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This research investigated the impact of customer empowerment on the performance of firms (i.e., banks), along with the mediating effect of innovation and customer satisfaction between customer empowerment and the firm's performance, which was conducted in public sector banks in the Delhi and NCR region in India. For this study, 439 male and female bank employees were selected. Data collected from them were analyzed using confirmatory factor analysis and found that the variables satisfied the criteria of path analysis. Based on the path analysis it was observed that customer empowerment had a significant impact on firm performance, whereas customer empowerment had a non-significant impact on customer satisfaction and customer retention. The findings of this study are, therefore, different from those of prior studies which showed that customer empowerment has a significant impact on customer satisfaction and retention. The paper concludes with an integrated model showing the linkages among customer empowerment, innovation, customer satisfaction, customer retention, and firm performance.
Key Words: Customer Empowerment (CE), Customer Satisfaction (CS), Customer Retention (CR), Firm-performance, Innovation, Public Sector Banks
1. INTRODUCTION
In the current competitive and dynamic business environment customers seek the value product and services, where innovations may be considered as an important element for customer satisfaction. Innovation is all about offering product and services in such a way that it may fulfil the expected need want and desire of the customers, but at the same time, it may also provide pleasure and satisfaction through astounding and attractive features in the product and services (Potra, Pugna, Negrea and Izvercian, 2018). Customer satisfaction is considered and verified as a source of mediator between service quality and firm's performance (Hawari and Ward, 2006). Whereas innovative products or services are all about offering unique products and services or techniques to customers which makes the use of product and services more convenient and easier (Michel, Brown and Gallan, 2008; Pooja and Kumar, 2021). Innovation plays a vital role in the banking industries across the globe. Innovation is not only contributing towards the customer's satisfaction but it helps in value addition to the corporate reputation of the banking institutions as well as reduces the cost and makes them stronger in the competitive position of the bank (Blazevic and Lievens, 2004; Kumar and Gupta,...