth. Nevertheless, all this separately approaches helps to
sustainable development. Some leadership troubles indirectly relevant on customer satisfaction
level. According to information, provided by company, they measure and try to increase
customer satisfaction level. From other hand, according to open source information there is many
complains on service, especially by unfriendly atmosphere and long answering in social
networks. Concerning company approach to transfer experience from different industries,
integration different methodologies, with expectation to gain better benefits is correlated with
Hung article. (Hung 2006)
47
4.3 CASE2: Ekaterinburg School of Style analysis
4.3.1
Case description via quality dimensions
Company was opened in 2012 years in Ekaterinburg, Russian Federation. Interview was
conducted with the owner and company director.
General company information.
It was opened in 2012 as new format of brow-bars and education center. Studio started as
private cabinet of well-known makeup artist, and further grows into separate educational and
beauty center. Studio provides qualification improvement courses for professional makeup
artists, educational programs for beginners, individual private beauty workshops, also all specter
hair saloon services, and finally cosmetic and styling products for sale. Company is small sized,
32 employees are working there. The owner and director, 2 SMM mangers, 2 administrators, 1
operational director of studio, and the rest team of teachers and makeup artists. According to
open source information it is in top 10 best saloons in the Ekaterinburg city.
Social network usage.
Company doesn’t have a web-site. “…Our clients mostly used Instagram or Vkontakte,
we don’t need a web-site. We tried to create it two years ago, have invested money in it, but it
was a mistake. We don’t have time on make it interesting on daily basis. Our clients want lively
everyday pictures – it is the main resource for sale. We decide to be present were our clients
spent their time. Everybody use social networks. The bright brand in social networks is
important in our industry” said director.
Company has active social profiles, with 65 thousands followers in Instagram for
personal page of director, and 9 thousands followers for salon official page. Vkontakte official
public is slightly less active, there are 6 thousand followers.
SMM manager is responsible of official account and official public in VK.
Administrators used official pages, with same naming.
Company doesn’t have strict market plan, according to which they should post information.
Manager have operational and sales plan, and according to them decide the amount of thematic
and brand posts. Company uses excel spreadsheets where collected data from social networks
and analyzed it. They evaluate Instagram as main instrument for leads generation.
48
Customer relationship management and loyalty system.
Company doesn’t use any CRM software solution. Nevertheless, they realize clientoriented strategy and going to implement loyalty cards.
Concerning data collection, company complains on overload of unsynchronized
information. They use ATS (automatic telephone station), but it is not connecting with any CRM
solutions, this is why it is almost useless. In addition to this, all connection with clients leads in
social networks.
Firstly, company collected all data in dialogues, and partially duplicated it in paperbased documents. Further they faced a lots trouble with duplicates, difficulties to update and etc.,
this is why have been started to use excel spreadsheets as main tool for clients data-base. But
still, this process is mange by administrators and required twice more time for one client. Also
they faced troubles with changing the structure of data base, because studio is growing and new
problems how analyze the group of clients are raised.
Sales procedure
Company doesn’t have separate sales department, or sales manager. The role of sales
managers plays administrators. Studio director mentioned that it is a weak sphere of business
process organization. Firstly, it is combination of two different roles, secondly administrators
don’t have special skills for sales and company rewarding system doesn’t motivate them to sale
more. It was mentioned by company, that it becomes necessary to attract sales manager to solve
current problems with sales. Company has sales plan, but they didn’t implement a sales funnel.
Director said that it is unclear how to measure the efficiency of stuff, and efficiency of sales,
because they try implementing KPIs, but it doesn’t work.
Leadership, employees training system
“…we have a strong team of makeup artist, who is an opinion leaders in the industry, and
all of us invest a lot for personal development. We continuously study and adopt experience
from gurus”. “Our main pain is how to involve ordinary managers into work. Employees come
to this work because they interesting in industry, and expect easy and “beauty work”, but when
routine is starting company faced troubles with employees turnover.”
Studio doesn’t have special bonus and training system, for administrative stuff. Cosmetic brands
company as Tom Ford or Becca provide some sale educational trainings for administrative stuff
49
also, but it mostly concentrates on product sales, not on within company business process
performance. It has educational program for operational stuff, and clear bonus system.
Integration solutions
Company doesn’t know anything about possibility to integrate theirs social networks
profile with internal data base system, and about optimization. “…It will be great to integrate
networks, because it will reduce duplication work for administrative managers and it will be
much more transparent in terms of control. Personally I control managers, control how they work
with clients, but it is impossible to cover all dialogues. Sometimes clients complain on long
answering time sometimes we forgot to inform about changes in schedule. Such kind of
integrated system will solve many problems with our client service and positively influence on
brand recognition” said director of studio.
Process management
“At first time our process looks very simple, but it is not truth anymore. Market became
very competitive and it pushed all sector to adjust for new trends. We participate in conferences,
organize events, provide workshops in different cities and all of these are our process, which
connected work of hundreds people every day” said director.
Company is using flowchart method to control and analyze the process for organizing
external events, but has very weak approach to internal process management. There is no clear
instruction and sphere of responsibilities, and “everybody do everything”.
Experience adoption
“We are ready to change” said director of studio. Company oriented on Moscow
colleagues, where teamwork’s are preferable to push into the leading position such kind of
business. Company mentioned as the main problems are lack of professional knowledge and
expenses.
4.3.2
Actualized company’s service-oriented model analysis
Case 2 has customer oriented focus. They use customer satisfaction rate as KPI to
performance measure efficiency. But due to unsynchronized information flows company is
inflexible to rapid market adaptation. Leadership is a weakness of company because there is low
50
involvement of employees into company processes to reach the objectives. In addition to this,
director mentioned that they don’t put attention to skills training for operational managers.
