Profitable Customer Relationships Research Articles

Academic service quality, student satisfaction and loyalty: a study at higher education legal entities in Indonesia

PurposeThis study aims to explore the influence of academic service quality on student satisfaction and loyalty, based on a study at Higher Education Legal Entities (HELE) in Indonesia. HELE is a policy in higher education that empowers these institutions to become autonomous in management. Academic service quality (ASQ) is an essential aspect of fostering the satisfaction and loyalty of students.Design/methodology/approachThis study uses the descriptive quantitative and regressive survey approach to examine the influence of academic service quality on student satisfaction and loyalty. The population in this study encompassed all students from HELE. Meanwhile, 750 students were purposefully selected from 16 HELE in Indonesia. Data were collected using validated and reliable questionnaires. The garnered data were analyzed using a structural equation model through Smart PLS 3.FindingsThis study finds that (1) there is a significant direct influence of academic service quality on student satisfaction in HELE, (2) there is a reasonably direct influence of student satisfaction on student loyalty in HELE. (3) ASQ of HELE has a feeble direct influence on student loyalty and (4) there is a moderate indirect impact of academic service quality on student loyalty, mediated by student satisfaction at HELE in Indonesia.Research limitations/implicationsThe research was conducted across 16 HELEs in Indonesia. Many other universities do services and of course impact on satisfaction and loyalty for students, but are not included in this research. Besides that, other aspects are not included in this research either. Based on that condition, this result cannot cover all aspects of others in all universities in Indonesia.Practical implicationsThe practical implication of this study’s results for the leaders of HELES is to commit to student-centered, service-oriented tactics and actions for establishing student loyalty. Besides, these institutions must prioritize developing and maintaining profitable customer relationships in this changing world and offer an agenda for the future research.Social implicationsThe social implication will be indicated by higher universities to always improve the service quality of academics, with continuous improvement in the future. It has to do with every university so that student satisfaction improves, and student loyalty improves too. Exiting HELE in the future depends on the variables of service quality for stakeholders in the community around. If the community gets satisfaction, in the future, they will be back to support the HELE in the future.Originality/valueThe results of this study are original and novel, and strengthen the findings of previous research that there is an effect of academic service quality on student satisfaction. It confirms the effects of satisfaction on loyalty, along with the effects of academic service quality on loyalty mediated by satisfaction. These results rejected previous results that there are effects of academic service quality on student loyalty in HELE as organizations.

Business process reengineering for designing a knowledge-enabled customer-centric competitiveness strategy

PurposeThe study aims to design a holistic multi-stage hierarchical model that leverages the firm's knowledge-enabled distinctive core competencies (DCCs) and builds enduring and profitable customer relationships to achieve sustainable competitive advantage (SCA) in dynamic and challenging environments. It developed a knowledge-enabled customer-centric competitiveness strategy (KCCS) model that integrates four pillars: business process reengineering (BPR), knowledge management (KM), customer relationship management (CRM) and competitiveness strategy. It also proposed a BPR model to enable cross-functional cooperation and coordination for firms dealing with customers, provided a blueprint for KCCS's successful implementation and compared the KCCS model with other customer-centric (CC) approaches.Design/methodology/approachThis study adopted an exploratory research design based on a literature review of relevant studies. It has systematically analyzed 130 articles and books from Scopus, the Web of Science, Google Scholar and other renowned databases from 1982 to 2022. The analysis involved identifying and selecting relevant literature and conducting thematic research to develop a theoretical KCCS model that integrates BPR, KM, CRM, competitiveness strategy and the firm's SCA into a KCCS model.FindingsThis study developed an integrative KCCS theoretical model rooted in the extant literature in BPR, KM, CRM, competitiveness strategy, DCCs, SCA and other fields. The study proposed a BPR model as a significant component of KCCS that enables cross-functional cooperation and coordination, which are often troublesome for firms in their dealings with customers. The study also provided a blueprint for successfully implementing the KCCS model and compared the KCCS model with other CC approaches.Originality/valueThis study filled many research gaps in the literature in which knowledge-enabled CC frameworks are widely scattered. It offered a conceptual multi-stage hierarchical KCCS model that combines interrelated elements of BPR, KM, CRM, and competitiveness strategy. It proposed a BPR model as a significant component of the KCCS that enables cross-functional cooperation and coordination, which frequently form barriers when dealing with customers. It also provided a blueprint for successfully implementing the KCCS and compared it with other CC approaches.

