CRM Encueesta Por Dimensiones en Banco

Journal of Advances in Management Research
Customer perception of CRM implementation in banking context: Scale

development and validation
Neeraj Kumar Dubey, Purnima Sangle,
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Neeraj Kumar Dubey, Purnima Sangle, (2018) "Customer perception of CRM implementation in
banking context: Scale development and validation", Journal of Advances in Management Research,
https://doi.org/10.1108/JAMR-12-2017-0118
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CRM
Customer perception of implementation
CRM implementation in in banking
context
banking context
Scale development and validation
Neeraj Kumar Dubey and Purnima Sangle
Department of Decision Sciences & Information Systems,
National Institute of Industrial Engineering, Mumbai, India
Abstract
Purpose – The purpose of this paper is to develop and validate a scale for measuring a customer’s
perception of customer relationship management (CRM) initiatives of a bank. Based upon resource-based
view, CRM technology capability has been conceptualized as a multidimensional construct comprising of
technology, people and business resource (process). This study aims to develop a comprehensive scale for
performance measurement of CRM technology capability, customer orientation and co-creation from the
customer perspective.
Design/methodology/approach – A systematic scale development process was adopted consisting of
three phases, a qualitative inquiry which included item generation through literature review, expert opinion
and focus group study, scale purification and refinement using item analysis and exploratory factor analysis,
and scale validation using confirmatory factor analysis. The study sample consisted of 324 respondents, with
a usable response rate of 68 percent.
Findings – The findings of the empirical study resulted in a 42-item scale that measures CRM technology
capability (technology, people and process), customer orientation, co-creation and relationship quality and
outcome (RQO) (satisfaction, trust, commitment and loyalty). The predictive validity assessment model
suggested that CRM technology capability has a higher impact on RQO. The empirical findings also suggest
that technology is found to be the most important factor compared to people and process for CRM technology
capability. The findings are aligned with literature review and expert opinion that the evolving collaborative-
technologies-enabled CRM technology capability has changed the customer relationship paradigm.
Research limitations/implications – The study focused on a scale specific to the banking sector to
avoid conjoint factors, whereas a more generalized scale would have wider applicability across industries.
The current study sought to broaden the coverage by including a large number of banks who have
implemented CRM.
Practical implications – This reliable and valid scale can help practitioners in measuring the effectiveness
of their CRM implementation from the customer’s perspective, and provide insights that will help them in
bridging the gap between their intended objective and actual implementation. They can also use this study to
measure pre- and post-CRM implementation to see the effectiveness. This study also provides relevance of
customer orientation and offers insight about co-creation which has taken the center stage because of the
emergence of collaborative technologies.
Social implications – This will help in measuring perception of the customer which is an important
stakeholder in the engagement. This can help organizations in proactively taking care of customer’s rights and
measuring the level of satisfaction proactively, which has become a regulatory requirement in many economies.
Originality/value – This study is possibly one of the first to develop a psychometrically valid scale to
measure the customer’s perception of CRM using direct measures. The findings provide insight into the
factors that contribute to the effectiveness of CRM practices in the banking sector. This study demonstrates
that CRM technology capability, customer orientation and co-creation play a very critical role.
Keywords Performance measurement, Factor analysis, Co-creation, Scale development, Customer orientation,
Customer relationship management
Paper type Research paper
1. Introduction
Customer relationship management (CRM) continued to be the number one management Journal of Advances in
Management Research
tool by usage (Rigby and Bilodeau, 2015) and considered a critical enterprise application © Emerald Publishing Limited
0972-7981
with superior business objectives (Chao et al., 2007). Over the last two decades, business DOI 10.1108/JAMR-12-2017-0118
JAMR enterprises have witnessed a paradigm shift in the business environment, characterised by
regulatory changes, the emergence of non-traditional players, increased globalization,
ever-increasing competition, and advancement in information technology (IT). This is
compelling organizations to adopt a customer-centric approach focusing on building loyalty
in sharp contrast to old marketing practices of focusing on transactions (Khodakarami and
Chan, 2014). This has motivated organizations to adopt CRM as a core business strategy for
increased customer loyalty, satisfaction, retention and higher revenue (Diffley et al., 2018;
Santouridis and Tsachtani, 2015; Kim and Kim, 2009), and investing heavily on CRM
technologies (Tzokas et al., 2015; Chuang and Lin, 2013).
However, CRM implementation has often led to considerable dissatisfaction (Santouridis
and Tsachtani, 2015; Steel et al., 2013). Managing the performance of CRM is particularly
important because of the low success rates (Öztayşi et al., 2011). Although some researchers
(Santouridis and Tsachtani, 2015; Sivaraks et al., 2011; Coltman, 2007) have reported
positive benefits from CRM, many business reports and researchers have reported
unsatisfactory results (IDC, 2011; Richards and Jones, 2008). The “productivity paradox”
discussed by academicians in the IT literature (Albadvi et al., 2007; Santhanam and Hartono,
2003; Bharadwaj, 2000) possibly explains these varying results and has motivated increased
interest and investigation in the field of CRM performance measurement (Richards and
Jones, 2008). Such incongruent findings are prevalent across geographies which warrant a
deeper analysis of CRM performance and its measurement from academic researchers and
practitioners (Keramati et al., 2010; Chang et al., 2010).
The various streams of CRM research have primarily focused on the internal
organizational factors (King and Burgess, 2008; Alt and Puschmann, 2006), or strategies
(Chalmeta, 2006; Payne and Frow, 2005) or processes (Keramati et al., 2010). The extant
literature on CRM performance measurement lacks a holistic perspective, particularly in
adequately addressing the important dimension of customer perspective (Kim and Kim,
2009). The intent of current discussion is to highlight lack of comprehensive work
encompassing customer’s perspective in previous studies. The relatively matured areas of
performance measurement research, such as strategy and operations, have extensively used
the customer’s view point in their frameworks (Kim and Kim, 2009) because customer
feedback acts as a conduit between business strategy and organizational performance
(Kim and Kim, 2009; Kaplan and Norton, 1992).
Earlier work on measurement of customers’ perspective has used indirect measures – e.g.
customer-based service attributes because they could not be perceived directly by
customers (Sivaraks et al., 2011). Changes in the customer profile, advancements in
technology and new channels have forced organizations to move to a new era of CRM 2.0
(Greenberg, 2010), necessitating changes in customer-facing processes and usage of CRM
technology (Gensler et al., 2012; IDC, 2011). Such changes have enabled the customer to
directly perceive CRM technology capability.
Further, with the emergence of new collaborative technologies, customers are engaging
in continuous interactions with organizations during every stage of the relationship
spectrum leading to deeper collaboration, which results in an improved mutual
understanding of needs (Payne et al., 2008; Ballantyne, 2004). Together, customers and
organizations create and deliver values with desired customizations and co-creation of
offerings with-in a collaborative approach. The co-creation helps organizations to
understand customers’ perspective and design improved offerings that meet customers’
expectations (Vargo and Lusch, 2008). Changes in the technological landscape will mandate
organizations to develop CRM technology capability as a strategic resource, creating
demand for transformation of customer-facing processes, necessitating bigger investment in
enterprise systems like CRM applications (IDC, 2011). These collaborative technologies
will revamp the way organizations have been interacting with their customers, impacting
end-to-end sales, marketing and service processes (Chen and Tsou, 2012). The emergence of CRM
new technologies along with customers’ increased expectation of continuous dialogue, ease implementation
of access and transparent elucidation of risks and benefits from organizations, offer the in banking
opportunity as well as the need for collaborative learning and creation of mutual value.
The emerging trend of co-creation is likely to play a significant role in shaping context
organizations’ relationship with customers (Hidayanti et al., 2018; Cambra-Fierro et al., 2017).
In summary, there is a relatively little work in studying the finer aspects of CRM technology
capability and adoption of new strategies, such as co-creation. Hence, there is a need to
augment prevailing academic research in the field of CRM by enhancing our understanding
of performance measurement of CRM technological capability from the customer’s
point of view. Against this backdrop, it is important to study and define a comprehensive
scale for performance measurement of CRM technology capability and co-creation from the
customer perspective.
2. Theoretical background
Resource-based view (RBV ) theory conceptualizes an organization as a distinctive bundle of
resources that confer sustained competitive advantage based on their value, rareness,
inimitability and non-substitutability – VRIN (Barney, 1991). Value creation via leveraging
of IT has been researched largely using the RBV theory (Melville et al., 2004). Studies have
highlighted that technology can be easily acquired and replicated (Bharadwaj, 2000), and
have stressed that IT resources in isolation will not be able to deliver intended higher
performance or sustained competitive advantage (Rapp et al., 2010; Coltman, 2007; Melville
et al., 2004; Bharadwaj, 2000).
RBV-based IT research has viewed IT resources under three categories, IT
infrastructure, human resources (skills, attitude and training) and IT-enabled intangible
assets (business processes). Researchers have further emphasized that these resources and
the concomitant capabilities need to be deployed in a coordinated manner to derive
sustainable competitive advantage (Coltman, 2007; Melville et al., 2004). In this context,
capabilities are an organization’s ability to gather and synchronize resources together to
attain high performance (Rapp et al., 2010; Barney, 1991). Researchers in the fields of
information systems (IS) have studied the impact of unique organizational resources and
capabilities on performance through the RBV perspective (Diffley et al., 2018; Chuang and
Lin, 2013; Rapp et al., 2010).
There is a rich body of literature that forms the foundation for the CRM technology
capability and performance constructs used in this study. Considering the emergence of
collaborative technologies, the present study attempts to develop a scale focuses on the
constructs of CRM technology capability, customer orientation and co-creation.
Organizations implementing CRM foresee the maximum impact on improved customer
relationship quality and relationship outcome. To assess CRM performance from customer’s
perspective, the present research adopted the measures of relationship quality and outcome
(RQO) from recent customer specific studies (Wang, 2014; Sivaraks et al., 2011).
2.1 CRM in the service industry