Company faced problems with process oriented approach, and additional to this they couldn’t
manage all activities as one system. There are several reasons for this, firstly business process
are not regulated by any instructions, secondly chaotic approach to knowledge collection within
company. Last, but not least is factual approach to decision making, which is impossible to run
without systematic data.
Figure 4.3 Service oriented model for Case 2
To sum up, it was defined that company doesn’t have clear process management
approach, because they couldn’t identify where each process start and end, and who is
responsible for running each process. Company’s director complains on inefficiency of current
management system, because it doesn’t allow to measure efficiency and collect data. They
emphasize on professional development of operational stuff, more than final customer service
level. It results in unmeasured client service’s level. It highly correlated with Jones article (Jones
et al., 2007) observed in literature review. According to his paper result, CRM system and clear
client data-base became a base for sustainable company development, and provide all necessary
information for planning approach. Described case, doesn’t use clients data base, and they faced
problems with planning and efficiency measurement, which in turn in unsustainability. The
described in literature review trend of sales within social networks by Kumar’s article “From
51
Social to Sale” has been reflected in the case 2. Company has emphasized the importance of
social networks, and evaluated it as main sales instrument. Company faced troubles with
planning, because couldn’t collect customer requirements rapidly, and consequently with
operation, because couldn’t work with clients services and finally, the performance evaluation is
a weakness of process.
4.4 CASE 3: Novosibirsk School of Style analysis
4.4.1
Case description via quality dimensions
School was opened in 2012 years in Novosibirsk city. Interview was conducted with
owner, with School director, and operational director of salon within School.
General company information
School was opened in 2012 as first education center in Siberia were wedding stylist
education programs was offered. School based on personal experience and unique educational
programs of well-known bridal stylist.
Studio provides qualification improvement courses for professional makeup artists and
hair-stylist, educational programs for beginners, organize huge beauty events, provide beauty
workshop in eastern part of Russia. Also they have all specter hair saloon services, and have
partnership with such brands as Davines and TIGI.
Company is small sized, 75 employees are working there. There are owner and director,
small administrative department with School director, hair studio director, SMM manger and
accountant, 3 administrators and remaining 69 persons of hair, makeup, colorist, and bridal
stylists’ team. According to open source information school is unique case for Russia, due to
unique educational format, which provides there.
Social networks usage
Company has a web-site, but it mostly promoted qualification improvement courses for
professional makeup artists and hair-stylist. According to the interview, they will set new website soon for online education. “We actively used Vkontakte social network, and to be honest,
during first two years it was main instrument for promotion. Now, we are shifting focus on
Instagram and Facebook, despite of active VK profile. We believe that only excellent group
52
project could shape the industry in current market situation. Therefore, we use wide partnership’s
network to promote our brand and new tendencies in the market” said director of School.
Company doesn’t have clear vision how to evaluate the efficiency of social network, and
predict the workload within it.
Company has active social profiles, with more than 30 thousands followers in Instagram
(the sum value for all profiles) and 25 thousands followers in Vkontakte.
Company has market and content plan, conformed by School’s director. Content plan is
created without correlation with sales plan or any financial plans. “We try to follow our market
plan, but usually it doesn’t work. It is a creativity process, we follow by current situations” said
School director.
SMM manager is responsible of official account and official public in VK.
Administrators used official pages, with same naming to answer on all questions and comments.
“…we have problem with sales. Our Instagram page is provokes people to ask questions
and put some comments on our posts. Administrators do quick responses, but after we don’t
collect these potential clients for future work. It means that we are lost them. I am confident, that
my success as private bridal stylist was in virtue to good personal connection with clients. I
always get feedback, recommend them products, invite to me again to sup up I always try to
become a friend with clients. We do the same first time in the School, but now it became
impossible due to the amount of question. We are losing this warm and friendly atmosphere;
consequently we are losing client and money. We need to do something to improve it” said the
owner.
Company use client’s database via Excel spreadsheets, hair salon clients are collected
paper-based. The main problems with social networks are overload of information, workduplication, and difficulties of integration with internal CRM system was mentioned by
companies.
Customer relationship management and customer loyalty system
Company has customer relationship management’s system, but it is doesn’t have clear
proposition for ordinary users. “…It is sometimes surprised us, that our regular clients od salon
doesn’t know about our education service or about online-stylist application. We worry that
information about school is not clear to final users” said director. “We put efforts to make our
service personalized, it is our main strengths” said director.
53
Nevertheless, company doesn’t have loyalty system, special benefits for regular clients or
instruments for customer engagement.
Company doesn’t use software solutions and doesn’t analyze customer information for
future offers. They have complains on long-answering and faced some problems with timeplanning. “It became a real problem to create efficient schedule. We try to respect our clients’
preferences, and make schedule comfortable for them. Unfortunately, it resulted in time gaps of
our masters. The main difficulties are that we keep information in different sources. For
example, studio masters have classes and have clients within studio. Administrators should
check doubles is it possible to put client into fixed time slot. There is quite often situation when
client want to change day/time. Here chaos is starting. When we was a small studio just with two
masters it was ok, but now we have more than 50 and it is challenging task for us. ” said hair
studio director.
Company defined themselves “inflexible” in terms of future planning and efficiency
measurement. They use ATS (automatic telephone station), but it doesn’t connect with CRM.
Sales
Company doesn’t have separate sales department. Company marked sales as the main
weak aspect of total business problem. “We were ready to hire sales manager. The main
problem, that our process requires significant changes, we couldn’t provide necessary
instruments for sales department, as we didn’t organize database, clear description of products
and etc. We too much “creative”, this we have to eliminate soon by implementing more strict
control” said director.
School director is responsible for sales plan, with which administrators and salon director
is working. “If during the month we understand that we are far from our sales expectation, we
bring changes into our educational schedule, put additional workshops or lectures…” said owner.
Company has different KPI’s and evaluation system for each subdivision.
