Customer Relationship Management and Firm Performance
University of Wollongong - Faculty of Business (BUS)
Timothy M. Devinney
University of Leeds - Leeds University Business School (LUBS); University of Leeds - Division of International Business
INSEAD - Marketing
April 16, 2009
INSEAD Working Paper No. 2009/18/MKT
In this paper, we examine the impact of customer relationship management (CRM) on firm performance using a hierarchical construct model. Using the resource-based view (RBV) of the firm, strategic CRM is conceptualized as an endogenously determined function of the organization’s ability to harness and orchestrate lower order capabilities that comprise physical assets such as IT and organizational capabilities. The results reveal a positive and significant path between a superior CRM capability and firm performance. It is shown that CRM initiatives that jointly emphasize customer intimacy, cost reduction and analytic intelligence outperform those that take a less balanced approach. The results help to explain why CRM programs can be successful and what capabilities are required to support success.
Number of Pages in PDF File: 39
Keywords: Customer Relationship Management, Strategic IT, Capabilities, Performance
Date posted: April 16, 2009
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