Study of Customer Relationship Asset Management from the People-oriented Perspective

Yuguo WANG

Taishan University, Taian 271000, China

Abstract With the advent of the knowledge economy and information age in the 21st century, the relationship between managers, the managed personnel, and customers has undergone tremendous changes.In order to meet the needs of the development of the times, the business management has gradually turned to the study of people, and humanistic management has become one of the important factors influencing the sustainable development of enterprises.This paper came up with people-oriented management approaches and countermeasures for enterprises from corporate culture, customer satisfaction and loyalty, balance sheet management, customer database establishment, and improvement of the rate of return of customer relationship assets.

Key words People-orientation, Customer relationship assets, Business management

1 Introduction

From the perspective of the history of management development, the core of the construction of management concepts is mainly derived from the assumption of human nature.Generally, different management models and management ideas are determined by different assumptions.So far, the content of human nature hypothesis in management is relatively rich, and the famous hypotheses include: economic man hypothesis, social man hypothesis, complex man hypothesis,etc.At present, from the research situation of scholars, the development history of management can be divided into three different stages, namely, the scientific management theory stage, the interpersonal relationship management theory stage and the contingency theory stage[1].However, as far as its content is concerned, all stages cannot be separated from the people-oriented thinking.With the advent of the knowledge economy and information age in the 21st century, the relationship between managers, the managed personnel, and customers has undergone tremendous changes.In order to meet the needs of diversified markets and the development of modern enterprises, the content of management has gradually turned to the study of people.Humanistic management has become an important content.It conforms to the trend of social development and the demands of international development, and is the product of social economy and social environment.At the same time of effectively improving the enthusiasm of employees and enhancing their self-control, humanistic management also meets the requirements of human development.Based on the concept of humanistic management, we studied the content of customer relationship assets, in order to enrich related theories and practices.

2 Introduction of the people-oriented concept

2.1 Comprehensive analysis of human natureAccording to Marxist ideas, the all-round development of people is the ultimate goal of management and the core symbol of social progress[2].Therefore, it is necessary to make an overall and comprehensive analysis from the perspective of human nature when conducting management.Human needs are divided into physical, psychological, and self-realization needs, and needs and potential are equal.Modern business managers must establish the following concepts when engaging in related enterprise human resource management activities.(i)Respecting the psychological and physical needs of every employee and employed person, which is the highest operation purpose of the enterprise.Even with differences in occupation, age, gender,etc., every person has an independent personality and should enjoy the rights he deserves.Enterprises not only need to respect every employee, but also need to respect every customer that they cooperate with to enhance their corporate image and expand their influence.(ii)Putting customers(specific service groups)first.For enterprises, customers are the fundamental driving force for their development and growth.Business managers should not only create a good environment for internal members and meet their spiritual and material needs, but also need to put customers first and produce high-quality products.(iii)Putting the entire human beings first.Enterprises are the products of marketization, and their development is influenced by international politics, economy and culture.In the context of global economic integration, the ties between countries have become increasingly close, and the social attributes of people have undergone fundamental changes, transcending the boundaries between nations and countries.Based on this, the attributes of "people of the world" began to merge with enterprises, requiring enterprises to fully consider social benefits and contributions to human development in the process of development.In the early stage of reform and opening up, most Chinese enterprises focuses on pursuing the maximization of profits and the accumulation of wealth.However, with the continuous improvement of productivity, enterprises developed based on this model have gradually exposed their development disadvantages due to the lack of humanistic spirit.Human beings are entities of social economic activities and the most important resources, and all economic activities are carried out by humans.Therefore, enterprises must also rely on the people and improve their management quality through people-oriented management.

2.2 Focusing on developing the potential of people, which is a fundamental way to improve the quality of employeesEnterprise managers should fully realize this, appoint employees according to their quantity, learn from each other’s strengths to make up for one’s weak points, and improve team cohesion and organization through various channels.In addition, managers should properly allocate various resources, fully explore the potential of each employee, so that employees can devote themselves to work with great enthusiasm, display their creativity, and promote sustainable development of the enterprise.

