Running Title: The Determinants for Customer Acceptance and Use of Social CRM Systems Exposé The Determinants for Customer Acceptance and Use of Social CRM Systems: Quantitative Analysis of a User Acceptance Model Submitted by Fabian Haas European Master in Business Studies University of Kassel Kassel, Germany 30 th October 2012
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 2 List of content List of Abbreviations... 3 1. Abstract... 4 2. Introduction... 4 3. Overview of chapters... 5 4. Review of Literature... 6 4.1. General Part... 6 4.1.1. Definition of CRM... 6 4.1.2. Definition of Web 2.0... 7 4.2. Social CRM... 8 4.2.1. Definition of social CRM... 8 4.2.1. Outlining social CRM... 9 4.3. Research Model... 10 5. Hypotheses... 13 6. Methodology... 14 7. Work Plan... 14 Bibliography... 16
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 3 List of Abbreviations CRM PEU PLS PU scrm TAM UTAUT Customer Relationship Management Perceived Ease of Use Partial Least Squares Perceived Usefulness Social Customer Relationship Management Technology Acceptance Model Unified Theory of Acceptance and Use of Technology UTAUT2 (extended version) Unified Theory of Acceptance and Use of Technology
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 4 1. Abstract Title: The Determinants for the Customer Acceptance and Use of Social CRM Systems: Quantitative Analysis of a User Acceptance Model Keywords: Social CRM, User acceptance, customer engagement Background: Customer Relationship Management (CRM) has been widely identified as a discipline impacting performance, customer satisfaction and retention. As many fields in business it is exposed to new challenges due to the disruptive innovations in information technology and especially in social media. In the context of CRM this leads to a shift towards interaction and customer engagement, which entails the necessity of creating systems that are accepted and used by customers. Purpose: The purpose of this study is to identify the variables that determine the usage intention and the actual use of social CRM. Applying an adapted model of technology acceptance and use, hypothesis describing single elements influencing the behavior in the context of usage will be verified. Variables that are expected to influence the behavioral intention to use will be designed. Finally the influence of behavioral intention on actual use will be tested. Method: The required information will be collected through a quantitative study in an online survey. The responses will be analyzed by applying multivariate regression (PLS Method) in order to gain insights in strength and direction of the correlations between the tested variables. 2. Introduction The field of customer relationship management (CRM) has been object of extensive research starting in the 90ies until the first decade of the current century (Greenberg, 2009; Paas & Kulijlen, 2001; Payne & Frow, 2005; Winer, 2001). Most of them see CRM as a discipline prospering because of the advancements in information technology. However, the philosophy behind is grounded in the theories of customer orientation and relationship marketing (Dwyer, Schurr, & Oh, 1987; Jayachandran, Sharma, Kaufman, & Raman, 2005).
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 5 Since the progress in the field of Social Media and Web 2.0 there has been a shift in paradigm in the research area of CRM. As Askool and Nakata (2010) argue, companies now have to take into account a change in behavior which was influenced by the new type of media and interaction, changing among others the determinants for customer satisfaction. Traditional models, also in the field of CRM have run out of date and fail in delivering theoretical and practical insights (Harrigan, 2012). The discipline of CRM is changing into social CRM System (Mohan, Choi, & Min, 2008) with additional challenges in terms of being trustworthy, customer centric and customer driven (Shih, 2009). All the recent studies of social CRM (scrm) emphasize the importance of interaction and user engagement ex. (Askool & Nakata, 2010), an element which is peculiar to scrm and was less of a concern for traditional CRM this is shown in a literature review of Paulissen, Milis, Brengman, Fjermestad, and Romano (2007) who identified several fields of study in the context of CRM but none of them addressed the customer itself or elements like interaction. Considering this gap, the purpose of this study shall be to analyze the determinants of customer acceptance of scrm in order to find out, what businesses have to take into account for setting up an interactive and effective scrm System. Thus the general research question to be answered by this study is: What are the determinants that influence the customer acceptance and use of scrm Systems? 3. Overview of chapters 1) Introduction 2) Literature Review a) General Part: This section describes the fundamentals of CRM and Web 2.0 as those concepts constitute the basics where social CRM is built on. b) Social CRM: In the first part of this section, social CRM will be defined from different perspectives and the differences to traditional CRM will be analyzed. The second part will be dedicated to an in-depth explanation of social CRM providing explanation such as performance possibilities, fields of application, customer perspective and business potential.
