B01MARK210: Customer Relationship Management and Customer Satisfaction

This report presents a comprehensive literature review examining the critical role of Customer Relationship Management (CRM) in influencing customer satisfaction, particularly within the context of financial services. The review begins by defining CRM and its importance, then delves into the relationship between CRM and consumer behavior, emphasizing how effective CRM strategies can cultivate customer loyalty and retention. The report then explores the tangible and intangible benefits of CRM, including improved customer satisfaction, strategic information provision, and enhanced customer lifetime value. It also examines the direct impact of CRM on customer satisfaction, the effects of CRM applications, and various customer satisfaction theories, such as dissonance theory. By synthesizing existing research, the report highlights the significance of CRM as a strategic business approach that enhances customer satisfaction, improves business performance, and offers a competitive edge in the market. It concludes with a discussion of research gaps and implications for businesses aiming to optimize customer relationships and satisfaction.

Running head: CUSTOMER RELATIONSHIP MANAGEMENT
Customer Relationship Management
Name of the Student
Name of the University
Author Note

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Table of Content
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Customer Relationship Management and consumer behaviour.............................................2
CRM benefits and consumer values.......................................................................................4
Role of customer relationship management on enhancing customers’ satisfaction...............5
Effect of CRM applications on customer satisfaction............................................................6
Customer Satisfaction Theories.............................................................................................7
Research gap..........................................................................................................................8
References................................................................................................................................10

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Title- Role of Customer Relationship Management on Customer Satisfaction
Introduction
This research report is a complete review of the role customer relationship
management on customer satisfaction. It has been identified that level of customer
satisfaction can be highly influenced by the way customer relation developed and managed.
Customer Relation Management is a universal marketing strategy which can bring a set of
benefits to any sort of businesses despite some sort of inevitable challenges. Customer
relationship management (CRM) is all sort of activities, strategies and technologies that
organizations use to manage their interactions with the current as well as potential consumers.
It is certain that customer relationship management develop an effective relationship
with the consumer and in return generates loyalty as well as consumer retention. Taking the
above stated fact into account, the major context of the review has been on the role or impact
of customer relationship management on customer satisfaction. This means the review would
generate an insight about how customer relationship management can influence customers.
CRM is a management approach that often result in increased profits for a business.
Fundamentally, tools of CRM can create a simple user interface for a large collection of data
that certainly helps businesses identify as well as communicate with the consumers in the
most effective way. Following section of the report is review of existing papers on CRM,
theories related to CRM and customer satisfaction.
Discussion
Customer Relationship Management and consumer behaviour
Khodakarami and Chan (2014) performed a study and mentioned the fact that
Customer Relationship Management (CRM) means developing a comprehensive picture of
consumer needs, expectation as well as behaviour and managing those factors to affect

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business performance. On the contrary, Rahimi and Kozak (2017) defined CRM is more of a
system factors that pay attention to the management relationship between an organization as
well as its current and prospective relationship and these relationship could give organization
the joy of retained consumers. Authors of this study arguably stated the fact that relationship
marketing is more of a way about obtaining trust and satisfaction, which in turn could ensure
more sustainable success of an organization. Moreover, it has also been regarded as the most
effective section of sale function because then sales department study buying habits and
trends of consumers and attempt to match the range of services. Here, the major purpose is
about minimizing the number of sales and designing a system to retain consumers. Hence, the
whole technique is aided through computer programs. This means that the whole technique is
aided through some computer programs. On the other side, Nyadzayo and Khajehzadeh
(2016) mentioned about two fundamental programs like analytical CRM as well as
behavioural CRM. Authors have also stated that CRM analytical could gather and analyse
customer information to enhance firm’s value.
In this context, Khodakarami and Chan (2014) mentioned that behavioural CRM
tends to pay attention to psychological underpinning of service interaction as well as
managerial structure and use experiments as well as survey for effective CRM. Authors of
this article also state the fact techniques and capabilities of organization could influence
performance as a whole. On the basis of the viewpoint of authors, it can be stated that simple
analysis of consumer value is always critical in enhancing organization’s performance. Thus,
it can be stated that for businesses implementing CRM, there should be a proper system to
ensure the desired performance of consumer relationship management. Findings of this paper
helps to observe the fact that CRM practices have a very good capacity for enhancing
consumer base. It is the most effective tool for gaining information, for developing strategies
about new products. This fact is particularly found in the banking sectors because customers

