Electronic customer relationship management strategies, relationship quality, strategic agility and performance of small and medium enterprises in Nairobi County, Kenya

Abstract

In Kenya, SMEs play a crucial role in the counties, yet they encounter numerous challenges, resulting in over 90% of them failing by their third year and only a small number of SMEs in Kenya have expanded into large formal organizations, a negative trend commonly observed among SMEs. Recently, scholars have debated on the issue of e-CRM in developed and developing countries, few have focused on the effect of e-CRM components coupled with other factors on SME performance. As a result, there is a gap in how e-CRM influences SME performance. The purpose of the study was to determine the effect of electronic customer relationship management strategies, strategic agility and relationship quality on performance of small and medium enterprises in Nairobi County. The study’s specific objectives was to determine the effect of electronic customer relationship management strategies, relationship quality on SME performance, effect of electronic customer relationship management strategies on relationship quality, determine mediating effect of relationship quality, moderating effect of strategic agility and the moderating effect of strategic agility on the relationship between electronic customer relationship management strategies on SME performance via relationship quality. The study was anchored on Resource Based View theory, Relationship Marketing theory and Diffusion of innovations theory. The study was anchored on positivist paradigm and employed explanatory research design. The target population of this study comprised of 2,821 small firms operating within Nairobi central business district. A sample of 416 small firms was selected using normal approximation to the hyper-geometric distribution formulae. Senior managers were the respondents. The study used primary data collected from the respondents’ using questionnaires. Quantitative method of analysis was adopted. Cronbach alpha was used to measures the reliability of the questionnaire values above 0.7 were accepted. From the direct effects, electronic customer management strategies (β=0.533, p<0.05), relationship quality (β=0.333, p<0.05) and Strategic agility (β=0.138, p<0.05) all have a significant effect of SME performance. Strategic agility moderated the relationship between electronic customer management strategies and relationship quality (β=0.179, p<0.05, ∆R- square of 1.17%) but not on electronic customer management strategies and SME performance (β=-0.019, p>0.05, ∆R-square of 0.01%). There was a positive significant partial mediation of relationship quality (β=0.182, bootstraps lower limit =0.117, bootstrap upper limit = 0.257). Furthermore, the moderated mediation was positive and significant (β=0.046, bootstraps lower limit =0.015, bootstrap upper limit = 0.089). In conclusion, electronic customer management strategies, relationship quality and strategic agility play a crucial role in enhancing SME performance by fostering customer loyalty, positive word-of-mouth and customer advocacy. SMEs can achieve sustainable growth, increased sales, and overall business success. The study recommends that firms need to allocate funds for research and development grants specifically focused on enhancing eCRM technologies and strategies. SMEs may emphasize the importance of customer relationship quality. Train employees in customer service and communication skills. Encourage personalized interactions, active listening, and prompt problem resolution to build strong, long-lasting customer relationships.