Engaging Customers and Managing Customer Relationships

Marketing is about engaging customers and managing profitable customer relationships. Marketers aim to create value for customers in order to capture value from customers in return. The objective of the study is to discuss customer value, customer engagement, building customer relationships, and the various strategies and initiatives adopted by companies. Customer relationship levels and roles of digital and social media in customer engagement are discussed. Customers themselves generate substantial content nowadays. Again, companies should develop relationships not only with customers but also with partners like suppliers, distributors, and retailers to succeed in the long run. The roles and importance of consumer-generated marketing and partner relationship management are discussed. The discussions will help practitioners to understand the strategies and initiatives to be adopted to engage customers, manage customer relationships, to succeed in the competitive business environment, and to achieve business excellence in the long run.

Digital business model innovation among small and medium‐sized enterprises (SMEs)

AbstractDigital business model innovation (DBMI) has been acknowledged as a new business norm which allows for increased competitiveness. By adopting the dynamic capabilities theory, this research aims to investigate the adoption of DBMI among small and medium‐sized enterprises (SMEs) in a developing country. The qualitative data were collected using semi‐structured virtual interviews with SMEs. The findings revealed that the SMEs have redesigned their DBMI through value creation innovation, which refers to the use of new digital technology, new capability, and strong collaboration with new partners to streamline the business processes. SMEs innovate their value proposition by focusing on new product and service offerings and creating profitable customer relationships. Interestingly, SMEs also implement value delivery innovation, utilizing new delivery channels to target new market segments. In terms of value capture innovation, SMEs are concerned with obtaining new sources of revenues at a lower cost structure. Research studies on DBMI in Malaysia are scarce. The originality of this research lies in the exploration of DBMI in the real‐life business context, and the insights it will provide to SMEs and practitioners in the midst of adopting DBMI. The findings offer valuable insights for SMEs, practitioners, and policymakers in emerging economies.

Factors affecting the success of marketing in higher education: a relationship marketing perspective

ABSTRACT The current study examines the conceptual foundations and drivers of relationship marketing ideologies and their marketing applications in the tertiary education sector. Towards these objectives, a series of semi-structured interviews have been conducted among students of leading tertiary education institutions in New Zealand. Results of the study suggest that education providers’ (EPs) service-oriented behaviours, trust, commitment and their infrastructure enhance student satisfaction and loyalty in tertiary educational institutions. The study suggests that higher education providers (HEPs) should commit themselves to customer-centric service-oriented tactics and actions, and must earn customers’ trust and build loyalty from their marketing practices. Based on the research findings, a conceptual model of relationship marketing in higher education is proposed. The current study contributes to marketing theory by reviewing and summarizing the key drivers of relationship marketing and discussing their applications in the formal tertiary education sector. The study also provides suggestions to tertiary education marketers in terms of priorities for developing and maintaining profitable customer relationships in this changing world and offers an agenda for future research.

Competence development needs for micro-enterprises entering servitisation

Servitisation, as a means to drive growth, provides a great business opportunity for micro-enterprises (micros), offering the possibility of longer and more profitable customer relationships. However, such enterprises possess limited human resources and, thus, competences. Competence-related challenges must be understood in order to operate successfully in the field of servitisation. This study produces new knowledge about competence development needs. The study material consists of interviews conducted in ten Finnish subcontracting micros in the fields of forestry, agriculture, and mining. Using a multiple case approach allows for an extensive examination of the insufficiently studied phenomenon of interest - micros engaging in servitisation - utilising Tukker's (2004) product-service system. The results contribute both academically and practically by showing that micros face competence-related servitisation challenges in terms of entrepreneurship, change management, and financing. The study broadens Tukker's product-service categorisation to include product manufacturing industries that offer assembly services.

A new model to compare intelligent asset management platforms (IAMP)

Nowadays, no business activity escapes the fourth industrial revolution, called industry 4.0, which is characterized by digitalization of processes. The possibility of simultaneously having systems with greater interconnection, more information and greater flexibility, allows companies to have a clearer view of their processes and consequently improve their effectiveness and efficiency. The digital transformation can no longer be based simply on making the processes more efficient, but on creating more sustainable and profitable customer relationships, continuously aligning the value of the product with the changing customer requirements. Even though managing assets over the Internet is increasingly common, much effort is needed to identify the functionality that should be provided by these platforms to enhance existing asset management practices.The effort of IT vendors is focused on the development of IoT platforms, which allow, among other functions, to create a connection between machinery and digital systems, protect all devices and data against hacking or attacks, control operations and maintenance of equipment or perform different analyses of assets or systems. The aim of this paper is to understand the functionalities of the existing IAMP platforms, providing a system that evaluates these functionalities based on the business objectives from the point of view of asset management. This methodology allows maintenance managers guiding the evolution of the life cycle of their assets according to the business value conception. This makes this methodology especially suitable for supporting new challenging scenarios of maintenance management. In this paper we first talk about the structure of an IAMP, then how they integrate the asset management model and a summary of the features and modules that have the most known IAMP platforms. Finally, an evaluation system of IAMP platforms and a case study is presented based on their content for asset management.

