Sprejetje družbenega upravljanja odnosov s strankami in njegov vpliv na učinkovitost odnosov s strankami - vidik malih in srednje velikih podjetij

Doctoral dissertation. Social CRM adoption and its influence on customer relationship performance – SMEs perspective. Sprejetje družbenega upravljanja odnosov s strankami in njegov vpliv na učinkovitost odnosov s strankami – vidik malih in srednje velikih podjetij. June 2018. Author: Marjeta Marolt Supervisor: Assoc. prof. Andreja Pucihar Co-supervisor: Assoc. prof. Hans-Dieter Zimmermann UDC: 339.13:659.2:004(043.3).



University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. ACKNOWLEDGEMENTS Throughout the long journey of pursuing doctoral study, I have gained invaluable experiences. I am grateful for all the support and contribution of numerous people along this journey. First of all, I would like to express my sincere appreciation to my doctorate supervisor, dr. Andreja Pucihar, and co-supervisor, dr. Hans-Dieter Zimmermann, for thoughtful guidance, support, and inspiration through these years. I would like to extend special thanks to dr. Anja Žnidaršič, who took the time out of her busy schedule and provided me with valuable feedback and direction on the use of R software during the quantitative data analysis stage. I would like to give a special thanks to the members of the evaluation commission, dr. Mirjana Kljajić Borštnar, dr. Andreja Pucihar, dr. Hans-Dieter Zimmermann, and dr. Anja Žnidaršič for thesis evaluation. My sincere thanks also go to SMEs managers/owners who were willing to participate in qualitative part of the study. They have dedicated their valuable time to give deeper insights into social CRM practices. I also want to thank all the SMEs that participated in the quantitative part of the study. I would like to take this opportunity to thank for the support provided by the Faculty of Organizational Sciences, University of Maribor. Special thanks go to Mojca Zadnikar who provided support during the whole process of the PhD study. Last, but certainly not least, I would like to thank my family for support. First of all, to my partner, Gregor, whose patience and support of my academic endeavours enabled me to complete this dissertation. Then, there are my two children, Žan and Luka, who have contributed immeasurably to family enjoyment in a special way.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | I.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. ABSTRACT Social media (SM) is challenging the traditional relationship between enterprises and customers. The flow of information has become multidirectional, interconnected and difficult to predict. In order to create superior customer experiences, enterprises need to systematically use SM together with other customer relationship management (CRM) technologies. Customer loyalty and satisfaction can only be achieved through effective use of social media. Despite a rich body of literature on CRM innovation adoption, there is lack of research on social CRM adoption and its use, especially with regard to micro, small and medium-sized enterprises (SMEs). Specifically, studies focus either on the of social CRM adoption factors or on the impact of social CRM use on customer relationship performance. Therefore, there is a need for comprehensive representation of the entire chain of social CRM adoption constituted by the adoption factors, the extent of social CRM adoption and its influence on customer relationship performance. The aim of this research is to provide a conceptual clarity of the extent of social CRM adoption and develop a research model for exploring the effect of different factors on the extent of social CRM adoption and the impact of the extent of social CRM adoption on customer relationship performance in the context of B2C SMEs. In order to achieve a more comprehensive overview of the phenomenon under investigation, this study employed an exploratory, sequential mixed method approach. Based on the literature review, semi-structured interviews were conducted with six purposefully selected B2C SMEs. The findings from the qualitative phase of the study were used to develop a research model that guided the quantitative phase of the study. The empirical data were collected using self-administrated questionnaires. The data analysis was based on 119 B2C SMEs in Slovenia. The findings confirmed that social CRM is a complex phenomenon even for SMEs and suggest two-dimensional conceptualization of the extent of social CRM use: customerfacing processes and relational information processes. Regarding the factors of the extent of social CRM use our findings revealed that they are diverse, ranging from technological, organizational, to environmental. Furthermore, empirical evidence from this research also suggests that extensive use of social CRM positively affects customer relationship performance. All in all, through the theoretical discussion and empirical assessment, the thesis provides more detailed insights into the B2C SMEs social CRM adoption situation and provides a basis for further research. Keywords: social CRM, extent of social CRM adoption, adoption factors, customer relationship performance. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | II.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. POVZETEK Družbeni mediji predstavljajo izziv tradicionalnemu odnosu med podjetjem in stranko. Pretok informacij je postal večsmeren in zato težko predvidljiv. Da bi dosegli vrhunske izkušnje strank, morajo podjetja sistematično pristopiti k uporabi družbenih medijev skupaj z drugimi tehnologijami za upravljanje odnosov s strankami (družbeni CRM). Zavedati se morajo, da samo učinkovita uporaba družbenega CRM lahko vpliva na večje zadovoljstvo strank in njihovo lojalnost. Medtem ko obstajajo številne raziskave, ki so osredotočene na sprejetje upravljanja odnosov s strankami, raziskav na področju družbenega CRM primanjkuje, predvsem v kontekstu malih in srednje velikih podjetij (MSP). Nadalje, nekatere raziskave obravnavajo dejavnike, ki vplivajo na sprejetost družbenega CRM, medtem ko so druge osredotočene predvsem na učinke, ki jih prinaša sprejetost družbenega CRM. Tako nimamo celovitega pogleda na dejavnike, ki vplivajo na obseg sprejetja družbenega CRM in na njegov vpliv na učinkovitost upravljanja odnosov s strankami. Namen pričujoče doktorske disertacije je prispevati k poglobljenemu razumevanju uporabe družbenega CRM v MSP, ki poslujejo s končnimi strankami in razviti model, ki bo obravnaval povezave med dejavniki in obsegom sprejetosti družbenega CRM ter obsegom sprejetosti družbenega CRM in učinkovitostjo upravljanja odnosov s strankami. V ta namen je bila izvedena raziskava, ki združuje kvalitativni in kvantitativni pristop. Na podlagi spoznanj, pridobljenih pri pregledu relevantne literature, so se izvedli polstrukturirani intervjuji s šestimi namerno izbranimi MSP, ki poslujejo s končnimi strankami. Spoznanja, pridobljena v kvalitativni fazi raziskave, so bila upoštevana pri pripravi raziskovalnega modela. Ta je predstavljal temelj za izvedbo kvantitativne faze raziskave. V tej fazi se je s pomočjo spletnega vprašalnika pridobilo in analiziralo podatek 119 vprašalnikov. Rezultati potrjujejo, da je družbeni CRM kompleksen fenomen, tudi v kontekstu MSP. Poleg tega rezultati kažejo, da je obseg sprejetosti družbenega CRM v MSP, ki poslujejo s končnimi strankami, sestavljen iz dveh dimenzij: procesi, usmerjeni v stranke, in relacijski informacijski procesi. Rezultati glede vpliva dejavnikov na obseg sprejetja družbenega CRM kažejo na to, da so le-ti raznoliki, od tehnoloških in organizacijskih do okoljskih. Nadalje rezultati nakazujejo, da obseg sprejetja družbenega CRM vpliva na učinkovitost upravljanja odnosov s strankami. To je prvi poskus celovite obravnave sprejetosti družbenega CRM v MSP, ki poslujejo s končnimi strankami. Predlagani raziskovalni model tako ponuja številna izhodišča za nadaljnje raziskave. Ključne besede: družbeni CRM, obseg sprejetosti družbenega CRM, dejavniki sprejetosti, učinkovitost upravljanja odnosov s strankami. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | III.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. TABLE OF CONTENTS 1.. 2.. Introduction .............................................................................................. 1 1.1.. Research background ........................................................................... 1. 1.2.. Problem statement ............................................................................... 2. 1.3.. Theoretical approach ............................................................................ 4. 1.4.. Research aim and objectives ................................................................. 5. 1.5.. Research thesis.................................................................................... 5. 1.6.. Research design................................................................................... 5. 1.7.. Significance of the study ....................................................................... 6. 1.8.. Assumptions and limitations .................................................................. 6. 1.9.. Structure of the thesis .......................................................................... 