The impact of customer knowledge management on innovation capability and business performance: Evidence from Jordanian financial services

Abstract

Customer Knowledge Management (CKM) has emerged as a critical strategy for organizations aiming to boost innovation and improve performance in competitive markets. This study examines the impact of CKM on innovation capability and business performance within Jordan’s financial services sector. Specifically, it explores how knowledge from, for, and about customers influences innovation in terms of quality and speed, and the overall business performance. A quantitative approach was adopted, using a structured questionnaire to gather data from decision-makers across banks, insurance companies, and financial firms in Jordan. A total of 170 valid responses were collected and analyzed using Structural Equation Modeling (SEM) to test proposed hypothesized relationships between CKM, innovation capability, and business performance. The findings reveal that CKM plays a significant role in enhancing innovation capability, with innovation quality showing a stronger positive effect on business performance than innovation speed. The study concludes that CKM is a vital enabler of innovation and performance in knowledge-driven industries. Practically, the results suggest that financial organizations should strategically manage customer knowledge to strengthen innovation outcomes and achieve a competitive advantage. Emphasizing high-quality innovation driven by CKM practices can lead to sustained business success in dynamic markets.