Conceptualising Customer Relationship Management and Its Impact on Customer Lifetime Value in the Taiwanese Banking Sector
A review of the literature revealed that various scholars on the subject of customer relationship management hold divergent views on the exact domain of CRM because of its multi-faceted nature. Furthermore, CRM remains vague in terms of its impact on firm performance because the generative mechanisms have not been fully considered. In response, a theoretical framework of CRM as the underpinning foundation which establishes the linkages between CRM and the firm’s performance is proposed, which synthesizes different perspectives of key constructs of CRM and thus seeks to incorporate them into a practical and coherent framework that can be universally used. Therefore, the central aim of this thesis is to develop an empirically based conceptual model of the process that has the potential for crossing cultural and sectoral boundaries and highlights the potential link between CRM and the establishment of long term customer value. This thesis presents and discusses empirical findings from a survey of 226 senior managers and 584 customers in the Taiwanese banking sector who are examined from their perspectives by using structural equation modeling. From the perspective of managers, the findings largely supported the proposed hypotheses. Customer interaction and customisation, but not customer knowledge and customer knowledge management (CKM) capability, are significantly and positively related to customer value. CKM capability and customization are crucial in affecting customer satisfaction. The results also provided strong evidence of customer value’s impact on customer satisfaction, which in turn is necessary determinant of customer loyalty. Furthermore, the relationship between customer loyalty and CLV is positive. Consequently, it has been found that customer benefits play significant mediating roles between CRM and firm performance. On the other hand, from the perspective of customers, the results showed that managerial perceptions of CRM practice have no relationships with the customer value and customer satisfaction as perceived by customers. This thesis contributes to academic and managerial knowledge by providing alternative insights into CRM’s influences on the customer’s benefits and the firm’s performance from a dyadic perspective in one single model. Particularly, the inclusion of customer value and customer satisfaction constructs as key consequences of CRM is suggested to contribute additionally to provide a more complete model of a CRM-performance relationship within the banking setting. Therefore, the framework as a diagnostic tool can be used to identify where specific improvements are needed and where certain aspects of the organizational operations could be improved in CRM for pursuing their competitive advantage and long-term profit.
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