Customer relationship management and innovation capability: an empirical study

The purpose of this paper is to investigate the effects of various dimensions of customer relationship management (CRM) on innovation capabilities. Five dimensions of CRM (information sharing, customer involvement, long‐term partnership, joint problem‐solving, and technology‐based CRM) and five aspects of innovation capability (product, process, administrative, marketing, and service innovations) are identified. The one‐to‐one associations between the two constructs are developed and verified.

Data from 107 Taiwanese computer manufacturers are collected. Multiple regression analysis is employed to examine the effects of CRM on innovation capabilities.

The following results are offered: computer manufacturers in Taiwan perform various levels of CRM and, consequently, display different levels of effects on each of the five innovation capabilities. Generally, firms are able to increase their innovation capability by ad hoc CRM; the relationship between customer involvement and process innovation; customer involvement and administrative innovation; and long‐term partnership and marketing innovation are not significant; and technology‐based CRM has positive effects on all five types of innovation.

The findings suggest that not all CRM activities contribute to innovation programs, which clearly indicates the need for applying other mechanisms, such as supplier integration, to form a complete innovation program. Managers should align the development of their supplier management and CRM practices with the desired innovation capability.

The one‐to‐one relationships between CRM practices and innovation capabilities have not been properly examined. The findings suggest the need for more research in this area, and the statistical results provide managers with useful guidelines for implementing appropriate CRM practices to develop specific innovation capabilities to respond to enhanced competitiveness.