Customer centricity in mobile banking: a customer experience perspective

PurposeThe purpose of this paper is to increase understanding about how to improve customer value and to make mobile banking services a profitable business for banks and other financial actors. The study explores the user experiences and related value of a new mobile banking service.Design/methodology/approachThe study is implemented as a case study that is phenomenological in nature and linked to an interpretive consumer study. Empirical data were collected through 14 semi-structured theme interviews and a diary method. The data were analysed by using a content analysis method.FindingsThe findings illustrate the importance of customer centricity in the mobile banking context by identifying customer experience and related value in a new mobile banking service. The study extends current understanding of customer experience as a complex and multifaceted phenomenon by including value related to process, the use situation and the outcome, and it identifies temporality as influencing and connecting all these aspects. The study identifies several aspects that help us to understand what creates value for the customer while using mobile banking services.Research limitations/implicationsAs one limitation, this study was conducted in a developed country and the findings could be different in an emerging market context. Another limitation relates to the data, as the interviewees’ age range is quite limited, ranging between 20 and 40 years. However, they represent the consumers who normally use mobile services well and thus provide reliable data about their use experiences.Practical implicationsAs the banking industry is currently experiencing rapid and widespread changes and customers become more demanding, it is crucial for banks and other mobile service providers to understand the everyday lives of their customers and to integrate their future services into the customers’ value creation processes as smoothly and inseparably as possible. The findings of this study will help banks and other financial institutions to develop their strategies and operations in regard to customer-oriented thinking, which will further help them to create long-term, profitable customer relationships and improve future viability.Originality/valueThe study contributes to bank marketing research and extends previous research on customer-centred service marketing by providing a framework that identifies the value related to customer experience in a new mobile banking service. It explores the experiences of actual mobile banking service customers’ and the related value, and thus provides original implications for both theory and practice.

Data mining techniques for analyzing bank customers: A survey

In today’s business world, identifying the customers and analysis of their behavior is important for banking industry. Customer Relationship Management (CRM) is the process of maintaining profitable customer relationships by delivering customer value and loyalty. Moreover, CRM helps to improve the business relationships with customers. The goal of CRM is to maximize the lifetime value of a customer to an organization. Customer Lifetime Value (CLV) can rank and classify customers based on their lifetime value to identify valuable customers and retain them. There are several models for CLV estimation using the past data of customers. This subject helps organizations in their attempts to retain valuable customers. The banks must use appropriate data mining techniques to extract pattern and information from the existing data to gain competitive advantage. Therefore, data mining techniques have an important role to extract the hidden knowledge and information. The goal of this study is to review data mining techniques used for analyzing bank customers in order to help the banks to better identify their customers and design more efficient marketing strategies. The literature covered in this paper is related to the past seventeen years (2001–2017) and these approaches are compared in terms of data sets, prediction accuracy, and so on. We also provide a list of data sets available for the scientific community to conduct research in this field. Finally, open issues and future works in each of these items are presented.

Service Delivery and Customer Satisfaction in Nigerian Banks

The study examined the impact of the quality of service delivery on customer satisfaction in the Nigerian banks using Ordinary Least Square (OLS) methodology. The study established a relationship between better banks performance in service delivery and customer satisfaction through effective customer relationship management (CRM). Findings revealed that increase in the number of working days and number of bank branches led to better levels of customer satisfaction. Empirical evidence also revealed that increase in PROFIT margin is a function of improved level of customer satisfaction while number of bank branches (NNB) has a positive but insignificant relationship with customer satisfaction because the spread of branch networks or channels has better effects on customer satisfaction than number of banks. It also emphasized the role of the number of working days in achieving better bank services and profitable customer relationship management. The study thus recommends that the Nigeria banking industry should improve the quality of service delivery as it is a prerequisite for achieving a high level of customer satisfaction.

