The Impact of CRM on Customer Retention in Electronic Banking: Case of Iranian Banks

Abstract: The purpose of this study is to investigate the impact of CRM on customer retention in Iranian electronic banking. Iranian banks have used CRM more or less and proceeded to this issue with different rates of success. However, there are not available studies that investigated the impact of CRM in these banks especially in electronic environment.

This study first reviews and analyzes the previous researches in the literature that investigate the relationship between CRM and firm performance and customer retention. Next, based on the RBV and process-oriented approach, we suggest a process-oriented framework that links CRM to customer retention. In order to be able to appropriately measure the extent of the usage of each of the research variables across organization, suitable dimensions for each of the research variables are defined based on the literature. In this regard, CRM resources are measured with five dimensions which are operational CRM technologies, collaborative CRM technologies, analytical CRM technologies, organizational, and human CRM resources. CRM processes are studied on both operational and management dimensions. Finally, customer retention programs of CRM are studied in four dimensions including: customer service, customization, community of customers, and loyalty programs. A questionnaire has been designed and used to collect data from 286 top bank managers of two governmental (Refah and Maskan) and two private (Saman and Pasargad banks) banks‘ branches in the province of Tehran. The gathered data have been analyzed using quantitative methods based on a survey strategy.

The results of data analysis show the direct effect of all CRM resources including technological and infrastructural resources on CRM processes and also the direct effect of CRM processes on customer retention programs of CRM (loyalty programs, customer service, customization, and creating community of customers) which themselves have direct effect on customer retention. Another contribution of this study is that it presents a comprehensive set of customer retention programs of CRM and it studies the correlation between each of them and customer retention.