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often rate banks services, and banks highly use CRM compared to the organizations in other
industry. Nonetheless, Tseng and Wu (2014) argued that implementation of CRM can be
successful when there is good interaction between knowledge management abilities and
information technology. So, the achievement or success of CRM system usually lies in the
most effective management and implementation of gained consumer knowledge. Therefore, it
can be added that customer relationship management and knowledge management are related
to each other. If knowledge management is process oriented, it could certainly support CRM
system.
CRM benefits and consumer values
Segoro (2013) performed a study on consumer relationship management and
mentioned the fact that effective customer relationship management could bring several
tangible and intangible benefits to business. Similarly, Sun and Kim (2013) specified some
major benefits such as improvement customer satisfaction, retention of existing consumers,
providing strategic information and enhancement of consumer life. On the other contrary,
Tarasi et al. (2013) performed a study and mentioned the fact that CRM could develop and
sustain long-term relations with the consumers, which is a fundamental issue for businesses
with respect to reaching and maintaining market share and in enhancing customer retention as
well as profits. Authors of this study have also found that implementation could minimize
operational cost, increase profitability and improve customer satisfaction, retention and
loyalty. Munari Ielasi, and Bajetta (2013) mentioned that CRM techniques could help
organizations to obtain a set of competitive edges in the market by developing the provision
of differentiated products as well as some unparalleled services. It can be added that even
though applications of CRM focus on enhancing service quality and value and it is significant
to note that determining value is intrinsically related to consumer perception and there is a
solid requirement to mirror its benefits with the expectation of consumers. Finding of the

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study indicate that with the ever-increasing competition for the market dominance, several
organizations have made use of CRM system to enhance business intelligence as well as
decision-making, for enhancing consumer relations and increase quality of service and
products offering. This eventually result in increasing and sustained ranges of profitability.
Role of customer relationship management on enhancing customers’ satisfaction
As put forward by Choudhury and Harrigan (2014), customer relationship
management is more of a concept to deal with organization’s communication with its
consumers, users and all the issues associated with sales as well as financial transactions.
This study states the fact that technology in this regard used to manage and facilitate
organization’s business activities and techniques. Thus, customer relationship management is
mostly considered as the strategic business and techniques rather than a technical issue. It is
highly significant to identify that CRM has a long-term focus which is to increase quality and
to enhance the interface with the consumers. This eventually leads towards consumer
satisfaction.
In order to implement CRM properly, commitment and vision of top management is
highly required. This means that policies of strategy structure should be flexible as well as
explicit particularly the policy of pricing. Nyadzayo and Khajehzadeh (2016) stated that these
aspects are usually considered as the key issues to enhance consumers’ satisfaction and the
benefits of the firm. On the contrary, Taylor et al. (2015) mentioned that customer
satisfaction is more of a marketing term which measures how products and services are
effectively provided to company to meet customers’ demand and customer satisfaction is
highly required because it helps marketers and business owners a metric which helps to
manage and enhance their business. Soltani and Navimipour (2016) performed a study on
customer satisfaction and stated the fact that in a dynamic business environment where
businesses tend to compete for consumers, customer satisfaction is considered as the major

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key differentiator. On the other side, Trainor et al. (2014) performed a study and investigated
the influence of consumer relationship management on consumer satisfaction and loyalty and
the authors concluded that consumers’ satisfaction level not only depends on the kind of
products the brand sells, there are several other aspects can positively influence consumers –
such as service quality, loyalty programs etc.
Effect of CRM applications on customer satisfaction
Nguyen and Waring (2013) performed a study and mentioned the fact that customer
satisfaction has a strong and significant implications for economic performance of the
organization. According to the authors, consumer satisfaction has been found to have a string
and negative impact on customer complaints as well as positive impact on customer loyalty
using the behaviour. Findings of this paper indicates that increased customer loyalty could
enhance the usage level and minimize the possibility of customer defection. On the other
side, Rosman and Stuhura (2013) performed a study and mentioned that customer satisfaction
could reduce the costs related warranties, complaints, defective goods, field service cost.
Eventually, another recent study performed by Rahimi and Kozak (2017) give a strong
relationship between customer and satisfaction after controlling for fixed as well as
unobservable factors. Findings of this paper also state the fact that customer relationship
management applications are most likely to have a significant effect on customer satisfaction.
This means by gathering information across several consumer interaction as well as
processing this information to find the hidden patterns, customer relation management
applications often help organization to customize their offering to suit the individual tastes of
the consumers. It can be stated that customized offering could enhance perceived quality of
products and services on the basis of the view point of consumers. This happens because the
perceived quality is a determinant of consumer satisfaction, CRM implementation indirectly
affect their customer satisfaction through the effect of perceived quality.