The use of social customer relationship management by building contractors: evidence from Tasmania

Despite its ever-increasing popularity with consumers and businesses, many organizations are still unsure how to effectively use social media in a marketing context. One way in which building firms can use social media is as a customer relationship management (CRM) tool to improve customer engagement and satisfaction (known as social CRM). In order to explore how social CRM (SCRM) can be used, and is being used by building firms, semi-structured interviews with accredited building practitioners were utilized to collect data on SCRM use in the sector. The data were analysed to determine the factors that influence social media use, the extent of SCRM use, and the ways in which building contractors are using SCRM. It was found that builders are using social media to manage client relationships, but to a limited extent due to the complex nature of the builder–client relationship and a lack of perceived trustworthiness. Building firms favoured a transactional approach to social media use, and preferred not to use formal social media strategies. Builders are also reluctant to use social media to assist them in segmenting customers by their value to the firm. For effective social media use, builders may consider two main issues: SCRM strategy and customer-value segmentation to develop profitable customer relationships.

Systemic products and value creation processin healthcare networks

IntroductionEssential to any business network is the underlying through which it produces a value. Creating and capturing the value reflects the two fundamental functions of all organisations: 1) creating the value in ways that differentiate them from the competition and 2) develop core competencies that are different from those of competitors [Shafer et al. 2005]. In order to create the value for the end customer, networks need to employ their core competencies in core processes so that something valuable to the customer is created.This value-system construct is based on the notion that each product/service requires a set of value creating activities performed by a number of actors forming a [Moller & Rajala 2007]. Nowadays, it can be observed that the interest in the value net concept in the healthcare is growing. Progressing integration of the medical sector actors is indicated by the emergence of healthcare value nets and systematic product development. The purpose of the article is to identify and describe the forms of systemic products and network structures in healthcare in the context of value creation, and consequently to develop theoretical-descriptive models of value creation on the medical market. The paper presents a fraction of empirical research which has been aimed at identification and description of the value creating process and systemic product structures in the healthcare in CCE. This paper has been divided into several sections. The first section focuses on the introduction followed by a value-creation system, healthcare value networks and a systemic product in the healthcare literature review. The further part of the paper presents research objectives and research methodology, as well as a discussion and conclusions.1. Value-creation systemMarketing is about managing profitable customer relationships. The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering satisfaction [Armstrong & Kotler 2007]. Creating value for customers has been recognized as a key concept in marketing [e.g. Drucker 1954; Rust & Oliver 1994; Sheth & Uslay 2007; AMA definition of marketing; Chartered Institute of Marketing definition of marketing], making the value and value creation an important research subject [Gronroos 2011]. At the general level, the customer value has been referred to as an overall assessment [Zeithaml 1988], a function of consumption behaviour [Sheth, Newman & Gross 1991], perceived quality adjusted for the relative price [Gale 1994], an emotional bond [Butz & Goodstein 1996], relationship [Payne & Holt 2001], personal perception [Woodall 2003, and subjective personal introspection [Holbrook 2005]. In the article it is assumed that the value for customers appears when, after being assisted by the provision of resources or interactive processes, customers are or feel better off than before [Gronroos 2008]. Features of healthcare services quite considerably contribute to their distinctive character and, at the same time, affect the value offered to the customer/patient. On the basis of their skills and knowledge and with full observance of norms and rules prevailing in a healthcare services area, medical services firms provide services which are designed to solve problems of their customers. Customers' participation is vital and indispensable for this cooperation [Bitner et al. 1997].By value-creating system Parolini [1999] means a set of interlinked activities that create value for final customers. In order to leverage at best their resources and competencies, firms should not limit their perspective to their value chain (set of sequential activities) or, even worse, to their direct suppliers and customers. In conceiving their strategy, they must take into account the whole within which they operate, and, if possible, assume the point of view of the final customer [Parolini 1999]. …

A customer value-based airline revenue management approach considering both opportunity costs and misclassification of heterogeneous clients

Owing to intense competition, not only airlines are interested in the establishment of long-term profitable customer relationships. However, clients can often not be classified into the appropriate customer segment (each characterised with a long-term customer value) unambiguously as only insufficient information is available at the time of decision for acceptance or denial of their requests. By considering (mis-)classification and evaluating the expected effects on revenues, we extend a bid price control that bases its decision on uncertain trend information about segment distribution and chooses that particular segment maximising expected value during opportunity costs comparison. Finally, we can show advancements both in quality of decisions and revenues compared with traditional methods via simulation.

