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Southern Taiwan University Department of Business Administration

The study of the relationship between KM capability, customer life cycle activities, and CRM performance. Southern Taiwan University Department of Business Administration. Kuo-Wei Lee Date: Oct. 22, 2009 . Maneesap Rojdamrongratana. Background & Motivation.

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Southern Taiwan University Department of Business Administration

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  1. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Southern Taiwan University Department of Business Administration Kuo-Wei Lee Date: Oct. 22, 2009 Maneesap Rojdamrongratana

  2. Background & Motivation Various researchers have discussed about customer relationship management (CRM) in order to improve firm’s performance. CRM helps firm to reduce cost through improved efficiencies in managing customer interaction (Hansotia, 2004). In this study, we try to discuss the relationships between customer life cycle activities management (CACAM) and CRM performance. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (2)

  3. The concept of Customer Life Cycle (CLC) is increasingly discussed in the recent years (Hansitia, 2002). Similar to Product Life Cycle (PLC), Customer Life Cycle (CLC) has been segmented to four stages (Thomas,1998) : Acquisition : Attracting new customer Assimilation : Turning the first time buyers into repeat customers Cultivation : Cementing life-long customer bonds Reactivation: Bringing lost customer back. Background & Motivation The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (3)

  4. Background & Motivation The company should know about the natural of four stages in the CLC to achieve better CRM performance. By creating and delivering the suitable marketing activities to each stage, firms can improve CRM performance (Hansotia, 2002). One of the purpose of this study is to discuss the impact of CLCAM on CRM performance. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (4)

  5. Background & Motivation In addition, CLCAM are supported by the firm’s ability in leverage customer data creatively, effectively and efficiently to design and implement its strategies. Hence, the customer knowledge is one crucial resource for CLCAM. Companies need to gather a lot of information and create various kind of knowledge to make CLCAM successful. Knowledge should be managed well in order to utilize the information more effectively (Menon & Varadarajan, 1992). The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (5)

  6. Background & Motivation In prior research, it indicated that four dimensions of knowledge architecture, including KnowledgeAcquisition, Conversion, Application, and Protection are essential organizational capabilities for effective knowledge management (Gold, Malhotra, & Sehars, 2001). There are some studies mention the importance of CLCAM and highlight CLCAM will help the business get succeed (Thomas, 1998). However, there are no scholars discuss the linkage of using KM to manage CLCAM to achieve the CRM performance. This study will also prove the relationship between KM capability and CLCAM. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (6)

  7. Background & Motivation • Furthermore, in recent years, the information technology (IT) has help firms to leverage and utilize the data to support the firm’s decision, especially in marketing field (Shaw, Subramaniam, Tan & Welge, 2001) . • So, IT is one of most important factors that affect the relationship between KM capability and CLCAM. In our study, the moderating effect of IT on KM capability and CLCAM will be also examined. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  8. Background & Motivation Finally, the customer relationship is also built on the foundation of trust (Berry, 1995) . Trust is an important feature in the building and development of quality relationships through a process of making and keeping promises (Dwyer, Schurr & Oh, 1987; Gronroos, 1990; Hewett, & Bearden, 2001). The empirical evidence in prior research also show that trust relates to the CLCAM and CRM performance. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (8)