7. Literature review ........................................................................................ 8 2.1.. 2.1.1.. Social media ................................................................................. 8. 2.1.2.. Customer relationship management .............................................. 10. 2.1.3.. Social CRM .................................................................................. 11. 2.1.4.. Theories explaining social CRM adoption and use ........................... 14. 2.2.. Social CRM adoption and use .............................................................. 21. 2.2.1.. Studies on e-business usage intensity ........................................... 21. 2.2.2.. Studies on CRM and social CRM usage intensity ............................. 22. 2.3.. Factors found to have an effect on CRM adoption and use ..................... 24. 2.3.1.. Technological context .................................................................. 24. 2.3.2.. Organizational context ................................................................. 25. 2.3.3.. Environmental context ................................................................. 26. 2.4.. Performance outcomes ....................................................................... 26. 2.5.. Social CRM and SMEs ......................................................................... 28. 2.5.1.. Use of social media by European and Slovenian SMEs..................... 28. 2.5.2.. Definitions of SMEs ...................................................................... 29. 2.6. 3.. Social media for CRM ........................................................................... 8. Chapter summary .............................................................................. 30. Research design overview ......................................................................... 32 3.1.. Research approach............................................................................. 32. 3.1.1. 3.2.. Research design .......................................................................... 32. Chapter summary .............................................................................. 34. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | IV.

University of Maribor – Faculty of Organizational Sciences. 4.. Doctoral dissertation. Qualitative study....................................................................................... 35 4.1.. Case study design ............................................................................... 35. 4.2.. Data collection .................................................................................... 37. 4.2.1.. Sampling ..................................................................................... 37. 4.2.2.. Ethical consideration..................................................................... 38. 4.2.3.. Pilot study ................................................................................... 38. 4.2.4.. Interview process ......................................................................... 38. 4.3.. Data analysis ...................................................................................... 39. 4.3.1.. Data analysis technique ................................................................ 39. 4.3.2.. Data analysis process ................................................................... 40. 4.3.3.. Participating SMEs ........................................................................ 44. 4.4.. Findings of qualitative analysis ............................................................. 46. 4.4.1.. Findings related to the extent of social CRM use ............................. 47. 4.4.2.. Findings related to the technological context .................................. 54. 4.4.3.. Findings related to the organizational context ................................. 55. 4.4.4.. Findings related to the environmental context................................. 58. 4.4.5.. Findings related to customer relationship performance .................... 59. 4.5.. Discussion .......................................................................................... 61. 4.5.1.. Extent of social CRM ..................................................................... 61. 4.5.2.. Factors of the extent of social CRM use .......................................... 63. 4.5.3. Impact of the extent of social CRM use on customer relationship performance............................................................................................. 65. 5.. 4.6.. Preliminary research model and hypotheses .......................................... 66. 4.7.. Chapter summary ............................................................................... 68. Quantitative study .................................................................................... 69 5.1.. Survey design and development ........................................................... 69. 5.1.1.. Online survey tool ........................................................................ 70. 5.1.2.. Instrument design ........................................................................ 70. 5.1.3.. Instrument structure and measurement of variables ........................ 70. 5.2.. Data collection activities ...................................................................... 76. 5.2.1.. Sampling ..................................................................................... 76. 5.2.2.. Ethical consideration..................................................................... 77. 5.2.3.. Piloting ........................................................................................ 77. 5.2.4.. Instrument distribution ................................................................. 77. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | V.

University of Maribor – Faculty of Organizational Sciences. 5.3.. 7.. Data analysis ..................................................................................... 78. 5.3.1.. Enterprise and respondent characteristics ...................................... 78. 5.3.2.. Testing the measurement model ................................................... 83. 5.3.3.. Testing the structural model ......................................................... 89. 5.3.4.. Hypotheses testing ...................................................................... 91. 5.4. 6.. Doctoral dissertation. Chapter summary .............................................................................. 93. Discussion of findings ............................................................................... 94 6.1.. Description of current use of social CRM .............................................. 94. 6.2.. Factors affecting the extent of social CRM use ...................................... 96. 6.2.1.. Factors within the technological context ........................................ 96. 6.2.2.. Factors within the organizational context ....................................... 97. 6.2.3.. Factor within the technological context .......................................... 98. 6.3.. Extent of social CRM use and customer relationship performance ........... 99. 6.4.. Chapter summary .............................................................................. 99. Conclusion.............................................................................................. 101 7.1.. Summary of findings ......................................................................... 101. 7.1.1.. Research question 1 ................................................................... 101. 7.1.2.. Research question 2 ................................................................... 102. 7.1.3.. Relating findings to other similar studies....................................... 102. 7.2.. Contribution of the study ................................................................... 103. 7.2.1.. Contributions to theory ............................................................... 103. 7.2.2.. Implications for practice .............................................................. 104. 7.3.. Limitations of the study ..................................................................... 106. 7.3.1.. Research design ......................................................................... 106. 7.3.2.. Sample and data set ................................................................... 107. 7.4.. Directions for further research............................................................ 107. References .................................................................................................... 108 Appendices .................................................................................................... 127. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | VI.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. LIST OF FIGURES Figure 1: Technology acceptance model (Davis (1989) ........................................ 15 Figure 2: Diffusion of innovation (Rogers, 1995) ................................................. 16 Figure 3: Technology, organization, and environmental framework (Tornatzky & Fleischer, 1990) ............................................................................................... 