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 6 c) Research Model: In this part, the variables influencing the user acceptance will be established, by reviewing and analyzing previous models. 3) Methodology: This part will provide explanations about how the research will be conducted. 4) Analysis of Results: First the results will be analyzed applying statistical methods (PLS). Starting from these values, the research model will be tested and verified. 5) Conclusions: This section will draw the conclusions based on the research results in order to develop managerial implications. 4. Review of Literature In order to provide a comprehensive overview of the analyzed literature so far, the sources will be grouped according to the preliminary structure of the Master Thesis. 4.1. General Part 4.1.1. Definition of CRM Point of View Content Reference General definition Technological definition Integrated definition Marketing based definition Definition of CRM as a set of activities aiming at establishing and maintaining loyalty and satisfaction of customers on the long run. Definition of CRM as a process to identify customer needs and to develop close relationships by the use of technology which collects, analyzes and manages customer data. Definition of CRM as an integration of business processes and technologies to manage interactions with customers and contributing to customer satisfaction. CRM is seen as a system to collect and manage information with the aim to increase the sales and make the selling process more efficient. Definition of CRM as a tool to identify the profitable customer and thus enabling the company to focus on those and to deliver the ideal product with the ideal elements of the marketing mix (place, promotion and price) at the right time. (Landroguez, Castro, & Cepeda-Carrión, 2011) (Paulissen et al., 2007) (Bose, 2002) (Paas & Kulijlen, 2001)
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 7 Strategy based definition Effects/ Potential/ Benefits CRM is considered to be a philosophy with the goal to improve interactions in the business environment by the use of a business strategy and technology. CRM is defined as a strategic approach generating several benefits as increased profits and customer satisfaction. Lowers customer recruitment costs Stable customer base Reduced cost of sales Higher customer profitability Increased customer retention and loyalty Enables analysis of customer profitability Increases understanding of customer and gives the possibility to treat customers considering their potential positive effect on performance Satisfaction increases performance CRM increases customer value (loyalty and acquisition), profitability and customer satisfaction Loyalty increases profits (Greenberg, 2003) (Sarner et al., 2011) (Swift, 2001) (W. Reinartz, Krafft, & Hoyer, 2004) (Kamakura, Mittal, de Rosa, & Mazzon, 2002) (Kim, Suh, & Hwang, 2003) (W. J. Reinartz & Kumar, 2000) Active commitment and loyalty programs influence positively the reten- (Verhoef, 2003) tion and the customer share development Direct mailings support customer share development CRM use is positively correlated to (Jayachandran et al., performance 2005) ecrm reduces cognitive dissonance (Clark & Das, 2009) 4.1.2. Definition of Web 2.0 Point of view Content Reference Definition Elements of Web 2.0 User generated content, network effects, collective intelligence, data on epic scales, enabling services, lightweight programs, open platform (Faase, Helms, & Spruit, 2011) Services Blogs, Wikis, Social Tagging, Multi- (Faase et al., 2011)
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 8 Social Media Usage media sharing, syndication, social networking Social Media Usage Data (Heller Baird & Parasnis, 2011a) 4.2. Social CRM 4.2.1. Definition of social CRM Perspective Content Reference Technical definition SCRM is defined as user friendly application that supports the existing structure of CRM improving the efficiency by integrating social networks and other (Mohan et al., 2008) Strategy based definition Customer oriented definition external data. SCRM is seen as strategic direction of the company aiming to create customer involvement and engagement to create a closer relationship with the customer with the final outcome of obtaining mutual benefits. The technological aspect including Web 2.0 is seen as a tool to obtain these advantages. SCRM is defined as a system and strategic approach, combining the power of online communities with CRM systems to increase the engagement and involvement of customers with the final goal to establish a value relationship between customer and company. SCRM is defined as a system, dedicated to meet the requirements of the dynamic environment of communities in social media, where the customer has a high degree of power. Social CRM is 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. (Faase et al., 2011) (Askool & Nakata, 2010) (Heller Baird & Parasnis, 2011a) (Greenberg, 2009, p. 34)