  9. Research objectives • To identify interrelationship between KM capability, CLCAM, and CRM performance • To investigate how the interaction of KM capability and Information Technology will affect CRM performance • To investigate how the interaction of CLCAM and Trust will affect CRM performance The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  10. Framework Moderator IT Moderator Trust • Customer life cycle • Activities management(CLCAM) • New customer Acquisition • Cross sales for customer • Customer retention • New Product development • KM Capability • Acquisition • Conversion • Application • Protection • CRM performance • Customer Satisfaction • Customer Loyalty H4 H5 H1 H2 H3 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  11. H4: Interaction between KM capability and IT has significant effect on CLCAM • H4.1: Interaction between KM capability and IT has significant effect on new customer acquisition activity management. • H4.2: Interaction between KM capability and IT has significant effect on cross sales activity management. • H4.3: Interaction between KM capability and IT has significant effect on retention activity management. • H4.4: Interaction between KM capability and IT has significant effect on new product development activity management. Hypotheses • H5: Interaction of CLCAM and Trust has significant effect on CRM performance • H5.1: Interaction of CLCAM and Trust has significant effect on customer satisfaction • H5.2: Interaction of CLCAM and Trust has significant effect on customer loyalty H1: KM capability has significant effect on CLCAM • H1.1: KM capability has significant effect on new customer acquisition activity management. • H1.2: KM capability has significant effect on cross sales activity management. • H1.3: KM capability has significant effect on retention activity management. • H1.4: KM capability has significant effect on new product development activity management Moderator IT Moderator Trust • H2: CLCAM has significant effect on CRM performance • H2.1: CLCAM has significant effect on customer satisfaction • H2.2: CLCAM has significant effect on customer loyalty • CLCAM • New customer Acquisition • Cross sales for customer • Customer retention • New Product development • KM Capability • Acquisition • Conversion • Application • Protection • CRM performance • Customer Satisfaction • Customer Loyalty H4 H5 H1 H2 • H3: KM capability has significant effect on CRM performance • H3.1: KM capability has significant effect on customer satisfaction. • H3.2: KM capability has significant effect on customer loyalty. H3 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  12. Hypotheses • H1: KM capability has significant effect on CLCAM • H1.1: KM capability has significant effect on new customer acquisition activity management. • H1.2: KM capability has significant effect on cross sales activity management. • H1.3: KM capability has significant effect on customer retention activity management. • H1.4: KM capability has significant effect on new product development activity management. • H2: CLCAM has significant effect on CRM performance • H2.1: CLCAM has significant effect on customer satisfaction • H2.2: CLCAM has significant effect on customer loyalty • H3: KM capability has significant effect on CRM performance • H3.1: KM capability has significant effect on customer satisfaction. • H3.2: KM capability has significant effect on customer loyalty. • H4: Interaction between KM capability and IT has significant effect on CLCAM • H4.1: Interaction between KM capability and IT has significant effect on new customer acquisition activity management. • H4.2: Interaction between KM capability and IT has significant effect on cross sales activity management. • H4.3: Interaction between KM capability and IT has significant effect on customer retention activity management. • H4.4: Interaction between KM capability and IT has significant effect on new product development activity management. • H5: Interaction of CLCAM and trust has significant effect on CRM performance • H5.1: Interaction of CLCAM and trust has significant effect on customer satisfaction • H5.2: Interaction of CLCAM and trust has significant effect on customer loyalty The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  13. Questionnaire Design Responses were assessed using 7-point Likert scales • 12 items of KM capability • 16 items of CLCAM • 8 items of CRM performance • 3 items of IT • 3 items of customer trust The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  14. Data Collection • Method : Convenient Sampling • Samples: 500 Thai companies in related departments • Questionnaire: Email questionnaire survey • Data Collection Period: Early February,2008 to middle April,2008 ( approximately 2.5 months) • Respondents: 107 survey questionnaires were responded. (Responded rate is 21.4 %) • Missing data: 3 sets • Usable respondents: 104 respondents The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  15. Characteristics of respondents The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  16. Results & Findings Note：P*<0.1、P**<0.05，P***<0.01 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  17. Results & Findings Note：P*<0.1、P**<0.05，P***<0.01 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  18. Results & Findings Note：P*<0.1、P**<0.05，P***<0.01 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  19. Results & Findings Note：P*<0.1、P**<0.05，P***<0.01 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  20. Results & Findings The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  21. Results & Findings The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  22. Results & Findings The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  23. Results & Findings Note：P*<0.1、P**<0.05，P***<0.01 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  24. Results & Findings Note：P*<0.1、P**<0.05，P***<0.01 The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  25. Contribution • This study contributes to the theoretical development of a relationship model of KM and CRM as customer life cycle activity management (CLCAM) and CRM performance. • It provides the view of which KM capability is valued to concern in each CRM activity which related to CLCAM and CRM performance. Also, the CLCAM affects CRM performance significantly. • The results of this research can make more understanding about how KM effect CLCAM and how to use KM capability with CLCAM more effectively to enhance CRM performance. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  26. Limitation • This study uses the convenient sampling because it is quite difficult to balance the characteristics of samples. • Only a few prior research to discuss the concept of the customer life cycle activity management (CLCAM). It has some theoretical limitation. Due to this few prior research, it would be argued that the validity and reliability of the construct and questionnaire design is quite weak. However, since factor analysis is examined in this study, we believe that the reliability and validity of this construct is still acceptable. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  27. Managerial Application • At first, new customer acquisition activity management should be concerned in knowledge acquisition and knowledge conversion more than others. Since the two variables have a significant effect on this activity. • Second, from the empirical evidence, it indicates that cross sales activity management need to synergize more knowledge capability. That is to say, managers who handle this kind of activity should enhance the knowledge management to make it more productivity. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana

  28. Managerial Application Third, for managers, customer retention activity management mostly depend on if the knowledge can be used very well or not. For them, how to convert , apply and protect the existing knowledge in the right way is very important. Finally, the most important capability for new product development is knowledge application because this activity needs to translate the new knowledge into tangible things. It means that the team of new product development should consist of different background persons in order to have different and broader views to develop new concept. The study of the relationship between KM capability, customer life cycle activities, and CRM performance Master’s Thesis Presentation @ Southern Taiwan University by Maneesap Rojdamrongratana (29)

  29. Thank You For Your Attention

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