TITLE:
Service Quality as a Moderator of the Payoff from Customer Relationship Management: A Moderation Analysis in Premium Hotels in the Greater Kampala Metropolitan Area, Uganda
AUTHORS:
Christopher Sebuliba, Frank Pio Kiyingi, Fred Lwanga
KEYWORDS:
Service Quality, SERVQUAL, Moderation, Customer Relationship Management, Perceived Firm Profitability, Premium Hotels, Simple Slopes, Uganda
JOURNAL NAME:
Open Journal of Business and Management,
Vol.14 No.6,
November
6,
2026
ABSTRACT: Purpose: Customer relationship management (CRM) is widely assumed to yield greater financial returns where service quality is high, yet this contingency has rarely been tested formally in African hospitality markets. This study examines whether employee-rated service quality is associated with perceived firm profitability, and whether it moderates the association between CRM and perceived firm profitability, among premium hotels in the Greater Kampala Metropolitan Area (GKMA), Uganda. Design/Methodology/Approach: A cross-sectional, explanatory sequential mixed-methods design was used. Survey data were obtained from 340 frontline employees in six purposively selected four- and five-star hotels (99.13% response rate), and qualitative data from 36 key-informant interviews with managers and guests. The moderation hypothesis, stated directionally from the study’s conceptual framework, was tested in a model that retained CRM, service quality and their product term irrespective of sign, with customer satisfaction as a covariate. The product coefficient, its 95% confidence interval, the equivalent nested-model test, a bound on its incremental explained variance, and conditional (simple) slopes are reported. A subsequent four-step refinement sequence is reported only as an exploratory analysis, with its final model’s identification status made explicit. Findings: Service quality was strongly correlated with perceived firm profitability (r = 0.714; B = 0.816, SE = 0.043, β = 0.714, R2 = 0.510, p r = 0.751). In the moderation model, the CRM × service-quality product term was small and negative (B = −0.097, 95% CI [−0.193, −0.002], p = 0.046) and accounted for no more than 0.25% of the variance in perceived profitability. The conditional slope of CRM declined only slightly across the observed range of service quality (0.85 at mean −1 SD; 0.80 at the mean; 0.75 at the scale maximum). The hypothesised positive, amplifying moderation was therefore not supported, and the small attenuating interaction is statistically fragile because nesting of employees within six hotels was not modelled. The perfect fit of the final exploratory model reflects a just-identified specification (χ2(0) = 0.00, six free parameters) rather than substantive superiority. Originality/Value: This is, to the authors’ knowledge, the first formal test of a CRM × service-quality interaction against perceived firm profitability among premium hotels in East Africa. It also shows how post hoc trimming toward a saturated model can remove, rather than test, an interaction, and it models more transparent reporting for hospitality moderation research. Research Limitations: The cross-sectional, single-source and perceptual design, and the clustering of respondents within six hotels, mean that all findings are associational and bounded to the premium segment studied.