Factors Influence Customer Satisfaction In Crm System

Published Date: 02 Nov 2017

RESEARCH PROPOSAL

Full title of the research

Factors Influence Customer Satisfaction in CRM System

Background of the Problem / Study

Over a century ago, people went to market to get their groceries and wet goods. The bargain to get their things becomes usual scene in market. The proprietor or the grocer will recognize their customers by name and their preferences and wants. In turn, the customer will be loyal to the proprietor or grocer and made repeated purchase because they were satisfied with the services given to them.

This scenario also narrated by Greenberg (2001) in his book ‘CRM at the speed light’ where the movie reflects the American social consciousness of the 1930s and 1940s. In this movie, it is the story of George Bailey a banker’s son who takes over the family Building and business, even though he has a restless soul and wants to see the world. However, he saw the townspeople were his customers, so his responsibility was to serve them with the best possible personal customer service.

Another person, Mr. Potter followed the strict rules of the bank. If the rabble wanted to borrow money, they did it on the banks’ terms or not at all. While Mr. George Bailey lent the hardworking townspeople the money at reasonable, flexible rates during what seemed to be the depression years because that’s the service they needed. The climax of the story shows the townspeople coming to George Bailey’s rescue by providing him with money to restore missing dollars that Mr. Potter falsely accused him of stealing, with each of donors citing at time where George Bailey had rescued them from some difficulty.

This idyllic customer relationship disappeared as the nations grow to the twenty-first century. The population moved from the farm communities to large urban areas. The consumers became more active with mobile and do online purchased through e-bay website or other e-commerce website. While supermarkets and department stores were established to achieve economies of scale through mass marketing.

Although prices were lower and goods more uniform in quality, the relationship between the customer and the merchant became nameless and faceless. The personal relationship between merchant and customer became a thing of the past. As a result, customers became fickle, moving to the supplier who provided the desired object at lowest cost or with the most features (Gray & Byun, 2001).

From the traditional business it grows to modern business. Before the CRM is introduced to the world, all the customers’ data will be stored in a file folder and kept in a file cabinet. When they have customers’ complaint, they need to open the file and recheck the invoice history of the customer. It is cumbersome and trouble for staff to solve customer problem in a short time.

Then, the process developed from file based to computer based. All the data will be saved in excel file. However, this process still has disadvantages until CRM system was introduced to the customer nearly twenty-first century. CRM, though not a formal program, generally combines various elements of technology, people, information resources and processes in order to create a business that takes a "360-degree" view of its customers (Galbreath & Rogers, 1999).

CRM system can be seen as a solution work with a certain regions working patterns. It gathers, stores, and analyzes the data, organizes the business, confers the services to the customers, and also helps decision-making (Virgiyanti, Abu Hassan & Asim, 2010). CRM fosters an environment where the automation of customer-facing processes and the integration of historically isolated customer databases helps a business to focus on doing business with the right customers. At the same time, a business can provide personalized, individualized attention – regardless of who the customer is interacting with or where that employee resides within the business (Galbreath & Rogers, 1999).

Many researchers debate the implementation of CRM system (Payne & Frow, 2006; Sedera, Tan & Dey; Greenberg, 2001). Is the system will be covered all the customer needs? Or customers will be satisfied whatever features that CRM provided to them? What the factors made the user will satisfy with this system.

In today’s competitive environment delivering high quality service is the key for a sustainable competitive advantage. Customer satisfaction does have a positive effect on an organization’s profitability. Satisfied customers form the foundation of any successful business because customer satisfaction leads to repeat purchases, brand loyalty and positive word of mouth. (Angelova & Zekiri, 2011).

Problem statement / Thesis Statement / Problem identification

Over a decade ago, many companies were implemented CRM system in maintaining and retain their customers. Unfortunately, not all the implementation was succeeded and the companies have to bear the consequences. A CRM system embodies the concept of CRM. In a CRM system, the approach is to combine strategy, process and technology to manage relationships with customers (Hee-Woong & Pan, 2006).

The ‘heart’ of CRM architecture is the data warehousing and analysis systems. This permits a single corporate view of the customer, facilitates segmentation of the customer based and provides some immediate business benefits in terms of marketing campaigns. Call Centres are a priority for many companies struggling to cope with the demands of customers for immediate service at any hour of the day (Thompson, Ryals, Knox & Maklan).