18 Figure 4: A schematic representation of the research design ............................... 33 Figure 5: Qualitative research approach ............................................................. 35 Figure 6: The qualitative content analysis process (adapted from Zhang & Wildemuth (2005)) ........................................................................................................... 41 Figure 7: Representation of the extent of social CRM use .................................... 62 Figure 8: The preliminary model of social CRM adoption by Slovenian SMEs .......... 66 Figure 9: Quantitative research approach ........................................................... 69 Figure 11: Distribution of enterprises by year of establishment ............................ 78 Figure 12: Distributions of enterprises by industry sector..................................... 79 Figure 13: Distribution of SMEs by the level of focus on end customers ................ 79 Figure 14: Use of SM use by enterprises ............................................................ 81 Figure 15: Average ratings of agreeing with statements regarding the use of social CRM in customer-facing processes..................................................................... 82 Figure 16: Average ratings for agreeing with statements regarding the use of social CRM in relational information processes ............................................................. 83. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | VII.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. LIST OF TABLES Table 1: Differences between traditional CRM and social CRM (adapted from Greenberg, 2008) ............................................................................................ 12 Table 2: Studies of e-business adoption that use only TOE or TOE with other theoretical models (adapted from Oliveira & Martins, 2011) ................................ 20 Table 3: Studies of the intensity or extent of e-business adoption ....................... 21 Table 4: Classification of enterprises in terms of number of employees ................ 30 Table 5: Categorization of enterprises by size .................................................... 30 Table 6: A summary of the qualitative research instrument ................................. 36 Table 7: The list of initial categories and codes .................................................. 42 Table 8: The list of categories and codes identified to relate the data .................. 43 Table 9: Characteristics of the participating SMEs .............................................. 45 Table 10: The summary of the findings from the qualitative phase of the study .... 47 Table 11: Hypotheses ...................................................................................... 67 Table 12: A summary of the extent of social CRM use construct .......................... 73 Table 13: A summary of the customer relationship performance construct ........... 73 Table 14: A summary of the technological context factors .................................. 74 Table 15: A summary of the organizational context factors ................................. 75 Table 16: A summary of the environmental context factor .................................. 76 Table 17: Demographic characteristics of the respondents .................................. 80 Table 18: Item loadings in the initial and in the adjusted measurement model ..... 86 Table 19: Internal consistency reliability for nine constructs included in the model 86 Table 20: AVE for nine constructs included in the model ..................................... 87 Table 21: Cross loadings .................................................................................. 88 Table 22: Correlations between nine constructs and square roots of AVE on the diagonal ......................................................................................................... 89 Table 23: Results for the relationships between factors and extent of social CRM use ..................................................................................................................... 90 Table 24: Results for the relationships between the extent of social CRM use and customer relationship performance ................................................................... 90 Table 25: Summary of hypotheses testing ......................................................... 92 Table 26: The summary of main findings of the extent of social CRM use ............ 95. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | VIII.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. 1. Introduction 1.1.. Research background. The continuous evolution of the internet and the emergence of new digital technologies and tools, especially social media (SM) (see, e.g. Kaplan & Haenlein (2010) is challenging the traditional relationship between enterprises and customers (Lobato, Pinheiro, Jacob, Reinhold, & Santana, 2017). Traditionally, customers were predominantly passive receivers of distributed messages, and enterprises had almost complete control over their brands. With the rise of SM (especially social networking sites, blogs, and content communities) the flow of information about a brand has become multidirectional, interconnected, and difficult to predict (Hennig-Thurau, Wiertz, & Feldhaus, 2015). While the iterative dynamics between organization and customers is evolving at rapid pace (Ghazali, Nguyen, Mutum, & Mohd-Any, 2016) organizations need to create superior customer experience (Brodie, Ilic, Juric, & Hollebeek, 2013). For example, with SM they can listen to and engage with their customers as well as encourage them to become brand advocates. Thus, SM has a high potential for customer relationship management (CRM) (Malthouse, Haenlein, Skiera, Wege, & Zhang, 2013). The paradigm of SM use for CRM is known under the term social CRM (Malthouse et al., 2013). CRM implemented through computerized software and database systems is commonly adopted by large enterprises (Ko, Kim, Kim, & Woo, 2008). On the other hand, there is an evidence that SM have become important tools that facilitate the implementation of CRM activities by small enterprises (Charoensukmongkol & Sasatanun, 2017; Malthouse et al., 2013; Trainor, Andzulis, Rapp, & Agnihotri, 2014). According to Charoensukmongkol & Sasatanun (2017), the research in the field of social CRM has been mainly focused on large enterprises that integrate social data into their existing CRM solutions making it possible to gain a more holistic overview of their customers. However, the application of SM for CRM in micro, small and medium-sized enterprises (SMEs) has not been adequately explored (Charoensukmongkol & Sasatanun, 2017). Given that SMEs have limited resources and expertise (Durkin, McGowan, & McKeown, 2013; Harrigan & Miles, 2014), their social CRM adoption and use is estimated to be different from large enterprises (Harrigan, Ramsey, & Ibbotson, 2009). Social CRM use offers many advantages for SMEs, including global reach with minimal efforts, instant feedback and improved communication, financial affordability due to lower costs compared with off-the-shelf CRM software, continuous interaction with customers, excellent service provided to customers through web (Cappuccio, Kulkarni, Sohail, Haider, & Wang, 2012) just to name a few. However, concerns about return on investment (ROI), risk of negative brand exposure (electronic word of mouth), security issues, requirements for additional funds hold enterprises back from allowing SM to become part of their CRM strategy as well as business strategy (Bernoff & Schadler, 2010). Still, SMEs are aggressively adopting SM to reinvent customer relationship (Baird & Parasnis, 2011; Kiron, Palmer, Nguyen Phillips, & Berkman, 2013). According to Harrigan & Miles (2014), SM may be the most appropriate CRM technology for SMEs, mostly because SM seem to fit with their intuitive way of. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 1.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. managing customer relationships. Additionally, for SMEs SM can even be a substitute for other CRM solutions (Cappuccio, Kulkarni, Sohail, Haider, & Wang, 2012). For SMEs, it is necessary to develop strong customer relationships and to sustain competitiveness. SM enable SMEs to face customer relationship management challenges. It seems that SM offer powerful solutions for enterprises with limited resources, knowledge, and expertise. Despite the potential advantages and the growing number of adopters, SMEs have lack of understanding how the social CRM adoption may improve customer relationship performance and under which circumstances. This may result in SMEs’ incapability to exploit significant benefits from social CRM use (Bughin, Byers, & Chui, 2011a) or even worse, they may experience negative consequences, such as negative brand exposure (Baird & Parasnis, 2011).. 