Evaluating customer relationship dynamics in healthcare sector through indoor patients' judgement

Purpose - This paper aims to examine the three dynamics of customer relationship management (CRM), namely, service quality (SQ), customer satisfaction (CS) and customer loyalty (CL) (long‐term relationship) in the healthcare sector. It specifically investigates the effects of physical environment quality (PEQ) and interaction quality (IQ) and significant components of SQ on outcome SQ dimensions, namely, CS and CL. Design/methodology/approach - A total of 400 indoor patients from departments such as, general medicine, pediatrics, general surgery, gynecology, ENT and orthopedics were selected using proportionate stratified random sampling from May‐August 2007. Personal contact approach was used for contacting the respondents. Data validity and reliability were duly assessed using exploratory factor analysis. The data were then analyzed using structural equation modeling through AMOS. Findings - Based on data analysis, the direct effect of CRM dynamics, i.e. PEQ and IQ on SQ and their ultimate effect on CS and CL is found to be significant. However, the model fit values came out poor asp(CMIN) (0.000), CMIN/DF (2,605.41), RMSEA (0.263), NFI (0.076), RFI (−0.066), IFI (0.078), TLI (−0.069) and CFI (0.074). Research limitations/implications - The cross‐sectional research design of the study does not offer nearly the same insight into the dynamics of CR as a longitudinal design study. The study analysed overall CS and CL as the major focus of the study was on the PEQ and IQ to understand impact of SQ on CRM outcomes and has ignored some antecedents that could help and explain customer perception more concretely. Further future studies could consider broader organization image typologies and measures in understanding CRM dynamics such as organizational excellence and customer value. This could become the future agenda for the upcoming studies. Practical implications - PEQ needs to be improved by focusing on cleanliness of wards and toilets, peaceful atmosphere, supportive and additional facilities, clean drinking water, clean beddings, special services to the needy. IQ hospitals should organize training programmes to inculcate better attitudinal and behavioural skills to understand patients, giving them proper care, listening to and answering their queries. For better process quality, hospitals need to focus on effective administration functioning. The study concludes that there is need to improve CRM dynamics (PEQ and IQ) in the public healthcare to accomplish CRM objectives (CS and CL). Originality/value - This study provides some important insights for CRM theory and practice. An understanding of SQ, CS and loyalty dynamics is a first step toward effective service management and the retention of customers in the long term. Three‐way interactions between the main effects of SQ, CS and loyalty yield additional insight into the relative importance of physical environment and IQ in customers' decision to be loyal, and that can provide a pave way for accomplishing CRM objectives.