The development of CRM system has enabled the organizations to collect and store more data than has ever before. The high volume of the data made the organization faced complexity to manage the data. The risk of poor information quality will be high since larger and complex data were collected and stored in the CRM database. Improved information quality can improve operational cost, customer satisfaction, decision making and employee confidence in using CRM system.

A few cases of CRM implementation, the top management neglected the opinions and views from employees. The management decided the CRM implementation but employees utilize the system. Shum, Bove and Auh (2008) also stated that little attention is given to the role of employees in the implementation of effective CRM activities. While Sedera, Tan and Dey added that an enterprise system (ES), unlike a traditional Information System, entails many stakeholders ranging from top executives to data entry operators. These stakeholders typically have multiple and often conflicting objectives and priorities and rarely agree on a set of common aims.

The explosion in direct channels to the customer, such as e-business, call centers and loyalty card programmes, has produced huge volumes of data, which are being channeled into customer relationship management (CRM) databases for use in targeted relationship marketing and statistical modeling of consumer behavior. From the customer viewpoint, increasing expectations for personal recognition and improved quality of service are not fulfilled, causing dissatisfaction (Crie & Micheaux, 2006).

Implementation of CRM system in not conquered at all by Enterprise Company. In Malaysia, most CRM system was implemented by Telco Company like Digi, Telekom, Maxis and Celcom providers. Todays, the implementation of CRM was spread to the government agencies such as Malaysian Higher Education University. In 2010, Virgiyanti, Abu Hassan & Muhammad from University Sains Malaysia has investigated customer relationship management and service quality in Malaysian Higher Education. The findings from their studies show that "there is some un-satisfaction of students about the status of their application, prompt information provision on possibility of scholarships, good relationship with students and special programs for post graduate student, in this case such programs can be in the form of familiarization and introduction to University". They also suggested that the organization needs a proper CRM system which should involve the integration of major components of both CRM and Service Quality (Vigiyanti, Abu Hassan & Muhammad, 2010).

Despite of information quality, system quality also was highlighted by the end users. Some users says the system is not attractive, not user friendly and they do not understand how to use the CRM system. Because of this reason, many systems are not succeed and rejected by users.

Research Objective / Research Questions

Research Objective:

To measure customer satisfaction to the services given by CRM system

To identify system quality is meet the expectations confirmation in CRM system

To identify information quality is meet the expectations confirmation in CRM system

To examine individual impact influence perceived performance in CRM system

To investigate organizational impact influence perceived performance in CRM system

To investigate the relationship between perceived performance and expectations confirmation towards satisfaction in CRM system.

Research Questions:

How services given by CRM system can fulfill customer satisfaction?

Does system quality meet the expectations confirmation in CRM system?

Does information quality meet the expectations confirmation in CRM system?

How individual impact influence perceived performance in CRM system?

How organizational impact influence perceived performance in CRM system?

Does expectations confirmation and perceived performance have relationship with satisfactions in CRM system?

Scope and Limitation of the study

This study will be conducted in Universiti Teknologi Malaysia (UTM) located at Johor which is use CRM system in managing their customers (staffs and students). They applied CRM system for their report analysis, contact management, customer feedback and services, marketing and knowledgebase.

Despite of the limitations in regards to validity, reliability of the systems there some potential shortcomings associated with data gathering through questionnaires. The respondents may be biased during answering the questions or them just answering because they have to. Besides, the CRM system is still new in UTM and maybe they are still not aware they have that kind of system.

Significance of the Study

The significant of this study:

Significant from this study is the combination of two research streams which are IS success factors and expectations disconfirmation theory. Expectations disconfirmation theory has been extensively researched to explain the system usage.

The information collected from this study can be used by an organization to improve their utilization of CRM system to achieve their goals of gaining a competitive advantage.

The findings from this study also can be used to other researchers to study and compare with their study or used the findings to explore the new issue or topic.

Conceptual Framework

Customer Relationship Management

There are many definition of CRM reflecting the diverse of background scholars in this field. CRM is the building of a customer-oriented culture by which a strategy is created for acquiring, enhancing the profitability of, and retaining customers, that is enabled by an IT application for achieving mutual benefits for both the organization and the customers (Khalid, Haslina & Huda, 2011). This definition encompasses the three CRM perspectives which are philosophy, technological and strategy.

Sheth and Parvatiyar (2001) defined Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer. It involves the integration of marketing, sales, customer service, and the supply-chain functions of the organization to achieve greater efficiencies and effectiveness in delivering customer value. As implicit the definition, the purpose of CRM is to improve marketing productivity (Sheth & Parvatiyar, 2001).

