Customer relationship oriented marketing practices in SMEs

Purpose - The purpose of this paper is to examine to what extent small to medium-sized enterprises (SMEs) gather customer information and act on it keeping in mind the profitability of the business operations. A customer relationship oriented marketing process is suggested. This process includes customer information gathering, customer segmentation, creating value by differentiation and managing customer profitability. Special attention is paid to whether industry, size and customer markets affect the extent to which these tasks are performed. Design/methodology/approach - The data were collected mainly through an online questionnaire from SMEs in three industries operating in North Karelia, Finland. Principal component analysis was used and, thereafter, the variables loaded on each of the factors were combined to composite measures. These composite measures were used as dependent variables in the analysis of variance exploring the differences between the SMEs. Findings - The results show great differences in the activity of different marketing tasks, e.g. following how the customer relationships develop and pursuing profitable customers are performed often, whereas such tasks as segmentation and differentiation in terms of marketing communication are carried out less frequently. Based on the results, it can be argued that customer relationship oriented marketing practices differ between SMEs. The SMEs that are micro-sized, operated in the industry of other personal services and in consumer markets seemed to put less effort on marketing practices than did the other studied enterprises. Practical implications - It is shown in this paper that marketing activities frequently do not get enough attention especially in the smallest SMEs. In these enterprises, the role of the owner-manager is significant and consequently more attention should be paid to enhancing their marketing capabilities. Originality/value - The paper offers deeper insight into the little researched area of SME marketing and, especially, into the differences in marketing practices within SMEs.