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Journal of Business-to-Business Marketing
ISSN: 1051-712X (Print) 1547-0628 (Online) Journal homepage: http://www.tandfonline.com/loi/wbbm20
The Role of Buyer Trust in Outsourced CRM:
Its Influence on Organizational Learning and
Performance
Beverly K. Brockman, Jeong Eun Park & Robert M. Morgan
To cite this article: Beverly K. Brockman, Jeong Eun Park & Robert M. Morgan (2017) The Role
of Buyer Trust in Outsourced CRM: Its Influence on Organizational Learning and Performance,
Journal of Business-to-Business Marketing, 24:3, 201-219, DOI: 10.1080/1051712X.2017.1345260
To link to this article: http://dx.doi.org/10.1080/1051712X.2017.1345260
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3. Customer relationship management (hereafter
CRM) is now recognized as a fundamental source
of customer knowledge for firms (Mithas, Krishnan,
and Fornell 2005; Reimann, Schilke, and Thomas
2010). As recognition of its relevance increases,
more companies are outsourcing at least part of
their CRM activities (Kalaignanam and
Varadarajan 2012), with mixed results in perfor-
mance (Baker 2004; Thelen, Yoo, and Magnini
2011). When used effectively, CRM can provide
enhanced knowledge that improves firm perfor-
mance (Boulding et al. 2005); yet, simply implement-
ing CRM processes and technologies in a firm does
not guarantee success (e.g., Reimann, Schilke, and
Thomas 2010; Rigby, Reichheld, and Schefter 2002;
Whiting 2001). Intraorganizational collaboration
involving the sharing and interpretation of customer
data is critical for improved performance with CRM
(Rodriguez and Honeycutt 2011; Zahay and Peltier
2008). Yet, individuals within the firm will not use
customer information if they do not trust its source
(Moorman, Zaltman, and Deshpande, 1993). Lack of
trust in an information source can exist in any orga-
nization but it may be more likely with outsourced
CRM, due to issues that can arise in buyer-seller
relationships.
The purpose of this study is to examine the
influence of buyer trust in its outsourced CRM
supplier on its cross-functional learning processes
and firm performance. Buyer trust in the CRM
supplier is posited as a positive influence on the
buyer firm’s organizational learning processes of
information sharing, information interpretation,
and information access, which in turn positively
influence the buyer firm’s learning outcomes of
customer satisfaction/retention and market perfor-
mance. This article addresses the significance of
outsourcing the CRM function as an additional
influence on CRM outcomes. Effective sharing of
information and cross-functional integration of
customer data into unified strategies are as critical
for CRM success as the CRM technology itself
(Peltier, Zahay, and Lehmann 2013; Zahay and
Peltier 2008). Considering the importance of
these organizational learning processes to CRM
success, we add the element of CRM outsourcing
to the mix of variables that influence CRM out-
comes, and examine the role of buyer trust in its
outsourced CRM supplier.
Literature Review
CRM
CRM processes and technologies are associated
with identifying customers, creating customer
knowledge, and building customer relationships
that enable a firm to best create, satisfy, and
fulfill customer needs through customer intimacy
and partnerships (Srivastava, Shervani, and
Fahey 1999). Enhanced customer information,
when it is shared internally, can lead to
improved performance, such as increased market
share and customer loyalty (Lin, Su, and Chien
2006). As determined by Payne and Frow (2005),
CRM has multiple definitions falling on a con-
tinuum, from a narrow, tactical implementation
of a specific technology project to a holistic
approach used to manage customer relationships
which ultimately create shareholder value. The
latter view of CRM considers it a “strategic
approach that . . . unites the potential of relation-
ship marketing strategies and IT . . . This requires
a cross-functional integration of processes, peo-
ple, operations, and marketing capabilities”
(Payne and Frow 2005, 168). This holistic view
has been labeled the “best practice” of CRM
(Boulding et al. 2005).
CRM as a holistic approach requires a deeply
ingrained acceptance of it in the firm’s culture and
climate. As recognized by Bohling et al. (2006),
active involvement and support from top manage-
ment is needed for full infusion and acceptance of
CRM, just like any other essential element of an
organization. With such an approach CRM can
rise above existence as an IT tool to that of a
strategic enabler. As explained by Campbell
(2003), successful CRM implementation requires
a strategic approach, with coordinated efforts and
organizational processes that both generate, as well
as integrate, customer knowledge. More recent
research (Garrido-Moreno and Padilla-Meléndez
2011; Peltier, Zahay, and Lehmann 2013) supports
the view of integrated organizational learning pro-
cesses as critical for CRM success. Thus, successful
CRM requires a complex system of interactive
learning processes that are integrated among func-
tional areas, supply channel partners, and employ-
ees. It is against this background that we consider
the use of outsourcing CRM activities.
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4. Outsourcing CRM
Outsourcing defines the process of transferring the
responsibility for a specific business function from
an employee group to a nonemployee group
(Scheier 1997). It offers several advantages, such
as enabling existing staff to concentrate on core
activities, lowering overhead costs, reducing
investment in high technology, and—perhaps
most important—providing flexibility in changing
market conditions (Quinn 1999). In addition, out-
sourcing offers full utilization of external suppliers’
investments, innovations, and specialized profes-
sional capabilities, which for any one organization
would be prohibitively expensive to replicate
(Quinn and Hilmer 1994). Disadvantages also
exist in outsourcing, however, such as the loss of
critical skills by becoming dependent on outside
suppliers for services and transaction costs asso-
ciated with managing vendor relationships (Currie
and Willcocks 1997; Domberger 1998).
Varadarajan (2009) evaluated outsourcing,
offering an expanded view of outsourcers, ranging
from offshore subsidiaries to suppliers, customers,
competitors, and strategic alliance partners. In
addition to expanding the options of outsourcing
partners, Varadarajan provides a broader evalua-
tion scheme for the initial decision of whether or
not to outsource, moving beyond just cost to con-
sider both cost and quality. As an example, he
considers the outsourcing of low volume customer
CRM activities to be driven by cost considerations,
with the outsourcing of more knowledge-intensive
activities (i.e., research and development, new pro-
duct development) as decisions driven by quality
considerations. Using Varadarajan’s (2009) cost
versus quality classifications of outsourcing, it is
argued in this article that CRM as a holistic
approach involves knowledge intense activities,
such as information sharing and interpretation.
Failure to implement these elements of CRM
could lead to reduced organizational learning.
For example, Kalaignanam and Varadarajan
(2012) list various mechanisms for digitizing infor-
mation and achieving cost reductions in CRM
outsourcing, such as text scanning, text transcrip-
tion, information storage and retrieval, etc.
Although most of these are relatively simple, one
activity listed—creating actionable knowledge
based on information analysis—is a knowledge
intense activity, requiring information interpreta-
tion and a deep understanding of the firm’s stra-
tegies and core competencies. Success with such an
activity requires the firm to openly share and dis-
cuss customer information among functional
areas. Meaningful discussion and interpretation
requires that the data provided by the outsourced
CRM supplier be accepted within the organization
as correct and significant.
Organizations considering the outsourcing of
CRM components must recognize the CRM sys-
tem as part of an “adaptive learning” organization
(Stein and Smith 2009; Sun, Li, and Zhou 2006).
