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Journal of theoretical and applied electronic commerce research

versión On-line ISSN 0718-1876

J. theor. appl. electron. commer. res. vol.15 no.2 Talca mayo 2020

http://dx.doi.org/10.4067/S0718-18762020000200104 

Research

Exploring Social Customer Relationship Management Adoption in Micro, Small and Medium-Sized Enterprises

Marjeta Marolt1 

Hans-Dieter Zimmermann2 

Anja Žnidaršič3 

Andreja Pucihar4 

1 University of Maribor, Faculty of Organizational Sciences, Kranj, Slovenia, marjeta.marolt@fov.uni-mb.si

2 FHS St.Gallen University of Applied Science, Department of Business Administration, St. Gallen, Switzerland, hansdieter.zimmermann@fhsg.ch

3 University of Maribor, Faculty of Organizational Sciences, Kranj, Slovenia, anja.znidarsic@fov.uni-mb.si,

4 University of Maribor, Faculty of Organizational Sciences, Kranj, Slovenia, andreja.pucihar@fov.uni-mb.si

Abstract:

With the emergence of social media, customer relationship management has undergone noticeable changes and gained a great deal of attention from researchers and practitioners in recent years. In this paper, we provide additional insights into how intensively business-to-customer micro, small and medium-sized enterprises adopt social customer relationship management. Based on the literature review and insights from interviews with six micro, small and medium-sized enterprise owners/managers, we developed a conceptual research model that integrates the antecedents, intensity of social customer relationship management adoption, and performance outcomes. For the intensity of social customer relationship management adoption, we applied process-based conceptualization consisting of the customer engagement process and customer data management process. Then we empirically tested a conceptual research model by using data collected in a survey of 119 micro, small and medium-sized enterprises in Slovenia. We found that not all antecedents are equally relevant to both processes of the intensity of social customer relationship management adoption. Additionally, we found that the intensity of social customer relationship management adoption has a positive effect on customer relationship performance. Based on these findings, we provide recommendations for further research and offer practical implications for micro, small and medium-sized enterprises considering social customer relationship management adoption.

Keywords: Social customer relationship management adoption; Adoption intensity; Antecedent; Performance; Micro; Small; and Medium-sized enterprises

1 Introduction

Social media (SM), have refined the way enterprises are managing relations with their customers [71]. Before the rise of SM, customers were mainly passive receivers of messages. Since then, the flow of information has become multidirectional as customers are creating, seeking, and sharing information using different channels and devices. In this context, relationships with customers became more challenging to control and manage [49]. Nevertheless, enterprises have recognized SM as a useful tool for maintaining relationships with their customers [112]. For instance, with SM, enterprises gain the ability to actively engage with customers and build deeper relationships [115]. Some even manage to involve customers in product and service innovation processes [102].

While large enterprises are integrating customer relationship management (CRM) systems with SM to improve customer relations, small enterprises seem to build their customer relationships mainly on SM [44]. However, in comparison to traditional CRM systems, SM seem to be affordable tools for enterprises that have limited resources [83]. With SM use, micro, small and medium-sized enterprises (SMEs) can reach the global market with minimal costs and efforts [12]. Even though SMEs seem to be aware of the opportunities enabled by SM, most of them use it mainly as a marketing tool [106], usually without a formally defined customer-centric SM strategy [33]. This often results in a low-intensity of SM use for managing relations with customers, accompanied by lost opportunities.

SM have gained a great deal of attention from practitioners and researchers in recent years; [60], [77] however, there is still incomplete understanding of how enterprises use SM for CRM activities [46] and how this affects performance outcomes. Several researchers (e.g. [46], [113]) that adapted previous CRM constructs (e.g. [54], [107]) and developed new measures based on extensive literature review, have pointed out that there is a need for a more robust framework of social CRM adoption. For instance, [113] suggested employing a construct that captures not only the social CRM technology adopted by an enterprise but also the intensity of social CRM adoption within it. Moreover, when developing an intensity adoption measure, ether business-to-business (B2C) or business-to-customer (B2B) specifics should be taken into consideration [113]. This is also aligned with the Nordic School of service marketing, which noted that SM in relationship marketing are mostly used in B2C rather than in B2B relationships [82]. Recent studies focus either on the impact of social CRM adoption on performance outcomes (e.g. [18], [113]) or on the antecedents that drive social CRM adoption (e.g. [1], [103]) and, as such, do not provide a comprehensive overview of the social CRM adoption situation. In addition, as the existing body of research on social CRM is more focused on large enterprises [39] and since social CRM adoption in SMEs differs from large enterprises [45], it is essential to give greater emphasis to SMEs.

Considering the above-introduced knowledge gaps, this study aims to provide a comprehensive model for the explanation of the social CRM adoption situation in B2C SMEs. To fulfil this aim, the following research questions need to be answered. First, how can we conceptualize the intensity of social CRM adoption in B2C SMEs? Here, we propose a process-based conceptualization of the intensity of social CRM adoption, which consists of the customer engagement process and customer data management process. We derived the conceptualization of the intensity of social CRM adoption construct from the literature review and field research. Second, what antecedents are influencing the intensity of social CRM adoption? Here, we examine the impact of relevant antecedents influencing the intensity of social CRM adoption at a CRM process level. Third, what are the implications of the intensity of social CRM adoption? Here, we examine the implications of the intensity of social CRM adoption for customer relationship performance. To answer these research questions, we applied a sequential mixed-method. The first phase of research was qualitative and comprised in-depth interviews with key informants (B2C SME owners or managers) with previous experience in social CRM adoption. Insights from the interviews with B2C SME owners/managers were used to support the development of the conceptual research model and a quantitative instrument for the second research phase. In this paper, we focus on the presentation of results from the quantitative phase of the research. In particular, we present the results of the survey that was conducted with owners/managers in 119 B2C SMEs in Slovenia.

