The Influence of Customer Knowledge on CRM Performance of Malaysian ICT Companies: A Structural Equation Modeling Approach

Abstract

The business environment is transforming from product-centric to customer-centric. CRM as a customer-oriented business approach is considered as one of the powerful capabilities in organizations which help them to transform themselves to a customer-centric environment. The objective of the studies to configure the constructs of customer knowledge and CRM performance among 201 ICT companies in Malaysia. This study also examines the influence of customer knowledge as exogenous variable on CRM performance as endogenous variable as hypothesized. Using structural equation modeling (SEM) analysis method, the results confirmed knowledge for customer, knowledge from customer and knowledge about customer as constructs of customer knowledge. Financial, customer, internal process and innovation perspective also confirmed as constructs of CRM performance. The fundamental contribution of this study is determination of the significant interaction effect between customer knowledge and CRM performance constructs in the re-specified model of structural equation modeling (SEM). The utilization of CRM is directly related with increase in customer knowledge, which in turn has positive effect on customer satisfaction. By using knowledge management companies can improve their relationship with their valuable customers to create loyal customers and obtain competitive advantage.

Exploring the role of knowledge management practices in fostering customer relationship management as a catalyst of marketing innovation

“…Previous studies have confirmed how effective knowledge-management processes will determine CRM performance (e.g., Campbell, 2003;Croteau and Li, 2003;Nejatian et al, 2011). Campbell (2003 empirically observed the importance of harnessing knowledge-based competences when implementing CRM, because this accumulated knowledge enables firms to develop customer-specific strategies, which can become a source of competitive advantage.…”

“…Since knowledge management is responsible for acquiring and accumulating knowledge within organizations to promote innovation and CRM is able to capture customer preferences, desires and above all, accumulate knowledge; the integration of these two concepts could provide significant benefits to organizations (Nejatian et al, 2011). Consequently, these findings are also valuable for academics who study the business value of IT-related innovations.…”

“…Croteau and Li (2003), drawing on a sample of big companies, found that knowledge management was the most significant factor affecting CRM results, which confirms that a high level of knowledge management capabilities seems to foster effective and efficient management of customer relationships. Similarly, Nejatian et al (2011), observed a significant interaction effect between customer knowledge management and CRM performance. !Thus, we propose our final hypothesis: …”

“…As a result, these processes will help organizations to tailor their products and services, and to personalize the entire relationship with the customer based on the latterÕs detected needs. This leads to increased customer satisfaction and finally to economic profitability (Nejatian et al, 2011). Thus, knowledge management is deemed crucial to effective customer relationship management (Zablah et al, 2004).…”

Investigating the Relationship between Customer Knowledge Management and Knowledge Sharing among Insurance Companies in Malaysia

“…Specifically, the values indicate that the CKM dimensions and knowledge sharing have high internal consistency (knowledge for customer (0.80), knowledge about customer (0.81), knowledge from customer (0.89) and knowledge sharing (0.82)). Previous study by Nejatian et al (2011) also found that CKM dimensions have very high internal consistency (Knowledge for Customers = 0.95, Knowledge about Customers = 0.97 and Knowledge from Customers = 0.96) and 0.88 for knowledge sharing (Kang, Kim & Chang, 2008). Thus, the internal consistency reliability of these measures can be considered as good.…”