Abstract
Digital transformation is increasingly providing a wide range of business opportunities as well as changing the competition conditions. As a result, firms of varying sizes are integrating digital technologies such as digital platforms, into their strategy to attract new customers, manage customer relationships, create new value and achieve greater performance. This chapter draws on the dynamic capability view to examine how two forms of capabilities, namely, customer relationship management capability and digital platform capability interact to affect business performance. A survey of 103 Nigerian small and medium-sized enterprises was conducted to find evidence of these relationships in an emerging market context. The results of structural equation modelling (SEM-PLS) analysis reveal that digital platform capability has a mediating effect on the relationship between customer relationship management capability and business performance. Therefore, this chapter shows that developing relevant capabilities in today’s digitalised business environments is critical to achieving superior performance.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Acedo, F. J., Barroso, C., & Galan, J. L. (2006). The resource-based theory: Dissemination and main trends. Strategic Management Journal, 27, 621–636.
Alavi, S. (2016). New paradigm of digital marketing in emerging markets: From social media to social customer relationship management. International Journal of Management Practice, 9(1), 56–73.
AlQershi, N. A., Mokhtar, S. S. M., & Abas, Z. B. (2020). CRM dimensions and performance of SMEs in Yemen: The moderating role of human capital. Journal of Intellectual Capital. https://doi.org/10.1108/JIC-05-2020-0175
Al-Weshah, G. A., Al-Manasrah, E., & Al-Qatawneh, M. (2019). Customer relationship management systems and organizational performance: Quantitative evidence from the Jordanian telecommunication industry. Journal of Marketing Communications, 25(8), 799–819.
Allred, B., & Steensma, H. (2005). The influence of industry and home country characteristics on firms’ pursuit of innovation. MIR: Management International Review, 45(4), 383–412.
Amit, R., & Schoemaker, P. J. H. (1993). Strategic assets and organizational rent. Strategic Management Journal, 14, 33–46.
Ayodeji, O. G., & Kumar, V. (2019). Social media analytics: A tool for the success of online retail industry. International Journal of Services Operations and Informatics, 10(1), 79–95.
Barclay, D., Higgins, C., & Thompson, R. (1995). The partial least squares (PLS) approach to causal modelling: Personal computer adoption and use as an illustration. Technology Studies, Special Issue on Research Methodology, 2(2), 285–309.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 19–120.
Barney, J. B. (2001). Resource-based theories of competitive advantage: A ten-year retrospective on the resource-based view. Journal of Management, 27(6), 643–650.
Battisti, M., & Deakins, D. (2017). The relationship between dynamic capabilities, the firm’s resource base and performance in a post-disaster environment. International Small Business Journal, 35(1), 78–98.
Battor, M., & Battor, M. (2010). The impact of customer relationship management capability on innovation and performance advantages: Testing a mediated model. Journal of Management Management, 26(9–10), 842–857.
Bharadwaj, A., El Sawy, O., Pavlou, P., & Venkatraman, N. (2013). Digital business strategy: Toward a next generation of insights. MIS Quarterly, 37(2), 471–482.
Bouwman, H., Nikou, S., & de Reuver, M. (2019). Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs? Telecommunications Policy, 43(9). https://doi.org/10.1016/j.telpol.2019.101828
Bresciani, S., Ferraris, A., & Del Giudice, M. (2018). The management of organizational ambidexterity through alliances in a new context of analysis: Internet of Things (IoT) smart city projects. Technological Forecasting and Social Change, 136, 331–338.
Bryman, A., & Bell, E. (2011). Business research methods (3rd ed.). Oxford University Press.
Buttle, F. (2004). Customer relationship management: Concepts and tools. Elsevier Buttlerworth-Heinemann.
Cenamor, J., Parida, V., & Wincent, J. (2019). How entrepreneurial SMEs compete through digital platforms: The roles of digital platform capability, network capability and ambidexterity. Journal of Business Research, 100, 196–206.
Chen, I. J., & Popovich, K. (2003). Understanding customer relationship management (CRM): People processes and technology. Business Process Management Journal, 9(5), 672–688.
Chin, W. W. (1998). The partial least squares approach to structural equation modelling. Modern Methods for Business Research, 295(2), 295–336.
Christopher, M., Payne, A., & Ballantyne, D. (1991). Relationship marketing. Butterworth-Heinemann.
Coltman, T., Devinney, T. M., & Midgley, D. F. (2011). Customer relationship management and firm performance. Journal of Information Technology, 26(3), 205–219.
Day, G. S. (1990). Market driven strategy: Processes for creating value. Free Press.
Day, G. S. (1994). The capabilities of market-driven organizations. Journal of Marketing, 58(4), 37–52.