This study provides a comprehensive model, which offers a conceptual clarity of the intensity of social CRM adoption in B2C SMEs. In addition, it offers a deeper understanding of antecedents influencing the intensity of social CRM adoption and explains whether and why the intensive adoption of social CRM positively affects customer relationship performance. The rest of the paper is structured as follows. The next section reviews existing research on social CRM, proposes the conceptualization of the intensity of social CRM adoption, and presents the conceptual research model that links social CRM adoption antecedents, the intensity of social CRM adoption, and customer relationship performance. Then, the method used in this research is presented, and the findings discussed. Finally, the limitations and recommendations for further research are presented.

2 Literature Review

Topics related to innovation adoption and performance outcomes have broadly attracted researchers’ interest. Those studies differ with regard to underlying theories and technologies under investigation. In this section, we present theories used in previous CRM studies and the existing research on social CRM.

2.1 Theoretical Conceptualization

Numerous theories have been proposed to explain the adoption of technology innovations by enterprises. There are several theories that have provided insights into different aspects of the adoption of CRM systems, including the Technology Acceptance Model (TAM) [22], the Theory of Planned Behavior (TPB) [4], the Unified Theory of Acceptance and Use of Technology (UTAUT) [114], the Diffusion of Innovation Theory (DOI) [98], Resource-based theory (RBV) [9] and the Technological, Organizational, and Environmental (TOE) framework [111]. There are also a few CRM adoption studies in the SME context. For instance, [123] has proposed a model for mobile CRM adoption that combines TAM, TPB, UTAUT, DOI, and the TOE framework; [31] have introduced a model for electronic CRM adoption drawing upon the DOI and TOE framework; [1] and [47] have developed model for social CRM adoption based on the TOE framework and the DOI theory.

As noted by, [26] researchers have indicated that each theory contains inherent limitations and have thus advocated combining more than one theory to fully explain the organizational phenomenon in a complex business environment. Nevertheless, this multi-theoretical perspective should not be viewed as an integration of theories or comparison of theories [35], but rather as an approach that aims to link theories in order to synthesize the diversity of literature reviewed [118], to discover, evaluate, and compare relevant perspectives [35], and to fully understand the phenomenon being investigated [86].

The TOE framework and the DOI theory are theories that have been applied widely when studying the organizational adoption of technology innovation in the SMEs context over the past two decades [32]. The TOE framework explains three different contextual elements of organizational decision making that influence technology innovation adoption decision: technology, organization, and environment. This framework is frequently used in innovation adoption research [101], because it allows researchers to use a unique set of factors and measures [8], [109]. According to [88], the TOE framework is consistent with the DOI theory, and they are frequently used together in innovation adoption studies. The theory identifies several innovation characteristics such as relative advantage, compatibility, complexity, trialability, and observability that may either promote or impede the innovation adoption.

2.2 Social CRM Adoption

Social CRM builds on the traditional CRM that uses SM tools to better support customer relationship management [7], [28], [76], [112]. The definitions of social CRM range from technological to strategically oriented [64]. For instance, [81, p. 241] defined social CRM as easy-to-use standalone applications that can be leveraged on the structured processes of existing CRM to help end-users better leverage social networks, internal and external data, and news feeds, and existing sales and marketing content. This definition views social CRM as customer-facing technologies. However, the most common definition refers to business strategy and is defined as “a philosophy and a business strategy, supported by a technology platform, business rules, processes and social characteristics, designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It’s the company’s response to the customer’s ownership of the conversation” [37, p. 25]. Building on the previous definition, [112, p. 319] defined social CRM as the integration of traditional customer-facing activities including processes, systems, and technologies with emergent SM applications to engage customers in collaborative conversations and enhance customer relationships.

2.2.1 Intensity of Social CRM Adoption

Even though CRM is a complex phenomenon, a number of studies have typically treated its adoption decision as a binary choice problem (to adopt or to not adopt). For instance, in their survey, [52] asked the respondents to indicate whether they had adopted CRM systems or not. Furthermore, [113] acknowledged that respondents in their study may report that they possess a particular technology, but not the actual use of it and, therefore, suggest that future research should consider developing a measurement approach that will capture usage intensity or the extent to which the technologies are used within an enterprise. Drawing on the observation from [20, p. 497] that innovation is not truly adopted until it has actually been put into use in the adopting organization, this study considers the intensity of social CRM adoption as an enterprise’s ability to leverage SM tools in combination with other CRM systems to systematically manage relationships with customers. Therefore, consistent with previous research [97], [121], the focus is on a process-based conceptualization of social CRM.

Recently, several researchers (e.g. [14], [46], [103]) have explored the role of SM in CRM through different perspectives of CRM processes. According to [96] there are various perspectives of CRM processes, for example, customer-facing level CRM processes [97], cross-functional CRM processes [30] and CRM macro-level processes [91]. CRM process at customer-facing level presents how customer relationship initiation, maintenance, and termination are managed across customer contact points [97]. Even though several studies integrated traditional CRM with a SM customer-facing level, [39] in their recent study indicated that SMEs generally involve their cross-functional teams in carrying out their marketing process. This finding suggests that further research that links SM to CRM should focus on cross-functional CRM processes perspective. This perspective includes CRM processes (strategic planning, information management, customer value, and performance measurement processes) [92] that are allocated to the three different forms of CRM (strategic, operational, and analytical). Thus, the cross-functional CRM processes perspective not only explains the main activities within each process but also how each process interacts with one another.

In essence, there are two principal areas in which technology can support CRM processes: customer interactions and customer information management [46], [54], [91]. Customer interactions can encompass an information exchange, the exchange of products and services for money, or social exchange [91]. As suggested by [97], [103] customer relationships evolve over time and are composed of a series of interactions between customer and enterprises. Customer information management is concerned with creating and capturing customer data to build and maintain customer relationships [91].

2.2.2 Social CRM Adoption Antecedents

The antecedents that drive innovation adoption depend on the type of technology innovation and the domain in which adoption occurs [101]. This indicates that antecedents that drive the innovation adoption, including social CRM, need to be further explored [21]. A common approach in innovation adoption in organizations is to categorize important antecedents into different contextual perspectives [88]. Although various antecedents affect different CRM trends (e.g. mobile CRM, social CRM), all these antecedents can be classified in technological, organizational, or environmental contexts. Therefore, it is feasible to apply the TOE framework to explore social CRM adoption phenomenon.