1.2.. Problem statement. Despite opportunities that social CRM provides for SMEs (Harrigan & Miles, 2014; Malthouse et al., 2013; Trainor et al., 2014), there is a lack of research on how SMEs adopt and use social CRM (extent of social CRM use) (Harrigan, Soutar, Choudhury, & Lowe, 2015; Sigala, 2011). Majority of existing research has been undertaken to explore social CRM adoption and use in large and medium-sized enterprises, while much less attention has been paid to SMEs. However, the unique and important set of challenges differentiates SMEs from large enterprises (Durkin et al., 2013; Harrigan & Miles, 2014). A key aspect is their intuitive way of developing and sustaining relationships with customers (Harrigan & Miles, 2014). Furthermore, SMEs are more closely connected with customers and with the emergence of SM channels, their interactions are becoming relatively more impersonal (Durkin et al., 2013). Given that SMEs have limited resources, expertise and impact on the environment (Durkin et al., 2013; Harrigan & Miles, 2014), their adoption of social CRM is estimated to be different from large enterprises (Harrigan et al., 2009). Even though several studies on social CRM adoption and use (e.g. Harrigan et al., 2015; Trainor, Andzulis, Rapp, & Agnihotri, 2014) have adapted constructs used in previous studies (e.g. Jayachandran, Sharma, Kaufman, & Raman, 2005; Srinivasan & Moorman, 2005) and developed new measures based on extensive literature review, researchers observed that some constructs did not perform as expected. Trainor et al. (2014) even pointed out that differences about SM use for CRM purposes should be taken into consideration while investigating B2B (business to business) and B2C (business-to-customer) relationships of enterprises. Furthermore, some studies (e.g. Ahani, Rahim, & Nilashi, 2017; Sigala, 2011) were focused on the factors of social CRM use, while others (e.g. Choudhury & Harrigan, 2014; Trainor et al., 2014) were focused on the impact of social CRM use on customer relationship performance. Consequently, there is a need for comprehensive representation of the entire chain of social CRM adoption constituted by the adoption factors, the extent of adoption and customer relationship performance outcomes. In order to understand the use of social CRM some studies simplified the representation of social CRM to a single measure. For example, Trainor et al. (2014) presented a list of 15 SM technologies and asked the respondents to indicate whether they use these technologies for marketing. On the other hand, Sigala (2011) in her. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 2.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. study presented the use of social CRM in much more detail, along the entire customer lifecycle and suggested further verification and enrichment of her findings. Some of the recent studies (Ahani et al., 2017; Charoensukmongkol & Sasatanun, 2017; Choudhury & Harrigan, 2014; Hasani, Bojei, & Dehghantanha, 2017) attempted to explain social CRM use but not in such a detail like Sigala (2011). For example, Choudhury & Harrigan (2014) aimed to explain social CRM use by the list of eight different SM technologies and 22 further CRM functionality items, which were mostly adapted from the study of Jayachandran, Sharma, Kaufman, & Raman (2005). Thus, the conceptualization of the extent of social CRM use should be further explored. The organizational adoption and use of social CRM has been examined by several authors, taking into consideration adoption factors both within and outside the business unit (Ahani et al., 2017; Askool & Nakata, 2012; Hasani et al., 2017; Mousavi & Demirkan, 2013). In all these studies technology-organization-environment (TOE) framework was applied to provide the basis for modelling the adoption of social CRM. Askool & Nakata (2012) did not extend the TOE framework by adding another characteristic, while Mousavi & Demirkan (2013) added individual characteristics, Hasani et al. (2017) added managerial characteristics, and Ahani et al., (2017) added information process characteristics. Even though existing studies have considered all three main TOE contexts (technological, organizational, and environmental), they simplified the conceptualization of the extent of social CRM use. Social CRM use can help SMEs to achieve higher business performance in many aspects (Cappuccio et al., 2012; Charoensukmongkol & Sasatanun, 2017; Choudhury & Harrigan, 2014; Trainor et al., 2014). For example, enterprises have the ability to interact in real-time with customers, also on a one-to-one basis, they can promote their products and services more quickly and economically, and they can even reduce the operating cost (Cappuccio et al., 2012; Charoensukmongkol & Sasatanun, 2017; McCann & Barlow, 2015). Recent studies on social CRM performance measurement were mainly focused on enterprise-related performance metric (Charoensukmongkol & Sasatanun, 2017) or on customer-related performance measures such as customer satisfaction and customer loyalty (Choudhury & Harrigan, 2014; Trainor et al., 2014). While social CRM use contributes to business performance (Charoensukmongkol & Sasatanun, 2017), it appears that there is no agreement among researchers how it contributes to performance and therefore they search for different relations between social CRM use and performance (e.g. Choudhury & Harrigan, 2014; Trainor et al., 2014). For example, Trainor et al. (2014) used social CRM capability as a link between SM use by marketers and customer relationship performance. On the other hand, for example, Charoensukmongkol & Sasatanun (2017) explored the direct relationship between the intensity of SM use for CRM and business performance. Nevertheless, the findings of this study are only relevant to SM use for CRM, while traditional CRM solutions were excluded from the scope of the research. Understanding the opportunities and use of SM in the CRM context is important for SMEs in order to fully exploit social CRM. Even though SMEs seem to be aware of several social CRM opportunities, they usually do not have formally defined SM strategies and mainly use SM as an additional marketing channel (Aggarwal, Mccabe, Leary, & Aggarwal, 2012; SURS, 2013). These facts often result in a low-intensity of social CRM use, lost opportunities on the market, and lower competitiveness of SMEs.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 3.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. Therefore, this study develops a framework that represents an entire chain of social CRM adoption constituted by the extent of adoption, factors of adoption, and customer relationship performance. Consistent with previous research (Harrigan, Ramsey, & Ibbotson, 2011; Harrigan et al., 2015; Jayachandran et al., 2005; Reinartz, Krafft, & Hoyer, 2004), the focus is on the process-based conceptualization of the extent of social CRM use. In particular, our conceptualization of the extent of social CRM use emphasizes the utilization of SM for performing two main processes: communication with customers and management of customer data and information (Harrigan & Miles, 2014; Harrigan et al., 2011; Jayachandran et al., 2005; Kumar & Reinartz, 2012). Furthermore, this study also seeks to identify factors influencing the extent of social CRM use and the impact of the extent of social CRM use on customer relationship performance.. 1.3.. Theoretical approach. The proposed study draws upon the technology-organization-environment (TOE) framework, Diffusion of innovation theory (DOI) and Resource-based view (RBV) theory. The TOE framework is an organization-level theory that identifies three different elements that influence adoption decision: technological context, organizational context and environmental context (Tornatzky & Fleischer, 1990). This framework has a solid theoretical basis, consistent empirical support (Lin & Lin, 2008; Thong, 1999; Zhu, Dong, Xu, & Kraemer, 2006; Zhu & Kraemer, 2005) and as a generic theory it can be used for studying different types of innovation (Zhu & Kraemer, 2005). The TOE framework was also used in recent studies on adoption intention of social CRM (Askool & Nakata, 2012) and implementation of SM with emphasis on customer relationship management (Mousavi & Demirkan, 2013). Drawing on the theoretical and empirical evidence, the TOE framework is an appropriate conceptual driver for this research. To better understand innovation adoption decision some studies combined the TOE framework and DOI theory (Chong, Ooi, Lin, & Raman, 2009; Hsu, Kraemer, & Dunkle, 2006; Levy & Ellis, 2006; Thong, 1999; Wang, Wang, & Yang, 2010; Zhu, Dong, et al., 2006). According to these authors, the TOE framework is consistent with the DOI theory. The DOI theory at organizational level identifies three different predictors that drive organizational innovativeness: individual (leader) characteristics, internal organizational characteristics and external characteristics of the organization (Rogers, 1995). These adoption predictors are comparable to all three contexts of TOE framework (Baker, 2012). Some researchers have also combined TOE framework and RBV theory to provide the theoretical rationale to establish causal relationships (Mishra, Konana, & Barua, 2007; Zhu & Kraemer, 2005). While RBV theory served as the theoretical foundation of recent studies on social CRM (e.g. Trainor et al., 2014) we find this theory relevant to this study. For the aim of this research, we will combine TOE framework and DOI theory with RBV theory.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 4.