Customer Relationship Management not only consolidates customer information from multi channels – wireless devices, e-mail, or the web but also attempts to solve the "data silo problem" that many organizations have found themselves confronting (Sahaf, Qureshi, & Khan, 2011). Companies have at their disposal a range of database, data mart, and data warehouse technologies, as well as growing number of CRM applications. Such developments make it possible to gather vast amounts of customer data and to analyse, interpret and utilize it constructively (Payne & Frow, 2006).

An effective customer database allows a company to understand better customer’s needs – particularly their relationship needs – better than the competitors. The data about customer’s needs, attitudes and behavior enables companies to identify today’s key customers, develop CRM with tomorrow’s customers, and calculate the revenue the customer generates, and estimate own future investment opportunities (Zineldin, 2006).

According to Payne and Frow (2006), CRM relates to strategy, managing the dual-creation or value, the intelligent use of data and technology, the acquisition of customer knowledge and the diffusion of this knowledge to the appropriate stakeholders, the development of appropriate (long term) relationships with specific customers and/or customer groups, and the integration of processes across the many areas of the firm and across the network of firms that collaborate to generate customer value.

Since business understand it costs more to acquire new customers than it does to retain existing ones, it pays to introduce current customers to additional products and services. Data quality makes the transformation from new customer to best customer much easier by, among other things, consolidating purchase history (Peiken, 2003). Peiken (2003) also said that "A CRM solution is only as good as the quality of the customer data that feeds it".

CRM Strategy Frameworks and Processes

Payne and Frow(2006) proposed cross-function approach for CRM strategy development. Developing a cross-functional approach to CRM requires identifying its key processes and their major components. They specifically focus on the formulation of CRM strategy rather than CRM implementation issues.

They agreed six process selection criteria for use in determining key generic CRM processes. Five CRM processes were identified that met the selection criteria including:

a strategy development process

a value creation process

a multi-channel integration process

an information management process

and a performance assessment process

They utilize these five generic processes within the CRM strategy and implement model developed because this framework’s specific cross-functional focus.

Before reviewing the model, they summarize their research approach. Payne and Frow referred Gummersson’s ‘interaction research’ methodology which emphasizes that interaction and communication play a crucial role in the stages of research and that testing concepts, ideas and results through interaction with different target groups of managers forms an integral part of the whole research process. This interaction research programs utilized executives who were primarily from large enterprises in the business to business and business to consumer sectors.

Their model was developed using an ‘interaction research’ approach and combined field-based interactions, involving the executives groups outlined above with insights from the literature to identify key implementation areas. These components were then incorporated into a first preliminary model. The model went through several iterations and a number of further minor revisions. The final version of the model is shown below.

Figure 1: CRM Strategy and Implementation Model

This model has two main components: key CRM implementation elements and core cross-functional CRM processes. As a result of this research four critical elements for successful CRM implementation were identified. They were interactively and progressively refined into the following categories: CRM readiness assessment, CRM Change Management, CRM Project Management and employee engagement. They then integrated these four critical elements for CRM implementation with five core CRM processes (Payne and Frow 2005) in a conceptual model for CRM strategy and implementation.

Key CRM Implementation Elements

CRM Readiness Assessment

A CRM readiness assessment can help managers assess the overall position in terms of readiness to progress with CRM implementation and to identify how well developed their organization is relative to other companies.

CRM Change Management

To implement a large-scale and complex CRM initiative, companies will typically have to undergo substantial organizational and cultural change. A critical dimension of any large CRM programme therefore is an effective change management programme.

CRM Project Management

CRM project management has increasing importance as the size and complexity of CRM initiative increase. We identified two main types of CRM projects; first, where a team of specialists is brought together on a temporary basis to address a particular project with a finite completion date. Second, where a cross-functional team is assembled with a remit of ongoing management of part of the enterprise’s CRM initiative. Successful CRM projects deliver against the CRM objectives derived from the corporate objectives and support the overall business strategy.

Employee Engagement

The final of the four implementation elements is the engagement of employees to support the various initiatives that comprise the overall CRM programme. Change management and project management are particularly dependent on engagement of employees for their success. Ensuring the delivery of a superior customer experience during times of unexpectedly high demand requires the active engagement and commitment of all customer-facing staff and is a hallmark of a well-planned CRM implementation.

