Long-term customer relationship : A study on how to achieve long-term customer relationship in the car retail sector

Abstract: In the literature today, there is an apparent absence of generally accepted models for how to achieve customer loyalty within the car retail sector.  Researchers have proposed that it is less expensive to serve long-term customers than newly acquired customers (Reishheld, 1994; Mittal & Lassar, 1998; Zineldin, 2006). However, the overall experience of satisfaction will play a crucial role for companies’ ability to build a long-term relationship with its customers (Gee, et al. 2008). Upon this gap, we decided to build a framework where we propose that the delivery within “sales and service” plays a crucial role for the perceived customer satisfactions associated with the retailer. In the study, we first investigated the circumstances within “sales and service” domains that leads to customer satisfaction and secondly, we examined whether fulfilled customer satisfaction in the “sales and service” domain leads to a long-term customer relationship for the car retailers. In accordance with the purpose of gaining knowledge on long-term customer relationship building within the car retail sector, we developed further knowledge that is applicable for car retailers as well as for the industrial wisdom within the automotive industry.   In the study, we applied the deductive approach. Hypotheses was generated based on existing literature, and were developed into a proposed framework, see figure 2.  We tested these hypotheses by applying a qualitative study to confirm or refute them.  The study follows a qualitative research approach, by way of reason that we wanted to gain deep insight into how all the interviewees experience and their treatments within the car retail context; the study was conducted based on qualitative data from semi-structured interviews from ten participants.   Our study concludes that there is a general trend within the empirical findings that is mostly confirmed by the existing literature, that can provide a model which leads to perceived customer satisfaction within sales and service for a specific car retailer. The circumstances from “sales and service” that leads to customer satisfaction within the car retail sector are when the retailers: Work hard to achieve a personified relationship at all levels of the customer interaction, focusing on products offering and services according to the customers’ current needs, while delivering in a professional way according to their profession and always staying honest with the customer.     The results further reveal that 60 per cent of the interviewees are willing to stay in a long-term customer relationship with the retailer that can best fulfil the expectations set out above.   Although recent research shows that customer loyalty is decreasing (Laurell & Parment, 2015), our findings reveal that customers continue to believe in long-term customer relationship with the car retailers. As such, managers should put in places processes and measures that can achieve greater customer satisfaction throughout the “sales and service” period.