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Adapted customer relationship management implementation framework: facilitating value creation in nursing homes
Stephen R. Gulliver∗, Uday B. Joshi and Vaughan Michell
Informatics Research Centre (IRC), Henley Business School, University of Reading, Reading, UK
This paper proposes a framework to support customer relationship management (CRM) implementation in nursing homes. This work critically considers existing studies, which conducted in-depth questionnaires to identify critical CRM features (termed value- characteristics) that were identified as potentially adding the most value to nursing homes if implemented. Although the existing research proposed an implementation framework, summary of, and inconsistent inclusion of value-characteristics, limits the practical use of this contribution during implementation. In this paper we adapt the originally proposed framework to correct perceived deficiencies. We link the value characteristics to operational, analytical, strategic and/or collaborative CRM solution types, to allow consideration in context of practical implementation solutions. The outcome of this paper shows that, practically, a ‘one solution meets all characteristic’ approach to CRM implementation within nursing homes is inappropriate. Our framework, however, supports implementers in identifying how value can be gained when implementing a specific CRM solution within nursing homes; which subsequently supports project management and expectation management.
Keywords: CRM; implementation; framework; nursing home; value-characteristics
Around the world, the 85-and-over population is projected to increase 151% between 2005
and 2030, compared to a 104% increase for the population aged 65 and over and a 21%
increase for the population under aged under 65 (Cook & Halsall, 2012). In the UK, the
number of people aged over 65 increased from 8.4 million people in 1981 to 10.2
million people in 2011, causing a shift in the median age from 35.4 years to 39.7.
Between 2010 and 2035 the median age is predicted to rise to 42.2 years (ONS, 2012).
Hancock, Comas-Herrera, Wittenburg, and Pickard (2003) stated that the projected
number of people in the UK aged 85 and older would also increase by over two million
in the next 50 years. There is, therefore, a growing need for appropriate care provision
for the elderly. This problem is compounded for local authorities by a limited amount
of resources (Bathurst, 2011). Dahlgaard, Pettersen, and Dahlgaard-Park (2011) suggest
that three aims of healthcare are: providing care, enhancing health and maintaining low
costs; however the question of what care people need, and how this can be provided
with ever reducing resources, still remains. There are various levels of care, i.e. home
care, care-homes, nursing home and hospitalised care, yet what decides the level of
care that is provided to the individual? Is it cost? Is it physical demand (i.e. whether the
elderly person should physically be at home)? The level of care needed? Or is it level
of resistance (i.e. if the individual doesn’t want to leave their own home)?
# 2013 Taylor & Francis
∗Corresponding author. Email: [email protected]
Total Quality Management, 2013
Vol. 24, No. 9, 991–1003, http://dx.doi.org/10.1080/14783363.2013.776771
Local Authorities in the UK are responsible for the allocation of financial resources
with regard to care spending, and with the reduction in spending proposed by the UK gov-
ernment, current insufficient services are going to be further reduced (Altmann, 2011).
