Social Customer Relationship Management, Customer Perceptions and Relationship Quality in Star-Rated Hotels in Nairobi, Kenya

Abstract

The hotel industry in Kenya faces challenges in maintaining quality customer relationships with increased complaints trending on social media platforms. Negative information through social media adversely affects the relationship quality of customers and results in business loss and survival. Therefore, Social Customer Relationship Management (Social CRM) as an emerging paradigm can enable businesses to better understand, engage, and build a quality relationship with customers while managing customer perceptions. Nevertheless, most of the research on Social CRM, a relatively new phenomenon, in the hospitality industry is limited and is mostly focused in Asia and Europe with little in Africa and none in Kenya, particularly in the hospitality industry. Literature in Africa has focused more on the banking industry and SMEs in West and South Africa with little research focusing on the marketing dimension of special CRM. The study’s main purpose was to establish the effects of Social CRM dimensions and customer perceptions on relationship quality in selected hotels in Nairobi, Kenya. The study specifically determined the effect of data and information, processes and Social CRM strategies dimensions on customer perceptions and relationship quality. The mediating effect of customer perceptions on the relationship between social customer relationship management dimensions and relationship quality was also determined. Malthouse Social CRM house model, Relationship marketing, and Expectancy Disconfirmation Theories anchored the study. The study utilized sequential explanatory research design with a target population of an average of 16,464 customers per month from online hotel bookings and 29 target population for GRM, from three five-star rated hotels in Nairobi purposively selected. A sample size of 400 was selected using simple random sampling for customers and 9 GRM purposively selected. Data was collected from customers using a structured questionnaire. Quantitative data were analyzed using the Structural Equation Model (SEM). Findings showed that the final SEM model explained 58% of relationship quality, with R2 (0.58, p=0.000<0.05) and was fit (CFI=0.988, GFI=.943, NFI= 0.966, RFI=0.958, PNFI= 0.783, RMSEA=0.038, χ2(df) 185.506 (124), p=.000<0.05,). The results for the direct effect indicated a positive and significant effect of data information dimension (β 0.301, p=0.000<0.05) and processes dimension (β 0.142, p=0.000<0.05) on relationship quality in hotels. However, the Social CRM strategies dimension (β=0.017, p=.707<0.01) had an insignificant effect on relationship quality. Further, customer perceptions partly mediated the relationship process dimensions (indirect effect β=.180 p=0.000<0.05), data information (indirect effect β=.162 p=0.000<0.05), and hotel relationship quality. The study concludes that process and data information dimensions of social customer relationship management significantly affect relationship quality through customer perceptions. Thus, the study recommends that hotels should focus more on the data and information dimensions in addition to the hotel’s process dimensions as they seem to majorly affect relationship quality. Although Social CRM strategies were found not to affect relationship quality, realigning the strategies from sales and marketing to link with processes and data could boost relationship quality. From qualitative results, it was noted that customers mainly use WhatsApp, Facebook, X (formerly known as Twitter) and Instagram to connect with friends, family, groups with similar interests and local businesses respectively. Hotels can maximize the potential of the social media channels to obtain value. In addition, social media such as WhatsApp was found to be most used for internal communication by employees and management to address customer request through ‘customer 360’. The study recommends that management should focus on training employees on social media and organizational processes while constantly monitoring and addressing issues raised in social networks to build robust customer relationships. The research adds to new knowledge that customer perception has a significant and positive mediating role in relationship quality. It also improves on malthouse social CRM house process dimension by consolidating three indicators (e-culture, employee skills, management support) to organization e-structures and support. For relationship quality trust-based satisfaction was achieved (from customer satisfaction, and trust).