Assessment of factors leading to customer relationship
management success

Abstract: The purpose of this study is to Identify and assess the key elements of CRM
in the context of Iran’s software industry. To accomplish this objective,
we adopted an exploratory research approach to identify the CRM key
elements and effectiveness factors by means of literature review and expert
interviews.

Our initial research model is derived from two areas of the literature:
CRM key elements and CRM performance effectiveness evaluation. CRM key
elements are the aspects of the CRM that seems to be crucial to success of
a CRM strategy implementation. These factors are derived from three
researches done by Lindgreen et al. (2006), Bohling et al. (2006) and
Mendoza et al. (2006). On the other side, we focused primarily on the
performance effectiveness factors provided by Kim, Suh & Hwang (2003),
Bohling et al. (2006), Kevin et al. (2006), Wang and Lo (2004) and
Izquierdo et al. (2005).

Finally, we came up with the research frame of reference which was
constructed based on both literature and 8 pilot interviews conducted with
some CRM professionals in Iran. The expert interviews helped us to improve
our research model as well as fitting and matching it with regard to
requirements of Iranian business environment. After constructing our two
research conceptual models, we needed to conduct a quantitative research in
order to describe the causal relationships of the model’s variables.
Therefore, we adopted an explanatory research approach by means of a survey
strategy. After elimination of bias, 126 questionnaires were coded and
analyzed for investigation with an effective response rate of 54.8%.
The first conceptual model intends to evaluate a model containing 2 latent
variables and 11 observed variables in order to analyze the effect of
overall CRM strength on the overall CRM effectiveness of the companies.
Estimation of first conceptual model in LISREL showed that CRM strength has
a positive relationship with all CRM key elements. Process, Knowledge
Management and IT have the highest correlations with CRM strength. On the
other hand, CRM success has a strong positive correlation with all CRM
performance effectiveness factors. Internally-focused performance
effectiveness has the greatest correlation with CRM success which shows
internally-oriented factors have a greater share in constructing the CRM
overall success. Later on, the model showed that CRM strength strongly
enhances CRM success and the research findings recommend Iran’s Software
companies using and improving CRM key elements as a mean of enhancing their
performance and improving their market position.

The second conceptual model intends to evaluate a model containing 8 latent
variables and 26 observed variables in order to evaluate the direct effects
of CRM key elements on the overall CRM effectiveness of the companies. the
results showed that among the CRM key elements, Information Technology,
Change Management and ‘Organization’ significantly strengthen the CRM
performance effectiveness among the companies in the survey (at 95%):
moreover, Strategy significantly attenuate the CRM performance (at 95%).
The impacts of Process, People and Knowledge Management on the CRM
performance effectiveness are significant at 90% significant level. The
effect of Top Management Attitude on the performance effectiveness is not
significant.

As a result, building and validating a model of CRM key elements and
assessment of their impact on the performance outcomes, we contributed to
fill a void in the academic literature. Further to the knowledge and
implications that surround CRM, one of the main problems is that no common
model exists to guide companies active in different business environment in
adaptation of CRM strategy: on the contrary, companies need models
compatible with requirements unique to their own business environment, so
proposing a set of CSFs for software companies in Iran, on the behalf of
the software companies in other developing countries with the same
conditions, can contribute to application and deployment of CRM in
different business contexts.