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 9 Distinction to traditional CRM Distinction of Social Media Strategy and social CRM Strategy Evolutionary view It s now a two-way conversation. Listen, respond and talk intelligently. Stop dictating to customers. It s your customers, not you, who have the power. SCRM is defined as a system recognizing the importance of facilitating collaborative experiences and interaction rather than controlling the customers. Several factors are listed, mainly related to a higher degree of integration of features, transparency, engagement and collaboration. A social CRM strategy provides an overarching strategic approach for customer engagement as well as overall guidelines and a plan for governance, whereas a social media strategy approach rather points at the bare increase of usage of various types of social media. Describes the evolution in the field of CRM as a path from social media projects to social media programs and to a social CRM strategy George Colony (2007), CEO of Forrester Research quoted in Greenberg (2009, p. 33) (Heller Baird & Parasnis, 2011b) (Greenberg, 2009) (Heller Baird & Parasnis, 2011a) (Heller Baird & Parasnis, 2011a) 4.2.1. Outlining social CRM Topic Content Reference Performances related to scrm (What is it for?) Presence Action Sharing Reputation Relationships Conversation Groups Collaboration (Greenberg, 2009) Capabilities (How does it operate?) Context Activities Provision of Context Analysis of context Channel for transactions Platform for cooperation Empirical data and statistics about performances Monitor Assess and analyze Strategize and structure Test (Reinhold & Alt, 2012) (Heller Baird & Parasnis, 2011a) (Acker, Gröne, Akkad, & Yazbek, 2010)
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 10 Fields of application (Where is it applied?) Components (Which technological tools are used?) Resources used: (Which resources are used?) Applied in: (Where is it applied?) Customer benefits Embed Review Innovation Social Marketing Social Sales Social Service Co-developing products Generating brand awareness Aiding information gathering Offering price comparisons Assisting the selling process Enabling peer-to-peer customer marketing and service after purchase Marketing Knowledge generation Real time services Participation and cooperation Empirical data about the fields of application Search Engines Social Media Monitoring Business Intelligence Tools CRM Systems Social Media management Social Network analysis Posting Body Posting Envelope Profile Body Profile Envelope Interconnections Data (history etc.) Customer participation Blogs Podcasts Wikis Social Tagging and Bookmarking Social Search Data about customer usage and motivations Perception gap (Acker et al., 2010) (Sarner et al., 2011) (Reinhold & Alt, 2012) (Heller Baird & Parasnis, 2011a) (Reinhold & Alt, 2012) (Reinhold & Alt, 2012) (Greenberg, 2009) (Greenberg, 2009) (Heller Baird & Parasnis, 2011b) (Heller Baird & Parasnis, 2011b) 4.3. Research Model In order to establish the critical factors leading to the user acceptance and consequently to the use of scrm, a research model will be established displaying the hypothesis in this regard. The Model to be applied in this research grounds in several theories of user acceptance which will be reviewed in this section.
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 11 Model Description Reference Technology acceptance model (TAM) Extended technology acceptance model (TAM2) Further extension of the technology acceptance model (TAM3) Unified theory of acceptance and use of technology (UTAUT) Extension of the unified theory of acceptance and use of technology (UTAUT2) Conceptual model for user engagement in social CRM Conceptual model for understanding SCRM usage and acceptance Two external variables (perceived usefulness (PU) and perceived ease of use (PEU)) determine the attitude towards using which then determines the behavioral intention Starting point is the traditional TAM, extending the view by defining the constructs of subjective norm, image, job relevance, output quality and result demonstrability as determinants of perceived usefulness. TAM 2 was further extended by adding determinants of perceived ease of use: Anchorage determinants (computer selfefficacy, perceptions of external control, computer anxiety and computer playfulness) and adjustment determinants (perceived enjoyment and objective usability). Defines performance expectancy, efficiency expectancy, social influence and facilitating conditions as determinants of behavioral intention. Behavioral intention is defined as predictor of use behavior In addition to the variables mentioned by Venkatesh et al. (2003), hedonic motivation and price value are defined as determinants of behavioral intention. Habit is defined as predictor of both behavioral intention and use behavior. Starting point is the TAM, adding the fact that the attitude towards use determines customer engagement. This influences relational information process which is a predictor of CRM technology adoption (equivalent to the behavioral intention in TAM). 1 It is also based on the TAM; Three Web 2.0 elements (ease of networking, ease of participation and ease of collaboration) are determinants of PU and PEU as well as of familiarity, care and information sharing. The latter three build up trustworthiness, which is a determinant of attitude towards use. 1 (Davis, Bagozzi, & Warshaw, 1989; Davis, 1985, 1989) (Venkatesh & Davis, 2000) (Venkatesh & Bala, 2008) (Venkatesh, Morris, Davis, & Davis, 2003) (Venkatesh, 2012) (Harrigan & Choudhury, 2012) (Askool & Nakata, 2010) 1 Model has not been tested yet.