The internal technologies and technologies available in the market that are relevant for enterprises are explained by the technological context [111]. According to [99], technological antecedents play an essential role in the adoption of any technological innovation. The characteristics of technologies can be assessed in terms of possible benefits and barriers [15]. Reduced operating costs, effective communication, and bigger market exposure are some of the benefits that enterprise can gain after innovation adoption [108]. Barriers that prevent enterprises from adopting and thoroughly reaping the benefits of technologies are related to the complexity of technology and compatibility with enterprise practices and values [75]. Even though SM were not created for business purposes, they have revolutionized the conventional methods of CRM [44], [76]. Technology-related antecedents (relative advantage, complexity, compatibility, trialability, and observability) that represent the core pillars of the DOI theory, have been examined in the CRM adoption literature and have been used in the technological context several times [27], [47], [62]. Among the five antecedents, observability and trialability have not been studied as extensively as the other three antecedents have. There are also other antecedents that have been considered in the technological context, for instance, switching costs [93], vendor support [5], and the cost of adoption [1].

The internal characteristics and resources of an enterprise are explained by the organizational context. The features of organizational background, such as its size, organizational structure, technological expertise, managerial support may facilitate or inhibit innovation adoption [94], [110]. For instance, a flexible organizational structure has been found to assist innovation adoption [126], but the lack of employees’ information technology knowledge has an effect on decisions about doing business online [63]. The antecedents in the organizational context have also been used in several recent CRM studies. For example, technological readiness [1], [29], [62], [104], top management support [1], [62], [104], and innovation orientation [52], [62], [84] have been widely examined in the CRM literature. Additionally, financial resources, flexible culture, and customer orientation were also considered in this context.

The environment context relates to the ecosystem in which the organization operates, including industry, suppliers, and regulatory system. Even though few research studies considered antecedents related to this context [94], several studies have found that environmental antecedents have an influence on CRM adoption [47], [93], [104]. In the context of SMEs, industry type [5], [47], external pressure [47], [104], government support [1], [47], are antecedents that have been identified as important in recent CRM adoption studies.

2.2.3 Social CRM Performance Outcomes

There are many viewpoints regarding what performance outcomes are and how can they be measured [50], [74]. According to [40], most of the objective performance measures indicate the measures of performance outcomes from the entrepreneurs point of view (e.g. revenue, average growth rate in revenues), while subjective performance measures indicate the perceptions of entrepreneurs (e.g. successful promotion of service or product, customer satisfaction). According to [120], objective performance measurements often fail to describe managers’ views on the organizational objectives and argues that subjective approach is more appropriate for managers in order to reach a more accurate explanation of performance.

Even though social CRM can contribute to higher business performance in SMEs [3], [107], several researchers [14], [56], [113] have pointed out that the implications of social CRM remain largely underexplored. In particular, enterprises can interact with customers on a one-to-one basis as well as respond to customers’ needs and wants instantly. Furthermore, SMEs can promote their brand more quickly and at lower costs. According to [50], performance outcomes can be viewed and measured differently. For instance, [103] suggested investigating several social CRM performance metrics, including customer loyalty, customer profitability and sales data, quality levels and company reputation, while [76] provided guidelines for developing key performance indicators (KPIs) to measure performance. Nevertheless, recent studies have mainly tested the implications of social CRM on customer relationship performance (e.g. customer satisfaction, customer loyalty). For example, [113] found that social CRM capabilities have a positive influence on customer relationship performance, while the study of [18] did not support the link between customer engagement initiatives and customer relationship performance.

3 Conceptual Research Model and Hypotheses Development

Based on the findings from the existing research and insights from the qualitative phase of this study the conceptual research model was developed and hypotheses formulated. They are presented in this section.

3.1 Conceptual Research Model

The conceptual research model (Figure 1) was built based on the combination of theoretical insights and field research. The model consists of seven constructs related to the antecedents of social CRM adoption, the intensity of social CRM adoption, and customer relationship performance outcomes. The intensity of social CRM adoption is presented in the center of the model and is conceptualized through the customer engagement process and customer data management process. The identified antecedents are related to technological, organizational, and environmental contexts. As regards customer relationship performance outcomes, customer loyalty and customer satisfaction were identified as the most relevant by interviewed B2C SME owners/managers. Based on the conceptual research model, the hypotheses were formulated. They are presented in the following sections.

Figure 1: Conceptual research model of social CRM adoption 

3.2 Conceptualization of Intensity of Social CRM Adoption

We relied on a combination of theoretical insights (e.g. [97], [103]) and field research to conceptualize the intensity of social CRM adoption. The discussions with B2C SMEs owners/managers indicate that the use of social CRM is focused on two CRM processes: on customer engagement, on which they put much emphasis, and on customer data management, for which their effort is less evident but still of high importance. These findings suggest that instead of the customer-facing level perspective of CRM processes the macro-level perspective of CRM processes needs to be taken into consideration. Therefore, our process-based conceptualization of the intensity of social CRM adoption consists of the customer engagement process and the customer data management process. The customer engagement process presents how SMEs are interacting with customers through the acquisition, retention, and expansion stages (customer life-cycle phases) while the customer data management process presents how SMEs are managing customer information, from data collection to data integration and use. Such a process level conceptualization allows us to demonstrate that not all aspects of social CRM may proceed in parallel. For instance, the interviewed B2C SME owners/managers perceive customer engagement as relatively easy to achieve, while customer data management may require not only substantial organizational and technological resources, but also time. Furthermore, the interviewed B2C SME owners/managers indicated that not all antecedents are equally relevant to these two underlying processes. For instance, some of them argue that technology readiness is likely to affect the customer data management process more than the customer engagement process.

3.3 Conceptualization of Social CRM Adoption Antecedents

In our study, we conceptualize antecedents of social CRM adoption based on TOE framework. Antecedents are thus related to technological, organizational and environmental context.

