The nexus between CRM and competitive advantage: the mediating role of customer loyalty

Abstract

PurposeThe purpose of this study is to examine the impact of customer relationship management (CRM) components on competitive advantage through customer loyalty in the banking sector of Bangladesh.Design/methodology/approachA structured questionnaire was used for the data collection process. In all, 326 respondents were participated in the survey and selected conveniently from the commercial banks of Bangladesh. Data were analyzed by using Smart-PLS software.FindingsThe outcomes of this study indicate that customer orientation and technology capability have a positive impact on competitive advantage, while customer knowledge does not. Besides, customer loyalty significantly mediates the relationship between customer orientation and technology capability with competitive advantage, while this mediation effect appears insignificant between customer knowledge and competitive advantage.Practical implicationsThis study's findings can help Bangladeshi bank managers communicate with new customers about their promotional activities while keeping old customers informed about new CRM initiatives.Originality/valueThis study adds to the existing pool of knowledge on CRM components, customer loyalty and competitive advantage literature. Particularly, the mediating role of customer loyalty between the CRM components (customer orientation and technology capability) and competitive advantage is the unique contribution of this research.