International Journal of Ethics and Systems

Social customer relationship management (s-CRM) among small- and medium-

sized enterprises (SMEs) in Malaysia
Siti Hasnah Hassan, Noor Mohamed Mohamed Haniba, Noor Hazlina Ahmad,
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Siti Hasnah Hassan, Noor Mohamed Mohamed Haniba, Noor Hazlina Ahmad, (2019) "Social
customer relationship management (s-CRM) among small- and medium-sized enterprises (SMEs) in
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Customer
Social customer relationship relationship
management (s-CRM) among management

small- and medium-sized

enterprises (SMEs) in Malaysia
Siti Hasnah Hassan Received 15 November 2017
Revised 5 February 2018
School of Management, Universiti Sains Malaysia, Minden, Penang, Malaysia 22 June 2018
13 July 2018
Noor Mohamed Mohamed Haniba 10 December 2018
Accepted 26 February 2019
Global Envdk Sdn Bhd, Bukit Jalil, Kuala Lumpur, Malaysia, and
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Noor Hazlina Ahmad

School of Management, Universiti Sains Malaysia, Minden, Penang, Malaysia

Abstract
Purpose – In this twenty-first century, the emergence of social media has been integral in business-related
processes, especially in small- and medium-sized enterprises (SMEs), which allows businesses to interact and
build a relationship with customers to improve their sustainable service quality. Concisely, this study aims to
examine the benefits of social customer relationship management (s-CRM) performance from the perceptive of
SMEs owned by Muslims.
Design/methodology/approach – A survey method was used and the data were gathered from 135
SMEs which participated in Halfest (Halal Fiesta Malaysia) trade show in Kuala Lumpur, Malaysia.
Findings – Interestingly, the results revealed that the adoption of information and communications
technology (ICT) has both direct and indirect impacts on s-CRM performance. On the other hand, the
perceived value of s-CRM mediates the relationship between customer information management and
performance of s-CRM. In this context, the perceived value was ascertained to be an influential factor for both
ICT adoption and customer information management.
Research limitations/implications – With a connection to the results, this study concludes that to
enhance business performance to sustain in the marketplace, the establishment of s-CRM is crucial, as it has
significant implication in marketing, customer service and sales department of SMEs.
Originality/value – This paper provides new insight into the importance of s-CRM to SMEs to improve
interactions with the key stakeholders and convey meaningful insight to instil customer-centric practices.
Keywords Sustainability, SMEs, Social media, Adoption of ICT, s-CRM,
Social customer relationship management
Paper type Research paper

1. Introduction
The emergence of rapid development of social technology in this highly competitive
business market has drastically transformed the e-business landscape. In response to this
significant growth, companies, especially the small- and medium-sized enterprises (SMEs),
need to seek building greater customer engagement while maintaining their current
International Journal of Ethics and
Systems
The authors are grateful to Ministry of Malaysian Education and Universiti Sains Malaysia for © Emerald Publishing Limited
2514-9369
funding this research under the Fundamental Research Grant Scheme (203.PMGT.671184). DOI 10.1108/IJOES-11-2017-0192
 IJOES customers to sustain in the business. Because of this huge development, organizations,
particularly the SMEs, need to seek after to a more prominent degree to build client
commitment while keeping up their present client to manage in the business. In many
developed and developing countries including Malaysia, e-commerce has been viewed as a
catalyst and an innovation that can enhance SMEs entrepreneurial characteristics (Ahani
et al., 2017; Alyoubi, 2015). Technology is vital to customer relationship management (CRM)
implementation specifically social technologies that act as an enabler of customer
engagement. Social media networks (SMNs) such as Facebook, WhatsApp, Twitter, Skype
and other comparative tools have aided to reclassify e-commerce because of their mobility
features and the versatility of mobile devices (Shemi and Chris, 2018; Sulaiman et al., 2015).
CRM has been essential in ensuring the positive relationship and interaction with the
current and prospective customers. The topic of CRM is gaining wide coverage because of
the favourable changes in preferences and the increasing demands of customers (Awasthi
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et al., 2014). Consequently, electronic CRM (e-CRM) has been identified as a new strategy to
enhance firms’ competitiveness and sustenance in the industry and with the advancement of
social media interaction, social CRM (s-CRM) is now is a new way in building relationships
with the current and future customer. Despite the prevalence of CRM in business, it is
reported that SMEs experienced higher failure rate in the CRM projects (Miri-Nargesi et al.,
2011). Therefore, this occurrence requires meticulous scrutiny to apprehend matters related
to CRM among SMEs.
The CRM refers to the managerial process that many of the organizations have applied to
create a sustainable competitive advantage. Acquiring profitable customer and building a
long-term relationship is a key to sustain in the marketplace (Mekkamol et al., 2013). CRM
helps business interactions with customers by combining business processes and
technologies that seek to understand a company’s customers and future prospects
(Kim et al., 2003; Venturini and Benito, 2015). CRM is a blue print to turn profitable
customers into company asset to sustain longer in the marketplace. Additionally, CRM is
not a new component in the research field; however, with the advent of new technology, the
concept has undergone evolution into two elements, namely e-CRM and s-CRM to denote the
incorporation of a new medium of interaction with the customers. Electronic CRM (e-CRM)
refers to “the use of internet technologies to facilitate the management of customer
relationships” (Harrigan et al., 2008, p. 386). Specifically, e-CRM can be defined as “a mean of
selling, serving, or communicating with customer through the web” (Keshvari, 2012, p. 34).
Indeed, with the presence of such salient and systematic technological tool, organizations
will be able to identify their most valuable customers and accommodate them with a more
personalized customer service to foster an in-depth relationship with customers. In addition,
e-CRM is used to build, extend or retain existing customers (Coltman, 2007) in order for the
organization to continue serving their customers better through a more comprehensive
understanding of their needs and wants.
SMN is a new phenomenon that has transformed how the business environment
operates. With respect to the progress of the business context in this twenty-first century, it
has been reported that there is a significant hike in the number of SMEs engaging in social
media as a platform to practice e-CRM which is called social CRM (s-CRM). In fact, the
emergence of social CRM is mainly because of the rapid proliferation of Web 2.0
technologies and social media networking sites which subsequently created a new category
of customer, called “social customers” (Chen and Vargo, 2014). Particularly, social customers
are actively involved in social media sites and they are generally, technologically
empowered, digitally resourceful and globally connected. However, this situation is not
 entirely propitious, as it has posed challenges to the businesses, especially SMEs who are Customer
operating with small seed capital. relationship
Furthermore, the need to relate CRM to SMEs arises as Sarosa (2012) discovered SMEs as
one of the key contributors to economic growth in a country's development. In addition,
management
SMEs is also one of the fastest-growing industries in most countries (Kurnia et al., 2015),
especially in developing countries; therefore, their contribution cannot be neglected (Kurnia
et al., 2015; Madanchian et al., 2015). In Malaysia, SMEs play significant roles in the
economic development, social uplifting and political stability of the country (Madanchian
et al., 2015). The SMEs shape 99.2 per cent of all business foundations and granted about 32
per cent of gross domestic product (GDP) and 59 per cent of total recruitment of the country
(Ramayah et al., 2016).
In this connection, it is evident that there is a growing need for continuous research to
further comprehend and enhance the relationship of SMEs and CRM, which is mutually
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beneficial to SMEs and the country’s economic development. However, previous research in
CRM adoption has found that minimal effort has been made to determine organizational
readiness at the CRM pre-implementation stage (Miri-Nargesi et al., 2011; Otieno, 2015).
Based on the information gathered, previous researchers on e-CRM were mostly focussed on
large scale organizations as they are the only one who could afford the high-end technology
system (Harrigan et al., 2008; Morgan and Hunt, 1994). Nevertheless, with the rapid
development of technology, e-CRM through social media platforms is now no longer an
expensive system. Besides, this progress has also enabled SMEs to manage their CRM
electronically and mostly through social media. Despite the increased attention towards s-
CRM practice in SMEs, the integration of CRM across multiple media is challenging.
Undeniably, new social technology and s-CRM strategy have to undergo further
research, as literatures have indicated that s-CRM has yet to be fully used as most
businesses are still in the midst of exploring and fully understanding the concept of new
social commerce environment (Chen and Vargo, 2014). On a separate note, the handling of
information and communications technology (ICT) should be in compliance with the
existing guideline as ineffective or inconsistent implementation of ICT will eventuate to
adverse effects on the customer relationship (Ab Hamid and Kassim, 2004). Therefore, the
objective of this paper is to study the effect of electronic CRM by using social media which
refers to Social-CRM (s-CRM) among SMEs.