Leadership and employees trainings
Company have development program for each employee, but the program is biased. It
means that all efforts they put into industry involvement. “…the quality of our service is the
main important criteria for our development, and personally I believe that each person in my
team should translate the brand positioning, through their personal style, knowledges and
hobbies. We organize special lectures about fashion history and on regular basis attend
54
qualification improvement workshops.” said owner of the company. Occasionally they provide
skills trainings for administrative employees. Company uses down-up approach, and many of
realized projects or initiatives was get from employee’s suggestions.
Integration solutions
Company doesn’t know anything about possibility to integrate theirs social networks
profile with internal data base system. We start use Bitrix CRM system, but we couldn’t transfer
our business process into this system. Moreover, we three times duplicate information: first we
get information into social network, than secondly transfer from social network into excel on
daily basis, than thirdly, from excel into CRM on monthly basis. It was too complicated; this is
why we stop to use it. If it is possible to integrate, it will be great” said director of the School.
Process management
Internal process is regulated by instructions. “…each position and action are described in
instructions. Also we use spreadsheets for administrative employees, where necessary
information about time and workload” Company faced troubles with external process. “When we
participated in partners programs we spent many human resources, time and etc. without any
evaluation. We don’t have any algorithms how to evaluate efficiency of such kind projects.
Taking into consideration that this projects is significant part of our business we want to improve
this sphere. But again, without clear customer data-base it is almost impossible” said director.
Experience adoption
“Concerning product development we always study from Europe colleagues. We built
our school and our service as it does the best schools in Italy. We need to improve financial
situation of company, and again we are ready to implement Italian strategies. They use teamworks approach, separate teams supported each event or course, marketing and advertising they
work together”. Company oriented on foreign experience adoption.
Case 3 has a strong customer focus, because they evaluate their performance mostly by
customer satisfaction rate. Company provides high level services and educational products, but
inflexible in terms of rapid adoption to customer needs and markets requirements.
In terms of leadership company try to implement within company leadership strategy and
emphasized importance of tem-work in each level. Currently they successfully implemented it
only for masters and stylists which resulted in from on hand excellent service, from another
resulted in down-up projects. Employees feel free to launch and realized theirs idea into within
55
company’s project. The development program for administrative and operational employees is a
weakness of company. Generally company provide productive atmosphere and help people to be
involved into processes and to reach objectives. Additional arguments to prove this statement is
low level of stuff turnover.
Case 3 company believes that employees are the main company assets. But from another
side company has difficulties with business process and without significant changes in daily
work couldn’t provide necessary instruments for sale’s manager work. Organization has
significant problems with process approach. External companies activities are not manages as
process, and don’t have recourse related approach. Finally, it resulted in unmeasured workload
without clear spheres of responsibilities. Again company complains on unsystematic clients data
became one of the main peculiarities. System approach to management is the weakness of
company. It order to achieve companies objectives, all interdependent process should be identify,
understand and manage as one system. Company doesn’t have clear vision at all processes,
doesn’t have thorough KPI system to measure performance and doesn’t use any ERP or CRM
software solutions.
4.4.2
Actualized company’s service-oriented model analysis
Company has problem with one more criteria of successful quality management
approach: factual approach to decision making. Without gathering and analyzing data it is
impossible to make evaluated decisions. It is resulted in highly risk approach and unsustainable
financial performance.
Service-oriented model illustrates that company has problem with planning, operation
and performance evaluation. The reasons of these are mostly in disintegrated information flows.
Having active social media profiles company have to adopt business process, because marketing,
sales and customer engagement are realized through social medias’ profiles. Without clear
process of customer engagement it is impossible to track customer expectations and measure
customer satisfaction of service. Again, quality improvement is highly correlated with
integrations of CRM and social network. Taken into consideration that company doesn’t install
software solution to keep and analyze customer information and their rapid growth it is a risk to
lose a competitive place in the market. System approach to management is the weakness of
company. It order to achieve companies objectives, all interdependent process should be identify,
understand and manage as one system.
56
Figure 4.4 Service-oriented model of Case 3
To sum up, case 3 actively use social network for brand promotion and sales, and work
into social networks is one of the main company’s activities. Company evaluates works into
social networks as one of the main part of their business process. Company complains on
overload of information flows from clients and partners. According to interview results,
company get benefits from employees initiatives. It is highly correlated with Dulce Gonçalves’s
article, which empirically proved improvement of project’s quality brings changes not only on
product’s level, but also at the leadership and project management levels.
4.5 Cross case analysis and comparisons via quality dimensions
It was observed 3 regional companies, which are presented 6 case studies because of one
of the company (Case 1) has 4 subdivisions, which managed as separate business units, with
separate CRM and ERP system. Consequently, according to Yin (2003) multiple case studies can
be used to either, “(a) predicts similar results (a literal replication) or (b) predicts contrasting
results but for predictable reasons (a theoretical replication)”. In this paper both approaches will
be used, because this technology has rare adoption and at the same time being quite innovative.
57
From one perspective of view we expected the same approaches of using social network
as main sales instrument. This expectation is based on results of Wioletta Wereda article
(Wereda 2013), that stated the importance of networks for company - clients’ communication.
From another perspective of view we expected low level of integration, and low level of
education within companies about these opportunities. Here below in the table 4.1 the
comparison of case studies will be presented.
Dimension of quality
Case 1
Customer focus
Low customer focus Customer
in
Case 2
terms
of
service
final part
Case 3
of
and which
satisfaction.
focus
is Customer focus is part
strategy, of strategy. Orientation
realized
by of customer
high service quality.
satisfaction. Problems
Flexible
to
quick KPI system is one of with measurement of
adoption
to current the approaches used satisfaction
market requirements
by companies.
Inflexible to current
“Be in time” with Inflexible to current customer requirements
new
product,
new customer
services and etc.