Many researchers (e.g. Wu and Lu, 2012) have highlighted the challenges associated with
service industry and discussed how CRM can help in improving business performance, and
help them handle typical challenges of service industry such as “intangibility,
inseparability, heterogeneity and perishability” (Parasuraman et al., 1985) and highlighted
opportunities to benefit in banking (Chuang and Lin, 2013; Keramati et al., 2010; Neslin and
Shankar, 2009). Banks have been early adopters of IT for several decades (Pennings
and Harianto, 1992). In recent years, technology has brought transformational changes in
the banking world and banks are exploiting technologies across multiple channels to deliver
JAMR consistency, efficiency, personalization, value addition and customization. Banks are
shifting from an account-centric paradigm to a more customer-centric one, especially
leveraging CRM technologies and associated processes to manage all aspects of the
relationship to positively influence RQO (Sivaraks et al., 2011).
2.2 Dimensions of current research

Consumers’ perceptions and expectations play an important role in implementation and
effective deployment of CRM (Ali and Brooks, 2009). Success with CRM requires a deep
understanding of customer expectation, preferences and behaviors as well as a robust
infrastructure that supports the overarching CRM strategy (Peterson et al., 2010).
In line with the above views, this study looks at three dimensions of CRM technology
capability (Chuang and Lin, 2013; Rapp et al., 2010) along with customer orientation and
co-creation as the independent variables, and their effect on RQO.
2.2.1 CRM technology capability. Building upon the RBV, acknowledging that resources
need to be combined to build up characteristic capabilities, numerous researchers have
conceptualized CRM technology capability as a multidimensional construct which consists

