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Enhancing customer retention using customer relationship management approach in car loan bussiness

Author

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  • Megawati Simanjuntak
  • Nadia E. Putri
  • Lilik N. Yuliati
  • Mohamad Fazli Sabri

Abstract

The objective of this study was to analyse the effects of customer-perceived value, corporate image, and service quality on customer satisfaction, as well as to analyse the direct effect of switching barriers on customer retention, and to analyse the direct and indirect effects of customer satisfaction on customer retention. The conceptual research framework was examined by subjecting data pertaining to 310 customer car loans to structural equation modelling (SEM). The study findings indicated that customer-perceived value, corporate image, and service quality have a significant effect on customer satisfaction, while switching barriers have a significant effect on customer retention. Although customer satisfaction does not have a significant effect on customer retention, the indirect relationship that occurs through customer trust shows that the trust in the credit process and the service provided will prompt customers to use the company’s products or services when applying for new credit. The managerial implications of these findings include grouping customers, determining sales targets based on customer groups, offering products that have more advantages over competitors, providing credit packages and special programs to promote low-interest rates, and forming telesales as information channels. This research provides an overview of the loyalty of customers that will reuse the previous car loan company when reapplying for credit.

Suggested Citation

  • Megawati Simanjuntak & Nadia E. Putri & Lilik N. Yuliati & Mohamad Fazli Sabri, 2020. "Enhancing customer retention using customer relationship management approach in car loan bussiness," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1738200-173, January.
    • Handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1738200
    DOI: 10.1080/23311975.2020.1738200
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    Citations

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    Cited by:

    1. Priyanka Meena & Praveen Sahu, 2021. "Customer Relationship Management Research from 2000 to 2020: An Academic Literature Review and Classification," Vision, , vol. 25(2), pages 136-158, June.
    2. Pankaj Tiwari, 2022. "Bank affection and customer retention: an empirical investigation of customer trust, satisfaction, loyalty," SN Business & Economics, Springer, vol. 2(6), pages 1-27, June.
    3. Abdulmajeed Alqhatani & Muhammad Shoaib Ashraf & Javed Ferzund & Ahmad Shaf & Hamad Ali Abosaq & Saifur Rahman & Muhammad Irfan & Samar M. Alqhtani, 2022. "360° Retail Business Analytics by Adopting Hybrid Machine Learning and a Business Intelligence Approach," Sustainability, MDPI, vol. 14(19), pages 1-20, September.
    4. Michael Owusu-Kyei & Yusheng Kong & Michael Owusu Akomeah & Stephen Owusu Afriyie, 2023. "Corporate Governance and Total Quality Management Implementation in The Telecom Sector, Ghana," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(2), pages 141-157, February.

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