2. Literature review
Social CRM (s-CRM) is a new approach that recognizes consumers have strong opinions
about relationships as customers being managed in a social media context (Baird and
Parasnis, 2011). According to Greenberg (2010, p. 34), social CRM can be defined as a
philosophy or a business strategy, supported by a technology platform, business rules,
workflow, processes and social characteristics, designed to engage the customer in a
collaborative conversation to provide mutually beneficial value in a trusted and transparent
business environment. In other words, it is the company’s programmatic response to the
customer’s control of the conversation. Besides, s-CRM is a computer-mediated tool which
allows users to create, share or exchange information, news, ideas, lifestyle, photos and so
on through social media platforms. In addition, it operates as a new medium for companies
to connect to new customers or retain existing customers more effectively as compared to
other traditional media previously.
In this context, social media platforms such as Facebook, YouTube, Twitter, Integra and
LinkedIn have been identified as potential s-CRM tools. Clearly, with this widespread access,
s-CRM possesses the capacity to increase brand visibility, improve brand loyalty, provide
 IJOES swift responses and maximise cost efficiency to sustain in marketplace. In this respect, one
of the positive outcomes which can be expected is attracting businesses to engage in s-CRM,
as it allows customers to post comments, ratings, and share content across all social
networks (Chau and Xu, 2012). Most importantly, such features of s-CRM via social media
could significantly improve the organization’s online presence and improve the performance
of SMEs in the future.
Next, the discussion on how performance benefit of s-CRM can be influenced by
managing customer information such as the customer database, adoption of ICT strategies
and customer perceived values will be deliberated in-depth.

2.1 Performance benefits of social customer relationship management

In general, organizations have become more concerned and aware of the performance
benefits provided by CRM through social media, as it is a zero-cost method to interact and
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establish relationship with customers. As a matter of fact, s-CRM indirectly assists