Day, G. S. (2000). Managing marketing relationships. Journal of the Academy of Marketing Science, 28(1), 24–30.
Dehnert, M. (2020). Sustaining the current or pursuing the new: Incumbent digital transformation strategies in the financial service industry. Business Research, 13, 1071–1113.
Diamantopoulos, A., & Siguaw, J. A. (2006). Formative vs reflective indicators in organizational measure development: A comparison and empirical illustration. British Journal of Management, 17(4), 263–282.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic Management Journal, 21(1), 1105–1121.
Eisenmann, T. R., Parker, G., & Van Alstyne, M. (2011). Platform envelopment. Strategic Management Journal, 32(12), 1270–1285.
Fitzgerald, M., Kruschwitz, N., Bonnet, D., & Welch, M. (2014). Embracing digital technology—A new strategic imperative. MIT Sloan Management Review, 55(2), 1–12.
Foltean, F. S., Trif, S. M., & Daniela Liliana Tuleu, D. L. (2019). Customer relationship management capabilities and social media technology use: Consequences on firm performance. Journal of Business Research, 104, 563–575.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Goerzig, D., & Bauernhansl, T. (2018). Enterprise architectures for the digital transformation in small and medium-sized enterprises. Procedia CIRP, 67, 540–545.
Grant, R. M. (1991). The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33, 114–135.
Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017). A primer on partial least squares structural equation modeling (PLS-SEM) (2nd ed.). Sage.
Hair, J. F., Ringle, C. M., & Sarstedt, M. (2011). PLS-SEM: Indeed a silver bullet. Journal of Marketing Theory and Practice, 19(2), 139–152.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24.
Hair, J. F., Sarstedt, M., Hopkins, L., & Kuppelwieser, V. G. (2014). Partial least squares structural equation modeling (PLS-SEM): An emerging tool in business research. European Business Review, 26(2), 106–121.
Hamdan, A. R., Yahaya, J. H., Deraman, A., & Jusoh, Y. Y. (2016). The success factors and barriers of information technology implementation in small and medium enterprises: An empirical study in Malaysia. International Journal of Business Information Systems, 21(4), 477–494.
Haugland, S. A., Myrtveit, I., & Nygaard, A. (2007). Market orientation and performance in the service industry: A data envelopment analysis. Journal of Business Research, 60(11), 1191–1197.
Helfat, C. E., & Peteraf, M. A. (2003). The dynamic resource-based view: Capability lifecycles. Strategic Management Journal, 24, 997–1010.
Helfat, C. E., & Raubitschek, R. S. (2018). Dynamic and integrative capabilities for profiting from innovation in digital platform-based ecosystems. Research Policy, 47(8), 1391–1399.
Henseler, J., Hubona, G., & Ray, P. A. (2016). Using PLS path modeling in new technology research: Updated guidelines. Industrial Management & Data Systems, 116(1), 2–20.
Hess, T., Matt, C., Benlian, A., & Wiesböck, F. (2016). Options for formulating a digital transformation strategy. MIS Quarterly Executive, 15(2), 123–139.
Hjort, J., & Poulsen, J. (2019). The arrival of fast Internet and employment in Africa. The American Economic Review, 109(3), 1032–1079.
Ho, M. H.-W., Chung, H. F. L., Kingshott, R., & Chiu, C.-C. (2020). Customer engagement, consumption and firm performance in a multi-actor service eco-system: The moderating role of resource integration. Journal of Business Research, 121, 557–566.
Hu, L., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria vs new alternatives. Structural Equation Modeling: A Multidisciplinary Journal, 6(1), 1–55.
Jackson, D. Jr. (1994). Relationship selling: The personalization of relationship marketing. Asia‐Australia Marketing Journal, 45–54.
Kamalaldin, A., Linde, L., Sjödin, D., & Parida, V. (2020). Transforming provider-customer relationships in digital servitization: A relational view on digitalization. Industrial Marketing Management, 89, 306–325.
Kamboj, S., Yadav, M., & Rahman, Z. (2018). Impact of social media and customer-centric technology on performance outcomes: The mediating role of social CRM capabilities. International Journal of Electronic Marketing and Retailing, 9(2), 109–125.
Karna, A., Richter, A., & Riesenkampff, E. (2016). Revisiting the role of the environment in the capabilities–financial performance relationship: A meta-analysis. Strategic Management Journal, 37(6), 1154–1173.
Katz, D., & Kahn, R. L. (1966). The social psychology of organizations. John Wiley and Sons.