of technology resources and complementary resources – business process and human
resource as the pillars for enabling superior CRM capability (Chuang and Lin, 2013; Rapp
et al., 2010; Coltman, 2007). CRM technology capability enables organizations to understand
and collaborate with their customers to serve their needs (Rapp et al., 2010), through
bi-directional interactions and quicker service across customer-preferred channels (Sivaraks
et al., 2011), and offer co-creation opportunities (Cambra-Fierro et al., 2017; Saarijärvi et al.,
2013). Based on these studies, this study also considers CRM technology capability as a
multidimensional construct consisting of technology resources and complementary
resources – business process and human resource.
Technology resource dimension of CRM technology capability denotes effective
deployment of information solutions and IT infrastructure designed to support customer
relationships, and manage and automate internal operations in the area of sales, service and
marketing (Keramati et al., 2010; Coltman, 2007; Chen and Popovich, 2003). The advent of
the twentieth century ushered a multi-channel environment (Sangle and Awasthi, 2011) that
helps in improving the quality of interaction across channels with appropriate use of
data and customer knowledge (Alshawi et al., 2011), deliver customized, personalized
services and products through the preferred channel (Sivaraks et al., 2011), and enables
collaboration and enhanced customer experience (Trainor et al., 2014; Keramati et al., 2010).
To achieve a sustainable competitive advantage, technology is one of the critical and
important resources in any organization (Bharadwaj et al., 1993), and it is a mandatory
factor for a successful CRM implementation (Lindgreen et al., 2006).
The human resource dimension denotes the organization’s knowledge, and skills
pertaining to CRM initiatives (Rapp et al., 2010). It consists of training, experience, attitude,
relationships and insights of the employees (Keramati et al., 2010; Karakostas et al., 2005;
Barney, 1991; Bharadwaj, 2000). Researchers have deliberated and proved people as a key
factor in IT adoption and success (Rapp et al., 2010; Ko et al., 2008). People will play a critical
role amidst streamlined processes, and sophisticated CRM technologies (Garrido-Moreno
and Padilla-Meléndez, 2011), and studies have reported that sub-optimal performance of
CRM implementations results due to a lack of skilled and trained human resources
(Keramati et al., 2010). Business resources denote the final dimension of CRM technology
capability and encompass acquisition, retention and expansion of the relationship with
customers (Park and Kim, 2003; Reinartz et al., 2004). The business process associated with
CRM initiatives denotes integration of process at functional, customer-facing and
organization wide to achieve efficiency and effectiveness which impacts customer
relationship quality (Roh et al., 2005; Reinartz et al., 2004). Researchers have suggested that CRM
technology influences key business processes at the operational and management layer to implementation
create process capabilities (Keramati et al., 2010; Bharadwaj, 2000), and also stressed the in banking
importance of interdepartmental coordination and simplification of organization structure in
satisfying the needs and expectations of customers with agility ( Jüttner et al., 2006). context
2.2.2 Customer orientation. Numerous researchers have studied the role of customer
orientation and established its influence on CRM outcome (Chuang and Lin, 2013;
Garrido-Moreno and Padilla-Meléndez, 2011; Rapp et al., 2010; Jayachandran et al., 2005). For
sustenance of relationships with customers, organizations must embrace a customer-centric
culture and constantly deliver value to customers (Chen and Popovich, 2003).
Customer orientation entails a high degree of commitment and capability to collect,
disseminate and utilize insights about customers to develop responsive strategies by
coordinated actions across functions (Kohli and Jaworski, 1990; Narver and Slater, 1990). It
is robustly linked to business performance in a rapidly changing and evolving competitive
business environment (Kohli and Jaworski, 1990). Studies on CRM technology capability as
an organizational resource have usually included customer orientation as a related variable
impacting important business outcomes (Chuang and Lin, 2013; Rapp et al., 2010).
2.2.3 Co-creation. Today, organizations and customer have the opportunity to co-create
value through customized, co-produced offerings (Payne et al., 2009; Ballantyne, 2004). The
co-creation of value is a desirable objective which can facilitate organization in understanding
the customer’s perspective and improve the front-end process of identifying customers’
expectations, needs and wants (Lusch and Vargo, 2006).
Co-creation is a resource integration process which happens when customers are
attracted by value propositions, and it tempts them to share their resources during
collaborative activities and interactions (Frow et al., 2016). The foundation for value creation
between customer and organization is continuous and collaborative interactions (Prahalad
and Ramaswamy, 2013). Such interactions are based on four pillars – dialogue, access, risk
and transparency – which are interconnected steps, and by embracing these, organizations
improve the opportunities for value co-creation.
The CRM 2.0 will enable dialogue which would mean continuous, on-going and candid
engagement, and mutual inclination to actively participate (Ramaswamy, 2011) for a shared
learning about topics of mutual interest requiring an environment facilitating a systematic
and productive communication fostering a higher amount of trust between customers and
organizations (Prahalad and Ramaswamy, 2013). The collaborative technologies lead to
enhanced customer relationship by developing capability to understand each other better
(Diffley et al., 2018).
A paradigm shift from the “Goods-Dominant (G-D)” era, where the value was considered
embedded in the product and obtainable through ownership, there is a significant move
toward a “Service-Dominant (S-D)” economy where the value is obtained by using the
product and desirable experiences (instead of ownership) (Prahalad and Ramaswamy, 2013).
The risk is as understood as the probability of loss by the customer (Prahalad and
Ramaswamy, 2013). The inappropriateness of product can vary from various dimensions
related to functionality, timing, performance, etc. (Stone and Grønhaug, 1993), and
customers chose to participate in reducing the risk of receiving the inappropriate and wrong
product (Etgar, 2008) and assess their own suitability and desire to play an active role.
Organizations have traditionally benefited from exploiting the information asymmetry
with the customer, and diminishing information asymmetry is mandating transparency
(Prahalad and Ramaswamy, 2013).
These building blocks are interlinked, and one factor facilitates another, e.g.,
transparency can facilitate a collaborative dialogue (Prahalad and Ramaswamy, 2013)
JAMR and develop new capabilities in the organization. Access and transparency enables
customers to make informed choices. Dialogue and risk assessment enhance the capability
to debate and co-create products and services. Access and dialogue enhance the
capability to develop thematic communities. Transparency and risk assessment establishes
the institutionalization of trust.
2.2.4 Relationship quality and outcome. RQO is customer’s assessment of meeting the
expectations ( Jarvelin and Lehtinen, 1996; Crosby et al., 1990; Zeithaml, 1981).
Relationship quality is acknowledged as the level of adequate achievement of the
expectation of customer from their relationship (Hennig-Thurau et al., 2002) and denotes
an overall feeling of the customer about the relationship with the organization and its
interactions (Wong and Sohal, 2002).
Relationship quality comprises of various key factors that govern the level of
relationships between customers and organizations and they are – satisfaction, trust and
commitment (Hennig-Thurau et al., 2002). Researchers have identified satisfaction and
loyalty as an important construct of RQO (Leverin and Liljander, 2006). Researchers have
studied satisfaction, trust, commitment and loyalty as indicator of RQO in the service
industry (Wang, 2014).
3. Methodology for scale development

An exploratory study is recommended when there is limited literature about the research
problem. Considering the empirical and inductive nature of the current study, this study
adopted the widely used scale development paradigm provided by Churchill (1979) which
was subsequently augmented by numerous researchers (Anderson and Gerbing, 1982;
Bagozzi et al., 1991; Nunnally et al., 1994). The procedure comprises three stages: Phase 1
qualitative inquiry where factor affecting item generation and selection are identified using
literature review and interviews with academic experts and CRM practitioners; Phase 2,
scale refinement involving focus group study, face and content validity, pilot study and item
screening; and Phase 3 encompassing scale validation and final study. The methodology is
depicted in Figure 1.
Phase 1: Conceptualization – Qualitative Inquiry
Factor Identification Substantiation – Content and Face

Focus Group Study
– Literature Review Expert Review Validity
Phase 2: Scale Purification (Pilot Study n=99)

Confirmatory factor
Exploratory Factor
Analysis –
Analysis and Item Assessment and Sampling Design
Convergent and
Common Method Reliability Analysis and Data Collection
Discriminant
Bias
Validity
Phase 3: Scale Validation (n=225)
Replicate Convergent and