organizations in building their reputation and image to be more appealing to the customers
from their online database. Additionally, s-CRM also facilitates in enhancing customer
satisfaction by providing personalized customer service which strengthens customer’s trust
towards organization and encourages customers to interact with the organizations in an
uncomplicated manner. As stated by Julian (2012), customer loyalty will significantly
increase through the use of social media. In terms of business transactions, s-CRM could
exist as a catalyst to expedite transactions, leading to more conveniences (Sharma, 2016).
With respect to this study, it is worth noting that strategic and effective s-CRM solutions
allow the organization to expand profitably by gaining new customers, building a long-
lasting relationship and subsequently, ensuring customer loyalty.
However, organizations experience various difficulties in measuring the tangible returns
of the s-CRM as the commonly researched areas are directed towards the intangible outcome
of s-CRM which include service quality, customer loyalty, value enhancement, processes’
effectiveness, operation innovation, improvement on services, competitiveness, trust and
efficiency (Kim and Kim, 2009; Orenga-Roglá and Chalmeta, 2016; Zablah et al., 2004).
According to this group of researchers, the benefits of CRM include customer loyalty and
retention, higher customer profitability, customer value creation, product and services
customization and higher quality of products and services. From the information obtained,
there are two ways to evaluate performance benefits, which are company-centric and
customer-centric. Specifically, company-centric examines the overall aspect of the company
such as the perspectives of finance, customer, internal business, innovation and learning
while customer-centric is a customer-oriented perspective, which focuses on customer value
creation, satisfaction, loyalty, interaction, knowledge and so on. Thus, it is of utmost
importance that a comprehensive evaluation method is applied to accurately measure the
performance benefits of s-CRM towards an organization which will ultimately help the
organizations to develop a more effective CRM plan in the future.

2.2 Managing customer information

As highlighted by every organization, the customer database is indispensable for an
organization to identify their valuable customer segments and later provide personalized
customer service to each customer segment to establish and maintain a strong bond with
customers. In this respect, the s-CRM system enables organization to collect a large database
of consumer information and manage the related data through social networking sites.
Precisely, the s-CRM is a technological instrument which effectively assists in the
organization of collecting, storing analysing and disseminating customer knowledge
 (Vallabh et al., 2015). Even though some parties may refute this fact by claiming that Customer
customer data can be purchased from data warehousing system, however, according to a relationship
report by the (National Computing Centre (NCC), 2014), the reliability of customer data is
inconsistent for companies as it is not specifically designed to meet the demands of a
management
particular. Therefore, it is essential for organizations to have a systematic and effective
system to manage the accumulation of customer data to establish an impregnable customer
oriented strategy. According to Ritchie and Brindley (2005), only a handful of SMEs adopted
ICT system for the purpose of s-CRM management. This is mainly because of the fact that
SMEs are more likely to approach customers in a conventional manner, for instance, face-to-
face contact.
Companies that are not at least monitoring social media, let alone participating, have a
real blind spot as to what is really driving consumer purchase decisions” (Henschen, 2012,
p. 17). In particular, the social network theory states that companies have access to hidden
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customer information if they effectively manage their customer database through social
networking (Jonsson, 2015). This is because consumers nowadays are very dependent on
social networking site, thus often disclose daily routines in social networking sites.
Moreover, based on the research of Otieno (2015), it was discovered that social media can
help organizations to manage their CRM efficiently. For instance, organizations can exploit
and share their customer information online with the use of internet technology (Brady et al.,
2002). These evidences show the importance of customer information management through
s-CRM.
On top of that, the extant literatures also reiterated that organizations that are able to
properly manage their customer information through CRM are capable in expanding their
loyal customers base and increase the organization’s profit as a whole (Berndt and Tait,
2012). In this context, an organization with a well-developed CRM could enhance their
productivity and effectively customize its products or services to suit the needs of the
customers. With respect to the limitless possibilities of CRM, this will ensure organizations
to deliver better value to their customers. Given these benefits, CRM can therefore be
shortlisted as a practical alternative to intensify the organization’s competitiveness, as well
as to satisfy and retain the existing customers. Hence, it can be conjectured that:

H1. Managing customer information positively affects perceived customer value.

H2. Managing customer information positively affects performance benefits of s-CRM.

2.3 Adoption of information and communications technology strategy

As mentioned by previous researchers, the CRM systems are founded on IT or ICT solutions
(Law et al., 2013). As discussed earlier, ICT strategy enables organizations to manage e-CRM
effectively through social media. However, upon further investigation, it was discovered
that research on adoption of ICT strategy in SMEs is still insufficient (Ramdani et al., 2013).
One of the most rational reasons would be because of the failure of SMEs in implementing
ICT within their organizations (Kurnia et al., 2015; Ritchie and Brindley, 2005). Moreover,
research also showed that SMEs are typically uninterested in using the e-CRM system in
managing their customer relationship, although they have adopted ICT strategy in their
daily operations (National Computing Centre (NCC), 2014). On the other hand, there is
evidence which shows that some SMEs have started to adopt the e-CRM system which has
been previously employed by large-scale organizations (Ramdani et al., 2009). Also, on
another occasion, positive relationship between competitive advantage of a company and
ICT adoption was revealed (Grandon and Pearson, 2004; Seethamraju, 2015). As a matter of
 IJOES fact, organizations are more likely to adopt ICT strategy if they are cognizant of the relative
advantages of using it (Lee et al., 2004) and the perceived need to overcome business issue
such as performance gap by exploiting this new opportunity for their business (Kurnia et al.,
2015). However, according to Grandon and Pearson (2004), size of the organization is also a
critical factor which has to be taken into consideration when adopting ICT strategy among
SMEs.
The adoptions of ICT strategy and s-CRM have been found to be influential in the
context of perceived customer value. Bayo-Moriones et al. (2013) stated that the adoption of
ICT has been acknowledged to be one of the keys factors in boosting a company’s
performance and growth, for instance, market share and profit. As s-CRM is constructed on
the basis of a customer-centric philosophy, it is highly definitive that the adoption of s-CRM
could effectively increase the customer satisfaction, loyalty and retention (Law et al., 2013).
The practice also helps to strengthen the relationship bond between firm and customers,
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which allows the existing customers to differentiate the firm from their competitors. Based
on a study conducted by IBM (IBM Global Business Services, 2012), organizations that
outperform others in the competition are often those that emphasize on strong relationships
with customers and have positively support the movement of employing social media at the
workplace. Nonetheless, instead of feeling connected to the brand via social media,
surprisingly, customers were keener on experiencing the tangible value that the
organization offers. In addition, the growth of social media and ICT has empowered the
customers to be considered as instrumental in the sales process (Jagongo and Kinyua, 2013).
With respect to this fact, empowered customers are usually more demanding, and prefer to
have interactions and conversations regarding the brands available. Hence, the ICT
adoption is paramount in determining the customers’ perceived value towards the
organization.
Nonetheless, a company’s CRM practices might experience failure because of the lacking
of technology resources, competencies and skills required to effectively engage in the CRM
processes (Vallabh et al., 2015). According to the resource-based perspective, the
performance of an organization is primarily centred on its specific capabilities and
resources. For example, the differences of ICT endowments are sophisticated to be replicated
by others and hence, enables the firm to have a sustained competitive advantage over its
competitors (Bayo-Moriones et al., 2013). Therefore, in this study, we postulate that,

