The effects of customer knowledge process on improving product/service, frontline employee performance and customer relationship performance

Abstract

With the emphasis shifting increasingly to knowledge-based global economy, organizations have to frequently renew their learning systems to respond to fast-changing markets aiming to enable themselves to stay ahead of changes. Customer relationship management (CRM), as a strategic management tool for building customer asset, requires integration with customer knowledge management process for a more rapid response to changing markets. However, in the existing relationship marketing literature, the internal organization processes have not received adequate attention. To fill this gap, a conceptual framework of customer knowledge process (CKP), that is a crucial process for achieving effective CRM, is proposed in this research. In addition, this study examines the direct effect of CKP on the innovative capability and human resource function of an organization. Both outcomes of CKP result in product/service improvement (PSI) and frontline employee performance (FEP). An organization's customer knowledge, innovation ability, and employee capability are a firm's valuable resources that can produce optimal performance. The proposed framework is tested with data collected from 175 firms in Mainland China. The results show that CKP plays a vital role in enhancing a firm's product/service improvement and frontline employee performance, which subsequently lead to customer relationship performance. The study has practical significance for Chinese firms to broaden their knowledge in organizing and managing customer knowledge. Our emphasis on internal organizational CKP with its consequential results, i.e., improvements in creativeness and employee performance, will add new dimensions to CRM and the relationship marketing literature.