Confirmatory Factor discriminant Predictive validity
Figure 1.
Analysis Validity
Methodology for
scale development
3.1 Phase 1: conceptualization – qualitative inquiry CRM
To comprehend CRM technology capability, customer orientation and co-creation initiatives implementation
of an organization from the customer’s perspective, literature were systematically reviewed in banking
to understand various factors defining the same. The literature review revealed that very
limited empirical work measuring direct measures from the customer’s perspective had been context
reported; hence, this study looked at key studies done from the organization’s perspective
and identified important factors that would be easily perceivable by the end customer.
The key factors identified based upon literature review are described in Table I.
3.1.1 Expert opinion. Expert reviews were conducted with three academicians actively
pursuing research in the field of CRM, seven CRM consultants having 15+ years of
experience in consulting and implementing CRM in various organizations globally, and
three experts from the banking industry at middle and upper management levels having
CRM planning and implementation responsibility. The factors and dimensions identified
were subjected to expert review to determine the comprehensiveness as well as the
relevance of the identified constructs in the Indian banking scenario. Each expert was
requested to assess the factor for appropriateness in relevance to the Indian banking context
and if it will be perceived by customer or not. Their suggestions were incorporated, and this
enabled substantiation and identification of key measures from the customer’s perspective.
3.1.2 Focus group study. Since surveys are intrinsically constrained by the questions
asked, focus groups can offer additional information (Morgan, 1996) and hence have been
suggested as a suitable way for questionnaire development (Morgan, 1997). The focus group
study in the current study consisted of diverse participants including MBA students,
salaried employees from various functional domains (IT, marketing, HR and finance).
At least two moderators facilitated the discussion with the help of pre-prepared
semi-structured interview questionnaire.
3.1.3 Content and face validity. Content validity refers to the degree to which the items of
a scale represent a concept used in the study (Patyal and Koilakuntla, 2015).
After identification of key measures, items for each factor from past studies were
adopted and reframed ensuring identical understanding of the items by the participants of
the survey. For some factors, this study developed few questions emphasizing all the
important aspects identified in previous steps. Subsequently, the instrument developed was
scrutinized by a panel of seven experts (professors/CRM professionals). In an iterative
process only clearly worded items were retained after deletion of overlapping items to avoid
any misinterpretation. Some questions were rephrased so that the respondents could
comprehend them easily in the Indian banking context. The survey instrument comprised a
total of 57 items, 43 of which characterized the independent variables (CRM technology
capability, customer orientation and co-creation) and 14 items characterized RQO
(satisfaction, trust, commitment and loyalty).
3.2 Phase 2: scale purification

Most of the CRM studies conducted from customers’ perspective have either used five-scale
Likert scale (Bhat and Darzi, 2016; Padmavathy et al., 2012) or seven-scale Likert scale
(Cambra-Fierro et al., 2017; Wang et al., 2004). Sivaraks et al. (2011) used a five-point Likert
scale and used a two-stage process to convert to a seven-point Likert scale before the
analysis process. For pilot testing a questionnaire of 57 items responses were collected on a
seven-point Likert scale (from 1 ¼ strongly disagree to 7 ¼ strongly agree) to prevent subtle
data loss especially in non-moderated, electronic format (Finstad, 2010). The questionnaire
was segregated into two sections, where the first section consisted of personal information
including gender, education, profession and years of relationship with a particular bank and
the second section consisted questionnaire. In this phase of the study, the steps suggested
JAMR Factor Dimension Authors(s)
Technology Information availability and Garrido-Moreno and Padilla-Meléndez (2011), Teo et al.
integration across functional (2006), Jayachandran et al. (2005), Meltzer (2001),
areas Fletcher and Wright (1995), and Peppard (2000)
Data/IS quality Garrido-Moreno and Padilla-Meléndez (2011), Hwang
and Kim (2007), Jayachandran et al. (2005), Reid and
Catterall (2005), Rowley (2002), and Fletcher and
Wright (1995)
Infrastructure (hardware/software) Garrido-Moreno and Padilla-Meléndez (2011)
Scheduling and tracking delivery Jayachandran et al. (2005)
of product and services
Multi-channel integration Rapp et al. (2010)
Personalized/Customized Jayachandran et al. (2005)
communication
Width and depth of CRM Teo et al. (2006), Jayachandran et al. (2005),
functions – sales, service, solutions and Kohli et al. (2001)
Integration with legacy/other IS Meltzer (2001), Kohli et al. (2001), and Fletcher
and Wright (1995)
Business process Support for customer life cycle Keramati et al. (2010), Jayachandran et al. (2005),
Reinartz et al. (2004), Rowley (2002), Verhoef and
Donkers (2001), and Peppard (2000)
Functional CRM process Winer (2001), Jayachandran et al. (2005) and
Teo et al. (2006)
Process driven assignment and Keramati et al. (2010) and Torkzadeh et al. (2006)
management
Well-designed process to enhance Torkzadeh et al. (2006) and Jayachandran et al. (2005)
interaction quality with customer
Decision-making process Winer (2001), Kohli et al. (2001), Teo et al. (2006) and
Kim and Lee (2007)
Human resource Employee satisfaction Donavan et al. (2004), Speier and Venkatesh (2002),
and Kohli et al. (2001)
Attitude Chen et al. (2009), Winer (2001), Kim and Kim (2009),
Donavan et al. (2004), and Maxham and
Netemeyer (2003)
Employee commitment Chen et al. (2009)
Skills and experiences Garrido-Moreno and Padilla-Meléndez (2011), Kim and
Kim (2009), Rowley (2002), Winer (2001), and Fletcher
and Wright (1995)
Management supports Kim and Kim (2009), Rowley (2002), Fletcher and
Wright (1995)
Customer Customer’s needs analysis Chuang and Lin (2013), Garrido-Moreno and
orientation Padilla-Meléndez (2011), and Rapp et al. (2010)
Feedback capture Garrido-Moreno and Padilla-Meléndez (2011)
Effort to maintain and enhance Garrido-Moreno and Padilla-Meléndez (2011)
relationship
Driven by customer satisfaction Rapp et al. (2010)
Proactive monitoring of Rapp et al. (2010), and Garrido-Moreno and
relationship Padilla-Meléndez (2011)
Close attention to service needs Rapp et al. (2010)
Co-creation Dialogue Prahalad and Ramaswamy (2013), Ramaswamy
(2011), Auh et al. (2007) and Bettencourt (1997)
Access Prahalad and Ramaswamy (2013) and Auh et al. (2007)
Risk assessment Prahalad and Ramaswamy (2013) and Auh et al. (2007)
Transparency Prahalad and Ramaswamy (2013), Auh et al. (2007)
Table I.
Key factors identified
from literature review (continued )
Factor Dimension Authors(s)
CRM
implementation
Relationship Satisfaction Wang (2014), Sivaraks et al. (2011), Kim and Kim in banking
quality and (2009), Mithas et al. (2005) and Crosby et al. (1990)
outcome context
Trust Wang (2014), Sivaraks et al. (2011), Anderson and
Weitz (1992), and Dwyer et al. (1987)
Commitment Wang (2014), Sivaraks et al. (2011), Anderson and
Weitz (1992), Dorsch et al. (1998) and Gundlack
et al. (1995)
Loyalty Wang (2014), Sivaraks et al. (2011) and Hennig-Thurau
et al. (2002) Table I.
by Churchill (1979) were adopted for the pilot testing and scale purification of the
instrument which is item analysis, exploratory factor analysis (EFA) and confirmatory
factor analysis (CFA) (purification).
3.2.1 Pilot study – sample selection criteria and data collection. Considering the
complexity of the subject and this was the perhaps one of the first time a direct measure was
being used to measure CRM technology capability from customer’s perspective, purposive
sample combined with the snowball sampling was used, and effort was made to select
people who are well aware of finer aspects of CRM.
As suggested by Johanson and Brooks (2009) that researchers should focus
more on internal consistency rather than increasing the sample size, this study focused on
relative efficiency for item analysis. The rate of increase in precision is non-linear and
should use Cronbach’s α to measure the internal consistency and according to Johanson
and Brooks (2009), 30 participants from the population of interest is a reasonable
minimum recommendation for a pilot study where the purpose is a preliminary survey or
scale development. The sample must have more observations than variables,
and minimum sample size should be 50 (Hair et al., 2006, p. 101). Gorsuch (1983) and
Kline (1979) had recommended 100 to be a minimum sample size for factor analysis and
SEM. Crocker and Algina (1986) suggested a sample size between 100 and 200 for a
comprehensive analysis.
As adopted by Keramati et al. (2010), pre-survey confirmation was sought from identified
respondents to recognize and establish their willingness to participate in the survey, and
whether they could provide contact details for the appropriate person who can provide
insight into this complex topic considering its newness. Though efforts were made to
contact a large number of respondents, however, at the time of pilot study a total of 140
respondents agreed to respond and were selected as the sample for this research, and a link
to web questionnaire and soft copy of questionnaire through e-mail were sent to them.
Subsequently, follow-up telephone calls were made to increase the response rate and if the
possible in-person meeting was also organized.
The questionnaire was administered in major cities in India to 140 respondents, out of
which 112 responses were received, and 99 of them were valid, equivalent to a response rate
of 70.7 percent, which was used to assess the initial reliability and to conduct EFA and CFA.
The profile of respondent in pilot study is mentioned in Table II.
3.2.2 Item assessment and reliability analysis. Since no variable can be a perfect measure
of a concept (Fornell and Larcker, 1981), several variables were used (Selnes, 1993). Three
methods were used to measure internal consistency – correlations among different items,
Cronbach’s α, and corrected item-total correlations. Cronbach’s α indicates the reliability of
the instrument and identifies consistency of the measurement scale developed on the basis
of responses. Nunnally et al. (1994) has suggested that threshold value of Cronbach’s α must
JAMR Classification No. % total
Profession
IT professional 76 77.0
Sales/marketing professional 6 6.1
HR professionals 5 5.1
Professors 4 4.0
Research scholars 8 8.1
Education
Graduate 73 73.7
Post graduate 23 23.2
PhD 3 3.0
Gender
Male 76 76.8
Female 23 23.2
Length of relationship with bank
Table II. Less than 1 years 2 2.0

