"Customer relationship management : An approach to competitive advantage in the banking sector by exploring the mediational role of loyalty"
Abstract : Purpose – The purpose of this paper is to develop a comprehensive integrated model which helps in explaining the impact of Customer Relationship Management (CRM) dimensions (complaint resolution, customer knowledge, customer empowerment and customer orientation) on customer loyalty and competitive advantage of a bank.
Design/methodology/approach – The research is based on a theoretical model which consists of four CRM dimensions and two exogenous variables.
Findings – The results provide evidence that the four CRM dimensions have a positive effect on customer loyalty and competitive advantage of the bank.
Research limitations/implications – Since, the study involved a single bank and therefore the results should be generalized cautiously.
Introduction
Over the past few years, Customer Relationship Management (CRM) has attracted much attention among academicians and executives. CRM has been assumed to create a long-term competitive edge for an organization and has a positive impact on bank performance as well. However, there are contrasting views about the exact definition of CRM. From operational perspective, CRM is a cross-functional organizational process that emphasizes establishing, maintaining and enhancing relationship longevity with core customers of the organization.
Dimension CRM
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H1a. There is a positive relationship between complaint resolution and customer loyalty.
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H1b. there is a positive relationship between customer knowledge and customer loyalty.
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H1c. There is a positive relationship between customer empowerment and customer loyalty.
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H1d. There is a positive relationship between customer orientation and customer loyalty.
4 CRM dimensions and hypothesis development
1. Resolution of complaints
2. Customer knowledge
3. Empowerment of customers
4. Customer orientation
OUTPUT CRM dimensions
1. Customer Loyalty
2. Competitive Advantage
Result and Findings
SEM is carried out after achieving the goodness-of-fit model for the measurement model and validating the research construct. The next step is to test various hypotheses of the causal relationship between the four dimensions of CRM and the outcome variables, namely customer loyalty and competitive advantage. The results of the direct and indirect path estimates are summarized in Table VII, which shows that CL acts as a partial mediator. The table shows the total, direct and indirect effects of CRM on CA via the mediating variable CL. It was revealed from the regression estimates and p-values that the direct and indirect paths between CRM and CA were significant in the presence of the CL mediating variable. This suggests that CL partially mediates the effect of CRM in CA.
Result and Findings
SEM is carried out after achieving the goodness-of-fit model for the measurement model and validating the research construct. The next step is to test various hypotheses of the causal relationship between the four dimensions of CRM and the outcome variables, namely customer loyalty and competitive advantage. The results of the direct and indirect path estimates are summarized in Table VII, which shows that CL acts as a partial mediator. The table shows the total, direct and indirect effects of CRM on CA via the mediating variable CL. It was revealed from the regression estimates and p-values that the direct and indirect paths between CRM and CA were significant in the presence of the CL mediating variable. This suggests that CL partially mediates the effect of CRM in CA.
Journal : Bhat, S. A., & Darzi, M. A. (2016). Customer relationship management. International Journal of Bank Marketing, 34(3), 388–410. doi:10.1108/ijbm-11-2014-0160