Leadership
Partial
requirements
action
to Focus on professional Focus on professional
involve employees
development
of development
Skills trainings, focus masters.
on
sales
of
masters.
and Doesn’t have special Personal
brand
operational managers/ bonus and training development
Low
level
of system,
employees‘
for company’s brand.
administrative stuff.
engagement,
High
level
people
Clear system and track
of development for each
of
employee.
employees turnover
Involvement
Down -Up approach
level
of Wide and efficient of High involvement of High
partnerships
and administrative
engagement
company’s
and
employees,
employees
of
of
into
representatives. Low inefficient
company process.
level of engagement partnership’s network
Productive partnerships
of operational stuff
network
58
Table 4.1 Case studies comparison (continues)
Dimension of quality
Case 1
Process approach
CRM
software,
system.
Case 2
system Excel
Case 3
spreadsheets Internal processes are
ERP for internal process regulated
by
Process regulation. Attempts instructions.
External
approach
analytically evaluates activities are chaotic,
implemented.
process
Problems
with but was stopped by approach
overload
information
clients
efficiency, without any systematic
of chaotic
or
information measurement to analyze
from flows.
efficiency/effectiveness.
and
inefficiency of CRM
solution
System approach to System approach is Unsystematic
realized,
main approach, due
management
peculiarities due to disintegration
relationships
separate systems of activities
Unsystematic approach,
to due to disintegration of
of activities
into
into manageable process
ERP and CRM, plus manageable process
overload
of
duplication work due
to disintegration of
social networks into
manageable process
system Insufficient
Insufficient information
Factual approach to Planning
based on collected information to factual to factual approach
decision making
data and companies approach
decisions decisions making. Data
processes allowed to making. Data from from
use customer profiles clients weakly used used
to make customized to
offers.
decisions
clients
to
weakly
decisions.
and Company has to change
offers customization.
process
approach
to
reduce
loss
of
information.
Table 4.1 Case studies comparison
59
4.6 Actualized service-oriented model under social network trend
The similarity of observed cases that there are troubles in all levels of management which
companies faced due to unsystematic approach to the data collection, and managing
communication through social networks as separated process. Here below the actualization of
service-oriented model will be observed due to the interviews results and open source
information.
Figure 4.5 Actualization of service oriented model
Service oriented model is common framework to analyze processes in service-oriented
companies, absorbed different dimensions, influencing on quality.
Our research goal is reveal the operational approaches in social networks and how to
use social networks in order to improve business process efficiency. Therefore, it is important to
reveal on what aspects integration solution could influence in company business process via
service oriented framework.
60
Step 1. Plan. When integration solution is implemented, company has essentially
information to make prediction of future trends. Planning is based on 3 components customer
requirements, organization context and needs of interested parties. Integration solutions allow
collecting current customer expectation, to reduce communication time between company-client,
so company could adapt to market expectations.
Step 2. Do. Integration solutions brings additional value to the company, firstly by
operational managers worktime reducing per one client, secondly it becomes an analytical basis
to evaluate operating strategies. Integration solution will automatically save information of
“lead” form social profile into internal database. All cases mentioned that currently they do it
manually and underlined that due to this company faced operational problems. Also, when
integration is tuned, it is possible to implement adequate KPI system to measure social networks
efficiency. Cases showed that even if company has KPI system or any internal approach to
measure it brings unrealistic results, due to information losses, unavailability of time
measurement. To sum up, in operational context integration of social networks allowed to
transfer all existing experience for example from call-center into messengers or social networks,
with developed KPIs, sales algorithms, sales funnel, testing the efficiency of strategies and etc.
Step 3. Check. Partially it was mentioned at previous stage, that integration allows
testing hypothesis of sales mechanism and communicational approaches. Before integration is
tuned, company mostly uses «likes» and «followers» as main index, whether integration
provides more options to get feedbacks, to use statistical methods for analysis. According to the
cases description each companies faced difficulties, to get daily feedback from customer. In
rapid changing environment it is vitally important to continuously improve service.
Step 4. Act. According to case information the gap between initiatives and their
implementation were defined. Companies evaluate the unsynchronized information flows as
main problems aspect on the way of systematic approach. In Daniel Beimborn article was
provided the empirical study of 157 German companies (from service industry). The main result
is that service-oriented architecture has strong positive impact on business process quality. The
importance of interaction of all process in one IT infrastructure and ability to continually track
their performance is the significant competitive advantages.
To sum up, the cases results are highly correlated with observed literature within first
chapter, and almost each aspect of real companies’ process has theoretical junctions in
management research. Company underlined the problems with systematization of the
information flows, which correlated with Kike´s work. (Klie, 2015). Also, the importance of
61
social networks promotion was emphasized by each company, and Instagram was evaluated as
main efficient sales tool. For example, the sales growth results in case 1, company correlated
with transferring efforts into Instagram. This correlated with Baird and G. Parasnis (2011)
empirical research, which illustrates strong statistically significant correlation between
promotion in social networks and financial performance of company. Cases illustrated
importance of customer patterns analysis and complains in technological problems to continuous
run this. This aspect has reflected the Yongzheng Zhang’s research concerning purchase
behaviors, where statistically significant correlation reveals between some Facebook subset’s
and purchase preferences. The main goal of business process management is in integration
different methodologies and instruments, which will result in increasing efficiency and
effectiveness of business processes. Cases have shown that company already implemented
technological solution are more flexible and manageable. This observation is correlated with
Hung results. (Hung2006). Case 1 has developed system of clients database classification. In
details this approach to classification is correlated to the Rheingold, H. (2007) approach of
analyzing through gathering social, conceptual and ontological information on the three levels of
the semantic network. And finally, the quality management standards proper execution brings
benefits in terms of customer services, finical performance and ability to scale. It reflected the
Sarkis´s article empirical results. (Sarkis 2004)
5. EMPIRICAL RESULTS OF CRM AND SOCIAL MEDIA INTEGRATION
Here the idea of integration will be implemented to described in Case 3 company and the
efficiency of planning system and employees’ performance evaluation in small sized company
will be evaluated before and after implementation.
