Identifying the Drivers for Customer Centricity Practices among SMEs in Malaysia

HRMARS - This study explores the main factors that influence customer-centricity practices among Small and Medium Enterprises (SMEs) in Malaysia. Customer-centricity refers to focusing business strategies on meeting the needs of the most valuable customers; however, past studies have mostly discussed it in theory. Using a mixed-methods approach, the research first carried out interviews with SME managers to identify important factors, then used a survey to test these factors. The framework includes local market conditions, marketing innovativeness, internal and external factors, and system support. Data was analysed using Structural Equation Modelling (SEM) to find the relationships between these factors and customer-centricity. This study offers a complete model for understanding how SMEs can improve customer-focused strategies. It also provides practical advice for managers and policymakers to help SMEs compete, grow, and remain sustainable in a changing market. Purpose: The purpose of the current research project is to identify the key drivers that lead to the implementation of client-centricity strategy and to develop a framework that can help understand the impact of these drivers on the readiness of the target population. The study will employ a mixed-methods research design, comprising both qualitative and quantitative research methods to achieve this objective. Design/methodology/approach: This study adopted an exploratory sequential mixed-methods approach. First, qualitative interviews with SME managers identified key drivers of customer- centricity. These findings informed a quantitative survey distributed to a larger SME sample. Data were analysed using Structural Equation Modelling (SEM) to test relationships between identified factors and customer-centricity practices. Findings: The outcomes of the study are expected to provide evidence that can help the government formulate appropriate strategies, incentives, infrastructure, and regulations that can improve SMEs' performance, which can have a positive impact on the economic development of the nations. Research limitations/implications: The current research only looks at SMEs in Malaysia, so the results may not apply in the same way to SMEs in other countries with different cultures or economic level. Second, the survey data is based on what managers reported, which may include personal bias. Third, because the study is cross-sectional, it shows relationships at one point in time and cannot confirm cause and effect. Future research could follow SMEs over a longer period to see changes in customer-centricity, include SMEs from different countries for comparison, and use actual performance data together with survey responses. Practical implications: For SME managers, this study provides useful guidance on how to develop customer-centricity to improve competitiveness and sustainability. For policymakers and business support agencies, the findings point to areas where training, funding, and sharing of best practices can help SMEs respond better to fast-changing market needs. On a social level, stronger customer-centric practices can improve SME performance, create more jobs, increase customer satisfaction, and support economic growth in a fair and competitive way Originality/value: This study is one of the few to provide empirical evidence on the drivers of customer-centricity among SMEs in Malaysia. Unlike past work that is mostly conceptual or focused on large firms, it offers a tested framework combining environmental, organizational, and technological factors. Using a mixed-methods design, the study delivers context-specific insights valuable for both researchers and practitioners aiming to strengthen customer-focused strategies in resource-limited settings.