A Data Envelopment Analysis Method for Evaluating Performance of Customer Relationship Management

Abstract

Customer relationship management (CRM) is one of the fastest growing management approaches which can lead to stronger competitive position, resulting in larger market share and profitability. In this study, CRM efficiency among the customers of the Iranian banks is analyzed using a network data envelopment analysis (NDEA) approach. To implement CRM in the NDEA model, input, intermediate and output variables are service quality, customer satisfaction and customer loyalty, respectively. This research is a descriptive survey in which the total customers of different Iranian banks in Isfahan comprise the statistical population. The sample included 420 people that were selected by cluster sampling. After distributing questionnaires, only 245 questionnaires were completed. The model is tested via PLS path modeling and confirmed. To rank banks performance, NDEA model is used. Results show the power of NDEA model in the differentiation of the banks since there are no two banks with the same rank. The efficiency of sub-process is also presented to extract the reason of inefficiency in the total process. Because of the adopted research approach, the research results may lack generalization. Therefore, researchers are encouraged to test the proposed propositions further. The paper includes a model for assessing CRM with NDEA model and helps managers rank their companies in the customers' point of view.