Enhancing Customer Satisfaction through CRM: The Mediating Effects of Service Quality and Customer Loyalty

Abstract

In the current competitive world of services, the Customer Relationship Management (CRM) is becoming a vital component in organizations that want to cement their customer relationships and to improve customer performance in the long term. This paper seeks to explore how CRM affects the satisfaction of customers, mediated by the quality of services and customer loyalty. It used a quantitative research method and a structured questionnaire was used to gather information as a sample of 250 customers at the services of service-oriented industries which included banking, telecommunication, e-commerce, hospitality sectors in Lahore and Islamabad in Pakistan. The data gathered was analyzed with the help of Partial Least Squares Structural Equation Modeling (PLS-SEM) at SmartPLS. These observations indicate that CRM is positively impacted on customer satisfaction by a significant degree. Additionally, CRM serves to enhance the quality of the services and customer loyalty to a major degree, which contributes to the customer satisfaction. The mediation analysis proves that service quality and customer loyalty mediate the CRM and customer satisfaction relationship, thus showing that CRM positively affects both directly and indirectly satisfaction, as demonstrated by the quality of service delivery and the loyalty. The research also adds to the literature in relationship marketing in that it offers empirical data on how CRM affects customer satisfaction. In practical terms, the results reflect the role of the manager to invest in CRM technologies and customer-focused strategies that enhance the performance of their service and loyalty. This study finds that more customers will be satisfied with services and the service industries will have sustainable competitive advantage when CRM is properly implemented.