The administration of customer relations has shifted into a key strategic requirement for organizations engaging in highly active and competitive fields. In the organized retail sector, particularly in swiftly evolving city environments like Bengaluru, preserving customer loyalty is essential for achieving profitability, broadening market influence and enhancing the effectiveness of the organization over time. In the context of customers examining numerous buying opportunities, the necessity for proficient Customer Relationship Management (CRM) has escalated in importance for fostering long-term relationships with patrons and securing their persistent participation. Adopting CRM methodologies enables retailers to identify consumer patterns, modify their product offerings to meet those preferences and engage in meaningful interactions that enhance store efficacy.

This mix of results showcases the vital importance of CRM in fostering crucial behavioural criteria like customer experience, satisfaction and loyalty. Customer experience embodies the cumulative perceptions that customers formulate across all touch points within the retail milieu, while satisfaction denotes the evaluative assessment of the service rendered. Both components are essential in shaping whether customers keep participating with a retailer. While past research has demonstrated relationships among CRM, experience and satisfaction, the influence on customer retention in the structured retail space is not adequately examined, notably in expanding markets like India. The Loyalty of customers is an essential aspect that influences retention. Devoted customers consistently show more profound emotional bonds, heightened assurance and ongoing commerce, underscoring loyalty as a key component in interpreting CRM metrics. Recognizing how loyalty influences CRM strategies delivers essential understanding for retailers looking to strengthen their relationship-building initiatives.

Against this setting, the current analysis investigates the bridging roles of customer experience and customer satisfaction, along with the moderating aspect of customer loyalty regarding the relationship between CRM strategies and customer retention in organized retail entities in Bengaluru. The analysis brings together mediation and moderation tactics into a coherent structure, providing clarity on CRM and retention interactions while enriching both theoretical perspectives and practical retail management strategies.

REVIEW OF LITERATURE

Customer Relationship Management (CRM) Strategies

The strategies embraced in Customer Relationship Management involve structured methodologies, fresh innovations and actions that companies use to capture, cultivate and support their customer base (Gupta et al., 2009)(Kerdpitak, 2021). In the structured environment of retail, CRM methodologies underscore the significance of knowing consumer expectations, personalizing the way interactions happen and providing services that are driven by value across a range of touch points(Tahir et al., 2020). Commonly, these methods cover administration of client data, directed communications, loyalty initiatives, service personalization, addressing complaints and employing technology for engagement including mobile solutions and web platforms (Gil-gomez et al., 2020). Smart CRM approaches help retailers to strengthen their connections by refining service quality, heightening reactivity and establishing a harmonious customer interaction (Chong & Wong, 2005). Previous studies underscore that CRM operates as a strategic instrument for augmenting customer satisfaction, nurturing loyalty and influencing long-term behavioural outcomes (Azad & Singh, 2019). Through effective application, CRM methodologies can significantly enhance how customers engage, drive repeated sales and ultimately contribute to stronger customer retention (Kemunto Mecha et al., 2015). As a result, CRM stands as a key player in attaining a competitive superiority for retail organizations that are dealing with continuously transforming market environments.

Customer Experience

Customer experience pertains to the comprehensive and cumulative impressions customers form during their engagements with a retailer across various interactions (Soliman & J. Kamel, 2014). In environments where retail is organized, the experience of customers is affected by components such as the store's atmosphere, the excellence of service, the demeanour of employees, technological systems, the variety of items offered and the help available after sales (Areiqat et al., 2019)(Das et al., 2018). Research indicates that the customer experience exceeds simple service execution, integrating emotional, sensory and relational elements that shape customers' perceptions of their interactions (Upadhyaya, 2018)(Nepali et al., 2024). Properly executed CRM techniques markedly uplift positive customer relations by allowing customized dialogue, speedy service and fluid interaction (Militina & Achmad, 2020). Analyses consistently reveal that customer engagement is a significant component of both satisfaction and lasting behavioural impact (Daultani, 2021). Within retail spaces, enriched interactions promote more profound emotional links, amplified trust and a boosted chance of repeat patronage. In this way, the overall customer experience functions as a key intermediary, shifting CRM endeavours into advantageous perceptions and significantly increasing customer fidelity.