University of Maribor – Faculty of Organizational Sciences. 1.4.. Doctoral dissertation. Research aim and objectives. Building on arguments presented so far in this chapter, the main purpose of our study is to contribute to the growing body of research by exploring what are the factors that influence the B2C SME’s extent of social CRM use and how the extent of social CRM use influences the customer relationship performance. It also aims to develop and empirically test a relevant theoretical framework. The results aim to provide better insights on social CRM use in B2C SMEs and offer managerial implications towards the exploitation of social CRM. Building on the above-mentioned research aims, the objectives of this research are: -. To contribute to a growing body of the research on social CRM by studying the extent of social CRM use in B2C SMEs. To qualitatively examine the impact of technological, organisational and environmental factors on the extent of social CRM by B2C SMEs, To qualitatively examine the performance implications of the extent of social CRM use by B2C SMEs. To develop and empirically test a framework that integrates factors, the extent of social CRM use and customer relationship performance. To provide recommendations for more successful social CRM use in B2C SMEs.. 1.5.. Research thesis. Literature has revealed that the technological, organizational and environmental factors have an influence on the extent of social CRM use in B2C SMEs relationships. Furthermore, B2C SMEs relationships that use social CRM to a greater extent achieve higher customer relationship performance. The following research questions addressed by the study reflect the purpose of this study: RQ1. What factors influence the extent of social CRM adoption among B2C SMEs? RQ2. How does the extent of social CRM adoption influence on customer relationship performance among B2C SMEs?. 1.6.. Research design. To address the above research questions an exploratory sequential mixed-method research design (Venkatesh, Brown, & Bala, 2013) was applied. This is the two-phase approach where researchers investigate the topic using a qualitative approach which helped towards the identification and classification of themes and concepts before moving to a quantitative phase where findings of the qualitative phase are generalized. This research design allows the researcher to avoid structuring the study only on findings from previous studies (Cronholm & Hjalmarsson, 2011). In the first phase of our study, we integrated the findings from existing literature and enriched them by insights from interviews with six purposefully selected B2C SMEs.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 5.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. An interview protocol was used to guide the semi-structured interviews. In the second phase, the findings from the qualitative phase were used to develop a survey. The online administered survey was sent to 2000 Slovenian B2C SMEs in an attempt to generalize the findings from the initial qualitative phase. Survey data were analysed using SPSS software for descriptive statistics and R software for running the statistical test. These two phases were carried out during the period between February 2016 and July 2017.. 1.7.. Significance of the study. This study will contribute to theory by enriching the conceptualization of social CRM use in B2C SMEs. This conceptualization will offer a better understanding of the extent of social CRM use, factors influencing the extent of social CRM use as well as its influence on customer relationship performance in B2C SMEs. Our study will also have practical implications. SMEs will have a better understanding of social CRM and its use. They will know what they need to take into account when considering the use of social CRM to a greater extent. They will also gain insights regarding the implications of the extent of social CRM use on customer relationship performance. Furthermore, consultants and IT providers will have insights on the current adoption situation among B2C SMEs in Slovenia and will be able to better advise them on how to use social CRM more intensively as well as offer them more tailored solutions.. 1.8.. Assumptions and limitations. In this study, the following assumptions about participants and response rate were made. It is assumed that participants will in both, qualitative and quantitative research phases, participate voluntary, answer questions honestly and as completely as possible. They will also have a basic understanding of SM use in CRM. To elicit higher response rate in quantitative research phase the web questionnaire with the e-mail invitation letter and an e-mail reminder after three days was used. To reach enough B2C SMEs the database of Slovenian Business register (ePRS) provided by Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) was used. Furthermore, two assumptions regarding data collection instrument were made. First, in the qualitative research phase, we assume that the researcher will act as an effective and unbiased data collection instrument. Second, we assume that the survey data collection instrument will effectively measure what it is intended to measure. We also identified several limitations: -. -. This study is limited to the user perspective. In qualitative research phase insights from six SMEs were collected. The businesses included in the study do not represent all industries where SMEs exist. This study was limited to the B2C focused SMEs in Slovenia. Our concerns about generalization are eased by the fact that Slovenian B2C orientated SMEs seem not to be significantly different from the overall European B2C oriented SMEs. This research relies on survey responses provided by one key informant per organization.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 6.

University of Maribor – Faculty of Organizational Sciences. 1.9.. Doctoral dissertation. Structure of the thesis. This thesis is structured around seven chapters. The first chapter (Chapter 1) explains the necessity of conducting this study, including aims, objectives and the main research questions. Chapter 2 provides an analysis of the relevant literature available regarding both the link between the factors and the extent of social CRM use and the link between the extent of social CRM use and customer relationship performance. Chapter 3 contains research design overview of this study. It explains the research approach employed and rationale behind the research methodologies used. Additionally, it explores the deployed data collection techniques and concludes with discussing the sampling and data analysis methods used. Chapter 4 is devoted to present the qualitative phase of the study. It presents findings, which are used to develop the conceptual framework to guide the quantitative phase of the study. Chapter 5 focuses on reporting the results of the quantitative part of the study, while Chapter 6 interprets the results from qualitative and quantitative parts of the study into descriptive statements. Chapter 7 concludes the thesis with a discussion of the contribution of this research to theory and practice and ends with a discussion of limitations and further possible research directions.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 7.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. 2. Literature review The purpose of this chapter is to present the existing literature on CRM and to situate the proposed study in the literature. The literature review begins with the evolution of social CRM and provides insights into the social CRM adoption and use. Then, theoretical frameworks and models used in this study are presented, followed by the critical review of factors influencing the adoption and use of social CRM and its performance measurements. The literature review concludes with brief discussion of the characteristics of SMEs.. 2.1.. Social media for CRM. According to Greenberg (2010), the concept of social CRM emerged in 2007. Based on the academic and practitioners’ literature it appears that social CRM is an extension, not the replacement, of traditional CRM (Yawised, Marshall, & Stockdale, 2013). Social CRM builds on the foundation of traditional CRM and utilizes SM tools for better customer relationship management (Faase, Helms, & Spruit, 2011). To define social CRM, we need to create an understanding of SM and CRM. Sections 2.1.1 and 2.1.2 describe the fundamentals of SM and CRM, section 2.1.3 describes fundamentals of social CRM, following by relevant theories presented in section 2.1.4. 2.1.1. Social media SM are relatively new communications media and were initially targeted at individuals. Only in the last decade, SM have been deployed by business. This section will provide SM definition, its evolution, and use as well as its benefits. According to Kaplan & Haenlein (2009), there was some confusion as to what should be included as SM, and how it differs from the Web 2.0 and user-generated content concepts. Web 2.0 is a platform for the evolution of SM, while user-generated content can be seen as the sum of all the different ways people benefit from SM. Following this, SM can be defined as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content” (Kaplan & Haenlein, 2010, p. 60). This is more technological definition, while Strauss, Frost, & Ansary (2009, p. 326) proposed more content focused definition, stating that “SM are online tools and platforms that allow internet users to collaborate on content, share insights and experiences, and connect for business or pleasure”. Given that the focus of our study is on business use, the definition proposed by Strauss et al. (2009) is viewed as most relevant for the context of this research. Besides the variety of definitions of SM, there are also different approaches toward the classification of SM between authors. These classifications are proposed in order to delineate boundaries. Due to the diversity of SM landscape and the rapid emergence of new SM (Sinclaire & Vogus, 2011), these classifications are outdated shortly after its construction. Nevertheless, there are some prominent attempts which are worth mentioning. According to Strauss et al. (2009), there are four types of SM: reputation aggregators, blogs, online communities, and social networks. Although they recognised that there are overlaps between proposed types, they still see this Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 8.