The technological context refers to technology-related aspects such as relative advantage and compatibility that might influence intensity of social CRM adoption. Relative advantage is used to describe the degree to which an innovation is perceived as providing greater organizational benefits [98]. One of the earlies studies [122] argues that e-business use may help enterprises to increase sales, reduce cost, and better penetrate their markets. Many other empirical studies also reported the positive impacts of the relative advantages on the innovation adoption [17], [34], [51], [87], [89], [110], [117], [124]. Nevertheless, other studies (e.g. [72]) reported a negative relation between the relative advantage and innovation adoption. According to [68], even though this antecedent is positive by nature, it can still be negatively perceived by potential innovation adopters.

It has been noted by several researchers [5], [27], [47], [62], [93] that enterprises in which CRM is perceived to provide benefits are more likely to adopt an innovation than those in which CRM is not perceived as beneficial. Social CRM offers many benefits for SMEs, including the increase of business value and access to new markets and customers [11]. The qualitative study confirms these facts since interviewees emphasized that the main purpose of social CRM adoption was to reach more customers and engage with them more intensively. Further, the results of the qualitative part of the study show that customer feedback helps SMEs to identify customer requirements and new selling opportunities. Therefore, the perceived benefits of social CRM can be expected to play an essential role in the intensity of social CRM adoption in SMEs, both in the customer engagement process and the customer data management process.

H1a: There is a positive influence of relative advantage on the intensity of social CRM adoption in the customer engagement process.

H1b: There is a positive influence of relative advantage on the intensity of social CRM adoption in the customer data management process.

Compatibility is the level to which a new technology or innovation is consistent with the current needs of the existing practices [98]. This antecedent has been considered to be an essential driver of innovation adoption many times in the past. For example, it has been found influential in the adoption of e-business [70], [124], radio-frequency identification (RFID) [117], electronic commerce [34], and collaborative commerce [17]. According to [47], compatibility is also an important attribute in determining the adoption of social CRM. In other words, if an innovation is compatible with an enterprise prevailing values, infrastructure, and technologies it is accepted more easily [31]. It is especially crucial for SMEs that potential innovations are compatible with existing values, needs, and working practices [65]. The results of the qualitative part of the study also indicate that compatibility influences SMEs’ decision to adopt social CRM more intensively. Interviewed SME owners/managers seem to adopt social CRM more intensively if they perceive social CRM to be compatible with their existing CRM practices. While SMEs are managing customer relationships intuitively [44], the compatibly is expected to be more relevant to the customer engagement process.

H2a: There is a positive influence of compatibility on the intensity of social CRM adoption in the customer engagement process.

H2b: There is a positive influence of compatibility on the intensity of social CRM adoption in the customer data management process.

The organizational context refers to the characteristics of the enterprise, such as top management support and technological readiness, that might influence the intensity of social CRM adoption. Top management support has been recognised as an important antecedent in innovation adoption decisions [85]. The support from top management is critical for providing adequate resources for the innovation adoption [117], for instance, cloud computing [72], electronic procurement [67], collaborative commerce [17], and electronic supply chain management [69]. With respect to SMEs, there are several CRM studies that considered top management support as a key enabler of innovation [27], [62], [104]. The role played by top management is to stimulate change by communicating value to their employees [110]. In respect to (social) CRM adoption in the SMEs context, the findings of the qualitative part of this study are consistent with [1] and [5], who indicated that support from the management in SMEs is usually present due to the fact that they typically make all decisions in the enterprise, from a simple operational to strategic decisions. This indicates that the current business environment requires support from owner-managers in every possible way. In light of this, top management may also play a significant role in the intensity of social CRM adoption. Nevertheless, even though top management seems to be very supportive, the interviewed SMEs owners/managers give more emphasis to customer engagement activities than to customer data management.

H3a: There is a positive influence of top management support on the intensity of social CRM adoption in the customer engagement process.

H3b: There is a positive influence of top management support on the intensity of social CRM adoption in the customer data management process.

Technology readiness is a degree to which focal enterprise has the necessary information and communication technology (ICT) infrastructure and IC- skilled human resources in place for innovation adoption [90]. Several studies (e.g. [87], [117], [124], [125]) noted technology readiness influences the innovation adoption. According to [5], the generally simple ICT infrastructure used by SMEs enables them to implement innovations with only short delays and no significant problems. Nevertheless, SMEs need to take into consideration the relevant ICT knowledge and skills of their employees which is one of the most vital issues when adopting CRM [1], [5]. The results from interviews further emphasized the importance of knowledgeable employees, especially in the cases in which they are dealing with the integration of existing technologies with emerging SM tools. Thus, SMEs that have ICT infrastructure in place and employees with sufficient ICT knowledge and skills seem to be more prone to intensively adopt social CRM.

H5a: There is a positive influence of technology readiness on the intensity of social CRM adoption in the customer engagement process.

H5b: There is a positive influence of technology readiness on the intensity of social CRM adoption in the customer data management process.

The environmental context refers to external influences such as external pressure that influence the intensity of social CRM adoption. External pressure consists of competitive pressure, customer pressure, and industry pressure [104]. According to [61], [67], external pressure has been viewed as a push towards innovation adoption. For example, external pressure has been identified as having an influence on electronic CRM adoption [38], [104], mobile CRM adoption [116], [123] and social CRM adoption [47]. The external pressure was also acknowledged by interviewed SME owners/managers who mainly pointed out two aspects of external pressure: competitive pressure and customer pressure. Therefore, it can be expected that external pressure will encourage SMEs to adopt social CRM more intensively. For example, customers are applying greater demand in areas where they directly interact with enterprises. Likewise, SMEs may feel a need to adopt social CRM intensively in customer engagement and customer data management processes when they observe competing enterprises doing the same.

H6a: There is a positive influence of external pressure on the intensity of social CRM adoption in the customer engagement process.

H6b: There is a positive influence of external pressure on the intensity of social CRM adoption in the customer data management process.

