Are Retained Customers Automatically Loyal: A CRM Study

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ABSTRACT

In this thesis, the focus is on customer retention and loyalty under the realm of customer relationship management. The satisfaction level of the customers distinguishes a successful enterprise from and unsuccessful enterprise. Customer satisfaction eventually leads to customer retention and customer loyalty. The two terms are different in terms of customer satisfaction. This involves that the all the customers should be managed as an asset of the enterprise to ensure potential lifetime customer loyalty and revenue generation. In the era of advancing technology and competitive scenario, the role of CRM in this context cannot be denied. Lately, the rapid changes in the global economic and technological environment, the behaviours of consumers are also changing. Therefore, those retailers who could not cope with these sudden changes are not able to compete. Hence, they end up closing the business. Numerous studies about the loyalty of customers have been published; however, there is still a gap, which occurs due to the changing behaviour of consumers. This is why I have more interest in this subject. However, the purpose of this study is to analyse the existence of a relationship between retaining customers and their loyalty level with the organisation.

TABLE OF CONTENTS

ABSTRACTii

CHAPTER 1: INTRODUCTION1

Background of the Study1

Problem Statement2

Objectives2

Significance of the Study3

CHAPTER 2: LITERATURE REVIEW4

Misconception of Retained Customers Are Automatically Loyal4

Customer Retention6

Strategies of Increasing Customer Retention7

Satisfaction7

Switching Costs9

Customer Loyalty9

Behavioural Loyalty11

Attitudinal Loyalty11

Composite Loyalty12

Loyalty Dimensions12

Commitment13

Trust13

Involvement14

Word of Mouth14

Customer Retention versus Customer Loyalty15

Customer Relationship Management16

CRM Strategies16

Focus on Customer Satisfaction16

Reducing Switch cost17

Tesco's Customer Loyalty in UK18

Summary19

CHAPTER 3: METHODOLOGY21

Research Design21

Survey22

Research Focus: Problem, Purpose, and Frameworks23

Sample24

Position of the Researcher25

Reliability and Dependability25

Validity25

REFERENCES27

APPENDIX33

Appendix A: Consent form33

Appendix B: Questionnaire Survey34

CHAPTER 1: INTRODUCTION

Background of the Study

The organisations have gone about a complete transformation in the past few decades. The practices and procedure followed are no more the same. In the present scenario it is exceeding tough for any organisation to survive on just the conventional practices. The concept of competition has changed. Compete to win is the slogan of the organisations in the market today. There has been many changes in the business sector and it is imperative that organisations 'change with time' to stay ahead of the competition. The change needs to accurate and swift.

The discussion about change will not be complete without its reference to the technological advancements; the most critical change is the drastic innovations in the field of technology. These developments have had a considerable impact on the operational aspects of the organisations. Due to these technological brilliances the organisations are able to adjust and refine their marketing strategies to increase profitability.

One such technological innovation has been Customer Relationship Management (CRM). CRM in simple terms is an instrument made to improve the interaction between the organisation and the customer throughout the customer life cycle. CRM makes organisations competent on customer relationship front, rather than just struggling to gain competitive advantage through products or prices.

Loyalty of customers is thought to be an essential condition for the success of a ...