2.3 Establishing the enterprise’s decision-making philosophy and management system on the basis of human nature and basic human needsThe enterprise system and decision-making concepts are important content that reflects the level of human management[3].Taking employees as the core element of enterprise development, whether managers, executives or decision makers, all need to uphold the humanity and people-oriented principles.For example, when making decisions, fully listen to the opinions of employees; cultivate employees’ sense of belonging through the establishment of a complete reward and punishment system, and create a positive environment for employees, so as to realize employees’ self-management and self-development.Enterprises remain in a dynamic environment, and the shortening of product life cycles requires them to regard setting up a high-quality workforce as the basis for organizational success.In this respect, enterprises should provide employees with learning and training opportunities and improve their abilities and levels, which is the key to the success of an enterprise.

3 Research and development of customer relationship assets

Academic circles have different definitions of the concept of assets.According to theFrameworkforthePreparationandPresentationofFinancialStatementsissued by the International Accounting Standards Committee(IASC)in 1989, asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.However, this concept is relatively vague and its applicability is not strong.Since then, scholar John Bennet Canning pointed out in his bookEconomicsofAccountancythat assets are future services, which exist in the form of currency or refer to resources that can be converted into currency.Services belonging to an individual or organization and having legitimacy and being useful to an individual or organization can become assets.As defined by Financial Accounting Standards Board(FASB)of the United States, assets are the expected future economic benefits controlled by an accounting entity.According toChinaAccountingStandardsforBusinessEnterprises, assets are legal economic resources owned or controlled by companies that can be measured based on currency.In summary, although the definition of assets is different, they have common features, that is, the essence of assets is future economic benefits, which can create value for the enterprise and at the same time create cash flow.

At both home and abroad, assets are divided into tangible assets and intangible assets according to the form of assets.In the first place, different countries have different definitions of intangible assets.For example, in theStandardsforAssetAppraisalpromulgated by China, it is defined as: non-physical resources that are controlled by a specific entity, can affect the production and operation of enterprises, and can bring future economic benefits.In theInternationalValuationStandardsissued by the International Valuation Standards Council, intangible assets are considered to be special assets with economic characteristics but no physical form, and they, like tangible assets, can bring benefits and benefits to enterprises[4].With the continuous development of society and the continuous deepening of market-oriented reforms, intangible assets, as a symbol of corporate soft power, occupy an increasing proportion of corporate assets, and the scope involved is also increasing, such as technology patents, trademarks, product brands, human resources,etc.

Then, whether the customer relationship, that is, the relationship between the customer and the company, is also an asset?(i)The value and use value of the products made by the enterprise are ultimately determined by the customer.Only when a product has a market can it realize its value and use value, and then realize the capital flow of the enterprise, and carry out the next round of simple reproduction or expanded reproduction, thus having the ability to indirectly create cash flow for the enterprise.From this point of view, customer relationships have the most essential characteristics of assets.(ii)Customers’ demand for products of enterprises and purchases are based on the understanding of the product information.The purchase behavior is the result of past transactions or events such as advertising and sales of the enterprise.It is an early investment, which also conforms to the characteristics of assets.(iii)Customer assets can also be measured in currency.For example, if a person starts to buy and use a car at the age of 30, the average life span of the customer is 75 years, the normal life span of the car is 25 years, and the average price of the car is 300 000 yuan, then the value of the customer’s resources is 540 000 yuan.Through the above analysis, it can be seen that customer resources conform to the definition of assets and the nature of assets, so they can be regarded as intangible assets of the enterprise.In a sense, customer resources are the most valuable and irreplaceable of an enterprise.As stated by the management scholar Peter Ferdinand Drucker, the development level of an enterprise depends on its customers, customers are the enterprise’s only source of continuous profit, and only by establishing a good relationship with customers can the company’s internal and external competitiveness be enhanced.With the global spread of the market economy, the focus of marketing and even the entire process from strategic planning, product design, production, and sales has also changed to win, retain and cultivate loyal customers.The quantity and quality of customer resources owned by an enterprise have constituted a part of each enterprise’s core competitiveness.The corporate culture and strategies, such as "the customer is God", "we will focus on customers", quietly develop in every enterprise.

