expos© the determinants for customer acceptance and use of

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 30th

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


List of Abbreviations

CRM Customer Relationship Management

PEU Perceived Ease of Use

PLS Partial Least Squares

PU Perceived Usefulness

sCRM Social Customer Relationship Management

TAM Technology Acceptance Model

UTAUT Unified Theory of Acceptance and Use of Technology

UTAUT2 Unified Theory of Acceptance and Use of Technology

(extended version)


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 identi-

fied as a discipline impacting performance, customer satisfaction and retention. As

many fields in business it is exposed to new challenges due to the disruptive innova-

tions in information technology and especially in social media. In the context of

CRM this leads to a shift towards interaction and customer engagement, which en-

tails 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 tech-

nology. However, the philosophy behind is grounded in the theories of customer ori-

entation and relationship marketing (Dwyer, Schurr, & Oh, 1987; Jayachandran,

Sharma, Kaufman, & Raman, 2005).


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, compa-

nies 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 cus-

tomer 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 disci-

pline of CRM is changing into “social CRM System” (Mohan, Choi, & Min, 2008)

with additional challenges in terms of being trustworthy, customer centric and cus-

tomer driven (Shih, 2009).

All the recent studies of social CRM (sCRM) emphasize the importance of interac-

tion 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 identi-

fied 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 ana-

lyzed. The second part will be dedicated to an in-depth explanation of social

CRM providing explanation such as performance possibilities, fields of ap-

plication, customer perspective and business potential.


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 defini-

tion

Definition of CRM as a set of activities

aiming at establishing and maintaining

loyalty and satisfaction of customers

on the long run.

(Landroguez, Castro,

& Cepeda-Carrión,

2011)

Technological

definition

Definition of CRM as a process to

identify customer needs and to develop

close relationships by the use of tech-

nology which collects, analyzes and

manages customer data.

(Paulissen et al., 2007)

Integrated defini-

tion

Definition of CRM as an integration of

business processes and technologies to

manage interactions with customers

and contributing to customer satisfac-

tion. CRM is seen as a system to col-

lect and manage information with the

aim to increase the sales and make the

selling process more efficient.

(Bose, 2002)

Marketing based

definition

Definition of CRM as a tool to identify

the profitable customer and thus ena-

bling 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.

(Paas & Kulijlen,

2001)


Strategy based

definition

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.

(Greenberg, 2003)

CRM is defined as a strategic approach

generating several benefits as in-

creased profits and customer satisfac-

tion.

(Sarner et al., 2011)

Effects/

Potential/

Benefits

Lowers customer recruitment costs

Stable customer base

Reduced cost of sales

Higher customer profitability

Increased customer retention and loy-

alty

Enables analysis of customer profita-

bility

(Swift, 2001)

Increases understanding of customer

and gives the possibility to treat cus-

tomers considering their potential

positive effect on performance

(W. Reinartz, Krafft, &

Hoyer, 2004)

Satisfaction increases performance (Kamakura, Mittal, de

Rosa, & Mazzon,

2002)

CRM increases customer value (loyal-

ty and acquisition), profitability and

customer satisfaction

(Kim, Suh, & Hwang,

2003)

Loyalty increases profits (W. J. Reinartz &

Kumar, 2000)

Active commitment and loyalty pro-

grams influence positively the reten-

tion and the customer share develop-

ment

Direct mailings support customer share

development

(Verhoef, 2003)

CRM use is positively correlated to

performance

(Jayachandran et al.,

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 ef-

fects, collective intelligence, data on

epic scales, enabling services, light-

weight programs, open platform

(Faase, Helms, &

Spruit, 2011)

Services Blogs, Wikis, Social Tagging, Multi- (Faase et al., 2011)


media sharing, syndication, social

networking

Social Media

Usage

Social Media Usage Data (Heller Baird &

Parasnis, 2011a)

4.2. Social CRM

4.2.1. Definition of social CRM

Perspective Content Reference

Technical defini-

tion

SCRM is defined as user friendly appli-

cation that supports the existing struc-

ture of CRM improving the efficiency

by integrating social networks and other

external data.