Age UK (2011) found that 61 of the 139 councils surveyed are creating savings by increas-
ing or producing new charges on social care provision including home help or day care
centres, which are paid for by the individual. Since individuals and/or families are
being asked to pay top-up fees, a trend is emerging of customer empowerment
(Ouschan, Sweeney, & Johnson, 2006). Interestingly MacStravic (2000) found that, if
managed, patient empowerment could aid healthcare organisations more than consumers
since patients are often happy to spend their own money to gain additional or customised
treatment, supporting the argument that a customer-centric philosophy is essential to the
development of new innovative products and services through the identification of custo-
mer problems and needs (Dahlgaard-Park & Dahlgaard, 2010). Michie, Miles, and
Weinman (2003) showed that empowering the patient–physician interaction leads to a
more positive health outcome, and this view is held globally by many as a chance to
lower excess healthcare costs and optimise healthcare outcomes (Vernarec, 1999). To
manage empowerment, and to allow residents’ medical and personal needs to be
identified (Berglund, 2007), we suggest the adoption of customer relationship manage-
CRM is a strategic dialogue with customers, through a customised delivery of a
service or product, to ensure that each customer contributes to the maximised profitabil-
ity of the organisation (Bohling et al., 2006). CRM implementation is often perceived as
strategic, yet it is fast becoming a survival tool in heavily user-centric domains (Chang,
2007). By capturing the correct information about residents to support service provision,
CRM can be used to create value for patients by supporting trust creation (Oinas-
Kukkonen, Raisanen, & Hummastenniemi, 2008), and the building of long-term relation-
ships (Sun, 2006). CRM management of care provision can deliver a empowered
customised service, which swiftly meets current and/or potential patient needs, enhances
healthcare service quality, allows increased valued addition, increases patient satisfaction
and increases mutual benefit (Cheng, Chang, & Liu, 2005). Moreover, CRM facilitates
healthcare providers with a method to gain more information about residents in order
to support development of appropriate care adjustments (Benz & Paddison, 2004). Lit-
erature offers generic CRM models (Eid, 2007), as well as specific consideration of
CRM implementation in nursing homes and healthcare (Cheng et al., 2005; Glaser &
Foley, 2008), yet despite discussion of how customer relationship can be effectively
mapped to operational activity (e.g. Chahal, 2010; Schniederjans, Cao, & Gu, 2012;
Vargo & Lusch, 2008), the literature rarely considers the practical mapping to the sol-
In Section 2, we introduce the reader to the domain of CRM, describing how CRM sol-
utions fall across four distinct categories of CRM solutions, i.e. operational, collaborative,
analytical and strategic. In Section 3, we introduce the Cheng et al. (2005) healthcare fra-
mework, and the need for case, data and care management. In Section 4, we critically
discuss the shortcomings in the Cheng et al. (2005) framework, and argue that adaptation
is required to create a framework that allows key value characteristics to be identified.
Moreover, in Section 4, we propose an adapted framework to support the identification
of value characteristics, and support implementation alignment with the four defined
CRM solution categories. In Section 5, we provide a summary of the work and highlight
our research contributions.
992 S.R. Gulliver et al.
2. Introducing customer relationship management
There are multiple definitions of CRM in the literature. CRM is the amalgamation of a
business strategy and an IT strategy (Payne & Frow, 2005), and includes dimensions relat-
ing to business strategy (Gummesson, 2002), customer life-cycle management (Galbreath
& Rogers, 1999; Nancarrow, Rees, & Stone, 2003), information technology (Shoemaker,
2001) and communication (Swift, 2001). Buttle (2004) defines CRM as the main business
strategy that combines internal processes and functions, and external networks, to generate
and provide value to the targeted customers with the goal of obtaining a profit; yet
describes it as being grounded on high-value customer-related data and facilitated by
Using CRM technologies, care providers can develop a one-to-one relationship
(Peppers & Rogers, 1993), formulate added value (Barnes, 2001; Storbacka & Lehtinen,
2001), control cost and spending (Johnson & Nunes, 2003) and/or analyse customer value
(Nykamp, 2001). Payne and Frow (2005) examined the value creation process and found
that business and customer strategy evaluations can be transformed into implementable
programmes, which create value for both the customer and the organisation.
Interestingly, METAGroup (2001) stated that there are three different types of CRM sol-
utions, i.e. operational, collaborative and analytical; however, Lin and Su (2003) and Buttle
(2009) distinguish strategic CRM as being separate. Operational CRM relates to appropriate
and reproducible business processes created to execute the firm’s preferred customer
relationship model in the areas of customer access, customer interaction, sales and
channel choices and customer learning on an individual basis (Tanner, Ahearne, Leigh,
Mason, & Moncrief, 2005). Collaborative CRM employs a combination of collaborative ser-
vices and infrastructure to ensure that an interaction between a company and its multiple
channels can be achieved (Payne, 2006). Analytical CRM relates to acquiring, warehousing,
isolating, combining, managing, understanding, disseminating, employing and conveying
customer-related data to enhance both customer and company value (Buttle, 2009). Strategic
CRM relates to the continued establishing and provision of value to customers (Plakoyian-
naki & Tzokas, 2002). Lin and Su (2003) state that strategic CRM provides the chance to
influence customer knowledge and produce value for customers, therefore aiding organis-
ations in understanding and satisfying customers’ needs.