The active learning that occurs in this type of firm
goes beyond a CRM system that is a repository of
transaction data to a deeper understanding of cus-
tomer needs in their latent form. Full integration
of a company’s knowledge management and CRM
systems is especially challenging when one system,
or part of it, is outsourced. A possible result of
such challenges is limitations in the level or quality
of organizational learning processes needed to
fully utilize customer data.
Trust
The relational nature that exists in economic
exchange has been established for decades
(Arrow 1974; Macneil 1980). Empirically, trust
was established as a significant factor in interorga-
nizational economic exchange with research by
Zaheer and Venkatraman (1995) who demon-
strated that a model including both trust and tra-
ditional transaction cost economics variables
explains relational governance better than a
model with only the traditional determinants of
governance. Morgan and Hunt (1994) provided
empirical evidence of trust as a key mediator in
interorganizational relationships, providing evi-
dence of the critical role trust plays. More recently,
trust has been recognized as a dominant factor in
interorganizational relationships in Palmatier,
Dant, and Grewal’s (2007) hybrid resource based
view model of interorganizational relationship
performance that combines the dependence, rela-
tional norms, and transaction cost economics
perspectives.
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5. Morgan and Hunt (1994, 23) defined trust as
“existing when one party has confidence in an
exchange partner’s reliability and integrity.”
Doney and Cannon (1997) extended work on
trust in interorganizational relationships by differ-
entiating between interpersonal trust (labeled as
the buying firm’s trust of the supplier firm’s sales-
person) and interorganizational trust (labeled as
the buying firm’s trust of the supplier firm).
Doney and Cannon’s (1997, 36) definition of
trust is similar to that of Morgan and Hunt
(1994) as the “perceived credibility and benevo-
lence of a target of trust.” Zaheer, McEvily, and
Perrone (1998) extended Doney and Cannon’s
(1997) split of trust into interorganizational and
interpersonal by demonstrating that interorganiza-
tional trust is the overriding driver of exchange
performance, negotiation, and conflict, whereas
interpersonal trust exerts little direct influence on
these outcomes. These authors do point out, how-
ever, that interpersonal trust may have an institu-
tionalizing effect on interorganizational trust.
Payan (2006) provided further evidence of inter-
firm trust over interpersonal trust as the key driver
of interfirm outcomes, whereas interpersonal trust
plays a supportive role in interfirm trust. Finally,
Fang et al. (2008) provide evidence that interorga-
nizational trust positively moderates the influence
of intraentity (i.e., interpersonal) trust on coordi-
nation and responsiveness in the interorganiza-
tional relationship. Thus, interorganizational trust
has been established as the most influential form
of trust in interorganizational relationships.
Considering information usage specifically, user
trust in the researcher has been found to signifi-
cantly influence information utilization, with
interorganizational relationships exhibiting a
stronger effect from trust on research utilization
than intraorganizational relationships (Moorman,
Zaltman, and Deshpande 1992). Trust between
business partners relieves tension in sharing infor-
mation as it is believed to be used for mutual
benefit rather than for individual gain, which
reduces the need for expensive contractual over-
sight (Faems et al. 2008; Szulanski, Cappetta, and
Jensen 2004). Finally, trust has been found to
promote learning capabilities in customer–sup-
plier relationships by facilitating information
exchange and developing common learning arenas
(Selnes and Sallis 2003). Thus, trust is well estab-
lished as an important mechanism in business-to-
business (B-toB) relationships, particularly inter-
organizational trust. In this article, we consider the
influence of interorganizational trust, specifically,
buyer trust in its outsourced CRM supplier, on the
information utilization processes needed for suc-
cessful organizational learning through CRM. The
focus is on the buyer firm’s trust in its supplier,
and how that trust influences the buyer firm’s
utilization of CRM data and the subsequent per-
formance outcomes. The role of interorganiza-
tional trust in outsourced CRM has not been
specifically considered in the B-to-B or the CRM
literature.
Hypothesis Development
The hypotheses provided in the discussion below
position buyer trust in its outsourced CRM sup-
plier as a critical factor in its organizational learn-
ing processes utilizing the outsourced CRM data—
information sharing, information interpretation,
and information access—and also recognize the
ultimate impact these processes have on the
buyer firm’s customer satisfaction/retention and
market performance. The relationships discussed
below are displayed in Figure 1.
The Influence of Buyer Trust on Outsourced CRM
Information Sharing, Information Interpretation,
and Information Access
The role of interorganizational trust in buyer–sup-
plier relationships has been established as a critical
factor in successful cooperation and interaction
within the partnership. Zaheer, McEvily, and
Perrone (1998) demonstrated the direct influence
of interorganizational trust on exchange perfor-
mance, negotiation, and conflict. Regarding infor-
mation processing in particular, these authors
speculate that cooperation between partners in
the exploration of new information, among other
factors, may account for the link between interor-
ganizational trust and exchange performance.
Payan (2006) found positive influence from inter-
firm trust on supplier–distributor coordination,
whereas Palmatier, Dant, and Grewal (2007)
found that trust gives partners confidence in
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6. their counterparts’ future actions and aids com-
mitment, cooperation, and conflict management.
Fang et al. (2008) demonstrated the moderating
influence of interorganizational trust on the rela-
tionship between intra-entity trust and resource
utilization between partners. And most recently,
Graca, Barry, and Doney (2015) demonstrated the
positive influence of interorganizational trust on
the interfirm exchange climate involving commu-
nication, conflict resolution, and cooperation.
Thus, there is evidence supporting a positive influ-
ence from buyer trust in its outsourced CRM
supplier to the buyer firm’s sharing, interpretation,
and access of outsourced CRM data, providing
support for Hypotheses 1, 2, and 3 given below.
Further support for each specific hypothesis is
provided in the following sections.
Information Sharing
In the B-to-B literature, information sharing is
typically referred to as information exchange and
is defined as a relational norm that establishes “a
bilateral expectation that parties will proactively
provide information useful to the partner” (Heide
and John 1992: 35) and “expectations of open
sharing of information that may be useful to
both parties” (Wang and Bunn 2004: 93). Thus,
it concerns the open sharing of information
between channel partners. Information exchange
is considered one of several important cooperative
norms that are necessary for effective exchange in
ongoing B-to-B relationships (Antia and Frazier
2001; Heide and John 1992; Wang and Bunn
2004). In this article, we refer to the definition of
information sharing used in the organizational
learning literature, which typically labels informa-
tion sharing as information dissemination defined
as a “process by which information is shared and
diffused horizontally and vertically throughout the
organization” (Sinkula, Baker, and Noordewier
1997, 308). This definition varies from the type
of information sharing considered most often in
the B-to-B literature; however, it is relevant here
because we evaluate the influence of buyer firm
trust in the outsourced CRM supplier on the speed
and extent of customer information that is shared
(i.e., disseminated) throughout the buyer firm. In
the organizational learning literature, information
dissemination is considered an overt, behavioral
microprocess that is part of the broader marketing
information processing behavior that must occur
for an organization to learn (Sinkula, Baker, and
Noordewier 1997). Information sharing typically
follows the information acquisition process. In
this study, information acquisition is considered
to occur within the outsourced CRM supplier, but
it is the responsibility of the buyer firm to share
this CRM information both horizontally and ver-
tically within its firm. As stated by Daft and Huber
(1987) and reiterated by Sinkula, Baker, and
Noordewier (1997), acquired information as a
source of detecting and correcting errors is useless
to decision makers without efficient dissemination.