5.1 Benchmarking execution of process improvement
The last research question: RQ4 “How companies can use existing CRM solutions for
social networks in order to improve business process efficiency?” will be explored by
benchmarking methodology.
62
To run benchmarking it is required to clarify the drivers and objectives. As it was
mentioned above we are gain to evaluate planning system improvement and operational
managers’ efficiency. The best practice of case 1 and the best practices from allied industry will
be used.
Firstly, we analyzed general approach, what should be done before implementation.
Results are presented as companies recommendations, which could be used by small-sized
companies from the same industry. Secondly, the changes implementation algorithms will be
fully described. Again, it will be presented as general recommendations. All recommendations
are coordinates with ISO 9001 2008 and satisfy the main principles of quality management.
Thirdly, the results of integration will be presented.
According to the results of case studies all company emphasized the difficulties with
unsystematic approach, therefore process oriented management need to be discussed. The 3
dimension approach as internal, integration and external is appearing of to the case study
analysis. As the objective of this work focused on CRM integration, the sales department, - as
main users of CRM solutions, processes will be analyzed.
Internal
process
Software
solutions and
integration
External
process
Figure 5.1 Scheme of sales department integration process
1. Internal process of sales department organization
2. Technological solution for CRM and Social Networks
3. External process: data collection process via customer information
External processes
1. Provide a user-friendly platform for customer communication. It could be messenger,
Instagram, Facebook, Vkonakte or another social network, where customer is used to be
2. All sales procedure: from wants formation to sales decision and aftersales services
should be easy for customer, and mostly conduct via social networks.
3. Company should provide clear loyalty system for active users (not always repeat clients):
63
a. To motivate plays role of “promotional agent”: share information, marked friends
under informational posts, comments, likes and other. activities
b. To motivate share their opinion or experience of the service, products, and team
c. To attract opinion leaders and blogger to help shape the industry through
promoting new products and trends
4. To collect on regular basis feedbacks and complains after purchase was done
5. To collect information from customer’s profile and systemize it via software on internal
data base. The information should include:
a. Personal data
b. Interests and hobby: analyzed via profile’s communities
c. The history of communication. What kind of products clients prefer, what kinds
of product was interested by ant etc.
6. To develop transparent system of benefits of using products.
7. To create a system of clients satisfaction
The benefits should be mutual, it means company should create and wildly promote the
bonus system for active followers. The motivation system should include: material rewards,
promotional price on companies services and mutual promotion for bloggers.
According to the ISO 9001 2008 organization should provide customer communication
via informing about product, working with customers enquiries and gathering customer
feedbacks or complains.
Internal process
1. To provide a necessary instruments for sale’s managers: software solution system, calls
and mails scripts, clients data base, whole vital instruction
2. To provide comfortable work- conditions for sale’s mangers
3. To use sales funnel, integrated into social networks context
4. To use measurement approach of efficiency of time and obtained results
5. To take all decisions according to statistical data from previous period
6. To collect the all sales data and customer behavior through continuously monitoring
special public communities
7. To develop system of criteria’s: how to classify clients by
a. Paying capacity
b. Loyalty to the company brand
c. Level of communication
64
d. Customer expectation of service
8. To take leads from first comment or like to sale.
9. To deeply analyze the tree of communication with clients, despite of the result of sale
a. If lead became a client company should analyzed “why”. What messages script is
result into purchase? What algorithms of communication were used?
b. If lead denies buying, organization also should analyze why. What was wrong
during the sales procedure?
10. To provide a transparent system of bonuses for sales manager. Each person should
clearly understand and demonstrably see the dynamic of his/her performance in financial
terms
11. To calculate the cost of leads according to marketing, sales expenses
12. To continuously improve the sales mechanism, to increase efficiency of managers and
decrease the cost of lead.
13. To collect statistical data from successful/unsuccessful contracts.
Technological solutions
1. To use special software which integrated CRM (if it exist in company) with social
networks account
2. To create algorithms of sales for each categories of product, and scripts for each category
of clients
3. To organize client database (even in company doesn’t have CRM system), which should
be synchronized with social network application
It was mentioned in ISO that for Internet sales is almost inefficient to analyze the
process of each order, it is better to analyze how products are promotes, what information does
clients have and etc. New product/new important client should be analyzed by special group
meetings with director of department. Regular or small orders analyzing is run during workprocess by responsible managers. Productive dialogue with clients: from client we get his/her
expectation, preferences, from company we translate our values, inform about products
It is important to analyze:
-
information of there is any problems with our service/products
-
customer orders
-
opinion of repeat customer of service level
65
-
any additional information helping to understand the customer behavior, market trends or
competitors action.
5.2 Procedures of changes implementation
Hereafter changes implementation will be discussed by the steps, which organization
should follow for successful reformation.
Stage 1: To reveal the problematic in current situation and persuasive employee why
changes is important.
At this stage it is vitally important to realize the problems of current situation and
consequent effect which will occur if decision will not take place. The future prospect, company
vision should be described. It is important to explain for each employee within sales department
why changes are required and what benefits employee will get after (better work conditions,
material rewards, ability to professional and personal growth). Drawing the dramatic picture of
situation without any changes is also effective way to perceive employee believe in common
objective. The chief if the department should understand that changes are directly concerns
people, so his goal to involve employees into this process. It is required from two weeks till one
month to conduct interviews with employees, depending on company size. At this stage should
be done:
-
Analysis of current problems (revenue decreasing, level of customer satisfaction,
decreasing of sales, troubles during work process, overloads of documents and etc.)
Measure and evaluate current situation.
-
Demonstrate current situation in numbers to employees, describe the future situation
if changes will not take.
-
Analysis of successful practice of competitors, how do they do their work, what
tools did they use and etc.
-
Formalizing the vision of common goal, and promote this vision within the
department.