Satisfaction

Expectation – Disconfirmation Theory(EDT)

Expectancy disconfirmation theory or disconfirmation of expectation theory is a consumer behavior model that has gained widespread acceptance in the research of explaining and predicting consumer satisfaction and the repurchase intention (Chiu, C.,M., et al., 2004). The EDT model is based on Cognitive Dissonance Theory (CDT) which was developed by Leon Festinger in 1957. The CDT was developed to explain how dissonance between an individual’s cognition and reality influence their subsequent cognition or behavior.

CDT posits that when an individual possesses two or more elements of knowledge that are related to each other but manifest inconsistencies, then the individual experiences a state of discomfort or dissonance. Greenwald’s analysis of the inconclusiveness of experimental confrontations of dissonance theory with self-perception theory introduced conceptions of operational and conceptual disconfirmability and defined them as follows:

When the relation between theory and data is characterized by questionable operations….so that unexpected data are not necessarily disconfirming of conceptualization, the theory will be said here to be characterized by operational disconfirmability. When the link between concepts and operations is more confidently established, the theory will be said to be characterized by the stronger level of disconfirmability (Greenwald, & Ronis, 1981).

EDT is adapted from the consumer behavior literature and integrated with theoretical findings from prior IS usage and success research .The core component of the expectancy disconfirmation theory is satisfaction. The original model of EDT was developed by Oliver in 1980 which theorized that consumer’s intention to repurchase a product or reuse a service is determined primarily by their satisfaction with prior use of that product or service. Satisfaction is jointly determined by disconfirmation and expectation. In this model disconfirmation is the most immediate influence on satisfaction. Then the model was extended by Churchill and Surprenant in 1982 to explicitly include perceived performance as an antecedent of satisfaction and include effects of expectations and perceived performance on disconfirmation and effects of expectations on perceived performance (Chiu, C.,M., et al., 2004).

In this model, there is five steps the outcome of consumers’ degree of satisfaction. First, consumers form an initial expectation of a specific product or service prior to purchase. Second, they accept and use that product or service. Following a period of initial consumption, they form perceptions about its performance on the salient attributes. Third, they compare these perceptions of performance with their prior expectation levels and determine the extent to which their expectations are confirmed. Expectations could be positively disconfirmed (perceived performance exceeds expectations), confirmed (perceived performance equals expectations), or negatively disconfirmed (perceived performance falls short of expectations). Fourth, they form a feeling of satisfaction or dissatisfaction based on their disconfirmation level. A moderate satisfaction level will be maintained by confirmation, enhanced by the delight of positive disconfirmation, and decreased by the disappointment of negative disconfirmation. Finally, satisfied consumers form intentions to reuse the product or service in the future, while dissatisfied users discontinue its subsequent use (Chiu, C.,M., et al., 2004).

Figure 2: Expectations Disconfirmation Theory

The IS-Impact Model

This section introduces the IS-Impact measurement model (Gable et al.,2008) and its measures. Gable and his colleagues define the IS-Impact of an Information System (IS) as "a measure at a point in time, of the stream of net benefits from the IS, to date and anticipated as perceived by all key-user-groups". The IS – Impact Model is a holistic index representing the stream of net benefits, the ‘impact half’ measuring net benefits to date, while the ‘quality’ half, forms our "best" proxy measure of probable future impacts, with ‘impacts’ being the common denominator (Gable, Sedera, & Chan,2008).

Using DeLone and McLean’s (1992) IS success model as reference (Figure 4), the Gable et al. (2003, 2008) – Figure 3, studies constitutes three completed survey rounds, serving both exploratory and confirmatory purposes: (1) identification – distill the salient set of systems success dimensions and measures; (2) specification – specify the dimensions and measures of system success derived from the identification survey and (3) confirmation – validate the system success dimensions and measures (Sedera, Wijesinghe, & Tan, 2009).

Figure 3: Gable et al. (2003) ERP System Success Measurement Model

The IS-Impact model adopts constructs represented by DeLone and McLean as causally or process related, but employs them for a different purpose. Impacts (Individual - Impact and Organizational - Impact) are explicitly and intentionally evaluated at the same time as Quality (System - Quality and Information - Quality); retrospectively, up to a point in time and not mediated by Satisfaction or Use (Gable, Sedera, & Chan,2008).