Information sharing, defined as the open shar-
ing of confidential information between channel
partners, has been considered as an antecedent to
the buying firm’s trust in the supplier firm (Doney
and Cannon 1997; Graf, Roberts, and Guito 2011).
Trust between the buyer and supplier has also
been considered as a positive influence on the
information exchange climate between channel
Figure 1. A model of buyer trust in outsourced CRM.
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7. partners (Graca, Barry, and Doney 2015). In this
study, however, we are concerned with the influ-
ence trust in the outsourced CRM supplier will
have on the speed and extent of information shar-
ing that occurs throughout the buyer firm. In
general, the greater the amount of information
acquired, the greater the amount of information
disseminated, but there are factors that moderate
the strength of this relationship, such as the per-
ceived quality of information received from a sen-
der, the level of trust between the sender and the
receiver, the physical distance between informa-
tion sharing parties, and the manner in which
the information is communicated (Maltz and
Kohli 1996). In the case of outsourced CRM, the
outsourced supplier will act as a type of informa-
tion gatekeeper, acquiring information, processing
it, and providing it to the outsourcing parent. This
approach may be potentially harmful to the overall
knowledge level of the buyer firm because the
outsourced supplier will lack the buyer firm’s
existing knowledge base regarding its market and
customers. Thus, the outsourced supplier will be
limited in its absorptive capacity and may not
recognize the importance of certain information
(Cohen and Levinthal 1990).
Trust between channel partners positively influ-
ences the information exchange climate in the
partnership, including communication, conflict
resolution, and cooperation (Graca, Barry, and
Doney 2015). In addition, the perceived quality
of the information passed from the outsourced
CRM supplier to the buyer firm affects the degree
to which the receiver acts on it (Menon and
Varadarajan 1992). This perception is relative to
the receiver’s previous experience and contextual
factors which result in the level of trust between
the two parties. Also, the greater the receiver’s
trust in the information sender, the greater the
information dissemination frequency (Maltz and
Kohli 1996). In short, employees for the buyer
firm are more likely to spread customer informa-
tion received from the outsourced supplier if they
trust it.
H1: Trust in the outsourced CRM supplier posi-
tively influences information sharing within
the buyer firm.
Information Interpretation
Pulling from the organizational learning literature,
information interpretation is the “process by
which information is given one or more com-
monly understood meanings” (Sinkula, Baker,
and Noordewier 1997, 308). The commonly
understood connotations that emerge from infor-
mation interpretation result from the application
of the shared mental models that are pervasive
throughout the organization (Day and Nedungadi
1994). The effectiveness of marketing information
processing is dependent upon these mental models
providing adequate representations of reality and
accurate assumptions of the market (Sinkula,
Baker, and Noordewier 1997). Thus, in this
study, we are concerned with the perceived quality
of information that emerges from the interpreta-
tion process. Achieving consensus among organi-
zation members on the meaning and implications
of new information can require a period of dis-
agreement and conflict resolution (Dess 1987).
Structured processes that provide a positive envir-
onment for debate may be needed. Open discus-
sions regarding different points of view help
organization members to evaluate information
from unique perspectives, and thus, to more thor-
oughly evaluate its validity. Forums for informa-
tion exchange and discussion are needed, with
communication occurring through liaison posi-
tions, integrator roles, face-to-face contact, task
forces, and so on (Slater and Narver 1995).
Information interpretation follows acquisition
and dissemination as a microprocess in the proces-
sing of market information (Sinkula, Baker, and
Noordewier 1997). The greater the amount of infor-
mation that is acquired and disseminated, the
greater the level of interpretation that can occur,
but other factors can affect the strength of these
relationships. For example, the existence of a domi-
nant logic and pervasive mental models can limit
the amount of consideration new information is
given. Similar to information sharing, the perceived
quality of the information received, stemming from
trust in its source, will influence the amount of
attention it receives (Maltz and Kohli 1996).
Limited interaction among players in the marketing
information process can reduce both formal and
informal discussion of new information. Similarly,
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8. organizations with restricted interface among those
who collect, spread, and interpret information are
less likely to engage in open communication pro-
cesses where disagreements can be heard, conflicts
discussed, and a shared interpretation gained. These
factors are more likely to exist within organizations
that outsource their CRM data collection. A higher
level of trust in the CRM data supplier, however,
may mitigate some of these limitations. If the buyer
firm has a higher level of trust in the outsourced
CRM supplier, it is more likely to engage in the open
discussions and active information exchange needed
to gain an adequate interpretation of the CRM data.
The evidence presented earlier regarding interorga-
nizational trust and its positive influence on part-
nership interaction and cooperation (e.g., Graca,
Barry, and Doney 2015; Palmatier, Dant, and
Grewal 2007) provides further support for the fol-
lowing hypothesis.
H2: Trust in the outsourced CRM supplier posi-
tively influences information interpretation
within the buyer firm.
Information Access
Information access refers to the accessibility and
availability of customer information within the
organization. Even if customer information
received from the outsourced CRM supplier is
shared and interpreted within the buyer firm, its
usefulness is dependent upon the extent to which
this information is accessible and available to all
firm employees. Information overload with CRM
data is quite possible as employees are not capable
of storing vast amounts of customer information
in their minds. Having CRM data available and
easily accessible through databases and shared
mental models means this information can actu-
ally be used to improve firm performance.
Information access can be related to organizational
memory which is defined, at its most rudimentary
level, as “stored information from an organiza-
tion’s history that can be brought to bear on pre-
sent decisions” (Walsh and Ungson 1991: 61).
Moving beyond basic information, organizational
memory contains theories, shared mental models,
databases, formalized procedures and routines,
and cultural mores (Slater and Narver 1995). The
criticalness of having CRM data accessible and
available as part of the buying firm’s organiza-
tional memory is emphasized by Sinkula, Baker,
and Noordewier (1997) through their acknowl-
edgement that a firm’s ability to store and access
past insights affects its ability to continuously learn
and build on the past.
As stated by Huber (1991) membership attri-
tion, norms and methods for storing information,
and methods for locating and retrieving stored
information influence memory effectiveness in
any organization. These factors also affect the
accessibility of information. The potential for
problems with these factors increases with out-
sourced CRM. As personnel turn over in a firm,
tacit knowledge can be lost along with an under-
standing of why certain previous decisions were
made. Rich background information about pre-
vious decisions provides a deeper, more thorough
understanding of current business operations.
The chance of remaining employees tracking
down background information becomes even
less likely in outsourcing situations. In addition,
firms can often fail to anticipate needing certain
information in the future. Consequently, impor-
tant knowledge is not stored or is only partially
complete. Again, the chances of this happening
are greater in firms that outsource the task of
gathering customer information. Employees with
the outsourced unit cannot always recognize the
need to store certain information because they
are not intimately connected with the organiza-
tion’s strategy and core competencies. Finally,
methods for locating and retrieving stored infor-
mation will differ between the outsourced sup-
plier and its buyer. Problems with organization
members not knowing if and where information
is located will only be exacerbated in outsourcing
situations. Some of these potential problems with
inaccessibility of customer information can be
avoided if the firm employees trust its source, as
trust in the data supplier will increase the value
placed in the data. Similar to information sharing
and information interpretation, a firm’s trust in
the outsourced CRM supplier can be expected to
positively influence the extent to which the buyer
firm makes the customer information accessible
and available.
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9. H3: Trust in the outsourced CRM supplier positively
influences information access within the buyer
firm.