Profile of respondents 1–3 years 7 7.1
during scale 3–5 year 42 42.4
purification More than 5 year 48 48.5
be at least 0.60 and is considered highly reliable beyond 0.70. In order to get better the value
of α (⩾ 0.6), items having low correlations and/or items whose correlations drastically lower
the corrected item-to-total correlations were omitted, and this process was followed in
iterative step. The results are reported in Table III.
3.2.3 Exploratory factor analysis. After item analysis, EFA using principal component
analysis along with varimax rotation with SPSS 20.0 was conducted to determine the
conditions which interrelate latent and observed variables, and to explain these variables in
terms of their common underlying factors (Hair et al., 2006). The strength of the relationship
between an item and a particular factor is reflected by the loadings, and a higher loading
denotes superior representation that particular item has on the factor. The deletion criterion
of the item was set at minimum cut off as: factor loadings (o0.50) (Karatepe et al., 2005),
cross loadings (W0.40) or communalities (o0.50) (Hair et al., 2006). The Kaiser–Meyer–
Olkin (KMO) statistic of sampling adequacy was analyzed to establish the appropriateness,
and its value must be equal or above than 0.60 for a good factor analysis (Tabachnick and
Linda, 2012). The KMO value in the current study was reported as 0.824 and significant
( po 0.01) suggesting suitability of factor analysis. Further, Bartlett’s test of sphericity was
found to be significant suggesting suitability of factor analysis. After removal of items
based on factor loading, cross loading and eigenvalue W1, 41 items remained whose pattern
is depicted in Table IV. The resulting nine factors were aligned with the proposed
conceptual model and explained 89.32 percent of the items.
3.2.3.1 Common method bias. One of the presumable problems with single researcher
self-reported data is the possibility of common method variance (CMV ). CMV or common
method bias denotes bias in collected response which might be due to external
measures other than the questionnaire. Harmon’s one-factor test has been recommended
by Podsakoff et al. (2003) to test CMV, where either a single factor will emerge from
the un-rotated factor analysis or one factor will account for the majority of the covariance
in the variables (Patyal and Koilakuntla, 2015). The results highlighted that first factor
explains 14.88 percent of the variance out of total 32.62 percent, thus indicating absence
of CMV.
Cronbach’s Mean Mean
CRM
Factor Item Question α (S1) (S2) Source implementation
in banking
Technology 0.964 27.29 26.24
Technology TECH1 My bank is able to provide me 5.44 5.32 Garrido-Moreno and context
accurate and correct information Padilla-Meléndez
about their product and services (2011), Rapp et al.
across channels (2010) and
Technology TECH2 My bank has proper IT systems, 5.51 5.33 Jayachandran et al.
so that I do not have to wait (2005)
because their IT system is down
or it is not working
Technology TECH3 They have right system to 5.51 5.28
schedule and track delivery of
services and product
Technology TECH4 My bank maintains proper 5.44 5.20
information about service
requests and enquiries
Technology TECH5 The information that I get from 5.39 5.11

various channels (internet/call
center/branch) is consistent
and reliable
Technology TECH6 My bank has proper systems to
maintain information about their
customers and remember their
privacy/preferences (deleted)
Technology TECH7 My bank sends me reminders and
alerts through my preferred
channel on important events and
transactions (deleted)
People 0.978 25.76 28.72
People PL1 My bank’s employees are 5.17 5.66 Garrido-Moreno and
committed to provide superior Padilla-Meléndez
service to their customers (2011) and Chen
People PL2 My bank’s employee truly value 5.21 5.72 et al. (2009)
their customers
People PL3 When required, my bank’s 5.18 5.76
employees will make personal
sacrifices to serve their customers
People PL4 My bank’s employees are 5.12 5.79
knowledgeable and experienced
to perform their job effectively
People PL5 My bank’s employees are trained 5.07 5.78
to perform their jobs effectively
People PL6 My bank’s employees try to
understand my problems and
suggest solutions proactively
(deleted)
People PL7 My bank’s employees take extra
effort to meet my needs and
demands (deleted)
Process 0.911 29.03 22.51
Process PR1 My bank follows well defined 5.81 4.47 Keramati et al.
process while delivering card, (2010) and
statement, password, cheque Jayachandran et al. Table III.
book, etc. (2005) Question items of
measurement scales
with means and
(continued ) Cronbach’s α
JAMR Cronbach’s Mean Mean
Factor Item Question α (S1) (S2) Source
Process PR2 My bank’s various functional 5.82 4.53

