Social media technology usage and customer relationship performance: A capabilities-based examination of social CRM

a r t i c l e i n f o Keywords: Customer relationship management CRM Customer relationship performance Information technology Marketing capabilities Social media technology This study examines how social media technology usage and customer-centric management systems contribute to a firm-level capability of social customer relationship management (CRM). Drawing from the literature in marketing, information systems, and strategic management, the first contribution of this study is the conceptu-alization and measurement of social CRM capability. The second key contribution is the examination of how social CRM capability is influenced by both customer-centric management systems and social media technologies. These two resources are found to have an interactive effect on the formation of a firm-level capability that is shown to positively relate to customer relationship performance. The study analyzes data from 308 organizations using a structural equation modeling approach. Much like marketing managers in the late 1990s through early 2000s, who participated in the widespread deployment of customer relationship management (CRM) technologies, today's managers are charged with integrating nascent technologies – namely, social media applications – with existing systems and processes to develop new capabilities that foster stronger relationships with customers. This merger of existing CRM systems with social media technology has given way to a new concept of CRM that incorporates a more collaborative and network-focused approach to managing customer relationships. The term social CRM has recently emerged to describe this new way of developing and maintaining customer relationships (Greenberg, 2010). Marketing scholars have defined social CRM as the integration of customer-facing activities, including processes, systems, and technologies, with emergent social media applications to engage customers in collaborative conversations and enhance customer relationships (Greenberg, 2010; Trainor, 2012). Organizations are recognizing the potential of social CRM and have made considerable investments in social CRM technology over the past two years. According to Sarner et al. (2011), spending in social CRM technology increased by more than 40% in 2010 and is expected to exceed $1 billion by 2013. Despite the current hype surrounding social media applications, the efficacy of social CRM technology remains largely unknown and underexplored. Several questions remain unanswered, such as: 1) Can social CRM increase customer retention and loyalty? 2) How do social CRM technologies contribute to firm outcomes? 3) What role is played by CRM processes and technologies? As a result, companies are largely left to experiment with their social application implementations (Sarner et al., 2011), and they …