Keramati, A., Mehrabi, H., Mojir, N., & Mousakhani, M. (2009). Customer relationship management and performance, a resource-based view of Iranian internet service industry. International Journal of Electronic Customer Relationship Management, 3(2), 103–120.
Kotler, P., & Keller, K. (2009). Marketing management (10th ed.). Pearson Education.
Kraaijenbrink, J., Spender, J.-C., & Groen, A. J. (2010). The resource-based view: A review and assessment of its critiques. Journal of Management, 36(1), 349–372.
Krasnikov, A., & Jayachandran, S. (2008). The relative impact of marketing, research-and-development, and operations capabilities on firm performance. Journal of Marketing, 72(4), 1–11.
Li, T., & Chan, Y. E. (2019). Dynamic information technology capability: Concept definition and framework development. The Journal of Strategic Information Systems, 28(4). https://doi.org/10.1016/j.jsis.2019.101575
LiPuma, J., Newbert, S., & Doh, J. (2011). The effect of institutional quality on firm export performance in emerging economies: A contingency model of firm age and size. Small Business Economics, 40, 817–841.
Loonam, J., Eaves, S., Kumar, V., & Parry, G. (2018). Towards digital transformation: Lessons learned from traditional organizations. Strategic Change, 27(2), 101–109.
Meena, P., & Sahu, P. (2021). Customer relationship management research from 2000 to 2020: An academic literature review and classification. Vision. https://doi.org/10.1177/0972262920984550
Melville, N., Kraemer, K., & Gurbaxani, V. (2004). Review: Information technology and organizational performance: An integrative model of IT business value. MIS Quarterly, 28(2), 283–322.
Migdadi, M. M. (2021). Knowledge management, customer relationship management and innovation capabilities. Journal of Business & Industrial Marketing, 36(1), 111–124.
Mithas, S., Krishnan, M. S., & Fornell, C. (2005). Why do customer relationship management applications affect customer satisfaction? Journal of Marketing, 69(4), 201–209.
Morgan, N. A., Vorhies, D. W., & Mason, C. H. (2009). Market orientation, marketing capabilities, and firm performance. Strategic Management Journal, 30, 909–920.
Nambisan, S. (2017). Digital entrepreneurship: Toward a digital technology perspective of Entrepreneurship. Entrepreneurship Theory and Practice, 41(6), 1029–1055.
Nambisan, S., Wright, M., & Feldman, M. (2019). The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes. Research Policy, 48(8), 1–9.
Ndubuisi, G., Otioma, C., & Tetteh, G. K. (2021). Digital infrastructure and employment in services: Evidence from Sub-Saharan African countries. Telecommunications Policy. https://doi.org/10.1016/j.telpol.2021.102153
Newbert, S. L. (2007). Empirical research on the resource-based view of the firm: An assessment and suggestions for future research. Strategic Management Journal, 28, 121–146.
Ngai, E. W. T. (2005). Customer relationship management research (1992–2002): An academic literature review and classification. Marketing Intelligence & Planning, 23(6), 582–605.
Parker, G., Van Alstyne, M., & Choudary, S. (2016). Platform revolution. W. W. Norton.
Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69(4), 167–176.
Peteraf, M. A. (1993). The cornerstones of competitive advantage: A resource-based view. Strategic Management Journal, 14(3), 179–191.
Peteraf, M., Stefano, G. D., & Verona, G. (2013). The elephant in the room of dynamic capabilities: Bringing two diverging conversations together. Strategic Management Journal, 34(12), 1389–1410.
Priem, R. L., & Butler, J. E. (2001). Is the resource-based ‘view’ a useful perspective for strategic management research? Academy of Management Review, 26(1), 22–40.
Ramaswami, S., Srivastava, R., & Bhargava, M. (2009). Market-based capabilities and financial performance of firms: Insights into marketing’s contribution to firm value. Journal of the Academy of Marketing Science, 37(2), 97–116.
Rapp, A., Trainor, K. J., & Agnihotri, R. (2010). Performance implications of customer-linking capabilities: Examining the complementary role of customer orientation and CRM technology. Journal of Business Research, 63(11), 1229–1236.
Rashidirad, M., & Salimian, H. (2020). SMEs’ dynamic capabilities and value creation: The mediating role of competitive strategy. European Business Review, 32(4), 591–613.
Reichheld, F. F., & Sasser, W. E. Jr. (1990). Zero defections: Quality comes to services. Harvard Business Review, 68(5), 105–111.
Reimann, M., Schilke, O., & Thomas, J. S. (2010). Customer relationship management and firm performance: The mediating role of business strategy. Journal of the Academy of Marketing Science, 38, 326–346.