3. Healthcare CRM framework
The medical care industry is a service industry that is fundamentally dependent on the cre-
ation of relationships (Cheng et al., 2005). To support this relationship, Cheng et al. (2005)
proposed a CRM framework (see Figure 1) for specific use in the nursing home domain.
The CRM framework created by Cheng et al. (2005) was influenced by Rigby, Reichheld,
and Schefter (2002) and Campbell (2003).
Cheng et al. (2005) focused on CRM implementation in nursing homes in Taiwan,
which is also experiencing an ageing population. They suggested that CRM in nursing
homes should contain three aspects: (i) case management of customer relationships; (ii)
information management of customer relationships; and (iii) care management of custo-
3.1 Customer relationship – case management
An interactive mechanism offers patients, who require long-term care services, a means of
obtaining a personalised plan of services. The interactive mechanism integrates varied
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service channels, including face-to-face services, facsimile, e-mail, long-term care-related
websites, discharge planning units of nursing homes and hospitals, in order to supply
patients and families with a reliable contact centre to ensure delivery of a timely, depend-
able, precise and high quality service channel.
Within the case management process, interactive communication between healthcare
workers and customers is significantly important to ensure that the need vs. service deliv-
ery gap is minimised. Healthcare workers should take part in a learning relationship with
both patients and their families in the ‘assessment of demand model’, i.e. to recognise their
needs and to create care plans that would serve as a reference for individualised care
3.2 Customer relationship – data management
The healthcare industry is knowledge intensive and, therefore, healthcare institutions (i.e.
nursing homes) have a growing need for customer knowledge management (KM) (Bose,
2003). Knowledge is based on data, which should, therefore, be organised and managed
(Bender & Fish, 2000). KM comprises processes that enable the use and development
of organisational knowledge so as to generate value and to enhance and maintain competi-
tive advantage (Carlucci, Marr, & Schiuma, 2004). Therefore, KM signifies a fundamental
Figure 1. CRM framework for care institutions (adopted from Cheng et al., 2005).
994 S.R. Gulliver et al.
element of CRM, and has been used within the framework proposed by Cheng et al. (2005)
to identify the needs of the residents so a personalised care plan can be created. Effective
use of KM, and a knowledge database, is often necessary to successfully gather, amass,
relocate and analyse the vast quantities of data being produced. This amount of data,
however, holds considerable useful knowledge that can be applied to service provision
CRM provides a customised and individualised service strategy to meet individual cus-
tomer demands. From the analysis of data, collected within case management, we can
identify resident characteristics, which can be used to segment care. The goal of the analy-
sis is to explain, comprehend and assess the organisation’s existing customer strategy
(Baran, Galka, & Strunk, 2008). ‘Suggested solutions’ involves proposing solutions that
assist healthcare workers in the nursing home to gain an advanced understanding of
patient’s needs and promote a service relationship between the nursing home and the
patient, which meets their needs and forms the basis of an individualised service plan.
3.3 Customer relationship – care management
With the employment of IT, and due to use of analytical tools to segment residents with
different backgrounds and needs, numerous care service strategies can be generated. As
a result, ‘care design’ can be managed, with a comprehensive care plan and customised
services, which can be integrated with case management. The care plan should aim to fulfil
the care demands of each resident, should provide a long-term interactive channel plan for
residents and their families, and should aim to enhance service and supervising care
quality. After the service is implemented by the nursing home, applicable data have to
be entered into the database, and the physical and mental condition of each resident,
and their care demands, should be assessed on a daily basis via ‘care delivery’ by
nursing home staff. With regard to CRM ‘monitoring and feedback’, the work of Cheng
et al. (2005) relates mostly to ensuring that internal and external stakeholders understand
their responsibilities and responses to care delivery.
It is clear in Cheng et al. (2005) that nursing homes mostly do not know how to conduct
a CRM implementation, or what value characteristics would be useful to consider imple-
menting to capture the right information for use in service provision. Accordingly, it is
essential that nursing-home CRM implementation prioritises the solution implementation
around CRM value characteristics.
