How do competitive environments moderate CRM value?

Authors:
Alfred Zhu Liu;Hongju Liu;Sean Xin Xu
Affiliations:
School of Business, University at Albany, SUNY, Albany, NY 12222, USA;School of Business, University of Connecticut, Storrs, CT 06269, USA;School of Economics and Management, Tsinghua University, Beijing, China, 100084
Venue:
Decision Support Systems
Year:
2013

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Abstract

Customer relationship management (CRM) plays a critical role in e-business. In this study we seek to quantify the value of Internet-based CRM applications, and the purpose of our research is to identify the mechanisms underlying CRM value creation. Using a unique dataset collected from vendor archives of CRM implementations, we find an increase in firm value associated with CRM applications. This value implication, however, is attributable to integration of CRM with existing enterprise resource planning (ERP) applications, instead of installing CRM functional modules per se. Further, we find that the integration contributes more value in markets featuring higher product differentiation or lower entry costs. Together these findings shed light on the mechanisms through which CRM applications increase firm value in specific competitive environments.