H3. Adoption of ICT strategy positively affects perceived customer value.

H4. Adoption of ICT strategy positively affects performance benefits of s-CRM.

2.4 Perceived customer value

In general, customer value is described as the consumer's total assessment of a product’s
value or utility based on their perceptions towards the services provided by and received
from the company (Zeithaml, 1988, p. 14). In this respect, a statement by Woodruff (1997)
highlighted that a company which engages in creating and delivering superior customer
service will not only increase the perceived value of the customer but also contribute
significant value to the company. Therefore, it is irrefutable that perceived customer value is
important in CRM development.
On the other hand, Handley (2012, p. 24) stated that customers will exhibit the tendency
of categorising an organization as a caring organization if it effectively and swiftly responds
to the customers’ complaints or enquiries. Consequently, customers will be more than
willing to assist in providing positive and constructive feedback to the brand. Most
 importantly, this will result in strengthened customer loyalty and the attraction of new Customer
customers. Thus, the communication between a company and customer is a profitable relationship
resource as the company will able to gain competitive advantages by demonstrating rightful
care and affection to their customers. Notably, the market nowadays is progressing beyond
management
the service-centred viewpoint, where the organization does not exist as the central point in
the customer interaction or even CRM (Derham et al., 2011). In fact, the CRM in the current
market places emphasis on customer experience whereby customer and community are not
sidelined in the process of value creation. With respect to this emphasis, the elements of
technological advances and globalization of information will be impactful in shaping the
desired perception of customer value.
Moreover, to achieve effective development of e-CRM, social media functions as a
medium which allows the organization to engage with their customers intensively. In this
context, social media removes communication barriers and enables the organization to track
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and analyse their customer database online, which objectively leads to the designing of an
effective e-CRM practice. Among the many designs available, social media has been
continuously linked to CRM as it is evidently a comprehensive method to gain insight on the
thinking process of customers, their desires and next course of action (Jagongo and Kinyua,
2013). This is because social media empowers customers (Fullerton, 2011). Concisely,
perceived customer value is a significant predictor of performance benefits of s-CRM. This
study posits that:

H5. Perceived customer value of s-CRM positively affects performance benefits of s-

CRM.
H6. Managing customer information indirectly affects performance benefits of s-CRM
through perceived customer value of s-CRM.
H7. Adoption of ICT strategy indirectly affects performance benefits of s-CRM through
perceived customer value.
Based on the literature review, a theoretical research framework was developed to link the
relationships for all the factors of this study. Figure 1 illustrates the link.

3. Methodology
This study adopted a quantitative approach to construct and examine the relationship
between the implementation of s-CRM and its performance benefits with perceived customer
value as the mediating variable for said relationship. To enhance the validity of the
questionnaire, measurement of constructs such as managing customer info, adoption of ICT,
perceived customer value of s-CRM and performance benefits of s-CRM was based on
previous relevant research (Harrigan et al., 2011, 2012). Quantitative approach was deemed
appropriate as it enabled researchers to examine and confirm the hypotheses objectively
which then provided explanations of the proposed benefits in s-CRM implementation among

Managing
Customers Info

Perceived Performance
Customer Benefits of
Values s-CRM

Adoption of ICT Figure 1.

 IJOES SMEs. Using a convenience sampling method, the survey was distributed to the SMEs
owners/managers who participated in the Halfest (Halal Fiesta Malaysia) trade show which
was held in Kuala Lumpur in October 2015.
The data gathered from the questionnaires were coded using the computerized IBM
SPSS (Statistical Software Package for Social Science) software version 19. This was
followed by an analysis using SmartPLS 3.2.6. Partial Least Square (PLS) path modelling is
a valid tool for structural equation modelling. According to Hair et al. (2017) PLS-SEM can
be used for the following reasons. First, the research objective is confirmation of theory
based on total variance. Second, the structural and measurement model is complex (many
constructs, items, hypotheses). Third, the data was not normally distributed, and lastly the
measurement of philosophy is estimation with the composite factor model using total
variance. Thus, in this study the PLS path was used because of the complexity of the model
as well as to confirm the model based on total variance.
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4. Results and discussion

