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Are Customer Information Systems Worth It?: Results from B2B Services

DEBRA ZAHAY Northern Illinois University - Department of Marketing ABBIE GRIFFIN University of Illinois at Urbana-Champaign - Department of Business Administration; University of Chicago - Graduate School of Business

Abstract:

    The Resource-Based View (RBV) of the firm suggests that assets, and their effective management, should be associated with achieving and maintaining competitive advantage. As the RBV has developed, it has moved toward the idea that difficult-to-imitate learning processes may be the only true source of competitive advantage to the firm. This paper empirically examines the relationship between a business unit's strategy, its ability to manage customer information, an intangible asset associated with firm learning, and achieving competitive advantage.

    Learning about customers takes place through having relevant dialogues with them, which is also known as Customer Relationship Management (CRM). As relationships develop, information about the customer is gathered in the firm's Customer Information Systems (CIS), the content of , and processes and assets associated with, gathering and moving customer information throughout the firm. CIS management capabilities as used here are based on learning organization theory and measured by the ability to get, store, move and use information throughout the business unit. This study of 209 business services firms finds that generic positioning (Low-Cost and Differentiation) and marketing strategies (Personalization and Customization) are related to Customer Information Systems development. CIS development in turn is associated with higher levels of Customer-Based Performance, which in turn is associated with increased Business Growth. However, strategy selection (and particularly Differentiation) has a greater impact on Customer-Based Performance than CIS management abilities. Whereas a good strategy makes up for deficiencies in CIS, a strong CIS alone without a clear strategy may only in a more limited case lead to a performance advantage.

    Managers are cautioned that the collection of masses of data without a clear strategic intent for their use may not be the wisest (or most profitable) course of action. Customization and Personalization themselves are not directly associated with performance. By far the greatest contributor to Customer-Based Performance is strategy selection. The greater long-term benefits of the knowledge gained from the CIS may be in the ability to assist in measuring Customer-Based Performance, rather than in the ability to immediately contribute to performance. These results suggest that Customization and Personalization may not be required for every firm's marketing strategy.

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