Impact of customer relationship management on customer satisfaction and customer loyalty in

190 Pages·2015·5.5 MB·English

IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT ON
CUSTOMER SATISFACTION AND CUSTOMER LOYALTY
IN SERVICE SECTOR

THESIS SUBMITTED FOR THE AWARD OF

DOCTOR OF PHILOSOPHY (Ph. D)

IN

MANAGEMENT STUDIES

BY

MARAJ REHMAN SOFI

UNDER THE SUPERVISION OF
PROF. IQBAL AHMAD HAKEEM

THE BUSINESS SCHOOL
UNIVERISTY OF KASHMIR
(NAAC Accredited Grade “A”)
2015
The Business School
University of Kashmir
(NAAC Accredited Grade “A”)
Hazratbal, Srinagar, Kashmir -190006

Certificate

This is to certify that the thesis entitled “Impact of Customer Relationship
Management on Customer Satisfaction and Customer Loyalty in Service Sector” submitted
to the University of Kashmir for the award of Doctor of Philosophy (Ph. D) in Management
Studies, is an original research work carried out by Mr. MARAJ REHMAN SOFI during the
period 2012-2015 under my supervision and guidance. The thesis has not formed the basis for
the award of Degree/Diploma/Associate-ship/Fellowship or other similar title to any
candidate of any university.

Prof. (Dr.) Iqbal Ahmad Hakeem
Supervisor

Prof. (Dr.) S. Mufeed Ahmad
Director
The Business School
University of Kashmir
Declaration

I, Maraj Rehman Sofi, hereby declare that the thesis entitled “Impact of Customer
Relationship Management on Customer Satisfaction and Customer Loyalty in Service Sector”
submitted to University of Kashmir for the award of Doctor of Philosophy (Ph. D) in
Management Studies, is an original work carried out by me during the period 2012-2015
under the supervision and guidance of Prof. Iqbal Ahmad Hakeem, The Business School,
University of Kashmir. The thesis has not formed the basis for the award of any Degree/
Diploma/ Associate-ship/ Fellowship or other similar title to any candidate of any university.

Maraj Rehman Sofi
Date:……………… Research Scholar
Word of Gratitude

It is a great feeling that I am being provided with an opportunity to pen down
something that I wanted to do any time of my life ever since I got introduced to my esteemed
teacher and supervisor, Prof. Iqbal Ahmad Hakeem, Professor, The Business School,
University of Kashmir. It has been possible only because of his unending and restless efforts
that I have been able to complete this research study through. He has always walked extra
mile just to ensure that I carry out this study in a real sense. In the end of my pleasure the
study has been worth as far as the result of this study is concerned, thanks to Prof. Iqbal
Ahmad Hakeem. His eager eye has caught me many a times on the wrong foot, taught me the
right; thus shaping my future for years to come.
Acknowledgement
I wish to avail myself of this opportunity to express my profound pleasure
and immense gratitude to those who helped me during the preparation of this
dissertation without whose aid it would have not been materialized.
It is my first and foremost duty to express my profound sense of gratitude
to my esteemed supervisor, Prof. Iqbal Ahmad Hakeem, The Business School,
University of Kashmir, for providing me the valuable time in completing my
thesis.
I owe my deep debt of gratitude to Prof. Shabir A. Bhat (Dean, Faculty
of Commerce and Management Studies), University of Kashmir, for being
cooperative and helping me in every possible way.
My gratitude goes to Prof. S. Mufeed (Director), The Business School
and all other faculty members, The Business School, University of Kashmir, for
their kindness and encouragement.
I extend my thanks to all employees and customers banks and hotels for
their cooperation as they provided me access to the required data for my
survey.
My special appreciation goes to Prof. G. M. Sangami, Director
Academic Staff College, University of Kashmir, for organizing research
methodology work shop. I would be failing in my duties if I do not express my
sincere thanks to the ministerial staff of The Business School for helping me at
various occasions.
I take this opportunity to thank respectfully and sincerely to my Parents,
without whose inspiration and prayers and great support, this work could not
have been completed.

