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To cite this article: Ilias Santouridis & Androniki Veraki (2017) Customer relationship management
and customer satisfaction: the mediating role of relationship quality, Total Quality Management &
Business Excellence, 28:9-10, 1122-1133, DOI: 10.1080/14783363.2017.1303889
1. Introduction
The continuously increasing competition evidenced in modern business conduct made
many companies, especially those in service industries, aware of the importance of their
customers retention. This led to a radical strategic shift towards the development of
relationship marketing (RM) strategies and the implementation of relevant tactics. RM
is an enterprise-wide approach, which, through meaningful communications, aims to
understand and influence customers in order to improve customer acquisition, customer
retention and profitability (Swift, 2001). RM introduced a holistic marketing approach
by promoting the recognition and management of a wide range of different company
relationship types (e.g. with internal and external customers, suppliers, competitors, com-
panies in other market segments).
RM strategies make necessary the collection, storage and processing of structured and
unstructured data of customers, in order to support both the daily communication with
Corresponding author. Email: isant@teilar.gr
them and the conduct of various types of analyses. This fact positioned information tech-
nology (IT) at the centre of the development and implementation of successful RM strat-
egies and tactics. Customer relationship management (CRM) software systems have been
widely used since the late 1990s as IT-enabled RM solutions (Ryals & Payne, 2001). CRM
systems engulf the RM paradigm and leverage IT to support companies in their aim to
acquire customers, understand and please their needs and expectations and maintain
long-term relationships with them (Peppard, 2000).
Customer satisfaction with the provided service has been always receiving a great deal
of attention by researchers, since literature suggests that there are a lot of benefits associ-
ated with its attainment, including increased levels of customer retention. Therefore, the
investigation of the possible effect that CRM practices have on customer satisfaction
can provide managers with vital information, regarding the development and implemen-
tation of successful RM strategies and tactics.
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2. Literature review
2.1. Customer relationship management
Management recognises that a companys success in todays business world depends to a
great extent on managing effectively relationships with customers. Therefore, the utilis-
ation of a CRM system is deemed necessary, since it can shorten significantly the distance
between customers and the organisation, thus contributing to organisational success
through customer loyalty, superior service, better information gathering and organis-
ational learning (Nguyen, Sherif, & Newby, 2007).
CRM has been defined by Parvatiyar and Sheth (2001, p. 5) as
a comprehensive strategy and process of acquiring, retaining, and partnering with selective
customers, to create superior value for the company and the customer. It involves the inte-
gration of marketing, sales, customer service and the supply-chain functions of the organiz-
ation to achieve greater efficiencies and effectiveness in delivering customer value.
The objective of CRM systems is to join IT and business processes in a manner that facili-
tates the organisation to acquire new customers, retain existing ones and maximise their
1124 I. Santouridis and A. Veraki
lifetime value (Peppard, 2000). CRM focuses on maintaining profitable relationships with
customers through all traditional channels of communication (Wahab, Othman, &
Rahman, 2011) and includes front-office applications that support sales, marketing and
customer service, and back office applications that help integrate and analyse customer
data.
An important question to answer is how to conceptualise the effectiveness of CRM prac-
tices. Based on the managers perspective, Chen, Yen, Li, and Ching (2009) developed an
instrument to measure CRM practices effectiveness. However, the study presented here
utilises the customers perspective regarding the degree to which they experience basic
CRM-expected outcomes (e.g. personalised service, personal data protection, customer
care and communication feedback), in order to monitor the effectiveness of the CRM prac-
tices implemented by mobile telephony service providers in Greece.
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1987; Garbarino & Johnson, 1999; Liu, Guo, & Lee, 2011; Rajaobelina & Bergeron,
2009; Smith, 1998). Crosby et al. (1990) pointed out that relationship quality contributes
to a lasting bond by offering assurance that the service provider will continue to meet
and exceed customer expectations with the relationship (satisfaction) and will not knowingly
distort information or otherwise subvert the customer interests (trust).
Palmatier, Dant, Grewal, and Evans (2006) defined relationship satisfaction as the cus-
tomers affective response to the relationship and argued that since it reflects exclusively
the customers satisfaction with the relationship, it differs from the satisfaction experi-
enced with the overall exchange. Satisfaction with the relationship is considered as an
important outcome of buyer seller relationships (Smith & Barclay, 1997). Therefore,
once customers feel satisfied with the companys investment on the relationship, the will-
ingness from their side to get involved and the extent of their satisfaction becomes higher
(Liang & Wang, 2005).
