ELECTRONIC CUSTOMER RELATIONSHIP MANAGEMENT AND FIRM
PERFORMANCE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Introduction
The chapter presents summary of the study finding, conclusions of the study and
recommendation for policy and practice. It also includes the limitation of study and areas
of further research on electronic customer relationship and competitive advantage in
commercial banks in Kenya.
Summary of the study
The objective of the study was to determine the relationship electronic customer
relationship management has on performance and competitiveness of commercial banks
in Kenya. The study used cross sectional survey research design. The targeted population
was the commercial banks’ employees in Kenya. The sample size of the study was 100
respondents. The research instrument used was a structured and semi structured
questionnaire. The rapid growth in electronic banking indicates a major move towards
use of electronic money as opposed to the over-the-counter customer service.
This leads to the need to analyze how E-CRM is working in order to harness how to use
it to gain competitive advantage. Electronic customer relationship management has been
used in commercial banks for some years and is beneficial to customers in spite of some
challenges. Some of these challenges can be identified by interacting with those utilizing
the electronic channels. However, according to this study, interaction with participants
was rated as average and this offers an opportunity for improvement that may lead to the
banks growth. This is especially so noting that the participants were willing to use all the
means of communication that are available. Despite this openness, more than half of the
participants identified phone calls as the quickest way to solve customers’ e-banking
problems. This shows the perception that dealing with a person one can talk to may lead
to faster solutions. Social media was second and this shows that customers are becoming
more tech savvy though there is still the problem of forgetting passwords or pin numbers.
In this study, the preferred touch points were email, social media, telebanking, online
banking service and customer service showing that participants were open to using
majority of the available systems to interact with the banks. In spite of this, systems
delays may inconvenience the user and it was the most mentioned complaint during use
of e-banking. Banks may improve the time taken to access and use the electronic systems
which may increase its usage and therefore give them a competitive advantage.
The E-CRM attribute with the highest mean is bank offers regular ECRM training. In
competitive advantage, having significant growth opportunities had the highest mean.
The attribute with the highest mean in organizational performance was that employees
had a positive attitude and delivered excellent customer service. Competitive advantage
had a positive association with organizational performance. It also had a moderating
effect on the relationship between electronic customer relationship management and
organizational performance increasing the explanatory power of the model.
Conclusion of the study
Demographic characteristic of the population under study reveal that over seventy
percent are youth aged between 18-33 years. The target population is in general single or
young couples in non- management job level, but highly educated and technology survey.
Electronic customer relationship through social media and telebanking were most
preferred regular means of communication. Banks hence have great potential of resource
that is not fully exploited that can give them competitive advantage.
Descriptive statistics indicated that E-CRM had a low exhibition in Kenyan commercial
banks but competitive advantage and performance had a higher exhibition. The
correlation analysis findings showed that E-CRM has no significant association with
organizational performance. Regression analysis before introduction of the moderating
variable indicated that electronic customer relationship management had no significant
impact on organizational performance. The regression analysis also exhibited that
electronic customer relationship management and competitive advantage can be used to
predict organizational performance. The coefficient for electronic customer relationship
management in the study implies that a unit increase in electronic customer relationship
management would cause a 0.307 units decrease in organizational performance while the
competitive advantage coefficient implies that a unit increase in competitive advantage
would cause a 0.376 units increase in organizational performance.
The cost of transacting using electronic banking system is generally influenced by mode
of electronic banking used. Human resource training on E-CRM was viewed as effective
given the quality of service received by customer, but not as regular as required. Banks
that continuously leverage on innovation and technology will be able to sustain
competitive advantage over those who are slow or do not adapt to change.
Limitation of the Study
Time limitation of research study would not have allowed the collection of data for all 43
registered commercial banks and financial institutions country wide. Limited financial
access led to the narrowing of the scope of research population.
Implications of the Study
The Central Bank of Kenya needs to regularly evaluate the challenges facing usage of
electronic banking system to improve on electronic customer relationships between
commercial banks and customers to improve on security, access and adaption. Areas of
password, pins, fraud and system delays should be addressed to improve on turnaround
time.
