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Customer empowerment and firms’ performance

Customer empowerment and firms’ performance PurposeThe purpose of this paper is to examine the effect of customer empowerment (CE) on financial performance and the role of innovation and customer satisfaction as mediating variables in this relationship.Design/methodology/approachTo empirically test the conceptual model and research hypotheses, data were collected through a survey from 216 branches of 14 commercial banks in Tunisia. Results were analyzed using exploratory factor analysis and structural equation modeling.FindingsThe results indicate a significant and a positive impact of CE on firms’ financial performance. Customer satisfaction, exploitative innovation and exploratory innovation mediate the relationship between CE and firms’ financial performance.Practical implicationsThese findings provide useful insights for practitioners, particularly bank managers who can improve their financial performance, customer satisfaction and innovation by empowering their customers and integrating them in the products and/or services conception process. Conclusions emphasize practices to be encouraged within banks such as services customization which are acquired by customers themselves, the expression of opinions, customers’ needs and the interaction among bank customers.Originality/valueSeveral studies in the literature have studied the CE and its impact on business performance. However, few research studies have focused on the variables that mediate this relationship. So far, this paper not only integrates mediating variables such as customer satisfaction and innovation to study the link CE-firm performance but also makes the distinction between exploitative and exploratory innovation which is seldom made by researchers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Bank Marketing Emerald Publishing

Customer empowerment and firms’ performance

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0265-2323
DOI
10.1108/IJBM-10-2016-0150
Publisher site
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Abstract

PurposeThe purpose of this paper is to examine the effect of customer empowerment (CE) on financial performance and the role of innovation and customer satisfaction as mediating variables in this relationship.Design/methodology/approachTo empirically test the conceptual model and research hypotheses, data were collected through a survey from 216 branches of 14 commercial banks in Tunisia. Results were analyzed using exploratory factor analysis and structural equation modeling.FindingsThe results indicate a significant and a positive impact of CE on firms’ financial performance. Customer satisfaction, exploitative innovation and exploratory innovation mediate the relationship between CE and firms’ financial performance.Practical implicationsThese findings provide useful insights for practitioners, particularly bank managers who can improve their financial performance, customer satisfaction and innovation by empowering their customers and integrating them in the products and/or services conception process. Conclusions emphasize practices to be encouraged within banks such as services customization which are acquired by customers themselves, the expression of opinions, customers’ needs and the interaction among bank customers.Originality/valueSeveral studies in the literature have studied the CE and its impact on business performance. However, few research studies have focused on the variables that mediate this relationship. So far, this paper not only integrates mediating variables such as customer satisfaction and innovation to study the link CE-firm performance but also makes the distinction between exploitative and exploratory innovation which is seldom made by researchers.

Journal

International Journal of Bank Marketing – Emerald Publishing

Published: Apr 3, 2018

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