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. classification as helpful. Kaplan & Haenlein (2009) base their classification scheme on two concepts, relying on a set of theories in the field of media research (social presence, media richness) and social processes (self-presentation, self-disclosure). According to this classification scheme, we can distinguish six different types of SM. While the scheme proposed by Kaplan & Haenlein (2009) is the most scientifically sound among investigated classifications, the diversity of today’s SM universe cannot be categorized in only six SM types. Therefore, the conversation prism was offered by Solis (2010) attempting to provide a comprehensive view of the social web. The last version of conversation prism was updated in 2016. The prism is supposed to help us identify where the conversations in the social sphere are taking place, together with their scale and frequency. Unfortunately, while, this is a clear and colourful visual representation of various categories of SM applications, the theoretical and scientific underpinnings of the conversation prism are rather weak. Rather than developing a classification scheme Kietzmann, Hermkens, McCarthy, & Silvestre (2011) proposed the honeycomb framework grounded on the functional traits of SM activities. The authors introduce seven functional building blocks of SM (identity, presence, relationships, reputation, groups, conversations and sharing) to help managers to understand the functional traits and implications of different SM activities. The above-mentioned classification was proposed by authors in order to help enterprises to choose the most appropriate SM tools. While these classifications seem to be beneficial for SMEs the fluid SM landscape still prevent organizational leaders to make the best decisions regarding SM tools (Kim, Jeong, & Lee, 2010). SM are connecting millions of users (Samuel & Joe, 2016) and provide businesses with opportunities to connect with more potential customers (Jones, Borgman, & Ulusoy, 2015). There is a global shift towards SM use for business purposes, as they have been found to play a crucial role in the success of the business (Jagongo & Kinyua, 2013). SM tools are utilized to effectively communicate and collaborate with employees, partners, customers, and suppliers (Kim et al., 2010). Another area where SM tools are used extensively is community building and professional networking. Furthermore, SM present promising tools for knowledge management (Soto-Acosta, Perez-Gonzalez, & Popa, 2014). Formal learning in enterprises can also be supported by SM, as well as recruitment, assimilation and employee retention. Additionally, SM is also extensively used in marketing, sales and customer relationship management (Kiron et al., 2013). According to Taneja & Toombs (2014), the number of SMEs that are using SM for marketing purposes has doubled since 2008. This may be at least partially explained by lower investment requirements (Cesaroni & Consoli, 2015) and provided evidence that SM have positive and wide-ranging impacts on SMEs (He, Wang, Chen, & Zha, 2017; Jones et al., 2015). Even though SM is being used by small enterprises extensively in recent years, many of those do not have formalized strategy on how to attract customers through SM. As SM allows small business to gather information that would otherwise be unavailable due to limited resource, they should track and measure if their SM efforts are beneficial (e.g. additional sale, customer satisfaction, and loyalty).. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 9.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. 2.1.2. Customer relationship management CRM is a concept that emerged in the information technology community in the mid1990s (Garrido-Moreno, Lockett, & Garcia-Morales, 2014; Payne & Frow, 2005). Despite the increased attention on CRM by both academics and practitioners since then, a consensus has not yet emerged about what counts as CRM. This section will provide CRM definition, its evolution, and use as well as its benefits. As already mentioned the understanding of the meaning of CRM is still incomplete and growing. It can be understood as a technological tool, a business process, a business strategy, or a business philosophy (Rababah, Mohd, & Ibrahim, 2011). Hsieh (2009) defined CRM as technology stated: “CRM is an enabling technology for organizations to foster a closer relationship with their customers”. CRM as a business process is “a macro-level process that subsumes numerous sub-processes, such as prospect identification and customer knowledge creation” (Srivastava, Shervani, & Fahey, 1999). CRM as a business strategy was defined by Payne & Frow (2005, p. 168) as “a strategic approach that is concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments”. CRM unites the potential of relationship marketing strategies and information technology (IT) to create profitable, long-term relationships with customers and other key stakeholders. CRM provides enhanced opportunities to use data and information in order to understand customers and to create value for them. This requires a cross-functional integration of processes, people, operations, and marketing capabilities that are enabled through information, technology, and applications”. CRM as a philosophy is defined as “a philosophy and a business strategy supported by a system and a technology designed to improve human interactions in a business environment” (Greenberg, 2010). Given that the focus of our study is on the holistic approach of customer relationship management in order to create shareholder value the definitions proposed by Payne & Frow (2005) and Greenberg (2010) are viewed as most relevant for the context of this research. Thus, CRM is an integrated approach that seeks to understand customer and focuses on customer relationship development and customer retention (Chen & Popovich, 2003). CRM consists of four dimensions: strategic, operational, analytical and collaborative. The strategic CRM deals with the creation of customer-centric business culture in order to acquire and retain customers (Buttle, 2009). The operational CRM deals with customers’ process automation in order to “improve the efficiency and accuracy of day-to-day customer-facing operations” (Iriana & Buttle, 2006, p. 24). The operational CRM includes marketing automation, sales force automation and service automation (Buttle, 2009; Iriana & Buttle, 2008). The analytic CRM deals with “capturing, storing, extracting, integrating, processing, interpreting, distributing and using the customer-related data in order to enhance both customer and company value” (Buttle, 2009, p. 11). The analytical CRM build on operational CRM, using statistical analysis tools. The collaborative CRM deals with the integration of all communications channels between the organization and its customers (Torggler, 2008) and works at the CRM operational level. The collaborative technologies include. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 10.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. different communication channels (e.g. email, website, SM) which customers can use when interacting with the organization. The various effects of CRM on the organization have been noted. First of all, through the higher customer retention rate organization increases profitability (Winer, 2001). CRM also can improve customer data sharing which can contribute to more crosssales and up-sales opportunities as well as more effective targeting and customer segmentation (Chen & Popovich, 2003). Furthermore, Chen & Chen (2004) identified in addition to tangible benefits also intangible benefits. Among intangible benefits, they consider improved customer satisfaction, positive word-of-mouth, improved service, better understanding/addressing of customer requirements, etc. Overall, CRM can generate loyal customers by enhancing customer services, retention, and satisfaction (Garrido-Moreno et al., 2014). Nevertheless, with fewer amounts of resources, knowledge, and impact on their environment SMEs are usually not able to adopt holistic CRM approaches in such a broad context as large enterprises. Therefore SMEs should focus on simple and feasible approaches that they can afford and are efficient at the same time (Harrigan, Ramsey, & Ibbotson, 2012). 2.1.3. Social CRM Social CRM is a relatively new concept which was evoked by the rise of SM for business in 2007 (Greenberg, 2010; Jacewicz & Cho, 2015). This section provides social CRM definition, opportunities, and drawbacks. As stated by many researchers (e.g. Askool & Nakata, 2010; Faase et al., 2011) social CRM builds on the traditional CRM that uses SM tools to better support customer relationship management. Whereas traditional CRM is based on an internal operation approach to manage customer relationships effectively, social CRM is aimed at customer engagement (Greenberg, 2008). To better differentiate traditional CRM from social CRM, Greenberg has together with the community of 300 CRM professionals defined differences (Greenberg, 2008) presented in Table 1. Traditional CRM Features/Functions. Social CRM Features/Functions. Customer-facing features (sales, marketing, and support) are still isolated from the back office, supply chain. Tools are associated with automating functions.. Fully integrated into an enterprise value chain that includes the customer as part of it. Integrates SM tools into apps/services: blogs, wikis, podcasts, social networking tools, user communities. Models customer processes from the Models company processes from the company point of view. customer point of view. Resides in a customer-focused corporate Resides in a customer ecosystem. business ecosystem. Marketing focuses on processes that Marketing is the front line for creating a send improved, targeted, highly specific conversation with a customer (engaging corporate messages to the customer. customer in activity and discussion),. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 11.