Reinartz, W., Krafft, M., & Hoyer, W. D. (2004). The CRM process: Its measurement and impact on performance. Journal of Marketing Research, 41, 293–305.
Rindova, V. P., & Kotha, S. (2001). Continuous morphing: Competing through dynamic capabilities, form and function. Academy of Management Journal, 44(6), 1263–1280.
Ritter, T., & Pedersen, C. L. (2020). Digitization capability and the digitalization of business models in business-to-business firms: Past, present, and future. Industrial Marketing Management, 86, 180–190.
Ryals, L. (2005). Making customer relationship management work: The measurement and profitable management of customer relationships. Journal of Marketing, 69(4), 252–261.
Salleh, N. A. M., Rohde, F., & Green, P. (2017). Information systems enacted capabilities and their effects on SMEs’ information systems adoption behaviour. Journal of Small Business Management, 55(3), 332–364.
Slotegraaf, R. J., & Dickson, P. R. (2004). The paradox of a marketing planning capability. Journal of the Academy of Marketing Science, 32(4), 371–385.
Spanos, Y. E., & Lioukas, S. (2001). An examination into the causal logic of rent generation: Contrasting Porter’s competitive strategy framework and the resource-based perspective. Strategic Management Journal, 22, 907–934.
Stoel, M. D., & Muhanna, W. A. (2009). IT capabilities and firm performance: A contingency analysis of the role of industry and IT capability type. Information & Management, 46(3), 181–189.
Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350.
Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18, 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z
Teece, D., Peteraf, M., & Leih, S. (2016). Dynamic capabilities and organizational agility: Risk, uncertainty, and strategy in the innovation economy. California Management Review, 58(4), 13–35.
Uhlenbruck, K., Hitt, M. A., & Semadeni, M. (2006). Market value effects of acquisitions involving internet firms: A resource-based analysis. Strategic Management Journal, 27, 899–913.
Valmohammadi, C. (2017). Customer relationship management: Innovation and performance. International Journal of Innovation Science, 9(4), 374–395.
Vithayathil, J. (2018). Will cloud computing make the Information Technology (IT) department obsolete? Infomation Systems Journal, 28, 634–649.
Vithessonthi, C., & Racela, O. C. (2016). Short- and long-run effects of internationalization and R&D intensity on firm performance. Journal of Multinational Financial Management, 34, 28–45.
Wang, F. (2020). Digital marketing capabilities in international firms: A relational perspective. International Marketing Review, 37(3), 559–577.
Wang, Y., & Feng, H. (2012). Customer relationship management capabilities: Measurement, antecedents and consequences. Management Decision, 50(1), 115–129.
Wang, Z., & Kim, H. G. (2017). Can social media marketing improve customer relationship capabilities and firm performance? Dynamic capability perspective. Journal of Interactive Marketing, 39, 15–26.
Warner, K. S., & Wäger, M. (2019). Building dynamic capabilities for digital transformation: An ongoing process of strategic renewal. Long Range Planning, 52(3), 326–349.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5, 171–180.
Wilhelm, H., Schlömer, M., & Maurer, I. (2015). How dynamic capabilities affect the effectiveness and efficiency of operating routines under high and low levels of environmental dynamism. British Journal of Management, 26(2), 327–345.
Yunis, M., Tarhini, A., & Kassar, A. (2018). The role of ICT and innovation in enhancing organizational performance: The catalysing effect of corporate entrepreneurship. Journal of Business Research, 88, 344–356.
Zahra, S. A., & Covin, J. G. (1995). Contextual influences on the corporate entrepreneurship-performance relationship: A longitudinal analysis. Journal of Business Venturing, 10(1), 43–58.
Zhou, K. Z., & Wu, F. (2010). Technology capability, strategic flexibility and product innovation. Strategic Management Journal, 31(5–6), 547–561.
Zollo, M., & Winter, S. (2002). Deliberate learning and the evolution of dynamic capabilities. Organization Science, 13(3), 339–351.
Zott, C. (2003). Dynamic capabilities and the emergence of intraindustry differential firm performance: Insights from a simulation study. Strategic Management Journal, 24, 97–125.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2022 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Edeh, J.N. (2022). Customer Relationship Management and Business Performance: Do Digital Platform Capabilities Matter?. In: Adeola, O., Edeh, J.N., Hinson, R.E., Netswera, F. (eds) Digital Service Delivery in Africa. Palgrave Studies of Marketing in Emerging Economies. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-83909-3_4
Download citation
DOI: https://doi.org/10.1007/978-3-030-83909-3_4
Published:
Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-030-83908-6
Online ISBN: 978-3-030-83909-3
eBook Packages: Business and ManagementBusiness and Management (R0)