(Mohan et al., 2008)

Strategy based

definition

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 mu-

tual benefits. The technological aspect

including Web 2.0 is seen as a tool to

obtain these advantages.

(Faase et al., 2011)

SCRM is defined as a system and stra-

tegic approach, combining the power of

online communities with CRM systems

to increase the engagement and in-

volvement of customers with the final

goal to establish a value relationship

between customer and company.

(Askool & Nakata,

2010)

Customer orient-

ed definition

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.

(Heller Baird &

Parasnis, 2011a)

“Social CRM is a philosophy and a

business strategy, supported by a tech-

nology platform, business rules, pro-

cesses, and social characteristics, de-

signed to engage the customer in a col-

laborative conversation in order to pro-

vide mutually beneficial value in a

trusted and transparent business envi-

ronment. It’s the company’s response to

the customer’s ownership of the conver-

sation.”

(Greenberg, 2009, p.

34)


“It’s now a two-way conversation. Lis-

ten, respond and talk intelligently. Stop

dictating to customers. It’s your cus-

tomers, not you, who have the power.”

George Colony

(2007), CEO of For-

rester Research quot-

ed in Greenberg

(2009, p. 33)

SCRM is defined as a system recogniz-

ing the importance of facilitating col-

laborative experiences and interaction

rather than controlling the customers.

(Heller Baird &

Parasnis, 2011b)

Distinction to

traditional CRM

Several factors are listed, mainly related

to a higher degree of integration of fea-

tures, transparency, engagement and

collaboration.

(Greenberg, 2009)

Distinction of

Social Media

Strategy and so-

cial CRM Strate-

gy

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 ap-

proach rather points at the bare increase

of usage of various types of social me-

dia.

(Heller Baird &

Parasnis, 2011a)

Evolutionary

view

Describes the evolution in the field of

CRM as a path from social media pro-

jects to social media programs and to a

social CRM strategy

(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

Context

(Greenberg, 2009)

Activities

Provision of Context

Analysis of context

Channel for transactions

Platform for cooperation

(Reinhold & Alt,

2012)

Empirical data and statistics about per-

formances

(Heller Baird &

Parasnis, 2011a)

Capabilities

(How does it op-

erate?)

Monitor

Assess and analyze

Strategize and structure

Test

(Acker, Gröne,

Akkad, & Yazbek,

2010)


Embed

Review

Fields of applica-

tion

(Where is it ap-

plied?)

Innovation

Social Marketing

Social Sales

Social Service

(Acker et al., 2010)

Co-developing products

Generating brand awareness

Aiding information gathering

Offering price comparisons

Assisting the selling process

Enabling peer-to-peer customer market-

ing and service after purchase

(Sarner et al., 2011)

Marketing

Knowledge generation

Real time services

Participation and cooperation

(Reinhold & Alt,

2012)

Empirical data about the fields of appli-

cation

(Heller Baird &

Parasnis, 2011a)

Components

(Which techno-

logical tools are

used?)

Search Engines

Social Media Monitoring

Business Intelligence Tools

CRM Systems

Social Media management

Social Network analysis

(Reinhold & Alt,

2012)

Resources used:

(Which resources

are used?)

Posting Body

Posting Envelope

Profile Body

Profile Envelope

Interconnections

(Reinhold & Alt,

2012)

Data (history etc.)

Customer participation

(Greenberg, 2009)

Applied in:

(Where is it ap-

plied?)

Blogs

Podcasts

Wikis

Social Tagging and Bookmarking

Social Search

(Greenberg, 2009)

Customer bene-

fits

Data about customer usage and motiva-

tions

(Heller Baird &

Parasnis, 2011b)

Perception gap (Heller Baird &

Parasnis, 2011b)

4.3. Research Model

In order to establish the critical factors leading to the user acceptance and conse-

quently to the use of sCRM, a research model will be established displaying the hy-

pothesis 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.


