The Impact of Customer Relationship Management (CRM) on Customer Loyalty: A Study Case of the W Automobile Sales Company

Abstract

This study investigated the impact of Customer Relationship Management (CRM) on Customer Loyalty at W Automobile Sales Company, a Toyota 4S dealership in Beihai, Guangxi, China. The research aimed to analyze how specific CRM dimensions influence customer loyalty, addressing a critical need for data-driven strategies in the automotive sector. The research employed a quantitative approach, utilizing a questionnaire survey to collect data from a random sample of 450 customers, with the analysis based on 380 responses from current customers, determined using a Sample Size Calculator with a 5% margin of error and a 95% confidence level. The study focused on five key CRM dimensions: Personalization, Customer Service, Communication, Technology Adoption, and Customer Experience. Prior to data collection, a pre-test was administered to evaluate the suitability of the questionnaire, and its validity and reliability were established using Cronbach’s alpha coefficient, with an overall alpha of 0.942. The analytical techniques utilized included descriptive analysis, Cronbach’s alpha coefficient, Pearson correlation analysis, and multiple linear regression.

The results of the correlation analysis revealed statistically significant positive relationships between all five CRM dimensions and customer loyalty. This finding aligns with previous research emphasizing the multifaceted nature of CRM and its impact on customer loyalty. The regression analysis conducted in this study identified Customer Experience (β = 0.211, p = 0.000) as the strongest predictor of customer loyalty, followed by Communication (β = 0.178, p = 0.000), Customer Service (β = 0.163, p = 0.001), Personalization (β = 0.142, p = 0.002), and Technology Adoption (β = 0.132, p = 0.007). The overall model explained 40.3% of the variance in customer loyalty (R² = 0.403, F = 59.901, p = 0.000), indicating a significant predictive power. The study also revealed significant differences in customer experience and technology adoption across different age and income groups. Younger customers (18-25 years old) reported lower levels of customer experience, suggesting a need for tailored strategies to engage this demographic. Overall, this study contributes to the growing body of literature on CRM and customer loyalty, particularly within the automobile industry. The findings underscore the importance of a holistic approach to CRM, encompassing personalization, customer service, communication, technology adoption, and customer experience. These insights provide actionable recommendations for W Automobile Sales Company to enhance customer loyalty and achieve sustainable competitive advantage. In conclusion, the findings confirm that Customer Relationship Management (CRM) significantly impacts Customer Loyalty by fostering stronger customer relationships and driving repeat business.