4.1 Company’s profiles
A total of 135 questionnaires were gathered from various industries who participated in the
trade show, such as food and beverage (37 per cent), food packaging (3.7 per cent), cosmetic
and personal care (8.1 per cent), household products and appliances (0.7 per cent), Islamic
fashion (28.1 per cent), services (3.7 per cent), pharmaceutical (3.7 per cent), tourism (3.7 per
cent), automotive (3.7 per cent), agriculture (1.5 per cent), oil and gas (2.2 per cent) and other
industries (3.7 per cent). Upon further examination, there was no missing data from the
responses. From these companies, a total of 104 companies (77 per cent) were identified to
have less than or equal to 15 operational years while the remaining 31 companies (23 per
cent) aged more than 15 years. On the other hand, 102 companies (75.6 per cent) were
identified to have less than 50 employees, 7 companies (5.2 per cent) with 50-100 employees,
9 companies (6.7 per cent) with 101-250 employees, 6 companies (4.4 per cent) with 251-500
employees, 5 companies (3.7 per cent) with 501-1,000 employees, 3 companies (2.2 per cent)
with 1,001-2,000 employees, 1 company (0.7 per cent) with 2,001-3,000 employees and last, 2
companies (1.5 per cent) with more than 3,000 employees. Besides, out of the 135 companies,
129 companies (95.6 per cent) were fully owned by locals while six companies (4.4 per cent)
comprised of local and foreign joint venture. With respect to the collection, it was discovered
that 37 respondents (27.4 per cent) held the managing director position, 14 respondents (10.4
per cent) were directors of company, 8 respondents (5.9 per cent) held the general manager
position, 28 respondents (20.7 per cent) were managers and 48 respondents (35.6 per cent)
occupied other positions. Based on the respondents’ profile, majority of the respondents (50.4
per cent) has been working for a duration of 1-5 years in the company, followed by 28
respondents (20.7 per cent) with less than a year of tenure in the company, 26 respondents
(19.3 per cent) with 6-10 years of working experience with the company, 9 respondents (6.7
per cent) with a total of 11-15 years in the company, whereas 3 respondents (2.2 per cent)
with a long-standing record of 16-20 years with the company and only a single respondent
(0.7 per cent) reported to have served the company exceeding the 20 year mark. In this study,
the profiles of companies are tabulated in Table I.

4.2 Measurement model

In this study, the measurement model with reflective indicators was modelled using PLS
using SmartPLS 3.2.6. software. Particularly, the measurement model was assessed by
inspecting the items’ reliability, internal consistency, construct reliability, average variance
extracted (AVE) analysis, and discriminant validity. Based on the rule of thumb, it is
 Company’s profile Frequency (%)
Customer
relationship
Company's industry management
Food and beverage 50 37.0
Food packaging 5 3.7
Cosmetic and personal care 11 8.1
Household products and appliances 1 0.7
Islamic fashion 38 28.1
Services 5 3.7
Pharmaceutical 5 3.7
Tourism 5 3.7
Automotive 5 3.7
Agriculture 2 1.5
Oil and gas 3 2.2
Other 5 3.7
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Age company
Less than or equal with 15 years 104 77.0
More than 15 years 31 23.0
Number employees
Less than 50 102 75.6
50-100 7 5.2
101-250 9 6.7
251-500 6 4.4
501-1,000 5 3.7
1,001-2,000 3 2.2
2,001-3,000 1 0.7
More than 3,000 2 1.5
Ownership status
Local fully owned 129 95.6
Local and Foreign joint venture 6 4.4
Position
Managing director 37 27.4
Director 14 10.4
General manager 8 5.9
Manager 28 20.7
Others 48 35.6
Years of working
Less than 1 years 28 20.7
1-5 years 68 50.4
6-10 years 26 19.3
11-15 years 9 6.7
16-20 years 3 2.2 Table I.
More than 20 years 1 0.7 Company’s profile

compulsory for a measurement model to possess satisfactory internal consistency and

reliability if the composite reliability of each construct exceeds the threshold value of 0.7.
The indicator reliability of the measurement model is measured by examining the item
loadings. A measurement model is said to have a satisfactory indicator reliability when the
loading of each item is at least 0.7 and is at least significant at the level of 0.05. Based on
the analysis, all the items in the measurement model exhibited loadings which exceeded the
value of 0.723, ranging from a lower bound of 0.723 to an upper bound of 0.897. In addition,
 IJOES it was recorded that all the items were significant at 0.01 level. Table II demonstrates the
loading value for each item. Based on the results, it can be concluded that all the items
applied in this study have demonstrated satisfactory indicator reliability.

4.3 Discriminant validity

In this study, discriminant validity was evaluated through the assessment on cross
loading and Fornell-Larcker criterion. Based on the rule of thumb, the amount of an
indicator’s outer loadings on a construct should be higher than the amount of its cross
loadings with other constructs (Hair et al., 2016). It was established that the square root
value of AVE of each construct should be higher than the highest value of its
correlation with any other construct, to obtain satisfactory discriminant validity.
Table III indicates that the values of all the off-diagonal elements are lower than the
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Constructs Items Loadings AVE CR

Managing customer info MCI 1 0.757 0.636 0.913

MCI 2 0.765
MCI 3 0.820
MCI 4 0.818
MCI 5 0.787
MCI 6 0.835
Adoption ICT ICT 1 0.723 0.639 0.914
ICT 2 0.813
ICT 3 0.760
ICT 4 0.881
ICT 5 0.761
ICT 6 0.848
Perceived customer value s-CRM PCV 1 0.787 0.723 0.886
PCV 2 0.897
PCV 3 0.863
Performance benefits of s-CRM s-CRM 1 0.876 0.733 0.956
s-CRM 2 0.882
s-CRM 3 0.878
s-CRM 4 0.832
s-CRM 5 0.791
s-CRM 6 0.814
Table II. s-CRM 7 0.882
Measurement model s-CRM 8 0.889

