Linking CRM capabilities to business performance: a comparison within markets and between products

Abstract

Abstract Business performance is the primary goal of any type of firm, being a top priority for managers. Customer relationship management (CRM) capabilities is known in the literature as an important driver of business performance. However, there are significant differences across firms due to market settings they are acting on, or to the nature of products they are selling. Yet, little is known about how the impact of CRM capabilities on business performance vary across Business-to-Business and Business-to-Consumer markets, or across firms that are selling goods or services. In this study, we use data from a sample of 102 firms to investigate how customer relationship orientation influence the dimensions of CRM capabilities and how these capabilities determine customer satisfaction and market effectiveness, two business performance outcomes. Structural equation modelling is used in order to test the hypothesized relationships. The total sample is spilt into subsamples taking into consideration market settings and product type criteria, and the hypothesis are tested within them. Our results reveal that in case of each subsample, customer satisfaction and market effectiveness are driven by different dimensions of CRM capabilities. Critically, we find that in cases of firms that are acting mainly on Business-to-Business markets, customer relationship orientation doesn’t influence customer relationship upgrading capability, a dimension of CRM capabilities. Finally, the implications of these results for practitioners and managers are presented.