An Integrated Customer Relationship Management (CRM) Framework for Customer Retention: Evidence from Malaysian Retail Sector
This study investigates the key factors influencing customer retention through Customer Relationship Management (CRM) practices in the Malaysian retail sector. Drawing on Relationship Marketing Theory, Resource-Based View (RBV), and Diffusion of Innovation (DOI), this study addresses the lack of integrated empirical models explaining CRM-driven customer retention in emerging retail markets. The study further incorporates customer satisfaction, trust, and perceived value as mediating variables, with omnichannel integration as a moderating factor.
A quantitative research design was employed using a structured questionnaire to collect data from 360 retail customers across fashion, supermarket, and electronics sectors in Kuala Lumpur. The data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to assess direct, mediating, and moderating relationships.
The findings indicate that service quality (β = 0.30) is the strongest predictor of customer retention, followed by customer data analytics (β = 0.26) and personalization (β = 0.24). The model explains a substantial proportion of variance in customer retention (R² = 0.68). Customer satisfaction, trust, and perceived value were found to play significant mediating roles, while omnichannel integration strengthened the relationship between personalization and customer retention. Sectoral differences were also observed, highlighting variations in the effectiveness of CRM strategies across retail formats.
This study contributes to CRM literature by providing an integrated and empirically validated framework that combines technological, relational, and analytical drivers of customer retention. Practically, it offers actionable insights for retail managers to enhance customer loyalty through data-driven and customer-centric strategies, while also highlighting the importance of balancing personalization with customer privacy concerns.
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