areas/departments co-ordinate
their activities to enhance the
quality of customer experience
Process PR3 My bank’s process ensures that 5.82 4.48
my requests, problems and
complaints are handled personally
by their employees who are
responsible for solving the same
Process PR4 My bank’s processes are designed 5.80 4.48
to enhance the quality of
customer interactions
Process PR5 My bank has streamlined 5.78 4.56
processes to conduct transactions
which are normally correct and
fast (deleted)
Process PR6 My bank follows systematic and
simple steps while selling any
product to me (deleted)
Process PR7 My bank follows systematic and
simple steps while resolving my
requests/inquiries (deleted)
Customer 0.977 32.24 29.93
orientation
Customer CO1 My bank has a good 5.72 5.04 Garrido-Moreno
orientation understanding of my needs and and
requirements Padilla-Meléndez
Customer CO2 My bank frequently takes 5.65 5.04 (2011) and Rapp
orientation feedback from me about their et al. (2010)
products and services
Customer CO3 My bank always tries to maintain 5.59 5.03
orientation and enhance their relationship
with me
Customer CO4 My bank is driven by customer 5.51 5.02
orientation satisfaction
Customer CO5 My bank closely monitors their 5.43 4.96
orientation employees’ performance while
servicing or selling to their
customers
Customer CO6 My bank pays great attention to 5.35 4.84
orientation my service needs
Customer CO7 My bank offers personalized
orientation products and services to me
(deleted)
Customer CO9 My bank frequently measure my
orientation satisfaction level with them
(deleted)
Co-creation 0.977 39.20 36.31
Co-creation CC1 When I experience a problem at 5.49 5.05 Auh et al. (2007)
the bank, I let them know so that and Bettencourt
they can improve (1997)
Co-creation CC2 I let my bank know of ways that 5.57 5.11
they can serve my needs better
Table III. (continued )

Cronbach’s Mean Mean
CRM
Factor Item Question α (S1) (S2) Source implementation
in banking
Co-creation CC3 My bank explain financial 5.61 5.16
concepts, fees and charges in context
meaningfully way while selling
products/services to me and
recommend me right product/
services
Co-creation CC4 I like to perform various activities 5.61 5.18
myself like choosing features and
benefits of various product
Co-creation CC5 They offer me various tools to 5.61 5.22
assess my goals based upon risk
profile
Co-creation CC6 My bank’s always give 5.65 5.28
information about their products’
terms and conditions, fees and
charges as much I need

Co-creation CC7 They explain the advantages/ 5.68 5.32
disadvantages and risks associate
with their products/services
Co-creation CC8 I openly discuss my needs with
my banker to help him/her offer
the best possible product to me
(deleted)
Co-creation CC9 The bank offers me to choose/
configure features/charges/
benefits (deleted)
Co-creation CC10 I provide my risk and return
preference to help bank offer me
suitable product and portfolio
(deleted)
Co-creation CC11 The bank enables me to perform
many activities through various
channels which a bank’s
employee would have otherwise
performed for me (deleted)
Co-creation CC12 I try to work co-operatively with
my bank employee (deleted)
Co-creation CC13 My bank keeps me well informed
about what is going on with my
investment (deleted)
Satisfaction 0.929 28.27 26.52
Satisfaction SAT1 As a customer I have a high 5.67 5.35 Wang (2014)
quality relationship with the bank
Satisfaction SAT2 I am happy with the effort that 5.63 5.30
the bank makes toward its
customers
Satisfaction SAT3 I am satisfied with my 5.63 5.27
relationship with the bank
Satisfaction SAT4 I can find the product and 5.64 5.26
services that matches my need
provided by the bank
Satisfaction SAT5 I think the interest/fees/charges I 5.72 5.35
pay for the bank’s services is fair
(continued ) Table III.

JAMR Cronbach’s Mean Mean
Factor Item Question α (S1) (S2) Source
Trust 15.89 15.25

Trust TRUST1 The bank’s services give me a 5.42 5.13 Wang (2014)
feeling of trust
Trust TRUST2 I count on the bank’s services 5.24 5.07
Trust TRUST3 The bank gives me an impression 5.22 5.04
of trustworthiness
Commitment 0.949 15.86 15.06
Commitment COM1 I am willing to go the extra mile to 5.24 5.00 Wang (2014)
remain a customer of the bank
Commitment COM2 I will keep purchasing the bank’s 5.31 5.07
products and services without
hesitation
Commitment COM3 I will keep purchasing the bank’s 5.30 4.99
products and services regardless
of the competitors’ promotions

Loyalty 0.969 15.21 14.00
Loyalty LOYL1 I will recommend the bank’s 5.09 4.76 Wang (2014)
services/products
Loyalty LOYL2 I will buy other products and 5.24 4.63
services from the bank
Loyalty LOYL3 I will re-purchase the bank’s 5.22 4.61
product and services
Table III. Notes: S1: Sample 1 used pilot study/scale purification (n ¼ 99); S2: Sample 2, validation sample (n ¼ 225)
3.2.4 Confirmatory factor analysis. Subsequent to EFA, during scale purification stage,
CFA was performed on the residual items using AMOS Version 20.0. CFA is particular
exploitation of structural equation modeling, which is also referred as linear structural
relationship model (Marsh and Hocevar, 1985) or covariance structure. Researchers have
stressed the importance of incremental indices – comparative fit index (CFI), incremental fit
index (IFI), Tucker – Lewis index (TLI), absolute fit indices root mean square error of
approximation (RMSEA), χ2 and the normed χ2 ( χ2/df ).
The indices of the model were found as χ2 (df ) ¼ 881.133 (529), p ¼ 0.000, normed
χ ¼ 1.666, IFI 0.935, TLI ¼ 0.926, CF1 ¼ 0.934, RMSEA ¼ 0.082 and SRMR ¼ 0.0604.
2
These values indicate that indices are with-in the acceptable range of values and denote
acceptance of model as recommended by Hair et al. (2006).
3.2.4.1 Convergent and discriminant validity. From the measurement model, the
convergent validity is evaluated with the help of significance of individual item maximum
likelihood loading (acceptable if ⩾ 0.5 and ideally ⩾ 0.7) and establishing if the indicators
are measuring the underlying constructs (Hair et al., 2006). The discriminant validity is
established if shared variance between measures is the less than the AVEs of the
individual measures (Fornell and Larcker, 1981). According to Hair et al. (2006), composite
reliability (CR) is the total amount of true score variance in relation to the total
score variance its value greater than 0.7 is desirable (Nunnally et al., 1994). The values are
reported in Table V.
The result confirms discriminant validity and the comparison between the AVEs and
shared variance:
(1) the scales are reliable as CR W0.7;
Rotated component matrixa
CRM
Component implementation
Co- Customer in banking
creation orientation Process Tech People Satisfaction Loyalty Commitment Trust
context
CC4 0.896
CC5 0.887
CC3 0.886
CC6 0.875
CC7 0.874
CC2 0.869
CC1 0.719
CO4 0.930
CO3 0.916
CO5 0.912
CO2 0.890
CO6 0.877
CO1 0.848
PR1 0.857
PR3 0.847
PR2 0.842
PR4 0.816
PR5 0.760
TECH3 0.839
TECH4 0.833
TECH5 0.794
TECH2 0.788
TECH1 0.721
PL3 0.925
PL4 0.898
PL2 0.881
PL5 0.784
PL1 0.777
SAT3 0.917
SAT4 0.901
SAT2 0.888
SAT5 0.882
SAT1 0.797
LOYL2 0.928
LOYL1 0.925
LOYL3 0.909
COM2 0.915
COM3 0.890
COM1 0.871
TRUST2 0.931
TRUST3 0.900
TRUST1 0.864 Table IV.
Notes: Extraction Method: principal component analysis. Rotation Method: varimax with Kaiser Exploratory factor
normalization. (Kaiser–Meyer–Olkin measure of sampling adequacy ¼ 0.824), Bartlett’s test of Sphericity analysis during scale
(Approx. χ2 ¼ 6,414.061; df ¼ 861 and Sig. ¼ 0.000). aRotation converged in seven iterations purification stage
(2) there is convergent validity as AVE W0.5; and