The Influence of Information Sharing on
Information Interpretation and Information
Access
The link between information sharing and infor-
mation interpretation is well established (Day
1994; Slater and Narver 1995). Also well-known
is the importance of positive conflict resolution
processes within the organization to allow new
information to be exposed to multiple interpreta-
tions and group norms encouraging open sharing
of information (Slater and Narver 1995). The qual-
ity of the information interpretation process
affects the quality of the knowledge that emerges.
Peltier, Zahay, and Lehmann (2013) considered
data quality in their study of organizational learn-
ing and CRM success, finding that both data shar-
ing and an organizational culture committed to a
shared vision for CRM data positively influence
customer data quality. Although information
interpretation refers to a process and data quality
refers to the usefulness of the data itself, the two
constructs are related. Considering information
interpretation in terms of process quality, it fol-
lows that a greater extent of information sharing
will result in an increase and improvement in
information interpretation.
H4: Sharing of CRM information within the buyer
firm positively influences its information
interpretation.
Information acquisition, dissemination, and
interpretation contribute to the firm’s existing
memory, operating in a loop of continuous feed-
back and influence (Slater and Narver 1995).
Considering the accessibility of CRM information,
it follows that firms that engage in a higher degree
of information sharing will make that information
more readily accessible to employees. A culture
that values the sharing of CRM data throughout
the firm will be more likely to establish processes
and mechanisms for employees to easily access
relevant customer information.
H5: Sharing of CRM information within the buyer
firm positively influences its information access.
The Influence of CRM Information Processes on
Buyer Firm Customer Satisfaction/Retention and
Market Performance
Because Slater and Narver (1995) proposed a posi-
tive influence of organizational learning on firm
performance, further empirical and theoretical
research has reinforced this view. For example,
Sinkula, Baker, and Noordewier (1997) provided
empirical evidence that market information gen-
eration and dissemination within the firm posi-
tively influences marketing program dynamism.
Other studies emphasize the importance of both
learning orientation and market orientation in
firm innovation and performance (Baker and
Sinkula 1999a,1999b; Hurley and Hult 1998). The
dominance of a learning orientation over market
orientation in its effect on organizational perfor-
mance found by Baker and Sinkula (1999b) pro-
vided additional support for the critical role of
organizational learning in firm success.
More recent studies have focused on the rela-
tionship between organizational learning processes
and firm success with CRM. Lin, Su, and Chien
(2006) find the acquisition and internal sharing of
customer information positively influences custo-
mer satisfaction and retention as well as firm cost
savings, employee productivity, and market share.
Stein and Smith (2009) provided support for ear-
lier research with their study results indicating an
association between customer information orien-
tation and CRM system implementation, and
between CRM use and firm performance.
Garrido-Moreno and Padilla-Meléndez (2011)
considered three organizational variables—
employee CRM capabilities, leadership emphasis
on CRM, and a customer-centric organization
structure—as mediators in the links between
knowledge acquisition, knowledge diffusion, cus-
tomer orientation, and CRM technology and CRM
success with financial and marketing results. And
Rodriguez and Honeycutt (2011) focused on CRM
performance for B-to-B sales professionals, finding
that CRM utilization results in stronger customer
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10. relationships, collaboration with clients and peers,
and higher performance with buyers.
Finally, Zahay and Peltier (2008) and Peltier,
Zahay, and Lehmann (2013) provided further sup-
port for the role of effective organizational learn-
ing practices in CRM success. Zahay and Peltier
(2008) demonstrated through qualitative research
that, in order to have success with its customer
information system, the firm must engage in an
active dialogue about the meaning of information
that is collected and disseminated. Peltier, Zahay,
and Lehmann (2013) provided additional support
for this view, finding that customer data quality is
enhanced through multiple organizational pro-
cesses including an organizational culture that
values customer information, cross-functional
learning that occurs with marketing/IT integra-
tion, and data sharing. In this study, we focus on
the buyer firm’s customer satisfaction and reten-
tion as compared to its major competitors. Based
on the research findings regarding the relevance of
CRM and organizational learning practices in firm
performance, it follows that effective processes
within the firm to first, develop a common under-
standing of customer information and second,
provide wide availability and access to this infor-
mation will improve the firm’s customer satisfac-
tion and customer retention.
H6: Information interpretation positively influ-
ences customer satisfaction and retention of
the CRM buyer firm.
H7: Information access positively influences custo-
mer satisfaction and retention of the CRM
buyer firm.
Thus far, most research evaluating the relation-
ship between CRM processes and firm success
have considered both customer and overall busi-
ness performance measures together. Peltier,
Zahay, and Lehmann (2013) evaluated customer
performance as an antecedent to business perfor-
mance and find support for their hypothesis. In
this study, market performance is measured
through sales and market share and customer per-
formance is measured through customer satisfac-
tion and retention. Customer satisfaction/
retention is expected to drive sales and market
share. Thus, we hypothesize:
H8: Customer satisfaction/retention for the CRM
buyer firm positively influences that firm’s
market performance.
Method
Sample and Data Collection
Measure development began with field interviews
and an early pre-test version of the survey among
marketing managers of 28 companies in a mid-
sized southeastern city. Based on these responses, a
pre-test survey was developed and mailed to key
informants in 50 firms who have participated in
new CRM outsourcing within the last 5 years.
Respondents were asked for their suggestions for
improving the survey instrument. Based on this
analysis, some items were modified or revised.
Considering the C-OAR-SE procedure for scale
development in marketing (Rossiter 2002), group
raters (e.g., marketing managers) were used during
the initial development phase, whereas expert
raters—consisting of two of the co-authors and
two additional marketing professors at a major
university—served as expert raters in developing
the final instrument. All constructs in the model
are considered to be abstract formed objects with
eliciting attributes. Techniques recommended by
Podsakoff, MacKenzie, and Podsakoff (2012) in
designing the survey instrument and cover story
were used to reduce method bias. In particular, the
cover story provided a clear statement that this
research investigates significant managerial issues
associated with CRM and outsourcing decisions.
In addition, the instructions on the survey instru-
ment defined CRM as a process of establishing,
developing, maintaining and optimizing long-
term mutually valuable relationships between cus-
tomers and the organization. Outsourcing of CRM
functions was also broadly defined as the practice
of turning over part or all of an organization’s
CRM activities to external service providers. A
copy of the survey results was promised, along
with the assurance of confidentiality. In addition,
in designing the survey instrument, steps were
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11. taken to decrease respondents’ motivation to
respond stylistically by separating items on the
questionnaire to eliminate proximity effects. In
particular, items assessing information interpreta-
tion were separated from those measuring infor-
mation sharing and information access. All the
scales used in the pretest were examined for inter-
nal consistency, unidimensionality, and content
validity. Based on this analysis, some items were
modified or revised.
