Abstract
The aim of this research is to investigate Sri Lankan bankers’ “Perceptions of Innovation based Relationship Marketing” (PIRM). The PIRM model demonstrates how Sri Lankan bankers perceive product innovation, process innovation and organizational innovation to improve relationship marketing. This research used an exploratory mixed-methods design where a qualitative phase was followed by a quantitative phase. Firstly, sixteen in-depth interviews were conducted with bankers from four Sri Lankan retail banks. Secondly, quantitative data were collected from 216 bankers in the same Sri Lankan retail banks. Partial Least Squares (PLS) structural equation modeling was used to evaluate the PIRM model. Results from the qualitative phase showed that bankers mainly rely on three dimensions of innovation: a) product innovation, b) process innovation and c) organizational innovation that facilitate their relationship marketing approach. Results from the quantitative phase show that there is no statistically significant relationship between perceptions of product innovation (β = -0.161; p < 0.007) and perceptions of relationship marketing. Nevertheless, perceptions of process innovation marketing (β = 0.235; p < 0.002) and perceptions of organizational innovation (β = 0.363; p < 0.000) show positive relationships with perceptions of relationship marketing. Additionally, i) perceptions of relationship marketing mediates between perceptions of process innovation (β = 0.119; p < 0.007) and perceptions of SCA and ii) perceptions of relationship marketing mediates between perceptions of organizational innovation (β = 0.184; p < 0.001) and perceptions of SCA. For the contribution to the knowledge, bankers will apply the PIRM model that enables better customer retention and facilitate SCA. As one of the main limitations, the research was considered the perceptions of retail bank employees, nevertheless customers’ perceptions were not investigated. Future research may apply the PIRM questionnaire and model in other service industries for training and the development of employees.