(3) there is discriminant validity as:
• MSV o AVE;
• in all cases ASV oAVE; and
• square root (diagonal elements) W inter-construct correlations.
JAMR Composite Average Maximum Average shared
reliability (CR) variance shared variance variance (ASV )
extracted (AVE) (MSV )
No. Construct Item S1 S2 S1 S2 S1 S2 S1
1 Technology TECH1 0.975 0.980 0.887 0.908 0.425 0.045 0.151
TECH2
TECH3
TECH4
TECH5
2 Process PR1 0.958 0.948 0.822 0.787 0.347 0.176 0.170
PR2
PR3
PR4
PR5
3 People PL1 0.903 0.934 0.658 0.739 0.045 0.038 0.021
PL2
PL3
PL4
PL5
4 Customer orientation CO1 0.982 0.985 0.886 0.904 0.425 0.176 0.148
CO2
CO3
CO4
CO5
CO6
5 Co-creation CC1 0.982 0.985 0.886 0.904 0.425 0.176 0.148
CC2
CC3
CC4
CC5
CC6
CC7
6 Satisfaction SAT1 0.910 0.951 0.677 0.798 0.064 0.063 0.014
SAT2
SAT3
SAT4
SAT5
7 Trust TRUST1 0.952 0.958 0.870 0.884 0.123 0.054 0.072
TRUST2
TRUST3
8 Commitment COM1 0.954 0.944 0.874 0.849 0.197 0.068 0.080
COM2
COM3
9 Loyalty LOYL1 0.970 0.970 0.916 0.916 0.171 0.068 0.074
LOYL2
LOYL3
EFA item loading Corrected item CFA item Square multiple
total correlation loading correlation
No. S1 S2 S1 S2 S1 S2 S1 S2
1 0.721 0.833 0.863 0.852 0.940 0.947 0.872 0.883
0.788 0.878 0.925 0.906 0.980 0.984 0.919 0.916
0.839 0.923 0.942 0.933 0.933 0.909 0.897 0.879
0.833 0.926 0.920 0.908 0.877 0.841 0.902 0.890
Table V. 0.794 0.883 0.841 0.812 0.792 0.734 0.822 0.799
Scale item
measurement
properties (continued )
2 0.857 0.962 0.909 0.943 0.910 0.934 0.912 0.944
CRM
0.842 0.969 0.951 0.960 0.957 0.965 0.953 0.969 implementation
0.847 0.975 0.965 0.972 0.991 1.000 0.943 0.960 in banking
0.816 0.962 0.956 0.963 0.954 0.952 0.942 0.957
0.760 0.936 0.893 0.925 0.893 0.912 0.882 0.922 context
3 0.777 0.795 0.668 0.705 0.845 0.785 0.716 0.744
0.881 0.901 0.825 0.837 0.960 0.893 0.838 0.846
0.925 0.937 0.891 0.904 0.892 0.971 0.836 0.850
0.898 0.911 0.846 0.872 0.739 0.868 0.828 0.853
0.784 0.808 0.669 0.714 0.559 0.765 0.700 0.736
4 0.848 0.935 0.868 0.948 0.845 0.957 0.881 0.955
0.890 0.949 0.919 0.971 0.900 0.981 0.934 0.979
0.916 0.953 0.953 0.979 0.954 0.994 0.933 0.975
0.930 0.955 0.958 0.978 0.986 0.975 0.946 0.969
0.912 0.943 0.938 0.963 0.958 0.950 0.964 0.977
0.877 0.935 0.910 0.949 0.928 0.936 0.942 0.965
5 0.719 0.814 0.802 0.800 0.782 0.785 0.706 0.672
0.869 0.939 0.933 0.946 0.910 0.929 0.918 0.923
0.886 0.946 0.960 0.968 0.951 0.962 0.954 0.959

0.896 0.949 0.973 0.980 0.981 0.987 0.969 0.978
0.887 0.951 0.974 0.982 0.995 0.997 0.979 0.987
0.875 0.953 0.966 0.980 0.983 0.992 0.982 0.991
0.874 0.951 0.955 0.978 0.969 0.987 0.969 0.987
6 0.797 0.883 0.712 0.844 0.577 0.769 0.740 0.826
0.888 0.934 0.821 0.909 0.684 0.833 0.828 0.902
0.917 0.942 0.874 0.934 0.842 0.901 0.803 0.896
0.901 0.931 0.861 0.914 0.990 0.989 0.911 0.933
0.882 0.904 0.824 0.869 0.947 0.957 0.884 0.904
7 0.864 0.916 0.857 0.877 0.884 0.898 0.772 0.805
0.931 0.950 0.943 0.952 0.994 1.000 0.892 0.908
0.900 0.913 0.880 0.892 0.916 0.920 0.829 0.845
8 0.871 0.876 0.865 0.840 0.892 0.877 0.797 0.772
0.915 0.936 0.945 0.940 1.000 1.000 0.893 0.883
0.890 0.922 0.871 0.844 0.909 0.882 0.806 0.780
9 0.925 0.911 0.904 0.900 0.914 0.911 0.823 0.816
0.928 0.956 0.958 0.961 0.990 0.990 0.931 0.935
0.909 0.944 0.941 0.945 0.965 0.969 0.914 0.922 Table V.
3.3 Phase 3: scale validation