The influence of service orientation and interaction orientation on consumer identification

A service orientation aims to provide professional and comprehensive service items to consumers in a sale or a non-sale situation, while an interaction orientation has the goal of creating good interaction ability with individual customers in order to maintain long-term, profitable customer relationships, and in the process obtaining valuable information about individual customers. These orientations build customer-centric operations and develop competitive advantages, thus enhancing firm performance and customer value. The main purpose of this study was to examine the relative and collective contributions of different strategic orientations on a firm's performance, with a focus on consumer–company identification. The structural equation model results indicate that (1) both service orientation and interaction orientation positively influence consumer–company identification and (2) interaction orientation results in higher perceived consumer identification.

Marketing of small business, A case of small business in India

Marketing plays an important role in the success of any business organization. MSME sectors contributes towards growth the economy by creating employments and productivity. One of the typical problem faced by new start-ups are finding consumer for their goods and service. Though we know that marketing starts before the production of good s and services and doesn't end with the sell of the goods. Marketing is a continuous process focused towards identifying, creating and satisfying the customers. The task of the marketing is to minimizing the distance between producers and consumer so that both can establish an exchange relationship. In India most of the Micro small medium enterprises (MSME) units are started because of the subsidy and incentives of the government. They begins to face problem relating to promotion their units when the units become operational. This paper tries to evaluate the existing marketing system and different marketing issues faced by the MSME sectors. I. Introduction Identifying the needs and wants of the of the consumers and creating goods and services to fulfill these needs is the fundamental task of the marketing function. The main objective is to establish a profitable customer relationship with target customers. Achieving these objectives require far more effort than merely making goods and service available. Every new entrepreneurs must do a great deal of deeper marketing research to understand who are his customers and how best to serve them. Research activities is a must before opening the new ventures and it must continue so long the business exists. A budding entrepreneur must make a concerted effort to establish identify the customer segments and satisfy them by delivering superior value in products and services. The focus must be on long term profitability by creating reputation for service and quality. There must be integration of other business function with the marketing effort. The market research indicates the new opportunities which requires a marketing strategy to be developed by the entrepreneurs to succeed in the market. A well formulated strategy provides guidelines to for the entrepreneurs concerning the objectives to be achieved, allocation of results, tasks to be carried out by the marketing functions and controlling the activity of the enterprise. Indian MSMEs are in a better position than their counterpart in other Asian countries because of the growth prospects and higher level of incentives by the Govt. of India. The Micro Small and Medium Enterprises in India, constitute more than 90 per cent of the total number of industrial units and they form the backbone of industrial development. These unit are suffering because of the low scale of operation and lack of latest technology. The era of liberalization has created higher competition from the foreign imports, changing manufacturing processes, highly dynamic and changing market condition and the requirement for different strategies. There is need for MSMEs to innovate newer processes and strategies to develop products which differentiate form imported products. To face the higher level of competition from big corporates houses and MNCs, MSMEs need to be dynamic and proactive to the evolving marketing needs and innovations. The MSME sector needs to be supported with better market facilities so that they can sustain themselves and contribute to productivity, employment generation and foreign trades. Objectives of the study-  To evaluate the existing marketing framework for the MSME sectors  To highlight the problem faced by the MSME sectors in marketing products and services  To evaluate the international marketing opportunities.  To evaluate the different strategy in a competitive and globalised environment.

Internet banking services as tool of CRM: a study of customer satisfaction in the National Capital Region, Delhi

CRM has emerged as one of the popular solutions for diminishing market share and sluggish growth in banking and financial sector. Since internet banking is based on the use of the internet, the services are mainly used in major cities of India. Internet banking is also considered an important CRM tool by the banks and is used as a business strategy to create, retain and maintain long–term profitable customer relationship. This paper examines the adoption of internet banking as a CRM tool by leading Indian banks. The study surveys the opinions of 400 customers of two public sector banks and two private sector banks (100 from each bank). ANOVA has been used for getting insights into internet banking services provided by the sample banks. The four selected banks are assumed to represent the banks in both the private and the public sectors and their CRM practices.