Stage 2: Reformation team creation
After sales department is informed about future changes, the chief of the department
should organize the reformation team, who will implement and manage future changes into life.
At this stage important evaluate how many people will join this team and who are they will be.
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The director, chief of the sales department and at least 20% of sales department’s employees
should create a reformation team. It is impossible to manage the whole process by one person
without team support. Implementation of new system is always painful process, which faced a
antiperistalsis. Group should be formed by people, who have leader skills and highly loyal to the
company. If this stage is skipped, than employee will sabotage further actions. At this stage
should be done:
-
The detailed plan for one, three and six month, including all steps, timing, and
objectives by periods.
-
The timeline for whole process, and timeline for members, for example the Gantt
diagram
-
The key figures should be denoted, when and what result should be obtained
Stage 3: Goal settings
This stage is to deeply understand by all reformation team members that goals are
common. The objective of chief is inspire people to work hard and believe that this difficult time
of changes is only one way to get benefits in future. Tram leader should organize a regular
strategic sessions, where individual approach are required. Result:
-
The reformation team should be the ideologists of changes
Stage 4: Promoting the idea of changes
The support from other department is one of the key elements of success. Also, even in
small and medium sized company there is a lack connection between departments, it is not clear
for what people from another departments is responsible for. Director or top management should
in regular basis inform why this changes is necessary, what results company want to get, what
steps in sales department are doing for whole company performance. At this stage mechanism of
communication should be done. To put it another words, communications with employees,
ability to collect feedbacks and productive ideas from stuff should be organized. Through all
channels the information about new system should be translated. The frequency plays a role in
case of understanding and acceptance of changes. Reformation team communication strategy
should inspire to be open-minded, shared opinions and suggestions, and provide the mechanism
how to do it. At this stage should be done:
-
Mechanism of communication between reformation team and stakeholders.
67
-
Involvement of employees among of reformation team within sales department
-
Active promotion of changes strategy benefits through all company channels
-
Chief of the department and reformation team should became an exemplar of new
system.
Stage 5: Integration of changes
This stage is painful for account-manager who used to old-system and used to stability
of high salary, because all changes concerning sales always come with instability. If company
before changes doesn’t have a performance system, which evaluate performance in terms of
KPI’s it is additional risk for conservative employees, because they will afraid of decreasing in
fixed salary. At this stage it is better to dismiss the employees who sabotage the new system.
Company behavior pattern is the main peculiarities on new way of efficiency. If person are not
ready to join formation process is better to rotate this person to another department or dismiss,
because this anticipation force could be crucial for whole work. It will be an example, that
company is serious in their action, and new system implementation is not a new caprice for tomanagement. This stage could be named as employee’s integration. Team should put attention
on coherence within department. At first stage of integration there will be people who are more
likely relate to changes, team leader should keep the contact with them, because during the
integration process they will be providers of real information and truly feedbacks. At this stage
should be done:
-
Involvement of sales department into changes process
-
Provided a mechanism of opinion-sharing’s, without pressure
-
Dismiss employees who are not ready to change
Stage 6: Short-term goal achievement
Employees will lose the motivation and believes in reform, if they don’t see the short
term results. The chief of department is fully responsible for obtaining short term results. The
chief should play a leader role, and promote first results within department and within company
in general. Especially if sales department change the structure of employees, and newcomers are
start to work, it is important guide them by new way. It is important to share these results with
subordinates, because reformation team is highly involved and results are essential for them. To
fix effectiveness of reform will help at further stages. To get results in sales, team should create
detailed algorithms of sales, including first communication till signing of contracts, system of
communication, measurement of efficiency (it was discussed above). It is emphasized, that
68
success is not only efficient scripts or fancy catalogues, but mostly in systematic approach how
company communicate with clients, how director set goals and help to achieve it, how the
intermediate analyze is analyzed. At this stage should be done:
-
Mechanism of sales are approbated
-
First results obtained and promoted
Stage 7: Analysis, adjustment
Long term planning is a good strategy if market stable, and company has a represented
data from previous periods. If not, the main objective is rapidly collecting the feedbacks from the
customer, competitors, and managers within the company. Ability to understand how market is
changing, what customer is thinking about launched new product or new service is key factor to
be successful. The next step is deeply analyzed this information to correct current strategy. To
learn from mistakes and be flexible is important to obtain the goal. At this stage should be done:
-
Planning system according to statistic data
-
Flexible system of gathering feedbacks
-
Flexible system of management due to benefits scheme and KPI performance
Stage 8: Tightening up the results and optimization
If there is a positive trend in increasing volume of sales, the changes should be continued.
The scaled process of reformation is crucial for whole process. There is no unique solution for all
cases, but it is quite essential that structural changes are required time. Timeline is defined by the
scale of department, by grands of problem and etc.
This stage is mostly focused on improving the process in detailed: debugging the
process of customer communication, optimization of client’s database, implementation of crosssales, developing special loyalty program for VIP clients and etc. Employees trust will increase
simultaneously with the new achievements. At this stage company could face the second
dismissal wave.
Stage 9: Results analysis and further improvement
This stage is a final step in first round of improvement. All results are collected and
deeply analyzed what were done successfully, what were not. All mechanism of communication
is analyzed as process. Metrics of performance should be re-analyzed and correct if need. At this
stage should be done:
69
-
Transparent system of motivation and direction
-
Arranged process approach for sales
-
Working instruments to measure performance of the department.
5.3 Novosibirsk School of Style CRM integration results
The process before implementation the integration approach is presented in figure 5.2.
Company had to stages of information collection. First they transferred the clients in excel
spreadsheets. Only clients were transferred, it means that almost 90-95% leads information have
been losing at this stage. There is no option to control and influence on motivation of negative
response. Transferring clients into Excel spreadsheets also limited the access to client, and
required additional time to continue communication. Plus, there is no option to measure
efficiency of sales strategy, because it is not transparent what algorithms/scripts were used with
clients. It is a barrier to quality improvement.