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In response to this statement, Saarijärvi, Karjaluoto and Kuusela (2013) mentioned
that to enhance the perceived quality of offering, CRM applications could enable
organizations to enhance the reliability of consumptions, experiences by facilitating the
timely as well as the most appropriate processing of consumer order. This fact is also found
in the study performed by Giannakis-Bompolis and Boutsouki (2014) where the authors have
discussed how Wyndham applies IT tools to provide a consistent service experience across
many properties to customers. So, it can be stated that both improved quality to customize as
well as reduced variability of the consumption experience perceived quality which could in
return positively affects consumer satisfaction. Thus, it is worth stating that CRM
applications also help organizations to manage customer relationship more appropriately and
effectively across several stages of relationship initiation. Effective management of
consumers is fundamental to manage consumer satisfaction and customer loyalty.
Customer Satisfaction Theories
According to Hinojos et al. (2017) dissonance theory recommends that an individual
who demand a high value product and received a low value product could identify the
disparity as well as experience a cognitive dissonance. Authors state the fact that dis-
confirmed expectations could create a state of dissonance or psychological discomfort. On
the basis of the principle of this theory, it can be added that existence of dissonance generates
pressure for the reduction, which can be perceived by adjusting disparity. Principle of this
theory hold that post exposure ratings are fundamentally a function of expectation range as
the lack of identifying disconfirmation is said to be psychologically uncomfortable.
Consequently, customers are posited to misrepresent demands-discrepant performance to
coincide with pre-expectation range. To support this, Tseng (2016) gave an example and
stated that if a disparity exists between the expectation of product and performance of

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product, customers might have psychologically concern and try to minimize it by changing
their perceptions of the products.
In this context, Hinojosa et al. (2017) argued that customers probably increase their
evolutions of such products when the cost of that particular product to individual is relatively
high. For instance, customer goes into a restaurant where he/she could expect it to be
effective and is confronted with unappetizing meal. This means that customs who driven a
very long distance as well as paid a very high price for product item, for minimizing the
dissonance, could probably say that food want not really as bad as it seems. Scholars perused
that this approach implicitly assume that customers could generally find the product
performance deviated in some of respect from their expectation. So some cognitive
repositioning could be necessary.
Research gap
It has been identified that existing papers have paid a considerable attention to CRM
concepts and its links with customer satisfaction. It can be added that when investigating
consumer behaviour, scholars lack insight about consumer behaviour and characterises. For
example, Nguyen and Waring (2013) mentored about the relation of customer relationship
management and consumers’ satisfaction but this study did not mention about the factors and
drivers that influence consumers to keep business relationship with the organizations. The
journal articles chosen for the analysis and review of customer relationship management
overlooked the importance of technology, because in today’s dynamic business environment
technology plays a great role in influencing consumer behaviour.
It has been identified that existing papers on customer relationship management did
not mention about the element CRM whose presence is highly necessary for influencing
consumers and their behaviour. Elements related to CRM should be critically analysed with

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the contemporary market environment. Authors did not pay attention to CRM trends and
contemporary business environment. As the market environment has been changing in a rapid
pace, it is certain that no element of customer relationship management can be considered
static for enhancing customer satisfaction.
Moreover, the discussion in the paper lacks insight of real-world facts and findings
with respect to customer relationship management. This means that in today’s contemporary
business environment, many organizations are applying diversified approaches to win
consumers’ trust and gain customer satisfaction. Moreover, due to dynamic business
environment, business strategies related to customer satisfaction and customer relations have
changed and the marketers are in the need and rush of changing and modifying their
marketing strategy for CRM. In addition to this, scholars should have stressed more on how
business today compete for consumers to deal with the market threats. Hence, the market
threats refer to the competition of the organizations with respect to acquiring market and
consumer base. Due to technology advances and rapid implementation of digitalization, even
the small and medium size organizations are having a dominant position in the market. So,
this is a significant threat to the organizations today.
However, no research paper has discussed the current trends in businesses and its
influential relation with the consumers. In addition to this, theories used in the studies lack a
clear presentation about consumer relationship management in its use. This means theories
are well presented but their applications lack real world facts and findings. Contemporary,
studies today are more concerned about the changing business environment. In order to
generate more clear understanding about consumer relationship management and changing
behaviour of consumers today. Scholars need to stress more on theories to learn how
contemporary events can be linked to the theories of CRM.

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References
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Giannakis-Bompolis, C. and Boutsouki, C., 2014. Customer relationship management in the
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H. Nguyen, T. and S. Waring, T., 2013. The adoption of customer relationship management
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Nyadzayo, M.W. and Khajehzadeh, S., 2016. The antecedents of customer loyalty: A
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