Based on the above analysis, it can be confirmed that the customer is the resource of the enterprise, then whether it is an asset of the enterprise? If it is, it belongs to tangible assets or intangible assets? Or is it can be quantified and how to quantify? Existing literature and practice show that the research and application of customer assets at both home and abroad still remain at the starting stage.The real elaboration of customer assets from the perspective of customer relationship started in the 1990s, but only began after the development of informatization.Specifically, with the increase in the number of multinational enterprises, some scholars have started to realize that customers can bring huge profits, so they describe them as corporate assets.Nowadays, the main international representatives are: Sweden’s Lev Stevenson put forward in the early 1990s that customer assets are the possibility of maintaining contacts between customers and enterprises.In 1993, H.San Andre believed that in the daily production and operation activities of enterprises, two elements must be paid attention to, one is human capital element and the other is structural capital element, and the two should be connected with customers and establish "customer capital" so as to fully play their role.The economist Thomas Stewart pointed out that when an enterprise conducts customer relations, the organizational relationship reflected by the customer and the extended resources of the customer, even the customer themselves, are themselves an intangible asset, which is essential to the play of enterprise value[5].

At the end of the 20th century, due to the establishment of the market economy system and the influence of foreign management studies, Chinese scholars began to focus on the study of customer relationship management, and it gradually became a hot spot after 2000.This can be seen from the increase in the translation and introduction of foreign related works since 2000.At the same time, some Chinese scholars started to try to introduce customer relationships into the definition of intangible assets of enterprises according to the actual situation of the country and the specific practices of enterprises; some scholars also use the concept of customer assets to describe the future development trend and environment of enterprises.In this situation, many theoretical models have been formed; some scholars have tried to quantify customer assets.In practice, some modern enterprises have started to try and introduce foreign technologies and core concepts related to the customer asset management system(CMS).

4 Putting people first to realize the customer relationship assets management

Value appreciation generally refers to the value of a certain thing has increased on the original basis.Enterprise assets also have such characteristics, such as enterprise buildings, finished products, and raw materials used by the enterprise, all of which can achieve value appreciation.Customer assets also belong to the category of assets, and can also maintain and increase in value.In what ways can an enterprise maintain and increase the value of customer assets?

4.1 Combining with the cultivation of a people-oriented corporate culture is to respect the rights of business entitiesBroadly speaking, the content of the business entities is relatively rich, including managers, employees, customers, shareholders, and even competitors.Managers and employees should firstly establish a sense of ownership.From the perspective of long-term interests, the enterprises respect for customers and the company’s sense of responsibility will affect the development of the enterprise to a certain extent, and even play a decisive role.Secondly, it is necessary to improve the quality of employees.At the same time of emphasizing product quality, it is required to recognize that human quality is the foundation of all quality.Thirdly, it is necessary to cultivate the team spirit.Through education and training, employees can form consistent values, ethical standards, and behavioral patterns, gather the strength of employees, unify their personal goals with corporate goals, and promote the common development of individuals and enterprises.

4.2 Improving the satisfaction and loyalty of enterprise customersAfter entering the 21st century, due to the continuous improvement of productivity and the accumulation of consumer experience, the buyer’s market has gradually become more rational.Similarly, the types of products of enterprises have become more abundant, and consumers have strong right to choose.Especially, with the advent of the information age, the distance between customers and enterprises has become closer, so that customers can obtain product information more widely and more conveniently.Therefore, once customers are dissatisfied with the products of the enterprise, they can easily change suppliers, and the transfer cost is almost zero.Moreover, the customer’s consumption shift may affect the consumption behavior of other customers.Thus, improving customer satisfaction and loyalty is of great significance to enterprises, but enterprises also face many difficulties.Some people think that if enterprises can not retain regular customers, they can develop new customers.However, the cost of developing a new customer is often much greater than the cost of retaining a regular customer.According to practice at home and abroad, if an enterprise chooses to retain a regular customer, the cost it will pay is much lower than the cost required to open up a new customer, and the cost ratio is 20%.In addition, for the development of enterprises, regular customers play an irreplaceable role, and most of the profits of enterprises come from regular customers.Therefore, it is necessary to find ways to improve the satisfaction and loyalty of customers, especially regular customers, to the enterprise.