3.4 Conceptualization of Customer Relationship Performance

Many enterprises have implemented CRM system in order to improve customer service and enhance customer retention [55]. The improvement of customer relationship performance by investment in CRM system was also demonstrated by several researchers (e.g. [13], [57]). According to [57], customer relationship performance differs among enterprises even though they use the same CRM systems. Research conducted by [18] indicated that performance outcomes depend on how well CRM systems facilitate CRM processes. The qualitative data analysis of this study revealed that social CRM facilitates two CRM processes: the customer engagement process and the customer data management process. First, by engaging with customers through social CRM enterprises can better react to market needs and improve customer satisfaction and loyalty [59], [113]. Second, social CRM enables access to a larger amount of rich data about customers [48], which enables enterprises to identify loyal customers and emerging trends. Thus, more intensive adoption of social CRM may improve customer relationship performance.

H7: There is a positive influence of the intensity of social CRM adoption on customer relationship performance.

4 Methodology

In an attempt to understand the complex research phenomenon of social CRM adoption in the context of B2C SMEs, the exploratory sequential mixed-method design was applied. In the qualitative phase of the study, we focused on the real challenges of B2C SME owners/managers. These insights together with the findings from existing literature were integrated into the conceptual research model. In the quantitative phase of this study, an online administered survey was developed and sent to 2000 Slovenian B2C SMEs in an attempt to generalize the findings from the initial qualitative phase. Figure 2 provides a schematic representation of this study research design.

Figure 2: Schematic representation of the research design 

When conducting the literature review, relevant papers on social CRM adoption published across information systems and marketing disciplines were considered. Available online journal databases, such as EBSCOhost, ProQuest, Web of Science and Scopus, as well as conference proceedings from well-established conferences in the fields of information systems (International Conference on Information Systems (ICIS), European Conference on Information Systems (ECIS), Americas Conference on Information Systems (AMCIS), Hawaii International Conference on System Science (HICSS) and Bled eConference), and marketing (American Marketing Association (AMA) and European Marketing Academy (EMAC)) were searched. We also reviewed other work of the authors from the obtained list of relevant papers as well as the citations of the papers [66]. The identified relevant papers were further examined to determine the main findings and to identify research gaps.

In the qualitative phase of the research, a semi-structured interview approach was used as a data collection technique because it offers a high level of flexibility in identifying new potential issues related to the investigated research phenomenon [23]. A paper-based interview guide with key questions structured around three main points, including the intensity of adoption, adoption antecedents, and performance outcomes, was deployed to guide the conversation. First, unstructured interviews with SM experts and CRM providers were conducted. These interviews not only provided insights into the situation under investigation from different points of view but helped us to identify additional SMEs selection criteria (e.g. should be registered and classified as SMEs and have B2C relationships, should belong to different sectors, at least one in each size group should have an online store). In total, six Slovenian SMEs that focused predominantly on B2C relationships participated in this phase of the research. The interviews were conducted with owners or digital marketing managers and lasted between 55 minutes and one and a half hours. Immediately after the interviews, clean transcripts of the audio records were made. Then the content analysis of the interview transcripts was undertaken. The findings of the qualitative phase served as a basis for the development of a conceptual research model and are presented in more detail in [78]. Based on the developed research model, the hypotheses were formulated. We aimed to demonstrate how each antecedent relates to the intensity of social CRM adoption at the process level and how the overall intensity of social CRM adoption affects customer relationship performance.

In the quantitative phase of the research, an online survey was chosen to collect data from the respondents. The survey was designed based on an extensive literature review and interview data from the qualitative part of the research. Overall, the final version of the survey had nine sections and comprised 35 questions. The first section comprised four questions to elicit background information about the enterprise. The questions were related to the year of establishment, size, industry, and B2C orientation. The second section comprised four questions about the social CRM tools used in the enterprise. The first two questions were about the use of traditional CRM tools, followed by two general questions about the SM use for CRM. The following six sections measured the constructs of the conceptual research model, consisting of dependent and independent variables (Table 1). Based on the interviews, the intensity of social CRM adoption is modelled as a second-order formative construct consisting of two first-order reflective constructs: customer engagement process and customer data management process. The remaining constructs were the first-order construct measured using items presented in Table 1. They were adopted or adapted from the existing literature, some developed anew and measured on a five-point Likert type scale. The new items were drawn from the literature review (e.g.), the examination of other measures of the construct that already exist (e.g. [6], [103]) and findings from the interviews with SMEs to which the focal constructs are expected to generalize. They were designed to assess customer engagement activities through customer-lifecycle phases in the context of social CRM. The remaining section collected demographic information about the respondents.

Table 1: Constructs and corresponding measurement items 

The survey instrument was first reviewed by two experts with academic backgrounds (an expert in digital business and an expert in statistics) and pretested with nine B2C SME managers/owners. Based on the feedback, a final version of the survey instrument was prepared. Because we wanted that informants have an overview of their enterprise’s social CRM activities, owners or managers (marketing managers, sales managers, or SM managers) of 2,000 randomly selected Slovenian SMEs, including 1,000 micro, 500 small, and 500 medium-sized enterprises were invited to participate in the survey. Based on experience from previous research in Slovenia, micro enterprises are less likely to respond and, therefore, we doubled the sample of micro-enterprises. A reminder e-mail was sent three days after the initial e-mailing. The data were collected in April 2017. Survey data were analyzed using SPSS software for descriptive statistics and R software (Partial Least Square Path Modeling package [100]) for running the statistical tests.

Among the distributed questionnaires, 198 completed responses were received. The dataset was further screened, and only SMEs (altogether 119) with B2C relationships were used for analyses. The detailed characteristics of the respondents are presented in Table 2.

The majority of the enterprises in the sample (76.5%) were established before 2006. The highest proportion (37.8%) of enterprises fell into the medium-sized category (50 to 249 employees), while the other two categories, micro (fewer than ten employees) and small enterprises (10 to 49 employees) account for 26.9% and 35.3% of the sample, respectively. The majority of enterprises classified themselves in the following industry sectors: manufacturing, wholesale and retail trade, and other service activities (together covering 68.1% of the enterprises in the data set). The detailed characteristics of the enterprises are presented in Table 3.

