Supplier-Customer Relationship Management and Customer Retention: A Perspective on Motor Dealerships in an Emerging Economy

Abstract

The purpose of the study was to investigate the influence of service quality, customer satisfaction and customer value on customer retention via Customer Relationship Management (CRM) performance at selected motor dealerships in the Buffalo City Municipality of South Africa (hereafter referred to as Buffalo City Municipality). The population included all customers of Toyota, Volkswagen and Nissan dealership brands in the Buffalo City Municipality. Both stratified random sampling and simple random sampling were used and a total of 252 customers participated in the study. Primary data was gathered using a self-administered questionnaire. Data was analysed using Structured Equation Modelling (SEM). The findings stipulate that the application of CRM is fundamental to obtaining the desired results of retaining more customers, in addition to obtaining more profitable customers and using the existing customers as advocates for acquiring new customers and spreading the positive word of the motor dealership outlet. The managers of motor dealerships must therefore understand that managing customer retention in isolation will not generate maximum revenues.

DOI: 10.5901/mjss.2014.v5n20p792