Relating Technology Based CRM to Service Quality in the Telecommunications Industry in Arusha City, Tanzania

Abstract

Customer Relationship management concept is vital not only to service based organizations but also to manufacturing based industries. CRM enhances the ability of businesses to survive in the context of a changing business environment characterized by high competition. Theoretically, CRM has been advocated due to the role that it can play in creating, nurturing and maintaining mutual relationships between an organization and its customers. This study examined the effect of the technology based CRM on service quality in the Telecommunications industry in Arusha, Tanzania. The study used an integrated theoretical framework that conceptualized the constructs for the technology based CRM using both theories on technology and those on customer service relationship management. Four hypotheses relating the independent and dependent variables were tested. The study used a descriptive survey design that was cross sectional in nature. The population of the study consisted of diverse stakeholders within the telecommunication industry in Tanzania. Those that comprised the population included four telecommunications companies, their respective distributors and subscribers, estimated at a total of 26,514,895. A sample of 323 respondents was drawn and data obtained from each using a predetermined questionnaire that was self administered to each respondent. The data obtained from the field was analyzed by both descriptive and inferential statistics and multiple linear regression was employed to test the hypotheses. The descriptive findings of the study indicated that mobile phone companies have employed the technology based CRM systems to a good extent (Mean=4) so as to align their business activities towards delivering services to customers. The results of the hypotheses tested indicated that there was no statistically significant relationship between system automation and service quality as well as system functionality and service quality (<i>β= -.109, p>0.05; β=-.244, p>0.05</i> respectively). However, the study found that there is a statistically significant relationship between system user acceptance, service quality, system integration and service quality (<i>β=-.588; p< 0.05; β= .814, p< 0.05</i> respectively). The study suggested that the mobile service organizations need to invest not only in technology based CRM but also to invest in the aspect of internal marketing since it has potential to enhance the level of service quality offered by mobile phone companies. The findings of the study called on future research on technology based CRM to incorporate the aspects of individual IT users’ demographic and psychological characteristics.