Is Customer Relationship Management a Success Factor in Electronic Commerce?

Customer Relationship Management (CRM) is a concept for increasing companies’ profitability by enabling them to identify and concentrate on their profitable customers. The term Electronic Commerce Customer Relationship Management (ECCRM) refers to the application of CRM in electronic commerce, i.e. when business relationships are maintained via the Internet or Worldwide Web. Previous studies on ECCRM implementations and their impact on businesses have often focused on the process level, technical aspects, or on marketing issues. However, viewed from a higher level, the effect on corporate success in electronic commerce is still unclear. The objective of our study is to examine this effect. Following a quantitative, indirect, and confirmatory methodology, we construct a covariance structure (or LISREL) model. We test our research hypotheses employing a data set comprising 469 cases of general companies, obtained from a representative survey of 1,308 companies in the German-speaking market. We also distinguish between Business-to-Business (B2B) and Business-to-Consumer (B2C) companies and control for the influence of company size and lag effects. We find that ECCRM is a critical success factor in electronic commerce, independent of companies’ time on the Web. It is especially critical for B2C and small companies.