4 Creating a characteristic-based framework for implementation of CRM in
4.1 Questionnaire analysis of CRM in nursing homes
To understand where CRM can most effectively add value within the nursing home
domain, Cheng et al. (2005) analysed international CRM and nursing-home-related docu-
mentation; thus determining the essential characteristic elements that defined the nursing
home domain. This is critically important, because despite validation in Taiwan, the
characteristic elements can be applied internationally. Questionnaires were created to
capture feedback concerning 84 characteristic elements. For each characteristic, two
pieces of information were captured: user feedback concerning perceived level of impor-
tance, which was captured using a five-point Likert scale, with five to one representing,
respectively, ‘very important’, ‘important’, ‘normal’, ‘not important’ and ‘very unimpor-
tant’; and level of current execution, defining characteristics that nursing homes perceive
Total Quality Management 995
that they are already doing, with information captured on a five-point Likert scale, with
five to one representing, respectively, ‘completely achieved’, ‘mostly achieved’,
‘normal achievement level’, ‘largely unachieved’ and ‘not achieved at all’.
Two hundred and twenty-five questionnaires were distributed among managers or
nursing supervisors at 211 nursing homes. One hundred and seven questionnaires were
returned; however, 14 were deemed invalid. Cronbach’s reliability was used to establish
the internal consistency of the rating scale in each different assessment dimension; cate-
gorised by component parts of the CRM Framework (see Figure 1). A computed alpha coef-
ficient ranges between 1 (representing perfect internal reliability) and 0 (representing no
internal reliability); with 0.8 used to represent an adequate level of internal reliability. As
all of the reliabilities exceeded 0.8, the reliability of data was seen as being high, i.e. all
dimensions of the questionnaire are dependable and constant. Due to the Likert scale defi-
nition, a mean score greater than four was categorised as being either important and/or very
important; and was, therefore, deemed as critical. The three dimensions that obtained the
greatest importance were: ‘Behaviour of service personnel (4.76)’, ‘Design of care processes
(4.62)’ and ‘support from the related units (4.61)’. CRM characteristics that were the most
executed in nursing homes were: ‘Customer data collection (4.21)’, ‘Behaviour of service
personnel (4.21)’ and ‘Design of care process (4.15)’. According to the results, the three
areas where practitioners consider themselves as having underachieved were: Data analysis
(3.23), Care service strategy (3.64) and KM (3.70). Interestingly, the results relate closely to
the level of computerisation used at specific individual nursing homes, the information
system equipment available and recognition by management of CRM.
4.2 Directions for improving nursing home quality care
Cheng, Lin, and Liu (1998) established that when the quality expectancy of two challen-
ging items, or the difference between expectation and satisfaction, is equal, the quality of
the two challenging items should demonstrate a rule that can decide the value prioritisa-
tion. The characteristics used in this study to evaluate the significance of CRM are calcu-
lated using the following formula:
IVCi(Importance Value, Corrected) = (Importance − Current status) × Importance
= (Ii − Ni) × Ii,
where Ii is the importance of characteristic i. Ni is the current execution status of
characteristic i. Both Ii and Ni are determined from questionnaire Likert scales.
Ii 2 Ni , 0 Current activity is perceived as being well appropriate in the context of importance.
Ii 2 Ni ¼ 0 Current activity is perceived as appropriate in the context of importance. Ii 2 Ni . 0 Current activity is not appropriate in the context of importance. Therefore, the root
cause must be located to make relevant improvement plans.
Following the identification of the IVCi value for each characteristic, Cheng et al. (2005)
used a 80/20 principle to categorise characteristic importance into five categories, i.e. absol-
utely important, very important, quite important, important and normal. They argued that by
using this method, nursing homes have a more comprehensive understanding of the value
potential of each CRM characteristic. Accordingly, Cheng et al. (2005) identified the 17
top CRM value characteristics that best support value creation with in nursing homes.
996 S.R. Gulliver et al.
4.3 Classification of characteristics
Three characteristics were identified relating to case management: (i) the nursing home
needs a method to manage the interaction of residents and their families; (ii) the
nursing home should repeatedly interact with the community residents to create good
interactions; and (iii) the residents should be assessed by a professional within a time
scale of seven days from them arriving at the institute to allow carers to appreciate
needs and customise care.
