Modelling Electronic Customer Relationship Management

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Behaviour & Information Technology Vol. 28, No. 4, July–August 2009, 373–387

Modelling electronic customer relationship management success: functional and temporal considerations M. Khalifaa* and K.N. Shenb
a

Information Systems Department, City University of Hong Kong, 83 Tat Chee Avenue, Kowloon, Hong Kong; bDepartment of Management Information Systems, Abu Dhabi University, PO Box 59911, Abu Dhabi, United Arab Emirates (Received 23 November 2006; final version received 26 January 2008) Previous information systems satisfaction research predominantly focused on generic technological attributes, failing to account for the specificity of the artefact. Furthermore, viewing satisfaction as a static evaluation state, the prevalent cross-sectional approach could not account for the dynamic nature of satisfaction. In this study, we address these gaps by following a functional approach and taking a temporal view in developing and testing a model explaining the effects of various types of electronic customer relationship management (eCRM) functions on customer satisfaction in the context of online shopping. A framework based on the transaction cycle is used to classify eCRM functions into pre-, at-, and post-purchase eCRM. Two distinct temporal phases, i.e. attraction and retention, are identified. The results of a longitudinal survey involving 670 customers of hardware retailers demonstrate the appropriateness of the functional approach in investigating eCRM success and the necessity of the temporal conceptualisation of customer satisfaction. The theoretical and practical implications of these results are discussed. Keywords: online customer satisfaction; electronic customer relationship management; information systems success

1.

Introduction

As organisations are transforming from product- or brand-centric marketing to a relational-centric approach, the importance of customer relationship management (CRM) is hardly questioned. Taking a broad view, CRM encompasses any application or initiative designed to help an organisation optimise interactions with customers, suppliers, or prospects via one or more touch points (e.g. call centre, salesperson and/or website) so as to identify, establish, maintain and enhance long-term associations with customers (Goodhue et al. 2002, Jayachandran et al. 2005). Electronic customer relationship management (eCRM) is concerned with the same principles as a CRM application, but tailored more towards e-commerce and online customers (Romano and Fjermestad 2001). The e-commerce website, therefore, reflects most CRM attributes and serves as the main interface for the customers’ interaction with the company (Horn et al. 2005). Nowadays, eCRM is increasingly used by companies to enhance their electronic marketing capabilities. According to a recent survey by Jupiter, the investment in CRM to back up electronic customer contact will grow from 870 million in 2005 to 4.7 billion in 2006.1 However, the implementation challenges appear to be enormous, as evidenced by commercial marketing research studies.

Approximately 70% of CRM projects result in either losses or no bottom-line improvement in company performance (cf. Reinartz et al. 2004). Rigby and Ledingham (2004) attribute it to the lack of consideration of the customer relationship cycle. Specifically for eCRM, Feinberg and Kadam’s (2002) survey suggests that eCRM failure may be due to the implementation of features that executives believe affect customer satisfaction, but in reality do not have any effect at all. Other studies (e.g. Kohli et al. 2004) pointed to the inadequate support of the customer’s decision-making process as possible reasons for eCRM failure. Given the important role of eCRM in e-commerce in general and e-marketing in particular, there is a growing interest in understanding eCRM success. In information systems (IS) literature, the IS success model (DeLone and McLean 1992) has long provided the theoretical basis for...
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