Model Description Reference

Technology ac-

ceptance model

(TAM)

Two external variables (perceived use-

fulness (PU) and perceived ease of use

(PEU)) determine the attitude towards

using which then determines the behav-

ioral intention

(Davis, Bagozzi, &

Warshaw, 1989;

Davis, 1985, 1989)

Extended tech-

nology ac-

ceptance model

(TAM2)

Starting point is the traditional TAM,

extending the view by defining the con-

structs of subjective norm, image, job

relevance, output quality and result de-

monstrability as determinants of per-

ceived usefulness.

(Venkatesh & Davis,

2000)

Further extension

of the technology

acceptance model

(TAM3)

TAM 2 was further extended by adding

determinants of perceived ease of use:

Anchorage determinants (computer self-

efficacy, perceptions of external control,

computer anxiety and computer play-

fulness) and adjustment determinants

(perceived enjoyment and objective

usability).

(Venkatesh & Bala,

2008)

Unified theory of

acceptance and

use of technology

(UTAUT)

Defines performance expectancy, effi-

ciency expectancy, social influence and

facilitating conditions as determinants

of behavioral intention. Behavioral in-

tention is defined as predictor of use

behavior

(Venkatesh, Morris,

Davis, & Davis,

2003)

Extension of the

unified theory of

acceptance and

use of technology

(UTAUT2)

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.

(Venkatesh, 2012)

Conceptual mod-

el for user en-

gagement in so-

cial CRM

Starting point is the TAM, adding the

fact that the attitude towards use deter-

mines customer engagement. This in-

fluences relational information process

which is a predictor of CRM technology

adoption (equivalent to the behavioral

intention in TAM). 1

(Harrigan &

Choudhury, 2012)

Conceptual mod-

el for understand-

ing SCRM usage

and acceptance

It is also based on the TAM; Three Web

2.0 elements (ease of networking, ease

of participation and ease of collabora-

tion) are determinants of PU and PEU

as well as of familiarity, care and in-

formation sharing. The latter three build

up trustworthiness, which is a determi-

nant of attitude towards use.1

(Askool & Nakata,

2010)

1 Model has not been tested yet.


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 pre-

dictors of acceptance for a technology. This Model acknowledges the influence of

those two variables on attitude toward using which influences the behavioral inten-

tion that finally determined the actual system use.

In the following years, there were several extensions of the model, by adding deter-

minants 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 com-

puter playfulness) and adjustment determinants (perceived enjoyment and objective

usability) (Venkatesh & Bala, 2008).

Furthermore, there have been variations of the model. Venkatesh et al. (2003) de-

fined 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 per-

ceived 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


adapted TAM Model, outlining elements of user engagement as outcome of the atti-

tude towards use as defined by the traditional TAM. As a consequence of user en-

gagement, the model defines relational information process and finally CRM Tech-

nology adoption (Harrigan & Choudhury, 2012).

For the purpose of this research, the elements of the previous models will be com-

bined, 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 in-

tention 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


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 con-

tacts as well as on social media pages.

The questionnaire will mainly contain seven point (Likert) scales as it has been ap-

plied 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 connec-

tions 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 Activity

a) 01.10.2012-

11.11.2012

Basic research

phase

Creating, discussing and adapting

the exposé

b) 01.11.2012-

30.11.2012

Theory phase Intensive literature review and

predisposition of theoretical part

of the master thesis

c) 01.12.2012-

06.01.2013

Methodology

phase

Study of methodology, estab-

lishment of the research model,

creating questionnaire

d) 10.12.2012-

22.01.2013

Intermediate

presentation

Elaborating first draft of inter-

mediate presentation

(20.12.2012), reviewing correc-

tions and creating final version

and presentation slides

(22.01.2013)


e) 06.01.2013-

31.01.2013

Field research

phase

Finalizing questionnaire and exe-

cuting the survey

f) 01.02.2013-

10.03.2013

Analysis phase Finalizing the method for the

analysis, executing the qualita-

tive evaluation, drawing first

implications

g) 10.03.2013-

31.03.2013

Drawing implications and con-

clusions

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.

10/12 11/12 12/12 01/13 02/13 03/13 04/13 05/13

a)

b)

c)

d)

e)

f)

g)

h)


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