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 12 The first relevant theory in this regard is the so called Technology acceptance model (Davis, 1985) who identifies perceived usefulness and perceived ease of use as predictors of acceptance for a technology. This Model acknowledges the influence of those two variables on attitude toward using which influences the behavioral intention that finally determined the actual system use. In the following years, there were several extensions of the model, by adding determinants explaining the perceived usefulness, such as subjective norm, image, job relevance, output quality and result demonstrability (Venkatesh & Davis, 2000) and determinants explaining the perceived ease of use, namely anchorage determinants (computer self-efficacy, perceptions of external control, computer anxiety and computer playfulness) and adjustment determinants (perceived enjoyment and objective usability) (Venkatesh & Bala, 2008). Furthermore, there have been variations of the model. Venkatesh et al. (2003) defined performance expectancy, effort expectancy and social influence as determinants of the behavioral intention (intention of use). The intention of use and facilitating conditions were defined as variables influencing the usage behavior. In addition age, gender and experience were identified as moderators of all the connections between the variables. The model is known as Unified Theory of Acceptance and Use of Technology (UTAUT). In their latest research, Venkatesh, Thong, and Xu (2012) extended the model, by adding two variables influencing the behavioral intention (hedonic motivation and price value) and one variable (habit) determining both behavioral intention and use behavior. Subsequently, this adapted model was labeled with the acronym UTAUT2 In addition to these models, there are other two models, adapting previous theories to the field of social CRM. Firstly, there is the so called Conceptual model for understanding SCRM usage and acceptance (Askool & Nakata, 2010). The general base of the model is the TAM; however, Web 2.0 elements are influencing the variables perceived usefulness and perceived ease of use as well as familiarity, care and information sharing. Attitude towards use is depending on perceived usefulness, perceived ease of use and perceived trustworthiness. Similar to the previous model, the Conceptual Model for Customer Engagement in Social CRM tries to explain the acceptance of the scrm System applying an
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 13 adapted TAM Model, outlining elements of user engagement as outcome of the attitude towards use as defined by the traditional TAM. As a consequence of user engagement, the model defines relational information process and finally CRM Technology adoption (Harrigan & Choudhury, 2012). For the purpose of this research, the elements of the previous models will be combined, in order to provide a model which aims at explaining the process as complete as possible. Since the models designed by Askool and Nakata (2010) and Harrigan and Choudhury (2012) are particularly addressed to this topic, they provide a good starting point. On the other hand, they don t explicitly take into account important factors such as social influence, hedonic motivation, facilitating conditions and habit as proposed by Venkatesh, Thong and Xu (2012). As a result of the review of the different models the elements identified to shape the behavioral intention to use social CRM in this research are: Perceived usefulness (Askool & Nakata, 2010; Davis, 1985; Harrigan & Choudhury, 2012) Perceived ease of use (Askool & Nakata, 2010; Davis, 1985; Harrigan & Choudhury, 2012) Perceived trustworthiness (Askool & Nakata, 2010) Social Influence (Venkatesh et al., 2003, 2012) Hedonic Motivation (Venkatesh et al., 2012) Habit (Venkatesh et al., 2012) Facilitating conditions (Venkatesh et al., 2003, 2012) 5. Hypotheses Finally the model shall consist in an explanation of the link between behavioral intention and use behavior. The designed preliminary model leads to the following Hypotheses: H1: Perceived usefulness has a positive influence on behavioral intention H2: Perceived ease of use has a positive influence on behavioral intention H3: Perceived trustworthiness has a positive influence on behavioral intention H4: Social influence is a determinant on behavioral intention
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 14 H5: Hedonic motivation influences behavioral intention H6: Habit is a determinant on behavioral intention H7: Facilitating conditions have a positive influence on behavioral intention and use H8: Behavioral intention influences positively the use of social CRM 6. Methodology The hypotheses mentioned above will be tested by applying a qualitative research. The data will be collected through an online questionnaire spread to personal contacts as well as on social media pages. The questionnaire will mainly contain seven point (Likert) scales as it has been applied in previous studies of comparable models (Davis, 1985; Venkatesh & Bala, 2008; Venkatesh et al., 2003, 2012). By proceeding this way, numerical results can be obtained. The obtained data then will be used to validate the model and to show the connections between the variables (both latent and observable). The method used for this is the Partial Least Squares method (PLS) performed by the software SmartPLS. By using these tools, the hypothesis constructing the research model will be validated and the model can be tested. 7. Work Plan Time a) 01.10.2012-11.11.2012 b) 01.11.2012-30.11.2012 c) 01.12.2012-06.01.2013 d) 10.12.2012-22.01.2013 Activity Basic research phase Theory phase Methodology phase Intermediate presentation Creating, discussing and adapting the exposé Intensive literature review and predisposition of theoretical part of the master thesis Study of methodology, establishment of the research model, creating questionnaire Elaborating first draft of intermediate presentation (20.12.2012), reviewing corrections and creating final version and presentation slides (22.01.2013)
Exposé: The Determinants for Customer Acceptance and Use of Social CRM Systems 15 e) 06.01.2013-31.01.2013 f) 01.02.2013-10.03.2013 Field research phase Analysis phase Finalizing questionnaire and executing the survey Finalizing the method for the analysis, executing the qualitative evaluation, drawing first implications Drawing implications and conclusions g) 10.03.2013-31.03.2013 h) 01.04.2013- deadline Finalization phase Reviewing the work, adaptation, correction, preparing final report and presentation The work plan is also displayed in the Gantt chart below. a) b) c) d) e) f) g) h) 10/12 11/12 12/12 01/13 02/13 03/13 04/13 05/13
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