Measuring the Customer Relationship Management Construct and Linking it to Performance Outcomes

Understanding how to effectively manage relationships with customers has become a very important topic to both academicians and practitioners in recent years. As a result, deploying strategic customer relationship management (CRM) initiatives has become very common. Yet, the existing academic literature and the practical applications of CRM strategies do not provide a clear indication of specifically what constitutes CRM implementation. In this study, we attempt to (a) conceptualize a construct of CRM implementation, (b) operationalize and validate this construct, and (c) empirically investigate the organizational performance consequences of implementing CRM. Our research questions are addressed in two cross-sectional studies across four different industries and three countries. Our first key outcome is a theoretically sound CRM Implementation measure. Our second key result is the finding that CRM Implementation has a moderate positive impact on a firm’s market performance which in turn is associated with better economic performance. The link between CRM Implementation and market-based performance is subject to moderating factors such as a company’s ability to create CRM compatible incentivization schemes.

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