Table 2: Demographic characteristics of the respondents 

Table 3: Characteristics of the enterprises 

About 79% of the enterprises do not have a CRM solution, but they have either enterprise resource planning (ERP) solutions (38.7%), business intelligence solutions (10.8%), office suites (e.g. MS Office) (66.4%) or other solutions (10.1%), for example, project management solutions and accounting solutions. Furthermore, only 37.5% of enterprises have a web store. Regarding the proportion of SM use, the majority of enterprises use Facebook (97.4%), followed by Twitter (44.8%) and Instagram (42.2%).

5 Results

In this section, we describe the data analyses we used to evaluate the research model and report the results related to each path of the structural model.

5.1 Assessment of Measurement Model

The research model for the assessment of social CRM adoption consists of five independent latent variables (constructs) with reflective indicators, one second-order latent variable composed with two first-order constructs (reflective first-order - formative second-order), and one final dependent latent variable with reflective indicators. The independent latent variables have effects on the second-order latent variable through its formative dimensions and the second-order latent variable influences the final dependent latent variables.

The partial least squares path modelling (PLS-PM) technique was applied to test the research model. The repeated indicator approach was used to test the higher-order construct [73]. This approach takes the indicators of lower-order constructs and uses them as the manifest variables of the higher-order latent variables [119]. Consequently, this approach is able to estimate all latent variables simultaneously, considering all nomological networks. Furthermore, the repeated indicator approach enables modeling the effects of antecedent constructs on the lower-order constructs as well as on the formative higher-order constructs via the total effect (the sum of the lower-order constructs multiplied by the effect of the lower-order constructs on the higher-order constructs) [10], thus enabling the texting of the formulated hypotheses. When using the repeated indicator approach for the higher order construct, the mode of measurement should be specified. For the reflective-formative hierarchical latent variable model, it is suggested by [10] to use the repeated indicator approach with mode B.

The measurement model was assessed in two steps. First, the appropriateness of the first-order reflective constructs was evaluated [41]. The evaluation was based on the assessment of convergent validity and discriminant validity. For the convergent validity, we evaluated factor loadings, Cronbach’s alpha (α), average variance extracted (AVE) and composite reliability (CR). All indicators with outer loadings higher than 0.70 were accepted. The first-order construct customer engagement process (CEN) consisted of some indicators with outer loadings less than 0.70. Those between 0.40 and 0.70 were considered for removal. Following the suggestion of [42], four of the five items were removed because the deletion of them leads to an increase in the AVE value of CEN above the suggested threshold value from 0.461 to 0.530. These items were deleted one at the time, starting with the item with the lowest loading. All the values of the CR are above the cut-off value of 0.7, and AVE is more than 0.5 for all constructs. Table 4 shows the results of CR, Cronbach’s alpha, and AVE for all first-order constructs.

Table 4: Assessment of composite reliability, Cronbach’s alpha, and average variance extracted 

Discriminant validity was examined using two approaches: cross-loadings and the Fornell-Larcker criterion. Appendix A shows cross-loading analysis in which the indicator’s outer loading on the associated construct is greater than any of its cross-loadings on other constructs. Table 5 shows the evaluation results of the Fornell-Larcker criterion for which the square root of each construct’s AVE is greater than its highest correlation with any other construct.

Table 5: Mean, standard deviation, intercorrelation of the latent variables for the first-order constructs 

The first-order reflective constructs evaluation was followed by the second-order formative construct evaluation. While formative constructs require a different assessment approach, we followed the recommendations of [25], who suggested assessing the level of collinearity and the contribution of formative indicators. The variance inflation factors (VIF) are well below the cut-off value of 5. Subsequently, we examined the outer weights of the two dimensions on the second-order construct. Both dimensions had a positive and significant path on the second-order construct (see Table 6).

Table 6: Quality criteria of formative measurements 

5.2 Assessment of Structural Model

After the evaluation of the measurement model, the structural model was assessed using the coefficient of determination (R²), and the strength of standardized path coefficients coupled with significance testing. We used PLS with the bootstrap resampling procedure (with 10,000 bootstrap samples) to test the proposed model [16]. The results are presented in Figure 3.

Figure 3: PLS analysis of the research model 

The R² values indicate the amount of variance in each dependent variable that is explained by the independent variable. In, the authors suggested that R² values of 0.67, 0.33, or 0.19 for endogenous latent variables in the inner path model are considered to be substantial, moderate, or weak, respectively. The path coefficients between the latent variables that were hypothesized in the research model should be at least 0.20 or ideally above 0.30 to be meaningful. As Figure 3 shows, the antecedent relationships of formative construct intensity of social CRM adoption (in grey) were measured at the formative dimension level (customer engagement process, customer data management process). Antecedents’ relative advantage, top management support, technological readiness, and external pressure have significant positive paths to the intensity of social CRM adoption through its formative dimensions.

Table 7 presents the summarized results of hypotheses testing. The analysis showed that the intensity of social CRM adoption in the customer engagement process is significantly influenced by relative advantage (β=0.274, t=2.727), top management support (β=0.374, t=3.752), and external pressure (β=0.268, t=3.040). Furthermore, the intensity of social CRM adoption in the customer data management process is significantly influenced by the relative advantages (β=0.244, t=2.101) and technological readiness (β=0.377, t=3.719). Compatibility is the only antecedent that did not significantly influence the intensity of social CRM adoption at the process level. The causal relationships between the overall intensity of social CRM adoption and customer relationship performance are significant (β=0.674, t=9.969).

Table 7: Summary of hypotheses testing 

6 Discussion and Implications

In this section, we interpret the findings from this study and provide implications for research and practice.

6.1 Discussion of Findings

The purpose of this study was threefold: first to conceptualize the intensity of social CRM adoption, second to examine the influence of the antecedents on the intensity of social CRM adoption, and third to examine the influence of the intensity of social CRM adoption on customer relationship performance. The results of this study indicate several findings, which are discussed with respect to the research questions.