Figure 4: DeLone and McLean IS Success Model - 1992

The three survey rounds helped identified, specified and validated thirty-seven a-priori enterprise systems success measures arranged under four dimensions: individual impact, organizational impact, information quality and system quality – to provide a single valid measure of overall IS success. When evaluating an IS, measures of these dimensions represent a ‘snapshot’ of the organization’s experiences of the IS at a point in time. The IS-Impact model, dimensions and measures are designed to be economical and simple, yielding results from multiple user perspectives that are comparable across different systems and contexts (Sedera, Wijesinghe, & Tan, 2009).

Research Framework

System Quality

H1

Expectations Confirmation

H3

Information Quality

H2

Satisfaction in CRM Systems

H7

Individual Impact

H6

H4

Perceived Performance

H5

Organizational Impact

Figure 5: Theoretical Research Framework

Figure 5 illustrated the integrated framework of Gable, Sedera & Chan (2008) and Expectations Disconfirmation Theory (EDT) to understand the overall satisfaction of CRM system. In EDT, there is construct called Repurchase Intention. In this framework, the researcher not includes this construct because the researcher only focused in measuring customer satisfaction. The framework by Gable, Sedera and Chan (2008) were adapted because the researcher wants to measure the System Quality, Information Quality, Individual Impact and Organizational Impact towards customer satisfaction. Below are the hypotheses generated based on the integrated research framework.

H1: System quality is significantly relate to expectations confirmation in CRM system.

H2: Information quality is significantly relate to expectations confirmation in CRM system

H3: Expectations confirmation related to satisfaction in CRM systems.

H4: Individual impact is significantly related to perceived performance in CRM system

H5: Organizational impact is significantly related to perceived performance in CRM systems

H6: Perceived performance is significantly related to satisfaction in CRM systems

H7: Expectations confirmation is significantly relate to perceived performance.

H8: System quality and satisfaction in CRM system is mediated by expectations confirmation

H9: Information quality and satisfaction in CRM system is mediated by expectations confirmation

H10: Individual impact and satisfaction in CRM system is mediated by perceived performance

H11: Organizational impact and satisfaction in CRM system is mediated by perceived performance.

Research Methodology / Research Design/ Sampling/ Data Collection/ Plan for Data Analysis

Research Methodology

This study will be used quantitative research design which is generally associated with positivism. This paradigm was chosen because the highly data collection techniques will be used during analysis phase. Generally, quantitative research examines relationship between independent variables and dependent variable.

The positivist research paradigm assumes that knowledge is based on verified hypotheses, an objective and true reality exists, the reality can be generalized, and researcher and reality are separated. Hence, this study will be used deductive approach, where use data to test the theory in the hypotheses.

Research Design

The research design includes the following five steps (Figure 6).

Step 1: Problem Formulation

Process:

Find secondary data e.g: journals, thesis, research paper, books

Deliverables:

-Define research problem, research objective, research questions, scope of study, significant of study

Step 2: Comprehensive Literature Review

Deliverables:

Review (literature, context, theoretical and methodological), conceptual framework

Process:

Criticize the literature review

Step 3: Research Process

Process:

Review research approaches

Deliverables:

Research paradigm, research design, research instrument

Step 4: Data Analysis

Deliverables:

Questionnaire with marked is ready to analyze

Process:

Develop questionnaire, distribute questionnaires

Step 5: Findings and Conclusion

Deliverables:

Complete thesis with findings, conclusion and future research.

Process:

Compare the findings from analysis test

Sampling

In this study, random sampling method was selected for sampling. The population for this sampling is Universiti Teknologi Malaysia (UTM) Johor . In random sampling, each sample of the population has known chance of being selected. The category of sampling will be divided by two categories which are staff and student. For group of student, the sampling will be randomed for undergraduate students and degree level only.

Data Collection

This study will be used questionnaire as a research instrument. This questionnaire will cover all the questions based on independent variables in theoretical framework. The questionnaires will have closed ended questions which answer has been provided to user. The researcher will measure all the variables via questions in the questionnaire which are group in ordinal, nominal and 7- Likert scale. The data from questionnaire will be analysed using SPSS software to get the output of questionnaire.

The questionnaire contains demographic questions for fundamental and the rest questions will be related to independent variable and dependent variable. The questions will be visualized the measurement between the independent variable and dependent variable.

Plan for Data Analysis

From the hypotheses, it showed that there is relationship between independent variables and dependent variable. Therefore, the appropriate test will be used in parametric group which are Pearson correlations, linear regression and multiple regression. These tests will be associated with Post Hoc analysis to validate more for significant value.