Adoption Managing customer Perceived customer value of s-CRM

Constructs ICT info s-CRM performance

Adoption ICT 0.799

Managing customer info 0.688 0.798
Perceived customer value of
s-CRM 0.567 0.594 0.850
Performance benefits 0.487 0.455 0.608 0.856
Table III.
Discriminant validity Note: Values in the diagonal (italic) are square root of the AVE while the off-diagonals are correlations
 value of square roots of the AVE. Therefore, based on the results, it was confirmed that Customer
Fornell and Larcker (1981) criterion was met. relationship
Additionally, the second assessment of discriminant validity is to examine the
indicators’ loadings with respect to all construct correlations. With connection to this
management
assessment, Table IV depicts the output of cross loading between constructs and
indicators which were produced by the SmartPLS algorithm function. Also, Table IV
demonstrates the comparison between all measurement items which were loaded
higher against their respective intended latent variable and other variables with the
loading of each block which produced a higher reading than any other block in the same
rows and columns. The loadings for all items in this study were significant as they
exceeded the recommended value of 0.5 suggested by Hair et al. (2014). In this context,
the loading clearly separates each latent variable as theorized in the conceptual model.
Hence, in this study, the cross loading output confirmed that the measurement model’s
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discriminant validity of the second assessments were fulfilled. Therefore, it can be

deduced that this study has established substantial discriminant validity.
As gathered from the results, the reliability and validity tests conducted on the
measurement model were satisfactory. In fact, all reliability and validity tests acquired
confirmation and the results indicated that the study’s measurement model is valid and fit to
be used in estimating the parameters in the structural model.

4.4 Structural model

The following subsections discuss the validity of the structural model of this study. First
and foremost, the structural model’s validity is evaluated by testing the coefficient of

Managing Adoption Perceived customer Performance

Constructs Items customer info of ICT value of s-CRM benefits of s-CRM

Managing customer MCI 1 0.757 0.546 0.452 0.374

info MCI 2 0.765 0.504 0.46 0.242
MCI 3 0.82 0.568 0.512 0.376
MCI 4 0.818 0.542 0.441 0.33
MCI 5 0.787 0.523 0.475 0.386
MCI 6 0.835 0.599 0.497 0.441
Adoption of ICT ICT 1 0.451 0.723 0.436 0.313
ICT 2 0.502 0.813 0.487 0.438
ICT 3 0.525 0.76 0.383 0.357
ICT 4 0.614 0.881 0.509 0.418
ICT 5 0.546 0.761 0.385 0.393
ICT 6 0.649 0.848 0.501 0.405
Perceived customer PCV 1 0.57 0.498 0.787 0.497
value of s-CRM PCV 2 0.465 0.489 0.897 0.542
PCV 3 0.474 0.454 0.863 0.508
Performance benefits of s-CRM 1 0.427 0.448 0.525 0.876
s-CRM s-CRM 2 0.414 0.457 0.539 0.882
s-CRM 3 0.394 0.454 0.521 0.878
s-CRM 4 0.328 0.353 0.44 0.832
s-CRM 5 0.347 0.381 0.497 0.791
s-CRM 6 0.326 0.349 0.478 0.814
s-CRM 7 0.419 0.408 0.545 0.882 Table IV.
s-CRM 8 0.437 0.462 0.596 0.889 Cross loadings
 IJOES determination (R2) and path coefficients. This study also assesses the mediation
relationships that are being proposed in the research model.

4.5 Coefficient of determination (R2)

Next, the b value specifies the amount of variance in the dependent variables, which is then
explained by the independent variables. In other words, a larger R2 value will result in an
enhanced predictive ability of the structural model. In this study, SmartPLS algorithm
function was used to generate the R2 values, while the SmartPLS bootstrapping function
was activated to obtain the t-statistics values. With respect to the results, the bootstrapping
generated 500 samples from 135 cases. The result of the structural model is presented in
Figure 2.
As illustrated in Table V, the relationship of customer info management and perceived
customer value ( b = 0.387, p < 0.05) and adoption of ICT and perceived customer value
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( b = 0.301, p < 0.05) were positively related to the perceived customer value with an R2 of
0.400 indicating that 40 per cent of the variance in perceived customer value can be
explained by the two constructs. On the other hand, the relationship between customer info
management and s-CRM performance ( b = 0.043, p > 0.05) was insignificant. Conversely,
the relationship of adoption of ICT and s-CRM performance ( b = 0.187, p < 0.05) was
positively related to the s-CRM performance. Concisely, all three variables exhibited an R2 of
0.399 which signified that 39.9 per cent of the variance in s-CRM performance can be
explained by these three constructs. Thus, H1, H3, H4 and H5 were supported, whereas H2
was not supported.
This was followed by the bootstrapping procedure which took into account the
calculation of standard errors from 500 resamples to evaluate the mediation effect. As
shown in Table V, the bootstrapping analysis highlighted that the indirect effect of b =
0.184 was significant with a t-values of 3.122 and the second indirect effect of 0.143 was
significant with a t-value of 2.554. In addition, as indicated by Preacher and Hayes (2008),
the indirect effect of 0.184, 95 per cent Boot CI: [LL = 0.068, UL = 0.229] and 0.143, 95 per

Figure 2.
Measurement model
 Path relationships Std Beta Std Error t-value Decision
Customer
relationship
H1: Managing customer info ! Perceived customer management
value of s-CRM 0.387 0.104 3.783** Supported
H2: Managing customer info ! s-CRM Performance 0.043 0.110 0.393 Not Supported
H3: Adoption ICT ! Perceived customer value of
s-CRM 0.301 0.107 2.763** Supported
H4: Adoption ICT ! s-CRM Performance 0.187 0.111 1.705* Supported
H5: Perceived customer value of s-CRM ! s-CRM
Performance 0.476 0.086 5.836** Supported
H6: Managing customer info ! Perceived customer
value of s-CRM ! s-CRM Performance 0.184 0.059 3.122** Supported
H7: Adoption ICT ! Perceived customer value of
s-CRM ! s-CRM Performance 0.143 0.056 2.554** Supported
Table V.
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Notea: If the t-value is greater than 1.645 (*p < 0.05); 2.33 (**p < 0.01) Path coefficient

cent Boot CI: [LL = 0.033, UL = 0.253] did not straddle a 0 in between, indicating that there is
mediation. Thus, it can be inferred that the mediation effect is statistically significant, thus
supporting H6 and H7.

