An Examination of Customer Relationship Management and Business Sustainability in Small and Medium Enterprises

1. Introduction

The growing competition among organizations has urged them to create successful relationships with their customers in an attempt to reach their desired objectives and sustain themselves on the long term. CRM has been viewed as a key strategy for acquiring and maintaining profitable customers. It focuses on fostering strong relationships with them by delivering the desired value that meets or exceeds their expectations (Hanaysha & Al-Shaikh, 2021). It was conceptualized by Grönroos (2007) as a process of managing the entire relationships between a company and its customers through numerous communication platforms and channels. The primary aim of CRM involves focusing on the right group of customers by offering them the desired products or services via traditional as well as digital marketing channels (Swift, 2001); and obtaining loyalty from them in return (AlQershi et al., 2020; Ryals & Payne, 2001). CRM is mainly directed towards connecting with customers through various means by updating them about the offerings of a company from time to time and communicating the benefits of selecting their brands over those of rivals (Sigala, 2018). It is also employed by several firms for improving the share of less profitable customers by offering them various marketing incentives (Marino & Presti, 2018). The rationale of CRM is built upon the fact that creating good relationships with customers represents the right approach for maintaining and growing a business. Zeithaml et al. (1996) indicated that customers who are loyal to a company or a brand tend to be more profitable than non-loyal ones.

Earlier studies (Dewnarain et al., 2019; Gholami et al., 2020; Gil-Gomez et al., 2020; Rapp et al., 2010) considered CRM as one of the most significant tools to obtain a long-term competitive advantage. CRM strengthens the capabilities of marketers by providing them with valuable information about existing and potential customers, which are necessary for both employees and their managers to attain particular marketing objectives in an effective manner (Mohammed et al., 2017). Thus, establishing robust relationships with key customers and managing them persistently has become the main focus for several organizations. Khosravifar et al. (2012) specified that the effective implementation of CRM depends on collecting important customer information before making marketing decisions. They added that this process requires continuous engagement with different types of customers and motivating them to share their experiences and expectations about a company’s offerings and service efficiency to solve any existing issues and increase their satisfaction. Furthermore, efficient CRM implementation occurs through understanding customers’ needs and meeting them better than the competitors (Lambert, 2010). The key challenge in CRM appears through the ability to detect and track customers who are profitable, besides satisfying and retaining them on the long term (Boulding et al., 2005; Marino & Presti, 2018). This argument was supported by Chen and Popovich (2003) who outlined that sustaining customer relationships represents a key challenge for businesses and requires the service providers to continuously deliver superior customer value.