The final survey was mailed to marketing man-
agers of 1,278 medium and large-sized companies
from four sample sources: 640 firms listed by the
Medical Marketing Association and the American
Banking Association, 120 firms from the local
telephone listing of the southeastern region, and
500 executives from companies listed by the
Reference USA source. Of the 1,278 surveys dis-
tributed, 221 were returned for a 17.3% response
rate: 28.96% from the marketing associations, 19%
from the local company list, and 51.13% from the
Reference USA source. A review of the respondent
profile shows support for Podsakoff et al.’s (2012)
recommendation that respondents possess the
necessary experience to answer the survey ques-
tions accurately. A breakdown of the respondents’
positions held in the company is as follows: CEO,
8.1%; VP Marketing, 24.2%; Marketing Manager,
46.9%; Project Manager, 19.9%; Other, .9%. The
average number of years respondents have worked
in their company is 9.94, and the average number
of years respondents have worked in their current
position is 6; 69.2% of the respondents are male
and 30.8% female. To assess non response bias, a
comparison of the first 20–25% of the respondents
with the last 20–25% of the respondents from each
sample source was conducted for all key constructs
(Armstrong and Overton 1977); no significant dif-
ferences were found. Common method bias was
assessed using the Harmon’s single-factor test.
Exploratory factor analysis explained 24.71% of
the total variance for the first factor, which is not
large enough to generate concern (Podsakoff et al.
2003). Common method bias was further assessed
by using the marker variable technique (Williams,
Hartman, and Cavazotte (2010). CRM outsourcing
level (e.g., the percentage of CRM outsourcing
activities engaged in by the firm for customer
support and service, sales force automation,
enterprise marketing automation, and the entire
CRM process) was used as the marker variable.
This technique provides an approach to test for
the presence of method effects and, if such effects
are present, a way to quantify the amount of
method variance associated with the measurement
of the latent variables. Using structural equation
modeling in LISREL (Jöreskog and Sörbom 2015)
a baseline model and a method C model were
compared to test the null hypothesis that the
method factor loadings were not related to the
substantive indicators. A chi-square difference of
16.82 with one degree of freedom exceeds the .05
chi-square critical value for one degree of freedom
of 3.84. Thus, method effects are present in the
measures. However, reliability decomposition esti-
mates into substantive and method portions using
the equations recommended by Williams,
Hartman, and Cavazotte (2010) indicates substan-
tive reliabilities of acceptable values. All substan-
tive values are greater than .85 with the exception
of customer performance (RSubstantive = .81) and
market performance (RSubstantive = .70). Thus
method variance, although present in the mea-
sures, is not significant enough to warrant
concern.
Measurement
The scale items are provided in the appendix. The
measure for trust was adapted from Morgan and
Hunt (1994). All other measures were developed
for this study.
Trust
Trust exists when “one party has confidence in an
exchange partner’s reliability and integrity”
(Morgan and Hunt 1994, 23). The four-item mea-
sure for interorganizational trust was adapted
from Morgan and Hunt (1994) to fit a service-
provider context.
Information Sharing
Information sharing is defined as the perceived
speed and extent of customer information sharing
that occurs throughout the buyer firm using a 4-
item Likert scale. This definition is based on the
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12. definition of information dissemination used in
the organizational learning literature as a “process
by which information is shared and diffused hor-
izontally and vertically throughout the organiza-
tion (Sinkula, Baker, and Noordewier 1997: 308).
Information Interpretation
Information interpretation is defined as the per-
ceived quality of customer information that is
assimilated and integrated in the buyer firm by
use of a three item, Likert scale. This definition is
based on the definition of information interpreta-
tion used in the organizational learning literature
as a “process by which information is given one or
more commonly understood meanings” (Sinkula,
Baker, and Noordewier 1997: 308).
Information Access
Information access is defined as the degree of
accessibility and availability of customer informa-
tion within the buyer firm using a three item,
Likert scale. This definition is based on the defini-
tion of organizational memory used in the organi-
zational learning literature as “stored information
from an organization’s history that can be brought
to bear on present decisions” (Walsh and Ungson
1991: 61).
Customer Satisfaction/Retention
Customer satisfaction/retention is defined as the
buyer firm’s level of customer satisfaction and cus-
tomer retention as compared to its major competi-
tors. It was measured using a 2-item Likert scale.
Market Performance
Market performance is defined as the buyer firm’s
sales and market share as compared to its major
competitors. It was measured using a 2-item Likert
scale.
Measurement Model
The measures were assessed for convergent, dis-
criminant, and nomologic validity in LISREL
(Jöreskog and Sörbom 2015), using the two-step
approach (Anderson and Gerbing 1988). Under
this method, convergent and discriminant validity
are evaluated during the measurement model
phase, whereas the structural model provides an
appraisal of nomologic validity. The covariance
matrix and the maximum likelihood estimator
method were used to analyze both the measure-
ment and structural models. Means, standard
deviations, and intercorrelations for all the
research variables are displayed in Table 1.
As a first step, exploratory factor analysis was
conducted on each of the constructs individually to
test for unidimensionality. LISREL was then used to
more rigorously test for convergent and discrimi-
nant validity of each of the construct measures.
Items were candidates for deletion from the mea-
surement model if they (a) showed several large
residuals with other indicants; (b) displayed insig-
nificant loadings (λx) for the expected construct; (c)
shared large, unexplainable variance due to error
with other indicants, as exhibited in the Θδ modifi-
cation indices; or (d) shared common variance with
multiple indicators of some other construct(s), as
indicated by large modification indices for Λx. It is
important to note, however, that consideration was
given to both statistical indicators and theoretical
issues before any items were deleted. The final
Table 1. Measurement information: mean, standard deviation, intercorrelations. CRM = customer relationship management.
Variable M SD 1 2 3 4 5 6
1. Trust 4.89 1.24 1.00 .582 .631 .550 .546 .489
2. Information sharing 4.58 1.39 .582 1.00 .712 .782 .541 .522
3. Information interpretation 4.90 1.23 .631 .712 1.00 .588 .534 .527
4. Information access 4.54 1.49 .550 .782 .588 1.00 .532 .522
5. Customer satisfaction/retention 5.05 1.23 .546 .541 .534 .532 1.00 .736
6. Market performance 4.78 1.23 .489 .522 .527 .522 .736 1.00
Correlations greater than 0.489 are significant at the α = .01 level
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13. measurement model exhibited strong levels of fit
with χ2
(120) = 175.27 (p = .0008), goodness-of-fit
index (GFI) = 0.917, adjusted goodness-of-fit index
(AGFI) = 0.881, comparative fit index (CFI) = 0.995,
root mean square error of approximation
(RMSEA) = 0.0467. See Table 2 for the λx loading
of each reflective construct measure. Composite
reliability of at least .6 and average variance
extracted of at least .5 are considered desirable
(Bagozzi and Yi 1988). Composite reliability for
each of the constructs is high, with the lowest
being .86 for business performance. Convergent
validity was supported in each of the constructs,
with the lowest parameter estimate being λ = .85
(t = 14.70) for Item 2 of the customer performance
measure. Discriminant validity was assessed by
comparing the variance-extracted estimate to the
square of the phi matrix. In each case, the var-
iance-extracted estimate was greater than .5, and
greater than the square of the phi matrix, with the
smallest being .75 for information interpretation
and business performance.
Results
The proposed structural model shown in Figure 1
was tested using the measures that resulted from
the measurement model analysis. The results of
this analysis are displayed in Table 3. The pro-
posed structural model has χ2
(127) = 188.86
(p = 0.0003), GFI = 0.91, AGFI = 0.88,
CFI = 0.99, and RMSEA = 0.048. The structural
model exhibits acceptable levels of fit considering
the sample size and model complexity (Bagozzi
and Yi 1988).
All hypotheses are supported. Considering these
relationships, a firm’s trust in its outsourced CRM
supplier positively influences the firm’s informa-
tion sharing, information interpretation, and
information access processes, with the strongest
influence from trust on information sharing.