4.6 Discussion
This study explores the role of s-CRM within SMEs sector. As stiffer competition is expected
in the business world, SMEs should be cognisant of the importance of customer
management (Özgener and Iraz, _ 2006). It is our contention that in this digital era, s-CRM is a
significant tool for the effective management of customers and establishment of sustainable
long-lasting relationships. Strong customer relationships drive sales, sustainability and
growth in today’s unpredictable economy situation in the marketplace.
Based on the data collected, this study exhibits congruence for all the hypotheses
developed except for hypothesis H2. H2 conjectured that managing customer information
will positively affect performance benefits of s-CRM. However, the result shows that
managing customer information will only indirectly affect performance benefits of s-CRM.
Managing customer information through SMNs allow the organization to get access to
customer database and restore the information for the company benefits (Harrigan et al.,
2012; Vallabh et al., 2015). SMNs allow business to build an ongoing and informative way to
engage with their customers. The digital technology has made efforts to track, analyze and
use information pertaining to the customers simpler, easier and faster. Thus, the study
concluded that customer’s information management is crucial to perceived customer’s value
but it is not reimbursed in the form of s-CRM benefits, i.e. profitability and customer-base of
organization. In this context, organizations can use customer’s information to upgrade the
quality standards of products/services, which are produced or delivered in the end.
Furthermore, this research recommends exploring the role of customer’s information
management specifically in the customer value segment from a marketing perspective. The
present study has provided empirical evidence that pertaining to the significant influence of
CRM on corporate sustainable performance. In addition, customer’s relationship
management is able to produce significant effect over the perceptual performance of
organizations but its objective performance remains constant. Essentially, the element of
initiating and developing relationship with the right and prospective customers would
eventually be reciprocated with rewards in terms of objective form. As time passes,
 IJOES customers develop better perception towards the services provided by the organization
while the company strives to optimize their industry to fulfil higher standards and maintain
positive association with clients.
On the contrary, if the company decides to neglect its existing relationship with
customers, the impact over economic dimension would be detrimental in the long run.
Nonetheless, this implication is not applicable to relationships which are short-term
based because customers would assume that such action is imperative in the pursuit of a
higher profitability based on products and services alone. Moreover, organizational CRM
readiness is measured by respondent-organization’s level of CRM maturity (Harrigan
et al., 2012; Payne, 2006). This study also confirms the presence of moderate level of CRM
maturity among Malaysian SMEs regarding social customer relationships. According to
the present CRM maturity level, the data clarifies that SMEs are collecting customer’s
information on an extensive basis but moderately integrating them into their electronic
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database. Thus, this clearly shows that SMEs have yet to fully exploit the availability of
s-CRM.
Organizations also realized that the stand-alone CRM is incapable of establishing
competitive advantage in the business sector. For instance, organizations perceive the
integration of the whole operating process as a complicated issue in obtaining a
competitive edge over business rivals. In this respect, this issue can be overcome within
the organization with the assistance of the Enterprise resource planning (ERP) package.
Specifically, the ERP is designed to facilitate the business operating system towards
running an effective e-business. Most importantly, the ERP significantly complements
organizations by overseeing cost reduction in terms of CRM and increasing return over
investment. ERP possesses the ability to provide leverage to organizations as it takes into
consideration relevant customer’s serving processes in marketing, sales and product
services, which are crucial in e-businesses. The combination of CRM with ERP package
which increases the cross-functional processing of organizations and efficient and
effective management and integration of knowledge are influential in gaining
competitive edge.
At present, social media is no longer a new phenomenon. Clearly, the presence of social
media has transformed the overall business scenario. For instance, now, organizations have
access to all the resources which were previously unavailable or inconvenient to be obtained.
On top of that, social media is leading organizations to improve their creditworthiness,
foster strategic partnerships and strengthen supplier-customer relationships. Inevitably,
e-CRM plays a pivotal role in competing against larger market players. Quality customer
communication through s-CRM is dependent on quality information management processes
and connection with the customers. SME managers are advised to use simple databases to
record customer data obtained through transactions or ongoing dialogue through social
media. With respect to this fact, SMEs are recommended to source for possible utilization of
websites, email and database technology and social media applications such as Facebook,
Instagram, Twitter and LinkedIn to improve CRM level. In addition, SMEs should refrain
from employing existing or developed e-CRM software since these are only beneficial for
large organizations and provide irrelevant information.

