CHAPTER 19
Integrating customer
relationship management and
supply chain management
MARTIN CHRISTOPHER and ADRIAN PAYNE
Introduction
Traditionally, the routes to competitive advan-
tage have typically been based upon strong
brands, corporate image, effective advertising
and, in some cases, price. These are the classic
components of conventional marketing strate-
gies. More recently, however, there have been a
number of signs that suggest that the power of
the brand – in both consumer and industrial
markets – is in decline (Brady and Davis, 1993).
For whatever reason, the customer seeks more
than ‘brand value’, as it is sometimes called,
and is looking increasingly for valuein a much
wider sense.
In the new paradigm of marketing, the
emphasis changes from brand value to cus-
tomer value. Essentially this means that the
supplying organization must focus its efforts
upon developing an ‘offer’ or ‘package’ that
will impact customers’ perception of the value
they derive through ownership of that offer.
This value might either be derived through the
delivery of benefits in performance terms and/
or in the form of a reduction in the customer’s
costs. Increasingly, customer relationship man-
agement (CRM) is being viewed as a strategic
approach that can help realize improved
customer value.
In this chapter we examine CRM with a
special focus on its critical linkage with supply
chain management (SCM). First, we discuss the
decline of the brand. Second, we examine the
concept of competing through capabilities and
the interlinking roles of CRM and SCM. Third,
we outline a strategic framework for under-
standing the key components of CRM. Fourth,
we review the changing nature of customer–
supplier relationships and the impact of supe-
rior SCM. Next, we examine the role that CRM
and SCM have in improving customer service.
Finally, we consider the development of mar-
ket-driven CRM and SCM strategies.The decline of the brand: the need for integrated CRM and SCM strategies
There is strong evidence from many markets
that brand loyalty amongst customers is not