The Impact of CRM on Customer Satisfaction and Customer Loyalty: Mediation Effect of Customer Perceived Value (Evidence from Hospitality Industry)

Abstract

Many businesses and service providers including hotels realize the significance of Customer Relationship Management (CRM) and its potential to help them gain new customers, retain existing customers, and maximize their lifetime value. This study aims to explore the relationship between CRM and customer perceived value (CPV), and their impact on customer perceived satisfaction and loyalty towards hotels in Egypt. The study clarifies the need for hotels to strengthen their business relationship with their customers as it is considered a strategic step for the growth and competitiveness of hotels. The contribution of this research is to help managers of hotels to better understand the real value of CRM and if it is really worth the large amounts of money that are put in it. Moreover, the study further added the investigation of whether CPV mediates the relationship between CRM and customer satisfaction/loyalty or not. The researchers adopted a quantitative approach that started with a comprehensive literature review of the main marketing concept of CRM and its alleged outcomes of customer perceived value (CPV), satisfaction and loyalty. This was followed by designing a conceptual model to answer the research questions. Next, primary data was gathered using self- administered questionnaires to collect quantitative data from several branches of one 5-star hotel in Egypt based on a case study approach. Structural Equation Modeling (SEM) technique was utilized to test the relationship between CRM and customer satisfaction and loyalty via l mediating variable which is CPV. Fitting measures prove to be within the required threshold, which proves that the model is fit. The results indicate that there is a positive significant relationship between CRM and CPV and that CRM positively affects customer satisfaction and loyalty, yet the researchers suggest application on other hotels to further test the model.