View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Walden University Walden University ScholarWorks Walden Dissertations and Doctoral Studies Walden Dissertations and Doctoral Studies Collection 2015 The Relationship Between Customer Relationship Management Usage, Customer Satisfaction, and Revenue Robert Lee Simmons Walden University Follow this and additional works at: https://scholarworks.waldenu.edu/dissertations Part of the Business Commons This Dissertation is brought to you for free and open access by the Walden Dissertations and Doctoral Studies Collection at ScholarWorks. It has been accepted for inclusion in Walden Dissertations and Doctoral Studies by an authorized administrator of ScholarWorks. For more information, please contact [email protected]. Walden University College of Management and Technology This is to certify that the doctoral study by Robert Simmons has been found to be complete and satisfactory in all respects, and that any and all revisions required by the review committee have been made. Review Committee Dr. Ronald McFarland, Committee Chairperson, Doctor of Business Administration Faculty Dr. Alexandre Lazo, Committee Member, Doctor of Business Administration Faculty Dr. William Stokes, University Reviewer, Doctor of Business Administration Faculty Chief Academic Officer Eric Riedel, Ph.D. Walden University 2015 Abstract The Relationship Between Customer Relationship Management Usage, Customer Satisfaction, and Revenue by Robert L. Simmons MS, California National University, 2010 BS, Excelsior College, 2003 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University September 2015 Abstract Given that analysts expect companies to invest $22 billion in Customer Relationship Management (CRM) systems by 2017, it is critical that leaders understand the impact of CRM on their bottom line. The purpose of this correlational study was to investigate potential relationships between the independent variables of customer satisfaction and CRM utilization on the dependent variable of business revenue. The service-profit chain formed the theoretical framework for this study. The study population included 203 service branches for an industrial equipment manufacturer in North America. The service director for the subject organization provided the data for the study via data extracts from the company’s corporate database. Some branches were eliminated, leaving a total sample size of 178. The results of a multiple linear regression analysis showed that the proposed model could significantly predict branch revenue F (2,175) = 37.321, p < .001, R2 = .298. Both CRM use and customer satisfaction were statistically significant, with CRM use ( beta = .488, p < .001) showing a higher contribution than customer satisfaction ( beta = -.152, p = .021). This study provides evidence to business executives that CRM use has a strong positive influence on revenue. Additionally, this study supports the findings of other studies that show a point of diminishing returns in improved customer satisfaction. This study contributes to positive social change by allowing firms to make better decisions with their investment dollars and by increasing CRM utilization through cause-related marketing. The Relationship Between Customer Relationship Management Usage, Customer Satisfaction, and Revenue by Robert L. Simmons MS, California National University, 2010 BS, Excelsior College, 2003 Doctoral Study Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Business Administration Walden University September 2015 Dedication The completion of this DBA doctoral study is the culmination of a life of learning, perseverance, and determination. I wish that I could take credit for all of this but that would be false. Primarily, I would never have made it through this journey without the strength, guidance, and mercy of my Lord. In addition to all he has done for me, he has blessed me with a wonderful family who has worked hard to make it possible for me to reach this goal. I am dedicating this dissertation to my amazing wife of 32 years, Karen. Without her love and support, I would never make it out of bed in the morning. This accomplishment is more a testament to her love, devotion, and belief in me than anything I could have done on my own. When I was ready to give up, she pushed me forward. When I thought I could no longer go on, she helped me through. She is due any honor, title, or prestige that may come from this achievement. Acknowledgments Many people deserve my thanks for helping me achieve this goal. First, I would like to thank my committee chair Dr. Ronald McFarland. Dr. McFarland has provided countless hours of honest and needed feedback to help me along this journey. He has worked diligently to help me get through this process as smoothly as possible. I would also like to thank my other committee members Dr. Alexandre Lazo and Dr. William Stokes. Both Dr. Lazo and Dr. Stokes have provided valuable feedback that helped me improve the quality of my work and ensured my study lived up to the rigid academic standards of Walden University. I would also like to thank Dr. Freda Turner and all of the DBA program faculty and staff. I cannot forget the help from the staff at the writing center and the library. Walden has put together an incredible staff for this program. The staff at Walden gives every student the tools and encouragement they need to succeed. I would not have wanted to attempt this program of study at any other institution. Lastly, I would like to thank my fellow students in every class and residency along the way. They were a constant source of encouragement and help. I can only hope that they would say the same about me. Table of Contents List of Tables ..................................................................................................................... iv List of Figures ......................................................................................................................v Section 1: Foundation of the Study ......................................................................................1 Background of the Problem ...........................................................................................1 Problem Statement .........................................................................................................3 Purpose Statement ..........................................................................................................3 Nature of the Study ........................................................................................................4 Research Question .........................................................................................................5 Hypotheses .....................................................................................................................5 Theoretical Framework ..................................................................................................6 Operational Definitions ..................................................................................................7 Assumptions, Limitations, and Delimitations ..............................................................10 Assumptions .......................................................................................................... 10 Limitations ............................................................................................................ 10 Delimitations ......................................................................................................... 11 Significance of the Study .............................................................................................11 Contribution to Business Practice ......................................................................... 11 Implications for Social Change ............................................................................. 12 A Review of the Professional and Academic Literature ..............................................14 Service-Profit Chain.............................................................................................. 15 CRM Market Growth ............................................................................................ 21 i The Emergence of CRM ....................................................................................... 22 CRM History ......................................................................................................... 23 CRM Benefits ....................................................................................................... 43 CRM Failures ........................................................................................................ 46 Problems With CRM............................................................................................. 47 CRM Definitions ................................................................................................... 50 CRM Strategy ....................................................................................................... 60 CRM Performance Measures ................................................................................ 64 CRM Success Measures ........................................................................................ 66 Transition .....................................................................................................................69