First, the findings provide support for our conceptualization for the intensity of the social CRM adoption construct. Our conceptualization of the intensity of social CRM adoption divides key social CRM activities into two CRM processes: customer engagement and customer data management. Similarly, as [97] we then developed items to assess the intensity to which extent these two processes are adopted. Such conceptualization is important because, first, the aspects of social CRM adoption may not proceed in parallel. This is in line with the statement of [121] that the intensity of technology adoption may vary across business processes with time. Second, our conceptualization highlights that not all antecedents are equally relevant to both underlying aspects of CRM processes.

Second, our results indicate that the influence of the proposed antecedents on the intensity of social CRM adoption vary significantly at the process level within the three contexts of the TOE framework. The integration of TOE framework and DOI theory has proven holistic enough to capture the intensity of social CRM adoption. More specifically, relative advantage, top management support, and external pressure significantly influence the intensity of social CRM adoption in customer engagement process. The intensity of social CRM adoption in customer data management process, in contrast, is significantly influenced by relative advantage and technology readiness. These findings are explained in the following three paragraphs.

Specifically, with respect to technological context, the only relative advantage was observed to have a significant influence on both underlying CRM processes of the intensity of social CRM adoption. This finding is consistent with earlier studies that indicate that perceived advantage is a major antecedent that has a direct effect on the adoption and use of CRM (e.g. [5], [47], [62]). This is also consistent with the finding of who noted a significance positive relationship between relavant advantage and social CRM adoption.This clearly indicates that the more the manager/owner of the enterprise perceives the intensive use of social CRM to be an advantage, the more likely it is that social CRM is intensively adopted. This also means that SMEs in Slovenia have sufficient awareness of the benefits of social CRM adoption. Unexpectedly, even though several recent studies (e.g. [1], [47], [62]) have pointed out that compatibility with the enterprise practices and values is essential for the adoption and use of various innovations and the qualitative data analysis suggested that compatibility is an essential antecedent of intensive social CRM adoption, the quantitative data analysis did not find it significant. However, the identified insignificance of compatibility is also consistent with some other previous studies, including [27], [94], [110] The mixed findings in relation to compatibility make it difficult to interpret the results from the present study related to this antecedent. One possible explanation might be that especially micro and small enterprises execute CRM activities more intuitively [44] and consequently are less sensitive to how social CRM is aligned with their practices. Another possible explanation is provided by [2] who pointed out that social media ease of use could have negated the impact of compatibility on behavioral intention.

In regard to organizational context variables, top management support and technology readiness were found to be significant antecedents but each for different CRM processes of the intensity of social CRM adoption. Even though various decisions in SMEs are usually directly influenced by the top management [85] and top management play an essential role when adopting CRM [1], [84], this study finds a significant impact of top management only on the intensity of social CRM adoption in the customer engagement process The possible explanation may be associated with the managers’ way of thinking. They are mainly relying on their intuition, usually making decisions on only a fraction of the data in their possession. The reasons behind the low level of data management are related to higher costs, lack of expertise, and time resources [19]. The same reasons were also acknowledged by interviewed B2C SME owners/managers in the qualitative part of the study. This study’s findings also suggest that the intensity of social CRM adoption in customer data management process is significantly influenced by technological readiness. This indicates that if the enterprise wants to manage customers’ data more holistically, they need to have appropriate information technology and adequate knowledge about how to use it [29]. This also reflects the reasons for a lower level of customer data management. Surprisingly, the influence of technological readiness on the intesity of social CRM adoption in customer engagement process was not supported. This may be associated with the findings from the qualitative part of this study, in which SME owners/managers argued that they do not need special skills and advanced technologies to engage with prospects and customers.

In terms of the environmental context, the assumption that external pressure has a strong effect on the intensity of social CRM adoption in the customer engagement process is supported while, even though the influence of external pressure on the intensity of social CRM adoption in the customer data management process is positive, it is not supported. One possible explanation of the lack of significance of this relation is that today’s customers have several different online identities in the eyes of the brands with which they interact [58]. Consequently, B2C SMEs are facing challenges when dealing with this issue, usually resulting in incomplete customer data. Furthermore, SMEs seem to operate in environments that they may not perceive as highly competitive. Consequently, they do not regularly monitor competitors and what tools they are using but place more emphasis on their customers [43].

Third, our findings indicate that the intensity of social CRM adoption is associated with better customer relationship performance. This finding is consistent with [113] who indicate that social CRM capabilities have a positive influence on enterprise customer relationship performance. Thus, the ability to interact with customers on a one-to-one basis allows the enterprise to enhance customer satisfaction and commitment [14], [113]. Through the use of social CRM, enterprises can access a larger amount of rich data on their customers [48] and are better able to respond to market demands [19]. The weights of the formative construct suggest that customer engagement process is the most critical aspect of the intensity of social CRM adoption, followed by the customer data management process. Nevertheless, according to the interviews, SMEs are aware that customer data management is significant for more intensive adoption of social CRM. Unfortunately, they are facing challenges when it comes to the management of customers’ data. According to this study, only the minority of B2C SMEs have well organized existing customer data that can be enriched with external sources of information such as SM. Still, interviewed SME owners/managers indicate that they are quite successfully engaging with their customers, because personal interactions with their main clients help them to acquire substantial knowledge about their preferences.

6.2 Implications for Research

The present study extends the existing body of knowledge in several ways. First, our study introduces a process-based conceptualization of the intensity of social CRM adoption [113]. As suggested by, this conceptualization exceed simple classification of adoption as an either-or proposition and offers a process-level understanding of the intensity of social CRM adoption. Additionally, by focusing on B2C specifics [113], the present study provides a more in-depth understanding of the intensity of social CRM adoption in the context of B2C SMEs.

Second, the present study synthesizes two research streams: technology adoption and technology performance outcomes to investigating how technology innovations related to performance outcomes. Only several studies examining technology innovation (e.g. [80], [121], [125]) have synthesized those two streams. Through the exploration of antecedents, the intensity of social CRM adoption, and customer relationship performance, this study indicates that antecedents significantly influence the intensity of social CRM adoption which further influences customer relationship performance. Thus, this study extends social CRM research by integrating these two research streams into one research model, offering a more comprehensive explanation of social CRM adoption in B2C SMEs.