University of Maribor – Faculty of Organizational Sciences. Intellectual property protected by all legal means available. The business focuses on products and services that satisfy customers. Customer strategy is part of corporate strategy Focus on company-customer relationship. Technology focused on operational aspects of sales, marketing, support.. Doctoral dissertation. observing and redirecting conversations among customers. Intellectual property created and owned together with the customer, partner, supplier, problem solver. The business focuses on environments and experiences that engage the customer. Customer strategy is a corporate strategy Focus on all iterations of the relationships (among the company, partners, customers) and specifically on identifying, engaging, and enabling the “influential” nodes Technology focuses on both the operational and the collaborative aspects of sales, marketing, support.. Table 1: Differences between traditional CRM and social CRM (adapted from Greenberg, 2008). While there is no unique definition neither for SM nor for CRM, the exact meaning of social CRM is still subject of heavy discussion. The definitions range from technological to strategic oriented (Lehmkuhl & Jung, 2013). For instance, Mohan, Choi, & Min (2008, 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 is more technological definition while the most common and accepted definition that focuses on social CRM as a business strategy is proposed by Greenberg (2009). He defines social CRM 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” (Greenberg, 2008, p. 25). Building on former definition Trainor (2012) defined social CRM as “Social CRM is 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”. Technology is vital for CRM success but does not necessarily require sophisticated technologies (Boulding, Staelin, Ehret, & Johnston, 2005). Nevertheless, these technologies need to facilitate the underlying marketing and customer-centric strategies (Jayachandran et al., 2005). According to several researchers (e.g. Choudhury & Harrigan, 2014; Jayachandran et al., 2005), there are two principal areas in which technology can enable CRM: customer communication and customer information management. The basic aim of whatever technology (from simple technologies such as websites, email, SM and databases to more sophisticated. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 12.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. technologies such as Salesforce CRM) is used for CRM is to build customer insights and use them to better tailor communications to customers. In the context of SM five components of customer insight were identified, including data, sentiment analysis, SM monitoring, customer profiles, and customer experience maps (Greenberg, 2010). Data received from SM should be combined with transactional data about costumer, through sentiment analysis organizations can understand the mood or emotional level of their customers and through SM monitoring organization can better understand customer behaviour and preferences. Furthermore, customer profiles are useful in customer segmentation and predictions, while customer experience maps follow the customer interactions in multiple environments and touch points to have an overview of what the customer actually thinks. The capture and utilization of this new form of data for CRM purposes present a challenge for enterprises (Hennig-Thurau et al., 2010). Besides the information, the communication is also vital to the success of CRM (Hung, Hung, Tsai, & Jiang, 2010). SM have made possible for enterprises to engage customers in conversation. Customers are no longer passive participants but they can participate in social networks, create and share content, and communicate with each other. Specifically, they can create and share marketing messages, they can provide customer services to each other and they can even get involved in co-creation process (Chau & Xu, 2012). SM are a convenient and low-cost method to reach customers and therefore available to SMEs. With the utilization of SM for CRM purposes, SMEs can strengthen customer brand loyalty (Orzan, Platon, Stefanescu, & Orzan, 2016) and satisfaction (Trainor et al., 2014). Nevertheless, according to Taneja & Toombs (2014), only 26% of small businesses effectively and efficiently utilize SM to generate new sales and customer relationships. Several researchers (e.g. Bakeman & Hanson, 2012; He et al., 2017; Schaupp & Bélanger, 2014) noted that this is because small businesses lack resources needed to maximize the use of SM in CRM. Furthermore, they have concerns about ROI and negative brand exposure (Baird & Parasnis, 2011). As noted by Baird & Parasnis (2011) enterprises have at least some isolated SM projects, some even multiple SM projects within customer-facing functions (e.g. marketing, sales, customer care), but only several are able to connect different SM project across customer-facing functions into integrated SM programs that encompass multiple initiatives within a function. They (Baird & Parasnis, 2011) also noted that the progress from isolating SM projects to a more integrated SM programs across customer-facing functions is slow and not linear. Küpper et al. (2015) think that such a progress might be the result of the lack of a holistic performance model. Overall, SMEs are facing some challenges brought by social CRM. SMEs need to identify what SM their customers are using and upon that find the most appropriate technologies to support CRM activities (Kietzmann et al., 2011). SMEs also need to set a proper social CRM strategy as well as to move beyond social marketing and exploit opportunities offered by sales, customer service and digital commerce (Sussin, 2015). Furthermore, SMEs need to know how to engage in conversation with customers online, ideally, the employees should be educated in public relations and customer service (Sigala, 2011). Another issue is lack of control because the. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 13.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. conversation is carried out via SM which is not a property of the organization, but the property of SM provider as well as everyone involved in the conversation (Kietzmann et al., 2011). SMEs are also confronted with a challenge on how to measure the performance (Küpper et al., 2015; Woodcock, Green, & Starkey, 2011). Last, but not least, the shift from traditional CRM to social CRM requires cultural changes focused towards customers (Newby, Nguyen, & Waring, 2014). 2.1.4. Theories explaining social CRM adoption and use While SM is challenging the traditional concept of CRM (Malthouse et al., 2013), enterprises need to employ SM in their traditional CRM approaches (Dutot & Bergeron, 2016). Many researchers have investigated social CRM from different theoretical perspectives using a wide range of constructs. This section aims to review the various theories and models, which have been used to understand the factors that influence social CRM adoption and the impact of the extent of social CRM on customer relationship performance. According to Ahani, Rahim, & Nilashi (2017), there are four widely-used theories: the Technology Acceptance Model (TAM); Diffusion of Innovation (DOI); the TechnologyOrganization-Environment (TOE) Framework; and the Resource Based View (RBV) Theory. These theories have differences in their focus and emphasis. For example, TAM has a greater emphasis on the individual technology adoption, while TOE and DOI are described as organisational-led theoretical perspectives. These theories have been used in the studies on CRM adoption and use, while RBV has been used for clarifying how enterprises use their resources effectively to improve their performance. Each theory is further introduced in next chapters.. TAM Davis (1989) developed the TAM theory based on expectancy-value theory and the theory of reasoned actions. TAM is the most widely used theory by researchers to explore user acceptance. This theory uses two variables, perceived usefulness (PU) and perceived ease of use (PEOU). These two determinants directly influence user’s attitude toward using the new information technology. The PU variable directly influences the attitude toward the use of the system and behavioural intention to use and is based on the observation that “people tend to use or not use the application to the extent they believe it will help them to perform their job better” (Davis, 1989, p. 320). PEOU influences on the PU and the attitude toward the use of the system. Attitude toward using the new technology leads to the user’s behavioural intention to use (BI) which in turn leads to actual system use. The model is shown in Figure 1.