The findings of the study indicate that electronic customer relationship management has
an insignificant impact on commercial bank performance but introduction of competitive
advantage enhances the relationship between the two variables. This will contribute to
theory and knowledge in the area of relationship development and outcome of such
relationship in regards to firm performance. Banks should adopt electronic customer
relationship management to gain competitive advantage in order to increase their
profitability.
Recommendations of the Study
a) Commercial Banks need to invest in human capital and technology to remain
competitive and profitable in the global market. Customer care training was identified as
key in developing, maintaining and expanding commercial bank customer base. Data
collected from electronic banking system will be a value resource for gaining competitive
advantage.
b) Customer complaints on electronic banking systems delays, blocked pins, forgotten
password, fraud and usage features that hinder the usage or adaption of electronic
customer relationships should be critically investigated to come up with lasting solution
that will improve usage and reduce complaints.
c) Many of the respondents agreed that they should be involved when new products and
services on electronic banking system are being designed or implemented to improve on
adaption and business relationship thus increase knowledge or benefit awareness.
Areas Suggested for Further Research
The customer of today is highly multibank and aware of current changes in business
trends. Reduced need for face to face interaction with banks to carry out business
transactions necessitates the need to develop customer relationship outside banking
environment to retain customers and maintain competitive advantage.
Similar studies on electronic customer relationship can be done for savings and credit co-
operative society or other industries to improve on customer retention and competitive
advantage to improve on organization performance.
REFERENCES
Abu-Shanab, E., & Anagreh, L. (2015). Impact of electronic customer relationship
management in banking sector. International Journal of Electronic Customer
Relationship Management, 9 (4), 254–270.
Ansoff, H. I. (2016). Strategic Management. New York: Springer.
Barney, J. B., (2001b). Resource-based theories of competitive advantage: A ten-year
retrospective on the resource-based view. Journal of Management, 27(6), 643.
Beckett-camarata, E. J., Camarata, M. R., & Barker, R. T. (1998). Integrating Internal
and external customer relationships through relationship management: a strategic
response to a changing Global Environment. Journal of Business Research, 41
(1), 71-81. doi:10.1016/s0148-2963(97)00013-1.
Bennett, R., & Barkensjo, A. (2005). Relationship quality, relationship marketing, and
client perceptions of the levels of service quality of charitable organizations.
International Journal of Service Industry Management, 16, 81–106.
Bhatnagar, A. & Saxena, R. (2013). CRM vs E-CRM to study and understand the impact
of traditional CRM vs technological CRM. Dubai International Conference on
Technology and Business Management, 18–20, pp.1–6.
Brigham, E. F., & Gapenski, L.C. (1997). Financial Management: Theory and Practice.
New York: The Dryden Press.
Carton, R. B. & Hofer, C. W. (2011). Measuring firm performance: Metrics for
entrepreneurship and strategic management research. Cheltenham, UK: Edward
Elgar Publishing.
Central Bank of Kenya (CBK). (2014). Monthly Economic Review March, 2014. Nairobi,
Kenya. Government Printers.
CGAP. (2011). Global Standard –Setting Bodies and Financial Inclusion for the Poor:
Toward Proportionate Standards and Guidance. Washington D.C: CGAP/World
Bank.
Chen, Q., & Chen, H. M. (2004). Exploring the success factors of eCRM strategies in
practice. Database Marketing & Customer Strategy Management, 11(4), 333–
343.
Clausen, J. (2009). Customer Relationship Management Methods. Retrieved from
http://www.suite101.com/content/customer-relationship-management-methods-
a177274.
Covey, S.R., (2004). The 8th habit: From effectiveness to greatness. UK: Simon &
Schuster.
Creswell, J. (2008). Educational research: planning, conducting, and evaluating
quantitative and qualitative research. New Jersey: Pearson, Merrill Prentice
Hall.
Daniel Wayne .W., (1992). Business statistics: For management and economics 6th Ed.
Boston Toronto: Houghton Mifflin.
Deshmukh, S., Deepa, N., & Shravanthi, A. R. (2013). E-CRM: an ultimate strategy
for an organization. International Journal of Management Research and
Review, 3 (3), 2557-2566.