Berry (1995) suggests that trust is the foundation on which RM strategies are built.
Moorman, Deshpande, and Zaltman (1993) define trust as the willingness to rely on an
exchange partner, on whom one has confidence, and such willingness originates from
the reliability, integrity and honesty of the company. Doney and Cannon (1997)
pointed out that trust refers to the reputation and level of caring from the companys
side, as recognised by the customer, and includes objective reputation and psychological
care. Garbarino and Johnson (1999) argue that trust is the customers confidence on the
quality and reliability of the services offered by the organisation.
3. Research methodology
3.1. Research instrument
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Field research was conducted by utilising a structured questionnaire, which was devel-
oped by adopting relative scales reported in literature. Each questionnaire item was
assessed by a statement and a seven-point Likert-type scale, indicating the respon-
dents strength of agreement with the statement and ranging from 1Strongly dis-
agree to 7 Strongly agree. The questionnaire composed of the following two
distinct sections:
(1) Respondent demographics and mobile telephony use. The questions in this
section aimed to capture the gender, age, educational level and monthly
income of respondents. Moreover, the respondents were also asked about their
mobile telephony usage (e.g. length of use, provider, time with provider, contract
or card).
(2) Main Questionnaire. This section included the items conceptualising all the basic
concepts involved in the research model. More specifically:
3.2. Sampling
The questionnaire was initially translated into Greek and then pilot-tested by 10 mobile
telephony users. The results of the pilot test proved to be satisfactory, since all the respon-
dents found most of the questionnaire items understandable and meaningful. However,
some of the pilot respondents found the meaning of three items confusing and suggested
wording changes. These suggestions were then incorporated into the questionnaires final
version. Furthermore, there was no pilot respondent who hesitated to answer any question
for any reason.
An online version of the questionnaire was then created by utilising one of the free
available online survey platforms. Mobile telephony users having accounts in social
media sites such as Facebook, Twitter and Google+, were then invited to answer the ques-
tionnaire. Respondents using more than one provider were asked to answer the question-
naire by considering the one they have been using more often. This process yielded 187
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usable questionnaires.
4. Results
PCA was conducted on the CRM practices items, using a cut-off of 0.5 for item scale
selection. Normalised varimax rotation was adopted to bring about a simple and interpret-
able structure. The Bartlett sphericity test on the degree of correlation between the vari-
ables (p , .001) and the Kaiser Meyer Olkin test (KMO 0.889 . 0.5) verified the
appropriateness of the sample. Two factors with eigenvalues greater than one (Kaizer,
1960, 1974) were extracted from data, as shown in Table 1. These principal components
accounted for 54.62% of the total variation. Following an examination of the items load-
ings on each factor, the two principal components identified were labelled customer care
and communication.
Inter-item analysis was then used (Table 2) to verify the emerged dimensions of CRM
practices, the relationship quality dimensions and satisfaction for internal consistency and
reliability (Nunnally & Bernstein, 1994). More specifically, Cronbachs coefficient alpha
was calculated for each construct, as recommended by Flynn, Sakakibara, Schroeder,
Bates, and Flynn (1990). The values ranged between 0.791 and 0.962. Therefore, all con-
structs exhibited values well over the minimum acceptable reliability level of 0.7.
The mediation analysis method proposed by Baron and Kenny (1986) was then fol-
lowed in order to examine whether relationship quality mediates the association
between CRM practices and customer satisfaction with the provided service. Four
linear regressions were conducted (one for IVDV, two for IVMV and one for
MVDV, as shown in Figure 1), the results of which are given in Table 3. All regressions
were conducted in a two-step hierarchical fashion. The first step involved the inclusion of
only the models independent variables, while the second incorporated also all the
1128 I. Santouridis and A. Veraki
demographic and mobile use variables. For all regressions, the results showed that the
inclusion of the additional variables in the model does not increase significantly the var-
iance explained. Moreover, the F values for all regressions were relatively high and much
greater than 1, showing that all models predict their dependents significantly well.
Additionally, the Durbin Watson values for all models were very close to 2, showing
that there is no autocorrelation, which, if present, would have invalidated the significance
tests (Durbin & Watson, 1951). Finally, none of the VIF values of the independent vari-
ables in all models is greater than 10 or substantially greater than 1, thus indicating
lack of multicollinearity (Bowerman & OConnell, 1990).