4.7 Small- and medium-sized enterprises well-being and e-business sustainability

ICT-enabled entrepreneurs in small to medium-sized enterprises (SMEs) have a
particularly relevant role in ensuring economic growth in a sustainable and inclusive
manner. ICT development has a profound impact on the economic growth, human well-
being, and the achievement of a sustainable future in the business world. Information and
 communications technologies have empowered the way business practices among SMEs Customer
throughout the world. The relationship between ICT developed and SMEs innovation has relationship
become more and more open and interconnected, new applications within their management
boundaries arise faster and become more powerful than ever. Computers enable the task
management of doing business to become easy and enable the reduction of production
inventory cost, labour cost and other related costs. The internet is a modularization of
robotics, crowdsourced and open data, self-organizing platforms and several other
developments.
Organizations possess the authority to decide on the most suitable approach to interact
and initiate a relationship with customers. As a matter of fact, the maintenance of an
existing relationship with a customer is always inexpensive and uncomplicated than
gaining a new one, thus the combination of traditional CRM channel and the modern s-CRM
is crucial for a business to establish a strong relationship with the customers. Many
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businesses are now turning to SMNs as a worthwhile communication tool and, if used
adequately, they can significantly improve their online presence, in the form of effective
promotion. On another note, it is notable that SMEs are often handicapped with various
constraints and resources, leading to the inability to conduct comprehensive customers’
research and analysis. Hence, in this context, a typical SME could function as leverage for s-
CRM by monitoring, tracking, collecting and analysing customers’ information through
social media. Consequently, SMEs could gain valuable insight regarding the needs, wants
and expectations of the customers, which can be subsequently translated into personalized
service to their customers.
Apart from that, s-CRM is important to SMEs as it can serve as a platform to improve
interactions with the key stakeholders and convey meaningful insights to instil customer-
centric practices. Moreover, s-CRM practices could contribute to the aspect of understanding
the knowledge regarding customer’s behaviour and attitudes. Therefore, companies
especially SMEs are encouraged to engage in s-CRM since it could enhance the likelihood of
success and ensure business survival. Eventually, a successful s-CRM system is expected to
boost customer loyalty, retain profitable customers and generate more revenue for the
SMEs, hence increasing their overall performance and existence in the future market.

4.8 Conclusion
In the contemporary business setting, business entities around the world are clamouring to
adopt the recent trend of using SMNs and exploit the opportunities offered by this
technology. In Malaysia, the digital economy is perceived as a key component in driving the
nation’s future economic growth. The recent statistics suggest a discernible increase in the
adoption of ICT among SMEs. This study has contributed to the knowledge of just how the
SMEs in Malaysia are managing to perform simplistic forms of s-CRM. The empowerment
of SMNs and the Internet is an important tool in building profitable customer database and
relationship among small business entrepreneurs. Last but not least, this study also has its
own limitation. The, findings offered by this study must be interpreted with caution because
of the geographical and demographic limitations. For the purpose of future research,
researchers could explore on the possibilities of other influential factors, which will
ultimately facilitate in the development of a more refined s-CRM practice. Among the
suitable recommendations which could be taken into consideration are identifying
the challenges faced by SMEs in implementing s-CRM, strategies in value co-creation and
the ways to enhance the s-CRM system design or processes.
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About the authors

Dr Siti Hasnah Hassan, PhD, is a Senior Lecturer in the Marketing Section, School of Management,
Universiti Sains Malaysia. She joined the university after completing her PhD at the Australian
National University in January 2009. Her research interest areas include consumer behaviour, Islamic
marketing and branding, food marketing, medical and spiritual tourism. She has published in several
international journals which include the British Food Journal, Journal of Religious and Health, Journal
of Islamic Marketing and Journal of Agribusiness Marketing. She also published few book chapters,
and her work has been presented at the Academy of Marketing Conference, Global Islamic Marketing
and other competitive local and international conferences. She is also actively involved with
 consultation/contract research programs with few companies such as Motorola, Silterra and others. Customer
She is also supervising PhD and MA students and conducting several researches under the
university and outside grants. Siti Hasnah Hassan is the corresponding author and can be contacted relationship
at: siti.hassan@usm.my management
Noor Mohamed Mohamed Haniba is a Chemist by qualification and Waste Management Expert by
training. He holds a Bachelor Degree in Chemistry and Masters in Business Administration, with
specialization in Corporate Governance. He is also a qualified company secretary. Responsible for
development of new projects and new ventures both locally and internationally. He has then
accumulated over 15 years of experience as an environmental consultant from various organization
among others Center for Environmental Technologies and Natural Resources Management
(CETNaRM), UPM, many ministries and other leading organizations, namely, Economic Planning
Unit, Department of Prime Minster (EPU), DANIDA (Embassy of Denmark), Ministry of Housing and
Local Government (MHLG), UNDP and many more. He has also written and presented (locally and
internationally) numerous papers (technical and non-technical) and received training locally and
internationally especially in the field of environment. He is also Director in Centre for Environmental
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Technology and Development Malaysia (CETDEM), a leading Malaysian NGO.

Noor Hazlina Ahmad, PhD, is a Professor at the School of Management USM. She joined the
university after completing her PhD at the University of Adelaide, Australia. She teaches
entrepreneurship and organizational behaviour-related subjects. She also supervises PhD and MA
students in the field of entrepreneurship and SMEs. Currently, she serves as the President of the
Asian Academy of Management and sits on the editorial board of the Asian Academy of
Management Journal. She has served as a visiting professor and external assessor at the
Management and Science University. She is also actively involved with consultation programs and
served as a facilitator for community, entrepreneurship and leadership projects. Hazlina has
published her research works in high impact journals such as Journal of Business Ethics,
Management Decision, Service Business, Social Indicator Research and Journal of Education
Technology and Society, as well as other indexed international journals including the Journal of Asia
Pacific Business, International Journal of Entrepreneurial Behaviour and Research, International
Journal of Entrepreneurship and Small Business, International Journal of Entrepreneurial Venturing
as well the Frontiers of Entrepreneurship Research. Her research interests are in the areas of
entrepreneurship, SMEs and organizational behaviour.

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