Customer Learning Processes, Strategy Selection, and Performance in Business-to-Business Service Firms

Learning about customers takes place through relevant dialogues with those customers, also known as customer relationship management (CRM). As relationships develop, information about the customer is gathered in the firm’s customer information systems (CIS): the content, processes, and assets associated with gathering and moving customer information throughout the firm. This research develops a measure of CIS management capabilities based on learning organization theory and measured by the ability to get, store, move, and use information throughout the business unit. This measure is then used to analyze customer learning processes and associated performance in the context of marketing strategic decision making. This study of 209 business services firms finds that generic marketing strategy positioning (low-cost and differentiation) and the marketing tactics of personalization and customization are related to CIS development. Customer information systems development in turn is associated with higher levels of customer-based performance, which in turn is associated with increased business growth. Since the strongest association with customer-based performance is strategy selection, the long-term benefits of the knowledge gained from the CIS may be in the ability to assist in measuring customer-based performance, rather than in the ability to immediately contribute to performance. Finally, for these firms, customization and personalization are not directly associated with performance and thus may not be necessary to support every firm’s marketing strategy. Subject Areas: Business-to-Business Marketing, Customer Information Management, Customer Relationship Management, Database Marketing, Generic Positioning Strategy, and Services Marketing. ∗This research was funded by grants from the Direct Marketing Policy Center at the University of Cincinnati, the Institute for Interactive and Direct Marketing at DePaul University and the University of Illinois, Department of Business Administration. †Corresponding author.