TESTING THE EFFECT OF CUSTOMER CAPITAL AND TECHNOLOGICAL INNOVATION ON BUSINESS PERFORMANCE

Abstract

The digital era, which should be implemented and able to get high opportunities, can also

become a threat if MSMEs keep their business the same. To face business competition that is now

increasingly complex, every SME actor is required to be able to adapt to the company's external

environment by continuously monitoring and managing customer capital and applying innovation in

technology. This study analyzes and examines the effect of customer capital and technological

innovation on business performance.This study uses a causality quantitative research design. The

number of samples used in this study was 110 SME business actors. Data analysis used an instrument

test, normality test, regression test, hypothesis test, and correlation test, as well as the coefficient of

determination. The results of the data analysis confirm that customer capital and technology have a

positive and significant impact on business performance. This research concludes that effective

customer capital management and the readiness of SMEs to deal with rapidly changing technology are

believed to impact business performance significantly. It can be implemented with a good idea that

can be replicated more easily, requiring continuously new and better product usage methods,

processes, and faster services.