Figure 5.2 Scheme of CRM connections before SN integration
After improvement changes the second stage was eliminated, and according to exist
practice CRM system automatically integrated with Bitrix CRM system. The integration process
70
could be run with different CRM software solutions. The market of integration software quite
developed and it is possible to choose best solution due to business process requirements. In this
case company already had Bitrix CRM solutions, and this is way BlueSales software was used.
The necessity of direct integration was shown in case 1, due to inefficiency of CRM without
direct connection with social network profiles. The integration scheme is presented in Figure 5.2.
The internal database was eliminated. We have imbedded the integration program among then,
which directly connect all leads from social network, analyze them, compared with existing
database and if necessary add new leads into CRM or add information for clients track. This
approach allows to reduce time processing per unit more than 20-25%. Brings sustainable
approach to measure sales strategy, because each algorithms automatically tested by KPI’s. The
main important aspect, that integration reduces information loses and company will have
sufficient information to implement factual decision making approach. Consequently the
planning system will be more realistic, has measurement approach, and clients/markets
expectation could rapidly tracked, analyzed and be taken into consideration for decision making.
Figure 5.2 Scheme of CRM connections before SN integration
The process of approbation has taken one year, because it concerned changes in all
management level. The coefficient was fixed before the implementation of changes, during the
implementation process and two month after the end of integration.
71
First driver was time efficiency. During first week before any changes have begun,
operational managers asked to put information about how many leads were manipulated, and
time requiring on this process. All communicational process was divided by three main
categories: first communication, qualifying communication and post-service communication.
Then mean value for each categories were taken. The same movements have been done during
and after integration process. The time before any changes begun have taken as 100% , than in
each step the changes in time have been measured, afterwards the deviation from the beginning
value were calculated. The results are presented in table 5.1
According to the table, we could conclude that integration system brings to the company
tine reduction almost by 20%. At first stage of changes negative results could be explain firstly
by incomplete scripts for automatic answers, secondly by several mistakes of connection
between products items datasets within CRM and BluSales program and thirdly by necessity to
educate stuff how to use application. By end of testing period results are stabilized and even
small reduction is observed. After the scripts was fully complicated, small mistakes within
infrastructures eliminated and operational managers used to the new process, company obtained
positive results.
Category of
The first week after
The fifth week after CRM
Two moth after
communication
CRM and network
and network were
integration was
were integrated
integrated (testing period)
done
(testing period)
First
communication
+5 %
-11%
-15%
+10%
-7%
-10%
-3 %
-15%
-20%
with client/ studying
Qualifying
communication
Post-service
communication
Table 5.1 Time-efficiency results
The next drivers are planning efficiency and employee performance measurement was
calculated as weighted index number. This parameter includes: the transparency of process for
director, the transparency of process for operational managers. These drivers were evaluated
during the integration period from 1 to 10, with weights of importance 70%, 30%
correspondently for director and manager. After two month after integration process was
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finished, the value of transparency increase by 25%. This result means that as for director as for
manager it became easy to take operational decisions according to collected data.
Ability to evaluate employees’ performance is represented by two parameters: conversion
rate per employee (amount of leads converted to clients divided by total operated leads) and
customer evaluation of employee (gathering through feedbacks). Before the CRM have been
integrated with social networks there is no option to measure employee performance, because
firstly there is no responsible manager for each employee (everybody was responsible for
everything) and secondly the feedbacks gathering was not on regular basis.
To sum up, the integrated social networks could bring to the company measurable
benefits on different management levels. Firstly, the planning process becomes easy to run.
Secondly, company has ability to conduct measurable KPI system for marketing and sales
strategy. Thirdly, the role of each employee of sales department could be tracked and analyzed.
The obtained results illustrate the reduction of time per each client, and transparency of business
process.
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6. DISCUSSION AND CONCLUSION
6.1 Discussion of the findings
The aim of the present master’s thesis was to describe the business processes of small
companies from beauty education and beauty service markets, through the actualizing serviceoriented framework, taking into consideration the strong trend of social networks e-commerce
perspectives, describe the main reasons of gap between existing software solutions and its real
business implementation.
First research question relates to the revealing the main obstacles which company faced
actively working with social networks. To answer on it, the questionnaire methodology was
implemented. The online questionnaire was sent to 120 companies, but only 87 responses were
collected (42% of response). Firstly, the results of survey are highly correlated with observed
literature, because 55% of respondents evaluate social networks as main tool for leads
generation. Secondly, the results illustrates that more than half of respondents faced difficulties
with information overloads (58%) and serious difficulties to develop criterial basis to classify
and analyze the information from social networks (72%). Taking into consideration that 30% of
respondents relate to data collection as “highly important” and 45% as “important” concludes
that the reason of gap in concerned technological aspects or real implementation obstacles of this
approach. The main important result of survey was defined that companies are faced troubles
with choosing CRM software solutions and transferring data from social network into internal
database, because 39% and 58% correspondingly respondents mentioned it as “highly important”
and “important”.
Second and third research question was aim to find out how company currently operate
and use trend of e-commerce within their business process, how they integrate the social
networks into manageable process. Also, aim to find the reasons of gap between companies’ real
business process and existing technological solutions. To answer on this questions case study
methodology was used. The regional companies from observing industry were selected. The case
studies conducted under quality management approach, this is why the interview reflecting the
quality aspects as: customer focus, leadership, involvement of people, process approach, system
approach to management, continual improvement, factual approach to decision making, mutually
beneficial supplier relationships. As the aim of present work is actualizing the business process
under the social networks influence, the service-oriented model was selected as main framework,
74
because firstly it represent the correlation of all aspects of organization and could be used as
separate on all organizational level, secondly because cases are from service-oriented
organizations and we aim to reveal the quality management aspects for them. The case results
illustrate that firstly all chosen company have almost the same business process and almost the
same obstacles with CRM system, clients database, unsynchronized information flows from
social networks. It could be conclude that industry is homogenous and results could be
transferred and implemented to the same small sized companies. Secondly, they have different
level of technological automatization and different approaches, which allowed silhouetting the
track of companies’ development and correlation between approaches and results. It is necessary
to emphasizes that cases studies had descriptive nature and the conclusions we obtained only
describes reality of regional companies. Results illustrates that business process of companies
changed under social networks influence and became a significant part for all observed cases.