Third, the contribution of our study relates to developing, theorizing, and empirically validating a conceptual research model investigating relationships among antecedents from technological, organizational, and environmental context, the intensity of social CRM adoption, and customer relationship performance. In this study, we test the concurrent applications of TOE and DOI theories in the social CRM context empirically and thus help researchers to achieve a solid understanding of the phenomenon being investigated and to test and validate theories [26].

Another contribution of the present study applies to the methodological approach. The majority of existing social CRM studies have adapted constructs used in previous CRM studies (e.g. [47], [113]) or developed new constructs based on an extensive literature review (e.g. [46]). As those studies were focused on enterprises of all sizes and some of the proposed constructs did not perform as expected, our study applied a sequential mixed method approach. With this approach, we gained more detailed insights into social CRM adoption practices from the perspective of B2C SME owners/managers which were then combined with the findings from the relevant literature and further empirically tested. Provided conceptualization, which includes insights detached from the real business environment is consistent also with the Nordic School of service marketing.

6.3 Implications for Practice

The present study also has several important implications for managers. First, our research summarizes different social CRM activities that occur in the customer engagement process and customer data management process. Thus, this approach could help managers to identify key activities that must be implemented to improve customer satisfaction and loyalty. Furthermore, managers can use this approach to compare their level of social CRM adoption with the competitor’s level of its adoption.

Second, this research provides a framework that can help managers to understand the ways in which enterprises combine different sources of competitive advantages (technological, organizational, and environmental) to intensify social CRM adoption and thus improve customer relationship performance. Managers are advised to examine internal resources and business environment that foster social CRM adoption and align them with overall business goals.

Third, a poor ability to exploit the benefits of digital technology, especially, big data and data analytics that enable a better understanding of customers’ needs can play an essential role for SMEs when accessing the global market. To overcome this barrier, managers need to consider which data they need and how to automatically and/or manually collect and manage them. Furthermore, they need to be aware that these activities require additional resources (e.g. knowledge, skills, technology, time), and their support.

Additionally, even though small enterprises are usually not able to integrate customer data that are acquired from various sources, they seem to be quite successful when engaging with their customers. Namely, micro and small enterprises are more frequently connecting with their customers on a personal level and therefore have quite a good understanding of their needs and wants. However, when the business grows the connection with customers on a personal level is becoming more difficult and infrequent and thus more in the form of larger campaigns. Thus, when the enterprise grows, for managers, it is imperative to promote the importance of the collection and integration of customer data from different digital channels and other information technologies (e.g. CRM, ERP) for better decision making.

7 Conclusions, Limitations and Further Research Directions

Overall, the findings of this study suggest that intensity of social CRM adoption must ideally consider both adoption antecedents and customer relationship performance in a single context. The application of the integrated TOE framework with the DOI theory to determine the antecedents that influence the intensity of social CRM adoption at the process level had demonstrated the robustness and relevance of the TOE model. The results also determine the effects of B2C SMEs intensity of social CRM adoption on customer relationship performance, suggesting that enterprises should invest in this area. Although this study provides unique insights into the social CRM adoption situation in B2C SMEs, there are also some limitations that offer avenues for further research.

First, choosing Slovenia as the context of this research affects the generalizability of the results to other countries. Analyzing social CRM adoption in other EU countries might yield further valuable findings. Second, this research relies on responses provided by one key informant per enterprise (owner, manager). Further research might consider comparing data obtained from managers across marketing, sales, after sales, and IT functions. This approach not only provides a more complex representation of the phenomenon being investigated but also strengthens both the reliability and validity of the findings. Third, while this study has taken into consideration all sectors, it would be interesting to repeat the study in a single industry sector (e.g. wholesale and retail, tourism). This would enable gaining deeper insights into the industry-specific social CRM adoption situation. Fourth, since the cross-sectional nature of the data did not allow observing a phenomenon over an extended period, further studies might consider using longitudinal methods, investigating the evolutionary nature of the intensity of social CRM adoption and sustainable customer relationship over a longer period. Fifth, even though the response rate was reasonable, further research is necessary to obtain larger data sets, which offer more options for statistical analysis.

Further research could examine other variables that may also play an essential role in the influence of antecedents on the intensity of social CRM adoption and between the intensity of social CRM adoption and performance outcomes. New variables (e.g. additional antecedents, performance outcomes) can be added to the existing model, or the existing model could be expanded by taking into consideration additional theoretical models. Furthermore, the measurement techniques can be further developed. For instance, the performance measures could also include other KPIs (e.g. number of times the brand is mentioned on SM, a number of innovative new products, cash flow or profit). Moreover, social CRM could be investigated not only through the CRM processes that are placed completely within business functions but also through cross-functional CRM processes perspective in order to provide a more holistic approach. In other words, this perspective can explain how SM serves as a tool for customer engagement in collaborative CRM as a part of the operational CRM. Furthermore, it can explain how different customer information collected in the collaborative CRM can be further evaluated in the analytical CRM. Last but not least, it can explain how the customer knowledge gained in the analytical CRM enables strategy development for the strategic CRM and proper customer engagement in the operational CRM.

In this research, it was observed that the majority of small and medium-sized enterprises use SM tools in combination with other CRM systems, while micro-enterprises, especially those with only a few employees, predominantly use only SM tools for social CRM activities. Therefore, some issues raised by small and medium-sized enterprises might not be relevant for micro-enterprises and vice versa. It would be interesting to focus future research separately on micro-enterprises, who seem to execute their daily social CRM activities noticeably differently than small and medium-sized enterprises do.

Acknowledgments

This research was supported by the Slovenian Research Agency; Program No. P5-00186Decision Support Systems in Digital Business.

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Appendix A: Cross-Loadings

Received: December 05, 2018; Revised: June 22, 2019; Accepted: June 23, 2019

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