The Influence of Customer Knowledge on CRM Performance of Malaysian ICT Companies: A Structural Equation Modeling Approach

Abstract

The business environment is transforming from product-centric to customer-centric. CRM as a customer-oriented business approach is considered as one of the powerful capabilities in organizations which help them to transform themselves to a customer-centric environment. The objective of the studies to configure the constructs of customer knowledge and CRM performance among 201 ICT companies in Malaysia. This study also examines the influence of customer knowledge as exogenous variable on CRM performance as endogenous variable as hypothesized. Using structural equation modeling (SEM) analysis method, the results confirmed knowledge for customer, knowledge from customer and knowledge about customer as constructs of customer knowledge. Financial, customer, internal process and innovation perspective also confirmed as constructs of CRM performance. The fundamental contribution of this study is determination of the significant interaction effect between customer knowledge and CRM performance constructs in the re-specified model of structural equation modeling (SEM). The utilization of CRM is directly related with increase in customer knowledge, which in turn has positive effect on customer satisfaction. By using knowledge management companies can improve their relationship with their valuable customers to create loyal customers and obtain competitive advantage.