Information sharing also has strong, positive influ-
ences on information interpretation and informa-
tion access. Information interpretation and
information access both have strong, positive
Table 2. Analysis of measurement model.
Construct measure
Standardized
λx
Trust
Item 1 0.882
Item 2 0.941
Item 3 0.940
Item 4 0.906
Composite reliability = .96; average variance
extracted = .84
Information sharing
Item 1 0.907
Item 2 0.901
Item 3 0.915
Item 4 0.876
Composite reliability = .95; average variance
extracted = .81
Information interpretation
Item 1 0.857
Item 2 0.897
Item 3 0.849
Composite reliability = .90; average variance
extracted = .75
Information access
Item 1 0.902
Item 2 0.936
Item 3 0.900
Composite reliability = .94; average variance
extracted = .83
Customer satisfaction/retention
Item 1 0.923
Item 2 0.846
Composite reliability = .88; average variance
extracted = .78
Market performance
Item 1 0.879
Item 2 0.855
Composite reliability = .86; average variance
extracted = .75
Table 3. Analysis of structural model.
Hypothesis From To Standardized Estimate t value
H1 Trust in outsourced CRM supplier Information sharing .61 9.02
H2 Trust in outsourced CRM supplier Information interpretation .36 5.56
H3 Trust in outsourced CRM supplier Information access .14 2.40
H4 Information sharing Information interpretation .54 8.05
H5 Information sharing Information access .74 11.15
H6 Information interpretation Customer performance .43 5.14
H7 Information access Customer performance .34 4.21
H8 Customer satisfaction/retention Market performance .86 13.53
CRM = customer relationship management.
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14. effects on the firm’s customer performance, and
customer performance positively influences the
firm’s business performance.
Limitations
There are several limitations to this study that
need to be addressed. First, the respondent of
choice was the manager of the company’s market-
ing or CRM program that has been on the market
at least a year. Although one can expect managers
to have a great deal of knowledge about the devel-
opment and management of the CRM system,
their outlook is probably more narrow than that
of the development and/or management team as a
whole. A second limitation is the possibility of
multiple cultural variables. Respondents were
asked to complete the survey items in regard to
their organizational unit, such as parent, division,
and subsidiary. It is possible, however, that the
individual units the respondents represent may
vary in terms of cultural values and structural
type. Third, from the perspective of generalizabil-
ity, this research involved different CRM systems
from various industries. This provided a wider
range of outcomes than if only one firm or indus-
try was examined. On the other hand, it is possible
that this wider sample limited a deeper under-
standing of the relationships between variables
that may be found when studying one firm or
even a single industry. Fourth, control variables
were not used in the analysis. Although strong
support was found for the hypothesized paths, it
is possible that the relationships would not be as
strong if control variables were used.
Discussion and Future Research
This study demonstrates the critical role of buyer
trust in its CRM supplier for successful organiza-
tional learning and firm performance from out-
sourced CRM. Trust in the outsourced CRM
supplier provides the foundation for effective uti-
lization of CRM data, with its most significant
effect on information sharing. Both buyer trust in
its CRM supplier and buyer information sharing
throughout its firm are important for information
interpretation and information access, which ulti-
mately influence customer satisfaction/retention
and market performance. Although this study
establishes the importance of buyer trust when
outsourcing the CRM function, it also presents
opportunities for future research to build a greater
understanding in this area. First, research examin-
ing the continuum of goals for outsourced CRM
and different cultural and procedural factors that
are relevant at different levels on this continuum
could provide insight for varying approaches to
CRM management. In particular, research consid-
ering the goals and strategy for the CRM system
and how those are coordinated with the out-
sourced CRM supplier may provide useful infor-
mation for understanding success with CRM. For
example, Kang et al. (2012) demonstrate through
case study that the types of controls used in a
partnership by the outsourcing firm should be
determined by the outsourcing strategy—efficiency
seeking or innovation seeking—the firm uses.
Firms seeking efficiency through outsourcing
employ process control—focused on the methods
suppliers use to achieve specific outcomes and
output control—focused on defining the specific
performance outcome goals suppliers should
achieve. Firms seeking innovation through out-
sourcing, however, rely on output control and
social control—focused on shared values, beliefs,
and goals through formal and nonformal commu-
nication channels. It is possible that the simpler
CRM functions could be outsourced effectively,
with cost-savings for the firm, through the use of
efficiency strategies, whereas the more complex
CRM activities that affect organizational learning
require a more stringent coordination of innova-
tion strategies with different types of controls and
relationship management techniques. CRM can
serve as a useful source of customer information,
but only if it is implemented properly.
A second area in need of research is specific
factors influencing trust in the outsourced CRM
supplier. One approach is to reevaluate factors
discovered in seminal studies of trust in market
information sources within the context of out-
sourced CRM. Moorman et al.’s (1993) identifica-
tion of relevant factors—perceived integrity,
confidentiality, expertise, timeliness, and congeni-
ality—provides a useful starting point. Another
approach is the evaluation of interorganizational
processes and procedures in place to assist the
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15. outsourcing relationship, and the structure of the
organizations (e.g., hierarchical vs. flat). The
degree of similarity (or dissimilarity) in organiza-
tion structure may also play a role in the develop-
ment of trust for outsourced CRM.
A third area of potential research is the critical
role of information sharing for information inter-
pretation and information access in the buyer
firm. Future research could address possible differ-
ences in the extent of information sharing that is
needed in firms that are outsourcing CRM versus
those that conduct the CRM function in-house. Is
information sharing even more important in firms
that are outsourcing? And if so, which cultural and
procedural factors are most critical to assist the
information sharing process? One starting point
could be possible differences in relevance among
Maltz and Kohli (1996) factors affecting informa-
tion dissemination—perceived quality of informa-
tion received from the sender, level of trust
between the sender and the receiver, the physical
distance between information sharing parties, and
the manner in which information is communi-
cated. Is there one factor that is more critical for
firms that are outsourcing CRM? And how does
this relevance differ from firms conducing CRM
in-house?
A fourth area for potential research is factors
affecting information interpretation and informa-
tion access of outsourced CRM data. Trust in the
outsourced CRM supplier is established in this
study as important for success with these pro-
cesses. Future research could explore other factors
that are relevant. For example, in information
interpretation, an influential champion of certain
pieces of information is most likely needed to
move that information towards consideration by
relevant employees. A study of how champions for
specific pieces of information emerge with out-
sourced CRM could be insightful. Should the
champion always come from the buyer firm, or
are there times when the CRM data supplier
should provide a leader? In addition, an under-
standing of the role physical separation between
the buyer firm and the outsourced unit plays in the
interpretation of information obtained through
outsourced CRM is important.
Fifth, the information access process has not
received as much attention in the literature as the
other organizational learning processes. As seen by
the results of this study, however, access to CRM
information is vitally important for the firm’s cus-
tomer satisfaction/retention and market perfor-
mance. A deeper understanding of information
access and the role it plays in both in-house and
outsourced CRM is needed. Information access
has similarities to organizational memory.
Huber’s (1991) research in this area includes orga-
nizational membership attrition, norms and meth-
ods for storing information, and methods for
locating and retrieving stored information. Each
of these areas could also be explored in their
relationship to outsourced CRM and the role of
information access.