Six characteristics relate to data management: (i) the nursing home should create its
own long-term care website to allow customers to gain pertinent information in a straight-
forward manner and enhance customer interactions; (ii) the nursing home should dis-
tinguish target customers in accordance with the types of residents in the database and
run one to one communications with residents and their family members in order to
meet their needs; (iii) the nursing home should alter its marketing strategy given the
results received from data analysis; (iv) staff should analyse and forecast the requirements
of distinct residents and their family members utilising IT analysis; (v) homes should gen-
erate individualised care plans, which are constructed using the results of the data analysis;
and (vi) the nursing home should encourage staff to be imaginative in planning care to
satisfy resident needs.
Eight characteristics were identified as relating to care management: the nursing
home should: (i) intermittently evaluate staff satisfaction; (ii) implement unit care,
with around 10 people per living unit. Each unit consists of a living room, kitchen
and dining room; (iii) consider requests and obtaining help from consulting firms to
administer activities connected with enhancing customer relationships; (iv) employ sur-
veillance in public areas to manage resident activities; (v) actively search for new resi-
dents; (vi) deliver various alternative treatment options; (vii) enthusiastically employ
and get in contact with volunteers, social organisations or school organisation to
assist in establishing activities; and (viii) Each staff member should partake in both
activities connected with enhancing customer relationships, and boosting their job
4.4 Critical review of results
Cheng et al.’s proposed framework for introducing CRM implementation in nursing
homes (see Figure 2) is based on the results that they obtained from the value characteristic
questionnaire. The framework, however, groups characteristics, to support an understand-
ing of relevant themes; yet seems inappropriate in the context of a CRM implementation.
In ‘case management’, for example, the themes ‘interactive mechanism’ and ‘assessment
of demand model’ do not clearly map to the three characteristics defined by questionnaire
results. Since multiple implementation methodologies, and/or CRM solutions could be
used to implement the characteristics, it seems more appropriate to consider all character-
As stated previously, CRM solutions can be categorised as being related to either oper-
ational, analytical, collaborative or strategic CRM solution types. In order to have a suc-
cessful CRM implementation, therefore, the correct solution type should be used to
implement key value characteristics. Since characteristics within the summarised
themes relate to different CRM types, it appears inappropriate to group characteristics
together as it risks critical characteristics being either ignored or wrongly implemented
within the final solution. In addition to the grouping of characteristics, Cheng et al.
(2005) was inconsistent regarding the value characteristics that were included. For
Total Quality Management 997
example, within the data management/KM theme they neglect to include a very important
Although the grouping of characteristics supports the reader in understanding the
‘theme’ of change to which CRM will add value, the summarising of value characteristics
makes explicit implementation more confusing for implementers. Accordingly, we
propose a more appropriate framework that explicitly considers each of the 17 defined
CRM value characteristics, which allows the implementation approach for each to be
4.5 New framework for implementation of CRM in nursing homes
An adapted framework (see Figure 3) is presented in this section, to better reflect the
results of Cheng et al. (2005), reduce the chance of issues being forgotten, and provide
a more holistic and implementation-focused plan. Rather than grouping characteristics
together using summary theme headings, as in Figure 2, each individual characteristic
is listed separately. As well as avoiding overt summary, this avoids inconsistent classifi-
cation. By listing each individual characteristic, we not only ensure that consistency in
the way that characteristics are represented, we are able to produce an efficient implemen-
tation plan for CRM; allowing the potential for each value characteristic to be linked to an
CRM solution type.
To support the practical implementation of CRM, each value characteristic was
assigned with at least one CRM solution tag (i.e. (O)perational, (C)ollaborative, (S)trate-
gic and/or (A)nalytical); which in our opinion best represented the type of CRM solution
that best meets the requirement defined by the specific value characteristic. Wang (2012)
appraised the implementation of CRM in 30 hospital-based nursing homes and 108 pri-
vately run nursing homes in Taiwan. Results show that hospital and private nursing
Figure 2. Overall framework of introducing CRM in nursing homes (Cheng et al., 2005).
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