Success factors and challenges for customer knowledge management (CKM) in service-related sectors

As summarized in section 5 of the RealKM Magazine explainer What is knowledge management (KM)?¹, one of the specialized areas of knowledge management (KM) is customer KM (CKM).

A newly published paper² in Eduvest – Journal of Universal Studies adds to the knowledge base in regard to CKM by exploring the success factors and challenges for CKM in service-related sectors. These diverse service sectors include banking, telecommunications, hospitality, contact and call centers, and e-commerce.

To prepare their paper, authors Nurul Aulia Larasati, Monica Ratna Andani, Nadya Safitri, and Dana Indra Sensuse carried out a systematic review of the research literature using the PRISMA 2020 guidelines³ and the Parsifal application⁴ to assist with screening and selecting studies. The population, intervention, comparison, outcome, context (PICOC) framework⁵ was used to define the research scope and develop the search strategy. After satisfying the inclusion criteria and quality assessment, 21 studies remained for final review. Systematic reviews⁶ produce a reliable knowledge base through accumulating findings from a range of studies.

Success factors

Through their systematic review, Larasati and colleagues have found that several interconnected factors influence successful CKM implementation in service-related sectors:

1. Organizational culture and leadership – A customer-oriented culture and support from top management are key direct factors in customer relationship management (CRM) success and successful CKM adoption. Further, organizations with a strong organizational learning culture (OLC) promote knowledge creation and sharing.
2. Knowledge management strategy and processes – It is crucial to have a well-defined CKM strategy matched with more general digital transformation plans and overall business goals. This includes establishing clear success criteria and performance measures to evaluate CKM effectiveness. Implementing well-defined processes for identifying, acquiring, organizing, sharing, and using customer knowledge is also a key factor.
3. Technology and infrastructure – A robust CRM technology platform, along with collaborative platforms and a map of knowledge, are crucial technological factors. Utilizing suitable software and hardware and ensuring that staff IT skills are adequate also supports CRM and CKM success. Additionally, the systematic integration of social media activities and customer data into a unified CKM framework has become increasingly vital. For automated customer support, a well-designed and CKM-informed knowledge base integrated with technologies such as web crawling, natural language processing (NLP), and artificial intelligence (AI) is vital.
4. Human capital and training – Having qualified employees and adequate resources, coupled with continuous investment in training on CRM and CKM principles, is critical for success. Such training increasingly involves equipping employees to work effectively with emerging technologies, including chatbots and service robots. Employee IT skills, including social media management and analytics, have been shown to significantly influence social CRM usage. Additionally, employee attitudes, motivation, and job satisfaction are important human factors that impact CRM and CKM effectiveness.
5. Customer involvement and focus – A strong customer focus is the most critical direct driver of CRM success. Actively involving customers in knowledge creation and feedback processes serves as a key enabler of CKM. Understanding and responding to customer needs and preferences, including leveraging customer input from various channels such as social media, contributes to successful CKM.
6. Continuous measurement and improvement of CKM initiatives – This process is facilitated when organizations establish clear success metrics and objective key performance indicators (KPIs) for evaluating performance and guiding continuous improvement. Continuously monitoring and analyzing customer feedback, including data from digital and online sources, is essential for service improvement.

Challenges

Larasati and colleagues’ systematic review also identified several significant CKM implementation challenges that span organizational, technological, and customer-related dimensions:

1. Justification of investment and lack of perceived value – Organizations often struggle to justify KM investments due to unclear financial returns and the difficulty in proving KM as a profitable investment. KM is frequently not perceived as a core business function, and the benefits of KM investments are not always immediately visible. A lack of executive understanding of KM’s value, coupled with the difficulty in quantifying its indirect business implications, creates a further obstacle.
2. Organizational resistance and lack of buy-in – Resistance to change among employees can hinder the adoption of new CKM systems and processes, while lack of top management support has been identified as a critical barrier to implementation.
3. Integration challenges – The integration of chatbots or CRM systems with existing systems often presents significant challenges. Systematically integrating diverse social media activities and data into a cohesive CKM strategy further adds to this complexity.
4. Data management and knowledge flow issues – Data management and knowledge flow issues are also challenges. Ensuring that knowledge is effectively captured, stored, and shared across the organization and with customers can be difficult. Service industries with remote workforces face difficulties in delivering digital services and effectively managing customer knowledge. Overcoming knowledge flow barriers between the organization and physically distant customers and staff is crucial. In addition, effectively analyzing large volumes of unstructured data from sources such as social media to extract meaningful customer knowledge is also a significant hurdle.
5. Difficulty on establishing clear performance metrics and objective KPIs to evaluate the impact of CKM – Many organizations face difficulties in establishing clear performance metrics and objective KPIs to evaluate the impact of CKM on business outcomes, such as customer satisfaction and profitability. Attributing achievements directly to KM initiatives is often challenging.
6. Customer hiding behavior – Customer knowledge hiding behavior on service multi-sided platforms obstructs CKM efforts to gather insights. Moreover, managing the diversity of global customer demands can lead to information overload and increased knowledge processing costs for service multinationals. Some organizations may also fail to fully utilize CRM for direct customer engagement and insight generation.
7. Technology and skill gaps – A lack of skilled personnel for chatbot development and maintenance and ensuring adequate staff IT skills to support CRM and CKM initiatives are ongoing challenges. Poor data quality management can also hinder CRM success.
8. Lack of specific CKM assessment tools in specific industries – In academic libraries, CKM concepts are rarely addressed or systematically implemented, and there is a lack of specific assessment tools. In call centers, high employee turnover and a stressful work environment can impact the effectiveness of CKM efforts. Implementing chatbots requires addressing factors such as user trust, effort expectancy, and managing conversational failures.
9. Keeping pace with digital transformation demands constant CKM adaptation – The rapid pace of digital transformation requires continuous adaptation of CKM strategies and technologies, which can be resource-intensive and demanding for organizations with limited capabilities.

Article source: Eduvest – Journal of Universal Studies, CC BY-SA 4.0.

Header image source: Yan Krukau on Pexels.

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