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 14.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. Perceived Usefulness (PU). Attitude Toward use of System (A). Behavioral Intention to use (BI). Actual Use. Perceived Ease of Use (PEOU). Figure 1: Technology acceptance model (Davis (1989) The results of the extensive validation of TAM model have raised some limitations which were resolved by elaboration of the model. First, the TAM2 (Venkatesh & Davis, 2000) model was developed. In this model, seven additional variables were included. Then, in an effort to improve the predictive power of a user acceptance variable the Unified Theory of Acceptance and Use of Technology (UTAUT) (Venkatesh, Morris, Davis, & Davis, 2003) was developed. It is based on the examination of eight models: TRA (Theory of reasoned Action), TAM motivational model, Theory of planned behaviour (TPA), TAM/TPB combined, a model of PC utilization, DOI, and social cognitive theory. TAM was also combined with Task-Technology Fit (TTF) model (Dishaw, Strong, Bandy, Dishaw, & Strong, 2002). A recent elaboration of TAM model is TAM3 (Venkatesh & Bala, 2008) which posit three additional relationships that previous models did not explore. Researchers have applied the TAM model to a wide variety of information systems and the articles have been published in different journals (Williams, Dwivedi, Lal, & Schwarz, 2009). Even though the appearance of TAM in articles appears to decrease TAM research continuous to appear in the literature, mainly in combination with other theories. For instance, we found a few recent studies on CRM adoption (e.g. Askool & Nakata, 2011; Peltier et al., 2009) where researchers also used TAM.. DOI theory The diffusion of innovation (DOI) theory describes how, why, and at what rate new ideas, technology, and process innovation is communicated through certain channels among the members of a social system (Kreps, 2017; Rogers, 2003). There are four main determinants of the success of IT innovation: communication channels, the attributes of innovation, the characteristics of the adopters, and the social system. Communications channels are the medium through which people receive the information about innovation, including mass media and interpersonal communication (Rogers, 2003). The theory identifies five attributes of innovation: relative advantage, compatibility, complexity, trialability, and observability. The characteristics of the adopters are categorized into five groups based on their attitudes toward and. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 15.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. innovation; innovators, early adopters, the earlier majority, the later majority, and laggards (Rogers, 2003). This DOI theory at the firm level (Rogers, 1995) uses three variables, individual characteristic, internal characteristics of the organizational structure, and external characteristics of the organization, as determinants of organizational innovativeness. The model is shown in Figure 2.. Individual (leader) characteristics Attitude toward change. Internal characteristics of organizational structure Centralization Complexity Formalization Interconnectedness Organizational slack Size. Organizational innovativeness. External characteristics of the organization System openness. Figure 2: Diffusion of innovation (Rogers, 1995) The theory has been applied and adopted in various ways (Oliveira & Martins, 2011), also in the context of CRM (e.g. Ko et al., 2008; Nguyen & Waring, 2013). Despite its widespread use, DOI has been criticised that the impact of organizational and environmental factors have not been taken into consideration (Tehrani & Shirazi, 2014). Therefore some researchers (Chong et al., 2009; Dwivedi, Ramdani, Kawalek, & Lorenzo, 2009; Hasani et al., 2017; Hung et al., 2010; Thong, 1999; Zhu, Dong, et al., 2006) combined the DOI theory with TOE framework.. RBV theory According to Barney (1991), resource-based view (RBV), theory suggests a link between resources and sustained competitive advantages. Resources can be both, tangible or intangible. Generally, competitive advantages can be generated and sustained through resources that may be rare, difficult for others to imitate, durable, appropriate, non-substitutable, immobile or imperfectly mobile and have value to. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 16.

University of Maribor – Faculty of Organizational Sciences. Doctoral dissertation. organizations in the industry (Barney, 1991; Wade & Hulland, 2004). Besides competitive advantages and resources which were already mentioned the important component of RBV theory is also capability. According to Taher (2012), there are almost as many definitions of organizational capabilities as there are authors on the subject. Perhaps one of the most known definitions is that capabilities are “the ability of an organization to transform inputs into outputs of greater value” (Wade & Hulland, 2004). Many studies acknowledge that capabilities have influenced performance (e.g. Melville et al., 2004; Trainor et al., 2014; Wade & Hulland, 2004; Wang & Feng, 2012). Moreover, some researchers (Santhanam & Hartono, 2003; Y. Wang & Feng, 2012; Zollo & Winter, 2002) also stated that capabilities are embedded in the organization processes or they defined them similar to CRM processes. In the literature review of RBV Taher, (2012, p. 158) found that most researchers considered capabilities as “processual ability to direct resources and their interactions in a manner that will contribute to the advancement of organizational performance”. As already mentioned the definitions of the capability as an important component of RBV theory vary from study to study. It is argued that this inconsistency is hindering the accumulation of knowledge (Priem & Butler, 2001). Nevertheless, there are social CRM studies using RBV theory (Choudhury & Harrigan, 2014; Trainor et al., 2014).. TOE framework Technology-organization-environment (TOE) framework (Tornatzky & Fleischer, 1990) explains three different elements of organizational decision making that influence adoption decision. These three elements are the technological context, the organizational context, and the environmental context (Figure 3). The technological context includes internal and external technologies relevant to the organization (both technologies that are already in use at the enterprise as well as those that are available in the marketplace but not currently in use). The organizational context refers to the characteristics and resources of the enterprise such as its scope, size, and amount of resources available internally. The environmental context refers to the ecosystem in which the organization conducts its business, including the structure of the industry, the presence or absence of technology service providers, and the regulatory environment.. Marjeta Marolt: Social CRM adoption and its influence on customer relationship performance – SMEs perspective Page | 17.