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Industrial Marketing Management
A process-oriented perspective on customer relationship management and organizational performance: An empirical investigation Abbas Keramati a,⁎, Hamed Mehrabi b, Navid Mojir a
University of Tehran, Industrial Engineering Department, Iran University of Tehran, Information Technology Management Department, Iran
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Research on the CRM-performance link has been fragmented due to various perspectives on CRM. This study, considering different concepts of CRM, proposes a process-oriented framework for examining the relationship among CRM resources, CRM process capabilities, and organizational performance. Based on the resource-based view (RBV) of the ﬁrm, CRM resources are classiﬁed as “technological CRM resources” and “infrastructural CRM resources”. Data from 77 Iranian Internet service provider ﬁrms were gathered in a ﬁeld survey. The empirical work indicates that the measured constructs demonstrate key psychometric properties including reliability and validity. The results reveal that CRM processes are more affected by infrastructural CRM resources rather than technological CRM resources. Moreover, the ﬁndings indicate that ﬁrms with improved CRM process capabilities enjoy better organizational performance. © 2010 Elsevier Inc. All rights reserved.
Article history: Received 15 September 2008 Received in revised form 11 November 2009 Accepted 21 January 2010 Available online 25 February 2010 Keywords: Customer relationship management Resource-based view Process capabilities Performance Survey ISPs
1. Introduction In the contemporary business environment, customers are considered to be the central element of all marketing actions, and CRM has become a priority for companies (Karakostas, Kardaras, & Papathanassiou, 2005; Rust, Zeithaml, & Lemon, 2000). This is highlighted by the claim of academics and practitioners that a customer orientation strategy is necessary for companies to survive and be successful in saturated markets (Heinrich, 2005). Business ﬁrms, regardless of the size of their organization, as a whole, are spending billions of dollars each year on CRM applications (Ngai, 2005; Zablah, Bellenger, & Johnston, 2004). Although some academic researchers have provided some evidence of the positive relationship between CRM and performance (Coltman, 2006; Mithas, Krishnan, & Fornell, 2005; Sin, Tse, & Yim, 2005), many academic and business reports have shown disappointing results (Chen & Wang, 2006; Heinrich, 2005; Richards & Jones, 2008; Rigby, Reichheld, & Schefter, 2002; Zablah et al., 2004). In 2003, Gartner reported that about 70% of CRM projects result in either loss or no bottom line improvement in company performance (Richards & Jones, 2008). These paradoxical results are similar to what the academicians have called “productivity paradox” in the Information Technology (IT) literature (Albadvi, Keramati, & Razmi, 2007). This could be one of the reasons that CRM is an emerging ﬁeld of inquiry (Richards & Jones, 2008). ⁎ Corresponding author. P.O. Box 11365–4563, Tehran, Iran. Tel.: +98 21 820 84194. E-mail addresses: firstname.lastname@example.org (A. Keramati), email@example.com (H. Mehrabi), firstname.lastname@example.org (N. Mojir). 0019-8501/$ – see front matter © 2010 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2010.02.001
To remedy the situation, we should ﬁrst determine from where the problem stems. Going through the literature, we found two problems that are relevant to the CRM-performance link. First, many companies have considered CRM as an IT solution and a technology for a marketing strategy (Peppard, 2000; Reinartz, Krafft, & Hoyer, 2004; Rigby et al., 2002). Through many years, IT researchers have been trying to answer the question of why IT does not confer direct competitive advantage. The clear reason, to which...