The Choice of Customer Relationship Management Approach in the Supply Chain: Examining Small Business Performance

Abstract

This study examines supply chain management approaches to customer relationship management (CRM), and how they influence the performance of small businesses. Our motivation was to relate supply chain positioning to business performance. The data for the small businesses for our study were sourced from the US Census Bureau’s survey of business owners (SBO) Public Use Microdata Sample (PUMS). We categorized the CRM environment for small businesses by primary customer type and by size, and examined the performance differences across these categories. Specifically, the CRM categories were business-to-consumer (B2C), business-to-business (B2B), business-to-government/federal (B2Gf), or business-to-government/state and local (B2Gs); while the size categories were Micro (<10 employees), Mini (10–24 employees), Small-I (25–49 employees), and Small-II (50–99 employees). We found evidence of superior performance for B2B firms on several dimensions including sales, employment, as well as sales per employee and sales per payroll measures of efficiency. This study contributes to the literature by clarifying how the positioning of small businesses in the supply chain can influence their performance.