Company mentioned that sales mostly provides within social network, and they evaluate
networks more sales instrument them marketing or brand tool. The incorporation of networks
into companies brings more troubles with control and process evaluation. Firstly, without special
software solution it is almost impossible to collect, classify and analyze the information from
customer and leads within networks. In context of highly competitive and quickly developed
market it became a serious risk for a company. Secondly, to improve and manage service level
became a challenging task, again due to all customer communication is run within social
networks. Thirdly, company couldn’t evaluate the efficiency of process, employees’ performance
or any adequate KPI’s without transferring and fixing the customer communication. If we are
talking about the reasons of existing gap between the companies’ requirements and existing
technological solutions the reasons are various. Due to the cases results the common problem for
all observed companies was low level of acquisitions with possibility to directly connect the
CRM with network.
The tendencies of CRM implementation are overlooked within the
observation, companies start from some internal Excel spreadsheets than implement CRM with
software solutions. Also, the technological aspects remain the main. Companies mentioned that
packages solutions couldn’t bring fast result and companies are afraid to invest to customizing of
CRM solutions. The last, but not least revealed reason is that implementation of any software
automatization required changes in any management’s levels. This process is time and money
consuming, requires changes in all process and employees adaptation. Without clear value
proposition from software companies it will be impossible to perceive the beauty company to
install automatization system.
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Fourth research question was about approbation of existing methodologies and best
practices of integration social networks in order to improve business process efficiency for one
case-company. To answer on this research question the benchmarking methodologies was used.
In order to provide best recommendation the cases results and best practice of changes
implementation from aligned industry were used. As main drivers of benchmarking the
employees’ performance efficiency, planning process transparence and operational managers’
time per one client reduction were chosen. The detailed list of recommendation, from internal,
external, and integration of them perspectives of view is provided. Due to the homogeneity of
business processes within this industry this recommendations could be useful for all companies
in order to improve process approach efficiency or improve measurement basis for employees’
performance. This instruction provides information on question “what” company should take
into account in order to improve their process under revealing trend. Secondly, the detailed
instructions of changes implementation were presented. The instruction consists of 9 steps, on
sales department example. Nevertheless it would be generalized to another departments or
management objects. This approach helps on answer “how” to run changes within companies,
what stakeholders should be involved into this process, and reveal the main problems which
usually arise. The last, and main important result is the numerical evaluation of approbation this
instruction on a company. The results illustrates that the integrated social networks could bring
to the company measurable benefits on different management levels. Firstly, the planning
process becomes easy to run. Secondly, company has ability to conduct measurable KPI system
for marketing and sales strategy. Thirdly, the role of each employee of sales department could be
tracked and analyzed. The obtained results illustrate the reduction of time per each client could
be reduced almost by 20%, and transparency of business process could be increased by 25%.
6.2 Theoretical implications
The study contributes to the theory for new paradigm of customer relationship
management systems. Reveal the necessity of new approaches to sales department evaluation,
due to strong dependency on customer relationship management. Also study provides theoretical
recommendation for CRM launching process for small and medium sized company.
Concerning quality management approach present master thesis provide small
contribution through revealing the actualized variant of service oriented model and the
investigation of CRM system ad a part of quality approach. Due to the case study results, it could
76
be conclude that business process of the typical representatives of the industry is homogeneous;
consequently the results of modern service-oriented framework could be generalized.
The work has been revealed the main obstacles companies faced under observed trend.
It could be observed as a theoretical basis for IT researcher for further investigation of software
products.
Additionally, it was analyzed e-commerce sphere: current investigation of social
network phenomenon, semantic and ontological layout. In this perspective of view work
contributes to research of social networks for sustainable development of e-commerce
organization, through providing information about how to collect and organize the information
of customer profile to predict and to offer better product solution.
The main theoretical contribution is in revealing necessity for new paradigm of
customer relationship management systems and it correlation with actualized service oriented
model.
6.3 Managerial implications
The study not only contributes to the theory with the results, but also provides valuable
managerial implications.
The managerial implications of the following study are aimed at the following groups of
managers: 1) management of beauty industry companies, who are going to use CRM system
software, 2) the sales department managers, who are going to implement measurable system of
performance evaluation, 3) management of CRM solutions development companies, by
clarifying customer needs and expectations.
Work provides two practical instructions, which could be used not only by typical
company from beauty industry, but also by small sized company from aligned industries. These
recommendations contribute to quality management implementation and management of
changes. The detailed list of recommendation, from internal, external, and integration of them
perspectives of view is provided.
Due to the homogeneity of business processes within this industry this
recommendations could be useful for all companies in order to improve process approach
77
efficiency or improve measurement basis for employees’ performance. This instruction provides
information on questions “what” and company should take into account in order to improve their
process under revealing trend and “how” to run changes within companies, what stakeholders
should be involved into this process, and reveal the main problems which usually arise.
6.4 Limitations of the study
Due to the nature of the qualitative research there is always an issue of the
generalization of findings. Also, to answer first research question the survey methodology was
used. Due to the low response level, the sample is not enough to make certain generalization of
the results. It will be better for thesis results operate with bigger sample, which could ensure to
run hypothesis testing. Finally, the benchmarking will generate more valuable result if there are
outstanding best practices within the industry, Due to the limitation of such kind company cases
and very narrow open source information about the industry, we have to transfer experience from
aligned industry and adopt it to market peculiarities.
78
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