4.3 Incorporating the customer relationship assets separately into the balance sheet as an important asset, and exploring the method of customer relationship asset evaluationFor an enterprise, its most important economic goal is to create wealth and to seize the greatest profit through the lowest cost of investment.However, compared with traditional asset management, the nature of modern assets and its specific measurement methods have undergone tremendous changes.Some tangible assets in enterprises are declining in the functions to enterprises, while some intangible assets of enterprises have become key factors affecting the formulation of corporate strategies and future development.The contribution rate of intangible assets to enterprises, in a sense, has completely surpassed tangible assets.The most important thing in intangible assets is customer assets, which should be evaluated in combination with the future benefits it brings.Traditional accounting does not include customer assets in the balance sheet, so it cannot truly reflect the true value and future prospects of the enterprise.If customer assets are included into important assets in the balance sheet, it will help to better understand the relationship between the enterprise’s operating conditions and the ability to create wealth in the future.It is recommended that relevant government departments and organizations organize relevant experts and scholars to set up special research groups to study the measurement and evaluation of client assets and related issues listed in the balance sheet.

4.4 Making database management of customer relationship assets, to enhance the value of customer relationship assetsToday’s world is characterized by fast speed and simplicity.With the expansion of the company’s scale of development and the expansion of business types, customer management has become more complex and contradictions have become increasingly prominent.Based on this, if the traditional management method is still adopted, it will neither achieve the management effect nor promote the company’s business development.Management scholars believe that customer resources must solve two key issues, one is customer demand, and the other is market positioning.Enterprises need to provide the right products that meet market needs at the right time and place, through the right channels.In this situation, enterprises can use the database to promptly understand the basic situation of customers, existing customers, potential customers, and potential demands of customers.Customer information management is the foundation of customer resource management.Customer information management can establish accurate information archives based on customer characteristics to achieve market positioning and demand generation.It is necessary to establish a customer resource database suitable for the enterprise, constantly update the information in the database, quickly grasp market trends, and expand market share in order to obtain more customer "votes", win more cash inflows, and increase the market value of customer assets.

4.5 Continuously increasing the rate of return on customer relationship assetsCustomers themselves can bring benefits to the enterprise.The return on assets of customers is an important indicator used to describe this benefit, and it mainly refers to the ratio of the profit brought to the enterprise by the customers and to the cost paid by the customers.To increase the return on customer assets, it is necessary to increase profits and reduce costs.However, it is required to guarantee the customer satisfaction and loyalty.The purpose of enterprise management is to maximize the value of the enterprise.Similarly, the purpose of customer management is to increase the rate of return of customer assets and maximize the customer value.Maximizing the customer value depends on two aspects: customer stock and customer quality.Customer quality refers to the turnover rate of customer assets.The product of the two determines the total customer value, that is, customer value = customer stock × customer quality.Therefore, customer management must first appropriately increase the customer stock, that is, increase the value of original customer assets and introduce new customer assets; second, improve customer quality, that is, increase the customer asset turnover.After the economic business enters the buyer’s market, it becomes more and more difficult to obtain new customers, and at the same time the cost is getting higher and higher.Therefore, this is not always consistent with the maximization of customer benefits.If enterprises deliberately pursue customers, customers will often feel very dissatisfied and as a result, leading to the loss of regular customers.Therefore, we came up with the following recommendations to increase the rate of return.(i)Changing the traditional way of integration of discovery and sales channels.On the basis of retaining the original customers, the company as a whole, not the salespersons, should explore high-quality and valuable potential customers.After the senior leaders take overall strategy and discovered high-quality and valuable potential customers, the salesperson of the company will sell products to those high-quality and valuable potential customers, so as to realize the separation of customer discovery and sales of products.(ii)Classifying customers and determining the core customers.According to Pareto’s rule, the 80/20 rule in the management field, that is, the value of customers is different.80% of corporate profits are mainly derived from a fixed 20% of customers.For companies, it is necessary to pay attention to distinguishing the value of customers.Enterprises should classify customers and take different strategies and management methods for different customers, focus on the most valuable customers, try to establish and maintain long-term cooperative relationships with customers, and promote frequent purchases and use of the company’s products, and accordingly get more cash flow and profit.

In summary, customers have become the center of all production and operation activities of enterprises in the world.Enterprises should take the customer relationship as their important assets to operate, and realize its value preservation and increase.Especially, in a more competitive market in the future, customers must be regarded as the top priority of the enterprise’s assets, and only in this way can the enterprise realize a sound and long-term development.