Model 1 examines the direct effect of CRM practices on customer satisfaction. This
effect was significant, explaining 33.4% of satisfactions total variance. Regarding the
VIF 2.469
Adjusted R2 0.334 0.537 0.383 0.567
F 47.71 108.92 58.71 61.85
Durbin Watson 1.909 1.853 1.927 2.048
Note: sb, R2 and F significant at p , .001.
two CRM practices dimensions, only customer care was found to have a positive signifi-
cant effect on satisfaction (sb 0.503, p , .001).
The effect of CRM practices on relationship quality was investigated by conducting
two regressions having as dependents the two relationship quality dimensions (Model
2.1 and Model 2.2). CRM practices were found to explain 53.7% and 38.3% of relationship
satisfactions and trusts variance, respectively. Furthermore, customer care was found to
have a significant positive impact on both relationship quality (sb 0.689, p , .001) and
trust (sb 0.343, p , .001), while communication was found to have a significant influ-
ence only on trust (sb 0.319, p , .001).
The possible mediating role of relationship quality was then examined by regressing
both CRM practices and relationship quality on satisfaction (Model 3). Compared
to Model 1, the incremental change in adjusted R2 was significant and large (23.3%,
p , .001). This implies that the two relationship quality dimensions had a strong
direct effect on satisfaction (sb 0.381, p , .001 for relationship satisfaction and sb
0.367, p , .001 for trust). The findings of Model 3 also show that the inclusion of
relationship quality in the model led to the elimination of the CRM practices impact
on satisfaction. Therefore, since the effect of customer care on satisfaction is no
longer significant when the two relationship quality dimensions are included in the
model, it can be inferred that relationship quality fully mediates the CRM practices
and customer satisfaction association. These findings lead to the rejection of the null
hypothesis and support of H1.
5. Conclusions
The aim of the present study was to investigate possible associations between CRM prac-
tices, relationship quality and customer satisfaction, by providing empirical evidence from
mobile telephony users Greece. The analysis of the research data showed that the customer
care dimension of CRM practices is a crucial predictor of customer satisfaction and of
both the relationship quality dimensions. On the other hand, the communication dimension
1130 I. Santouridis and A. Veraki
of CRM practices was found to have a significant effect only on the trust dimension of
relationship quality. Moreover, it was found that both the relationship quality dimensions
have a significant positive impact on customer satisfaction and fully mediate the influence
that the customer care dimension of CRM exerts on satisfaction.
The positive impact of a successful CRM implementation on relationship quality has
been also verified by Chang (2007). He used a balanced scorecard approach to identify
critical factors and outcomes of CRM implementation. Using an empirical approach,
Barry and Doney (2011) examined relationship quality in a cross-cultural setting. Their
findings highlighted the significant impact of CRM outcomes on relationship quality.
The study presented here produced useful findings, which can be utilised by managers
towards the development and implementation of CRM practices that will lead to customer
satisfaction. Considering that customer satisfaction is commonly cited in literature as a
prerequisite for gaining customer loyalty, the results can be proved useful for the develop-
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ment of long-term and profitable relationships with customers. This is of vital importance
for a saturated market, such as that of mobile telephony, even more so in a country experi-
encing a deep financial crisis, as is Greece. The central role of relationship quality must be
seriously taken under consideration so that relationship satisfaction and trust enhancement
initiatives are taken. Even more so, since the relationship satisfaction dimension of
relationship quality was found to fully mediate the impact of CRM practices and more
specifically its customer care dimension. Therefore, catering for issues such as personali-
sation of offerings, protection of personal data, provision of convenient and flexible
payment processes, easiness and efficiency of customer service, timely replies to customer
needs and membership programmes can enhance the customers satisfaction with the
relationship and through this their satisfaction with the provided service. Moreover, the
findings showed that customer satisfaction is also positively influenced by trust and that
communication has a positive impact on trust but does not has any effect on satisfaction.
This could mean that issues relevant to the communication with customers, such as con-
venience offered by communication channels, ease of use and efficiency of website and
easiness of information searching, influence the building of trust from the customers
side. However, these issues were not found to contribute to customer satisfaction. It is
likely that other trust elements, such as keeping of promises or company reputation,
lead to enhanced customer satisfaction.
RM and their associations. Finally, the conduct of statistical analysis by means of structural
equation modelling could help uncover these complex relationships.
Disclosure statement
No potential conflict of interest was reported by the authors.
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