Maraj Rehman Sofi
Contents
Chapter 1. Introduction 1-16
Introduction 1
Customer Relationship Management: An Overview 4
CRM as a Tool in Business Sectors 8
CRM in Banking Sector 9
CRM in Hospitality Sector 10
CRM Practices 11
Focusing Key Customer 12
CRM Organisation 12
Managing Knowledge 13
Incorporating CRM based Technology 13
Customer Prospecting 14
Personalization 14
Customer Satisfaction and Customer Loyalty 14
Chapter 2. Review of Literature 17-41
Introduction 17
CRM – A Review of Banking Sector 19
Review of CRM in Hotel Sector 27
Customer Satisfaction and Customer Loyalty 34
Research Gap 40
Chapter 3. Research Methodology 42-58
Need of the Study 42
The Problem Statement 43
Objectives 45
Research Model 46
Hypothesis 48
Selection of Sample Organisations 49
Respondents of the Study 49
Sample Size 50
Scale Development and Administration 53
Pre-testing 55
Chapter 4. Data Analysis and Interpretation 59-101
Validation of Scale 59
Structural Equation Analysis of
64
CRM best practice - Employee Respondents
Structural Equation Analysis of
66
CRM best practice - Customer Respondents
Structural Equation Analysis -
69
Customer Satisfaction and Customer Loyalty
Descriptive Analysis of
71
CRM best practices - Employee Respondents
Descriptive Analysis of
77
CRM best practices – Customer Respondents
Analysis of Conceptual Model 97
Chapter 5. Conclusion, Suggestion and Implications 102-121
Key Findings 102
Discussions 104
CRM best practices in Sample Service Organizations 104
Key Factors of CRM
105
towards Customer Satisfaction and Customer Loyalty
Effects of CRM on
108
Customer Satisfaction in Service Organizations
Effects of CRM best practices on
109
Customer Loyalty in Service Organizations
Effects of Customer Satisfaction on Customer Loyalty 111
Suggestions 112
Implications 116
Development of CRM oriented personnel 116
Internal Communication 117
Reward Systems 118
Employee Involvement 119
Limitations and future research directions 120
Annesure-I 122-125
Annexure-II 126-132
Annexure-III 133-141
References 142-172
List of Figures

Conceptual Model 47
Path diagram of Conceptual Model 100
Measurement Model – Employee Respondents 123
Measurement Model – Customer Respondents 124
Measurement Model- Customer Satisfaction and Customer loyalty 125
List of Tables
Table 3.1: Characteristics of Employee Respondents 52
Table 3.2: Characteristics of Customer Respondents 53
Preliminary Findings of Reliability and Validity
Table 3.3: 56
Measurements for Independent Variables
Preliminary Findings of Reliability and Validity
Table 3.4: 57
Measurements for Dependent Variables
Table 4.1: Exploratory Factor Results for Employee Respondents 60
Table 4.2: Exploratory Factor Results for Customer Respondents 61
Table 4.3: Exploratory Factor Results for Dependent Variables 62
Table 4.4: Reliability Measurements for Variables 63
Table 4.5: Results of SEM Analysis – Employee Respondents 65
Table 4.6: Results of Discriminant Validity for Employee Respondents 66
Table 4.7: Results of SEM Analysis – Customer Respondents 67
Table 4.8: Discriminant Validity for Customer Respondents 69
Structural Equation Results for Customer Satisfaction and
Table 4.9: 70
Loyalty
Results of Discriminant Validity for Customer Satisfaction and
Table 4.10: 70
Customer Loyalty
Descriptive Analysis for Key Customer Focus
Table 4.11: 72
(employee Respondents)
Descriptive Analysis for CRM Organisation
Table 4.12: 73
(Employee Respondents)
Descriptive Statistics for Managing Knowledge
Table 4.13: 74
(Employee Respondents)
Descriptive Analysis of Incorporating CRM-based Technology
Table 4.14: 75
(employee respondents)
Descriptive Analysis of Customer Prospecting
Table 4.15: 75
(employee respondents)
Descriptive Analysis for Personalization
Table 4.16: 76
(employee respondents)
Descriptive Statistics of Key Customer Focus
Table 4.17: 78
(customer respondents)
Descriptive Statistics of CRM Organization
Table 4.18: 79
(customer respondents)
Descriptive Statistics of Managing Knowledge
Table 4.19: 80
(customer respondents)
Descriptive Statistics for Incorporating CRM based Technology
Table 4.20: 81
(customer respondents)
Descriptive Analysis of Customer Prospecting
Table 4.21: 82
(customer respondents)
Descriptive Statistics for Personalization
Table 4.22: 83
(customer respondents)
Table 4.23: Descriptive Analysis of Customer Satisfaction 84
Table 4.24: Descriptive Analysis of Customer Loyalty 85
Table 4.25: CRM best practices (Employee Vs Customer) 87
CRM best practices vis-à-vis Customer satisfaction and
Table 4.26: 88
Loyalty
Table 4.27: Descriptive Analysis of CRM best practices across Education 90
Table 4.28: Descriptive Analysis of CRM best practices across occupation 91
Table 4.29: Descriptive Analysis of CRM best practices across Income 92
Descriptive statistics of Customer Satisfaction across
Table 4.30: 93
Occupation
Table 4.31: Descriptive statistics of Customer Satisfaction across Education 94
Table 4.32: Descriptive statistics of Customer Satisfaction across Income 94
Table 4.33: Descriptive statistics of Customer Loyalty across Occupation 95
Table 4.34: Descriptive statistics of Customer Loyalty across Education 95
Table 4.35: Descriptive statistics of Customer Loyalty across Income 96
Table 4.36: Structural Equation Results of Conceptual Model 99