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 acustomer-oriented business approach is considered as one of the powerful capabilities in organizations whichhelp them to transform themselves to a customer-centric environment. The objective of the studies to configurethe constructs of customer knowledge and CRM performance among 201 ICT companies in Malaysia. This studyalso examines the influence of customer knowledge as exogenous variable on CRM performance as endogenousvariable as hypothesized. Using structural equation modeling (SEM) analysis method, the results confirmedknowledge for customer, knowledge from customer and knowledge about customer as constructs of customerknowledge. Financial, customer, internal process and innovation perspective also confirmed as constructs ofCRM performance. The fundamental contribution of this study is determination of the significant interactioneffect between customer knowledge and CRM performance constructs in the re-specified model of structuralequation 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 canimprove their relationship with their valuable customers to create loyal customers and obtain competitiveadvantage.