Sixth, and finally, an analysis of the role of
buyer trust in its CRM supplier as it relates to
traditional transaction cost economics variables
in an exchange partnership—asset specificity and
opportunistic behaviors—would be beneficial.
Trust has been identified as a dominant variable
in interorganizational relationship performance
(Palmatier, Dant, and Grewal 2007). An evaluation
of trust within the context of outsourced CRM, in
relation to opportunistic behaviors and asset spe-
cificity required for the partnership would provide
a further test of interorganizational trust and its
impact in outsourced CRM. Factors unique to
CRM, such as procedural asset specificity and
reciprocal investments, should be identified and
evaluated. Identification of integrative processes
between the buyer and supplier for the most effec-
tive utilization of CRM data could be an extension
of this work.
In conclusion, it is the hope of these authors
that this research assists both academicians and
business practitioners by improving our under-
standing of the role of trust in CRM outsourcing
and its potential contributions to organizational
learning processes and firm performance. By
examining the vital outcomes of outsourcing
CRM systems, this study offers a holistic approach
to effective CRM deployment. Further, it is evident
that interfirm trust in the outsourced CRM sup-
plier is critical for effective organizational learning
processes, and these processes are the crucial link
for successful outcomes. Despite the progress and
insights achieved, a strong need still exists for
future research to build on these findings and
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16. further expand our understanding of this impor-
tant topic. Such research will offer meaningful
implications for research and practice alike.
Implications for Business Marketing Practice
This study offers several important managerial
implications for firms who outsource the customer
relationship management (CRM) function. First,
for effective utilization of CRM data, it is impor-
tant for firms to develop trust in the CRM sup-
plier. As discovered by Moorman, Zaltman, and
Deshpande (1993) the researcher’s perceived integ-
rity, confidentiality, expertise, timeliness, and con-
geniality are all important to the development of
trust. Applying these characteristics to CRM out-
sourcing, it is important for the top managers who
select the CRM outsourcing partner to feel con-
fident in that partner’s capabilities in these areas.
From an implementation standpoint, management
should provide opportunities for employees who
utilize the outsourced CRM data to develop con-
fidence in these areas as well. Managers can assist
in this by communicating qualifications of the
outsourced CRM supplier, such as any trade-spe-
cific certifications, awards, information about the
supplier’s number of years in business, and exam-
ples of other companies the supplier has assisted.
Managers can also help employees develop confi-
dence in the supplier’s integrity by sharing the
supplier’s code of ethics and serving as a champion
for the supplier. Research comparing the relevance
of interorganizational trust and interpersonal trust
(i.e., Zaheer, McEvily, and Perrone 1998) indicates
the dominance of interorganizational trust with
interpersonal trust also playing a supporting role.
Thus, firms engaged in outsourced CRM are
encouraged to develop reward systems that encou-
rage employees to build relationships with their
counterparts in the supplier firm, building inter-
personal trust. It would also be useful for the buyer
firm to help its employees understand the impor-
tance of the CRM outsourcing relationship to the
buyer firm’s success. Both of these factors—buyer’s
relational-centric reward system and product
dependence—affect the buyer’s relationship orien-
tation, which acts as a positive moderating factor
in buyer trust (Palmatier et al. 2008).
It is also important for management to provide
opportunities for interaction between the outsour-
cing partner and key firm employees who will use
the CRM data. If face-to-face interaction is impos-
sible then regular interaction through technology,
such as video conferencing and online discussion
boards is encouraged. In addition, a mechanism
for feedback from firm employees to the out-
sourced CRM data supplier to address concerns
should be implemented. These processes will not
happen without managerial oversight. Key man-
agers need to remain involved in CRM activities
and in the interaction between firm employees and
the CRM data supplier. Such oversight will be
easier to implement with a champion for CRM
and the outsourced CRM supplier. As Peltier,
Zahay, and Lehmann (2013) demonstrated, an
organizational culture that is committed to a
shared vision for CRM data is important for cus-
tomer data quality. If a champion in management
emphasizes the importance of CRM and the need
to build a strong working relationship with the
outsourced CRM supplier, employees are much
more likely to value it themselves. Ongoing,
focused managerial oversight, with support from
a respected leader in the firm, will increase the
likelihood of success with outsourced CRM.
The firm’s goals for its CRM data should also
be considered. Trust in the data source may be
less critical for basic customer data that is easily
recognized, codified, and transferred. Data
requiring more in-depth interpretation, however,
such as new or highly sensitive information, is
likely to require a higher degree of trust. Thus,
discrimination between the types of information
collected is recommended before the data is
shared, interpreted, and used. In addition, uncer-
tainties about the relevance of new information
have been found to be resolved through vertical
rather than horizontal knowledge flows (Schulz
2001). New information that may cause uncer-
tainty regarding its relevance may need addi-
tional support from a trusted source within the
firm.
Although trust in the data source is established
as an important variable for information utiliza-
tion, managers are also warned to consider the
hidden costs of trust (Selnes and Sallis 2003).
Examples of such costs include a systematic
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17. avoidance of negative information, reduced mon-
itoring of the other party’s behavior which results
in reduced questioning of the status quo, and
reduced creativity because of high congruence
among the participants. Thus, developing trust in
the outsourced CRM supplier is important, but
steps should be taken to moderate its potential
negative side effects. Approaches recommended
by Selnes and Sallis (2003) include ensuring het-
erogeneity into the groups working with the rela-
tionship, searching actively for external
information to obtain an outside perspective, and
identifying market metrics so that indicators
within the relationship are compared with outside
indicators. Applying these approaches to an out-
sourced CRM relationship, a firm might consider
developing processes for information sharing and
interpretation that requires input from multiple
sources with a rotating membership. In a CRM
outsourcing situation the firm will most likely
have limited ability to require employee turnover
in the data collection process; however, it can
mandate circulation among its own employees
for data interpretation. Obtaining external infor-
mation about customers from an outside source,
such as a market research firm or a consulting
company, to compare with the CRM data supplied
by the outsourced firm may also be useful. Finally,
finding industry metrics for CRM standards, if
possible, would provide a way to evaluate the
effectiveness of the firm’s CRM approach.
In addition to establishing the importance of
trust for effective utilization of outsourced CRM
data, this study also emphasizes the critical role of
information sharing for information interpretation
and information access. Although trust in the data
source is most certainly needed for CRM informa-
tion to be shared, this trust will be useless if an
effective information dissemination process is not
developed and implemented. Interface among
employees of the firm and those employed by the
CRM data supplier is likely to be limited. It is
important to establish a process for formal discus-
sion of new information, particularly that which is
new and complex. In addition, communication
channels that provide some degree of unrestricted
interface is also strongly encouraged as both for-
mal and informal communication is important for
effective information interpretation. Similarly,
CRM data must be made available through a sys-
tem that provides broad accessibility. The task of
making CRM information accessible involves both
technology and communication. Firms that engage
in outsourced CRM are encouraged to invest in
technology that allows easy access to CRM data
throughout the organization. Systems providing
open interface between the outsourced CRM data
supplier and members of the firm would be most
effective. In addition, established communication
channels that provide regular interaction among
firm members and employees within the out-
sourced CRM supplier should also contribute to
CRM data accessibility.