The study replicated CFA on an independent sample, thus reducing the error which might
happen by capitalization on chance (MacCallum et al., 1992) and subsequently checked the
nomological (predictive) validity by examining the relationship between CRM technology
capability, customer orientation and co-creation with theoretically related variables, i.e.
RQO, which is measured by satisfaction, trust, commitment and loyalty.
3.3.1 Replication of CFA. During scale validation phase, data were collected from
independent respondents. In total, 340 responses were invited, and 270 responses were
received, out of which 225 responses (66 percent response rate) were found to be usable.
The fit indices of the model were found as χ2 (df ) ¼ 1,431.058 (778), p ¼ 0.000, normed
χ ¼ 1.839, IFI 0.961, TLI ¼ 0.957, CF1 ¼ 0.961, RMSEA ¼ 0.061 and SRMR ¼ 0.0458.
2
These values indicate that indices are with-in the acceptable range of values and denotes
acceptance of model.
3.3.1.1 Convergent and discriminant validity. After replication of CFA, to confirm the
convergent and discriminant validity, steps mentioned earlier were repeated whose results
are mentioned in Table IV. The scale was found to be reliable and displays convergent
validity and discriminant validity.
JAMR 3.3.1.2 Second order CFA. In the current study, we proposed to investigate whether the
three factors CRM technology, people and process are nested in a second-order factor
structure, CRM technology capability or not. A higher-order model is capable of explaining
covariance between first-order factors in a more constrained and parsimonious way. Hence,
it was decided to evaluate higher-order model structure using CFA (Marsh and Hocevar,
1985). An evaluation of the second-order model indices values reported were χ2 (df )
¼ 1,476.305 (802), normed χ2 ¼ 1.841, RFI ¼ 0.960, TLI ¼ 0.957, CFI ¼ 0.960, RMSEA ¼
0.061 and SRMR ¼ 0.0698 suggested a reasonable fit and its values were closer to the first
order model. Since, the degree of freedom between first-order and second-order factor
models is usually different; hence further analysis is needed to check if the higher-order
model fits the data as well as the first order base model (Chen et al., 2009). Marsh and
Hocevar (1985) suggested that the value of coefficient T ( χ2 (first-order model)/χ2 (second
order model)) closer to 1 implies that a higher-order model sufficiently captures the
relationships among first-order factors. During our analysis, the value of coefficient T was
found to be close to 1.0, indicating the acceptance of proposed second order model depicted
in Figure 2.
3.3.1.3 Nomological (predictive) validity. The importance and significance of the construct
can be established by its antecedents and consequences and help in definition and
operationalization of the model (Chen et al., 2009). Therefore, nomological validity could be
determined only when the construct can predict the consequence of superior CRM
Figure 2.
Second order model
implementation. Since effective CRM implementation generally offers a higher level of RQO CRM
(Sivaraks et al., 2011). The nomological validity was evaluated by investigating the degree to implementation
which the constructs predict RQO. CRM technology capability, customer orientation and co- in banking
creation significantly predicted RQO and explained about 33 percent of the variance in RQO,
which is depicted in Figure 3. context
4. Discussion and implication of the study

Our study developed a scale measuring CRM technology capability (consisting of people,
process and technology), customer orientation and co-creation practices adopted by Indian
banks from customers’ perspective which examined its impact on RQO. The analysis of data
and results revealed the prominent role of technology for CRM technology capability, because
banks and customers are highly dependent on technology for banking operations blurring the
boundary between technologies and banking operation. Our model also suggested that
co-creation and customer orientation positively influences RQO. The developed scale
exhibited sound psychometric properties providing empirical substantiation.
The current study has significant implications to practitioners. Banks can easily leverage
this sector-specific scale to measure the CRM technology capability, customer orientation,
co-creation and measure its impact on RQO. Further, the developed scale can be exploited by
banking sector to measure and assess the statistical relationship between these factors.
Using the framework developed, the decision makers can design and plan their CRM
technology, process, human resource – training and performance measurement aligned to
CRM and customer orientation and define co-creation initiatives. Thus, the improvement
opportunities can be easily found by evaluating the scores on CRM technology capability
(people, process and CRM technology), customer orientation and co-creation initiatives
particularly in the changed scenario of new technological advancement, changes in
customer profile and disruptions in the industry.
The developed scale can also help banks to compare their performance pre- and
post-implementation of CRM initiatives and help them to set the benchmarks for these
factors which can act as a feedback mechanism to them.
Banks can also leverage this scale to study the relative performance of various branches
or bank as a whole and monitor longitudinally and use this scale to measure the
effectiveness of CRM journey compared to their competitors.
Co-creation
Satisfaction
Technology 0.25 0.30

0.62
0.31 Trust
0.28 CRM 0.45 Relationship

Process Technology Quality and
Capability Outcome 0.45
Commitment
= 0.33
0.17 0.51
People
0.27
Loyalty
Figure 3.
Customer Model and test of
Orientation nomological validity
JAMR Banks can also use the scale to identify distinct customer segments having a different
perception for these factors as they are dependent upon customer profiles which can provide
critical information and offer improvement opportunities for these customer segments.
5. Limitations and directions for future research

Although, the present scale has been successfully developed and validated, however, it has
some limitations which must be outlined. The current study used factor analysis which has
inherent some degree of subjectivity for identification and labeling of variables. The scale
was developed for banking industry only, and this approach allowed us for better control of
potential cross-industry confounds. But, the generalizability of our findings across the
industry may be a limitation. The study was conducted in the Indian context, and due to
cultural uniqueness and divergence across countries, the findings of the study may not be
extrapolated to other countries. Hence, further research should be carried out to corroborate
and authenticate this measurement scale in developed and other developing countries.
The study used purposive samples comprising of customers of banks who have
implemented CRM, hence, the results may not be generalized to distinguish between
adopters of CRM and non-adopters of CRM. In future, studies should try to assess the
impact of adopters and non-adopters of CRM. Also, the purposive sample did not reflect a
diverse educational profile subjecting to limitation. It would be interesting to further study
the impact of diverse customer demographic parameters.
Also, the scale can be administered individually in various types of banking industries
such as financial institution, financial technology firms, cooperative banks, etc.
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Corresponding author
Neeraj Kumar Dubey can be contacted at: neerajkumardubey@gmail.com
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Customer perception of CRM implementation in banking context: Scale

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2.1 CRM in the service industry

2.2 Dimensions of current research

conceptualized CRM technology capability as a multidimensional construct which consists

industry (Wang, 2014).

3. Methodology for scale development

Phase 1: Conceptualization – Qualitative Inquiry

Factor Identification Substantiation – Content and Face

Phase 2: Scale Purification (Pilot Study n=99)

Phase 3: Scale Validation (n=225)

Replicate Convergent and

3.2 Phase 2: scale purification

Table II. Less than 1 years 2 2.0

Technology TECH5 The information that I get from 5.39 5.11

Process PR2 My bank’s various functional 5.82 4.53

Table III. (continued )

charges as much I need

(continued ) Table III.

Trust 15.89 15.25

of the competitors’ promotions

(2) there is convergent validity as AVE W0.5; and

0.886 0.946 0.960 0.968 0.951 0.962 0.954 0.959

3.3 Phase 3: scale validation

4. Discussion and implication of the study

Technology 0.25 0.30

0.28 CRM 0.45 Relationship

5. Limitations and directions for future research

process”, Journal of Business Research, Vol. 61 No. 1, pp. 65-74.

Management Research, Vol. 12 No. 2, pp. 141-175.

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