Customer Relationship Management and Firm Performance

39 Pages Posted: 16 Apr 2009

See all articles by Tim Coltman

Tim Coltman

University of Wollongong - Faculty of Business (BUS)

Timothy M. Devinney

University of Manchester - Alliance Manchester Business School

David Midgley

INSEAD - Marketing

Date Written: April 16, 2009

Abstract

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.

Keywords: Customer Relationship Management, Strategic IT, Capabilities, Performance

Suggested Citation

Coltman, Tim and Devinney, Timothy M. and Midgley, David, Customer Relationship Management and Firm Performance (April 16, 2009). INSEAD Working Paper No. 2009/18/MKT, Available at SSRN: https://ssrn.com/abstract=1386484 or http://dx.doi.org/10.2139/ssrn.1386484

Tim Coltman

University of Wollongong - Faculty of Business (BUS) ( email )

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Timothy M. Devinney

University of Manchester - Alliance Manchester Business School ( email )

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Manchester, M15 6PB
United Kingdom

David Midgley (Contact Author)

INSEAD - Marketing ( email )

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France
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+33 1 60 74 55 00 (Fax)

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