Finally, this study did not consider the impact
of international partners in outsourced CRM, but
the use of international suppliers of CRM data is
certainly likely in today’s global market. A limited
amount of research examining the role of trust in
international buyer–supplier relationships indi-
cates that both the nature of trust and the institu-
tional and cultural bases of trust differ across
national country contexts (Zaheer and Zaheer
2006). In addition, a firm’s culture, individualistic
or collectivist, stemming from nationality, has a
moderating effect on the link between trust and a
buyer firm’s long-term orientation (Cannon et al.
2010). Although this study does not provide spe-
cific evidence of trust as a major factor in interna-
tional outsourcing of the CRM function, we have
demonstrated its importance in a general sense.
Considering Zaheer and Zaheer’s (2006) findings
that partners in an international collaboration
coming from asymmetric trust contexts face dif-
ferent motivations and expectations of behavior,
our recommendation for open and frequent inter-
action among employees in both the buyer and
supplier firms become even more important.
Following the findings from Peltier, Zahay, and
Lehmann (2013) both the buyer firm and its out-
sourced CRM supplier need to develop a shared
vision for the CRM data. These would need to
come from the top level of the organization so
that all employees understand its significance.
Overall, our study demonstrates the importance
of trust in the CRM outsourced supplier for suc-
cessful organizational learning and firm perfor-
mance from CRM. Active involvement to develop
trust in the outsourced CRM supplier for both
216 B. K. BROCKMAN ET AL.
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18. management, as well as for all staff employees who
utilize CRM data is critical. Equally important are
technological capabilities and communication pro-
cedures that enable effective data sharing, inter-
pretation, and access to CRM information.
Effective organizational learning from data sup-
plied by the outsourced CRM supplier will
improve both customer and market performance.
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APPENDIX: MEASUREMENT ITEMS
7-point Likert scale; 1 (strongly disagree) to 7 (strongly
agree)
Trust in Outsourced CRM Supplier:
In our relationship, my major CRM provider:
(1) can be trusted completely
(2) can be counted on to do what is right
(3) is always faithful
(4) is someone that I have great confidence in
Information Sharing:
The sharing of customer information with other departments:
(1) is timely
(2) is quick
(3) is wide across the company
(4) is convenient
Information Interpretation:
The customer information we assimilate:
(1) is consistent
(2) is accurate
(3) is excellent
Information Access:
Customer information within my company:
(1) is widely available
(2) is easily accessible
(3) is easy to find
Customer Satisfaction/Retention:
My company has performed better than major competitors in
regards to:
(1) customer satisfaction
(2) customer retention
Market Performance:
My company has performed better than major competitors in
regards to:
(1) sales
(2) market share
JOURNAL OF BUSINESS-TO-BUSINESS MARKETING 219
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The Role of Buyer Trust in Outsourced CRM:
Its Influence on Organizational Learning and
Performance
Beverly K. Brockman, Jeong Eun Park & Robert M. Morgan
To cite this article: Beverly K. Brockman, Jeong Eun Park & Robert M. Morgan (2017) The Role
of Buyer Trust in Outsourced CRM: Its Influence on Organizational Learning and Performance,
Journal of Business-to-Business Marketing, 24:3, 201-219, DOI: 10.1080/1051712X.2017.1345260
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![The Role of Buyer Trust in Outsourced CRM: Its Influence on Organizational
Learning and Performance
Beverly K. Brockmana
, Jeong Eun Parkb
, and Robert M. Morganc
a
Department of Marketing and Entrepreneurship, College of Business, The University of Tennessee at Chattanooga, Chattanooga, Tennesse;
b
Ewha School of Business, Ewha Womans University, Seoul, Korea; c
Innovation Initiatives, Culverhouse College of Commerce & Business
Administration, The University of Alabama, Tuscaloosa, Alabama, USA
ABSTRACT
Purpose: Company outsourcing of customer relationship management (CRM) functions is increas-
ing (Kalaignanam and Varadarajan 2012). Although outsourcing CRM may provide financial
benefits, the tasks of developing and utilizing the complex, cross-functional processes needed
to gain enhanced customer knowledge from CRM may be more difficult when some or all CRM
activities are outsourced. Trust in the information provided by the outsourced CRM supplier is
vital. In this study, the authors examine the influence of buyer trust in its outsourced CRM supplier
on cross-functional learning processes and firm performance within the buyer firm.
Methodology: Data were collected from a survey of marketing managers in 221 firms. LISREL 9.2 was
used to assess convergent, discriminant, and nomologic validity using the two-step approach
(Anderson and Gerbing 1988). Convergent and discriminant validity were evaluated in the measure-
ment model phase, whereas the structural model provided an appraisal of nomologic validity.
Findings: The results provide evidence of buyer firm trust in the outsourced CRM supplier playing a
critical role in the buyer firm’s success with information sharing, and both trust and information sharing
strongly influencing information interpretation and information access in the buyer firm. All three
organizational learning processes positively influence buyer firm customer satisfaction/retention and
market performance.
Research implications: An important area for future research is the possibility of varying levels of
trust needed for success with outsourced CRM depending on the buyer firm’s goals for its CRM
system. It is possible that the simpler CRM functions could be outsourced effectively through
efficiency strategies that do not require significant levels of trust, whereas the more complex CRM
activities that affect organizational learning require more stringent coordination and inter-orga-
nizational development. Varadarajan’s (2009) cost versus quality classifications of outsourcing
could be a useful starting point for this type of analysis. Considering the finding in this study
that information sharing is critical for information interpretation and information access in the
buyer firm, another area for future research is possible differences in the extent of information
sharing required by firms that are outsourcing CRM versus those that conduct the CRM function
in-house. One starting point could be possible differences in relevance among Maltz and Kohli’s
(1996) factors affecting information dissemination.
Practical implications: For effective use of CRM data, it is important for buyer firms to develop trust in
their outsourced CRM supplier. Managers can assist in this by communicating qualifications of the
outsourced CRM supplier, such as any trade-specific certifications, awards, information about the
supplier’s number of years in business, and examples of other companies the supplier has assisted.
Managers can also help employees develop confidence in the supplier’s integrity by sharing the
supplier’s code of ethics and serving as a champion for the supplier. In addition, firms engaged in
outsourced CRM are encouraged to develop reward systems that motivate employees to build relation-
ships with their counterparts in the supplier firm, and it would be useful for the buyer firm to help its
employees understand the importance of the CRM outsourcing relationship to the buyer firm’s success.
Finally, it is important for management to provide opportunities for interaction between the out-
sourcing partner and key buyer firm employees who will use the CRM data, to encourage effective
processes in information sharing, information interpretation, and information access.
Contribution of the article: This article addresses the significance of outsourcing the CRM
function and provides evidence that buyer trust in its CRM supplier is a critical factor in its
utilization of CRM data for organizational learning and firm performance. It also demonstrates
that effective sharing of information, cross-functional integration of customer data, and CRM
information accessibility are critical for firm success.
KEYWORDS
customer relationship
management; interfirm trust;
organizational learning
outsourcing
industrial marketing
business marketing
CONTACT Beverly K. Brockman bev-brockman@utc.edu Department of Marketing and Entrepreneurship, College of Business, The University of
Tennessee at Chattanooga, 6156, 615 McCallie Avenue, Chattanooga, TN 37403-2598.
Color versions of one or more of the figures in the article can be found online at www.tandfonline.com/WBBM.
JOURNAL OF BUSINESS-TO-BUSINESS MARKETING
2017, VOL. 24, NO. 3, 201–219
https://doi.org/10.1080/1051712X.2017.1345260
© 2017 Taylor & Francis Group, LLC
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