Date of Award

Spring 2004

Document Type


Degree Name

Doctor of Philosophy (PhD)


Business Administration-Marketing

Committee Director

Anusorn Singhapakdi

Committee Member

Kiran Karande

Committee Member

Anil Nair


In today's market, financial institutions are adopting Customer Relationship Marketing (CRM) as a strategy aimed at collecting and using data to deliver increased customer value (Payne, Holt, Frow 2000) and, in turn, to increase customer satisfaction and, ultimately, customer loyalty. However, as more studies are being done on the outcome of CRM strategies over time, it is becoming evident that the costs often outweigh the expected benefits and CRM projects have consistently over-promised and under-delivered (Norman and Zafar 2001). Often, customer satisfaction is increased slightly but loyalty rates do not increase at all.

To date, much of what has been written on CRM is from the practitioner's point of view and little is known from a theoretical perspective (Plakoyiannaki and Tzokas 2002). Firms have focused on customer satisfaction rates largely because of the suggestion, historically, that there is a strong, positive relationship between customer service and loyalty (Reichheld and Sasser 1990; Rust and Zahorik 1991). Yet, others have shown evidence that there are high defection rates of satisfied customers from some firms (Homburg and Giering 2001).

This study is an investigation of the use of a CRM strategy in the financial services industry and its effect on satisfaction and loyalty levels of the firm. It looks at what part demographics play in overall customer satisfaction and loyalty rates. And, it looks at what part satisfaction with technology might play on overall satisfaction rates.

The study was accomplished using data from a customer survey conducted in the credit card division of a financial services firm. Hypotheses were tested using standard multiple regression. The results suggest that technology satisfaction does drive overall customer satisfaction and that, in turn, overall customer satisfaction does drive loyalty. However, demographics do not have any significant effect in determining overall customer satisfaction or loyalty rates. And, although CRM is a common strategy used in financial services, for the purposes of this study it did not have a significant impact on overall customer satisfaction rates.





Included in

Marketing Commons