Customer-perceived internet banking service quality: a study in national capital region of India

With the advancement of technology and growth in internet penetration, the banking sector has developed different channels to customer for their banking needs such as ATM, internet banking and tele-banking. Internet banking is based on the uses of the internet and mainly used in urban areas. It is used as a business strategy to create, retain and maintain long-term profitable customer relationship. This paper examines customer perceived service quality of the internet banking provided by leading private and public banks in India, such as ICICI Bank, HDFC Bank, State Bank of India and Punjab National Bank. The study employs the surveys methods to find the opinion of 600 customers of these four banks. Factor analysis and ANOVA have been used for having insights in the internet banking services provided by the sample banks. The four selected banks are assumed to represent the banks in both the private and the public sector.

Optimality of Customer Relationship Management

Managing customers based on customer equity (CE) has emerged as the most effective way of doing business because of its ability to foster profitable customer relationship management (CRM) through appropriate marketing activities. Most research studies provide conceptual and empirical evidence of the positive link between CE and firm performance. However, regarding this possibility, it has been suggested by some researchers that this link may not hold true for other firms with different firmographic factors, such as firm growth rate, size, and resources. As previous research emphasizes that marketing managers should implement a strategy based on their unique business environment, our study addresses this issue by extending the framework to a different industry setting to investigate the impact of CE on firm performance. We develop a model for examining the relationship between the firm`s estimated CE and firm performance by each time period using a distributed lagged model. Then, we investigate the effect of CE on the firm`s profitability using a regression analysis. Finally, even though CRM is in increasing demand and firms are focusing on the customer as an asset, we conclude that there is a limited condition for this positive effect of CE. When the life cycle was divided by growth rate, CE was shown to have a distinctive effect on profit. In the case of a highgrowth stage, the effect of CE on profit is positive because of its potential customer base, whereas the effect is not significant in a low-growth stage. That is, when the business environment is saturated and the firms are no longer competing in the market, CRM may not be effective. In other words, a long-term performance orientation may not be as effective as previously believed. This research contributes to the previous literature, providing a counterintuitive suggestion that firm managers should be cautious about implementing a CRM strategy and should allocate resources properly in terms of their resource capabilities and ability depending on their situation.

Impact Of Emotional Intelligence On Performance Of Insurance Marketers: A Study Of Personnel In Indian Public Sector

Success of sales professionals depends on their ability to understand the need and empathize with the customers. Research has identified the attributes that play a major role in influencing the performance of sales people of which emotional intelligence is a major contributing factor. Goleman (1998) suggested that emotional intelligence facilitates sales personnel to build a strong and profitable customer relationship. The study presented here is focused on sales personnel of the life insurance sector. The rationale behind the choice of this sector is the significant contribution of this sector to the domestic economy which is growing at a rate of 10 per cent annually (Survey, 2010-11). In spite of the stiff competition from the private insurance companies, LICI has been able to top the list of actors in the insurance sector. Behind this success of LICI, the insurance advisors play a pivotal role. The researchers have tried to explore the facets of emotional intelligence influencing the performance of these advisors in different hierarchical levels spread across the Kolkata region, based on an empirical study through a structured questionnaire. Such a study may provide guidelines for the HR professionals in career management of the insurance sector sales personnel.

Challenges of Electronic Customer Relationship Management (e-CRM) in Rent-A-Car Sector in Bosnia and Herzegovina

Customer relationship management (CRM) in both B2C and B2B relationships is of crucial importance for success of modem companies. It is one of the main tools for improvement of relationship with customers, especially in the demanding world of services. Therefore, the electronic customer relationship management system (e-CRM) as upgraded version of CRM represents today not an option but an obligation for efficient and profitable customer relationship management. The use of e-CRM leads to increased profitability through attraction of new and retention of old customers. Thus, understanding the impact CRM and e-CRM have on efficiency of service industry; in particular tourism industry is of crucial importance for companies and managers.The aim of this paper is to provide the theoretical background and present discussions on implementation of CRM and e-CRM system particularly in tourism industry relating it to rent-a-car sector as part of the tourism industry. Furthermore, the paper explores the implementation and impact of e-CRM system in rent-a-car agencies in Bosnia and Herzegovina. This paper provides insight into the level of incorporation of e-CRM in rent-a-car agencies and their everyday business activities. Additionally, it proves that e-CRM leads to increase of profitability through the higher level of customer retention and attraction particularly in those rent-a-car agencies that have recognized the significance of e-CRM and have incorporated it into their business strategies. The paper is backed up with field research through structured personal interviews conducted with major rent-a-car agencies in Bosnia and herzegovina. the research findings indicate that those rent-a-car agencies the have implemented (e)CRM in their everyday business have benefited from it through increased level of customer retention and attraction.