Electronic Customer Relationship Management and Company Performance: Exploring the Product Innovativeness Development

Abstract The concept of this research springs from the controversy of previous research findings on the effect of Customer Relationship Management (CRM) which is seen as an integrated concept and applied only to large companies and is rarely to small and medium enterprises (SMEs). The main purpose of this research is to build a model and to investigate the effect of e-CRM capability, which is a development of the traditional CRM with internet technology support, as an effort in improving the marketing performance of SMEs through the exploration of innovative products development to address the gap. Innovation on products and services is a key component of SMEs business as a series of efforts to enhance their competitiveness in attaining superior business performance. However, SMEs have to be wary of innovation made if it is unplanned and not knowing their customers well. CRM comes to light as a management approach that enables companies to identify, fascinate, and increase profitable retention of customers through a good management relationship with customers as a support for innovative product development capability. The design of this research was descriptive research design. The data collection employed survey method with questionnaires distributed to 150 respondents of owners and managers of SMEs in Indonesia. The questionnaires were then processed and analyzed with Structural Equation Modeling (SEM) with Amos 20.0 software.