Customer Satisfaction

Customer satisfaction signifies the customer’s evaluative assessment of whether a product or service meets or surpasses expectations (Abe, 2015). When the actual service delivery meets or surpasses what was anticipated, customers find themselves satisfied, according to the expectation–confirmation theory (Coussement, 2013). In effectively structured retail settings, consumer satisfaction is impacted by service excellence, product stock levels, pricing policies, staff engagement, the design of the store and the totality of the shopping encounter (Datta et al., 2018). Analysis points out that strong CRM frameworks highlighting timely correspondence, personalized assistance and efficient trouble resolution are necessary for enhancing customer satisfaction (Jashari-mani, 2024). Delighted customers usually encourage uplifting impressions about the vendor, possess higher trust and express intensified buying desires (Shailaja & Sunantha, 2024). Moreover, it is well understood that customer contentment serves as a critical foundation for fostering loyalty. It serves as an intermediary factor by converting positive encounters into enduring behavioural outcomes (Castillo, 2018). In competitive shopping landscapes like Bengaluru, high satisfaction rates play a key role in differentiating retailers and securing customer loyalty and retention.

Customer Loyalty

Customer loyalty refers to the extent of dedication customer’s exhibit toward a retailer, manifested in repeated patronage, positive perceptions and resistance to switching (Noskova et al., 2015). Loyalty involves aspects of both actions and feelings. Where action-based loyalty relates to ongoing purchases, whereas emotional loyalty signifies a bond, confidence and preference towards a specific shop (Shukla et al., 2016)(Kopczewska, 2022). Research identifies loyalty as a critical outcome of effective CRM and customer satisfaction initiatives (Karaarslan et al., 2024)(Sairun et al., 2022). Loyal customers are more likely to respond favourably to promotional efforts, engage in long-term relationships and contribute to increased profitability (Corbishley, 2017). In systematic commercial frameworks, dedication programs, customized interactions and unwavering service performance support loyalty enhancement (Gao et al., 2024)(Noskova et al., 2015). Significantly, the devotion of customers functions as a pivotal element, influencing how CRM methodologies relate to customer retention. Investigations reveal that CRM approaches tend to be more productive for loyal customers, given their increased openness to initiatives that foster relationship growth. Consequently, commitment holds a pivotal position in boosting the influence of CRM on keeping customers.

Customer Retention

The principle of retaining customers focuses on a business's skill in developing lasting ties with its patrons and inspiring them to make purchases again (Noskova et al., 2015)(Jashari-mani, 2024)(Shailaja & Sunantha, 2024). For organized retail, it's important to emphasize customer retention to support profitability, decrease marketing outlays and develop a solid competitive profile (Keramati & Nili, 2011). Retained customers regularly reflect elevated transaction volumes, enhanced brand awareness and superior lifetime value relative to new patrons (Al-shatnwai, 2020). Academic investigations suggest that different dimensions like the quality of service provided, customers' engagement, satisfaction metrics and commitment levels are critical for maintaining customer retention (Abidar et al., 2023). Effective CRM models foster customer loyalty through acknowledging their expectations, customizing interactions and nurturing trust-oriented collaborations (Latif, 2019)(Mandal, 2016). Inquiries highlight that customer delight serves as a vital signal for retention, with favourable interactions encouraging continued engagement (Castillo, 2018). Moreover, committed shoppers are likely to keep choosing a vendor even if rival stores showcase enticing products. As a strategic outcome variable, customer retention epitomises the cumulative efficacy of CRM practices and relationship-building endeavours within the retail sector.

RESEARCH METHODOLOGY:

3.1. Research Context

This investigation is positioned within Bengaluru’s structured retail domain, a swiftly proliferating marketplace distinguished by vigorous rivalry and transforming consumer anticipations. As merchants emphasize relationship-oriented methodologies, comprehending how Customer Relationship Management (CRM) impacts experiences, contentment and retention emerges as critical for maintaining allegiance and augmenting enduring customer worth in this fluid metropolitan context.

3.2. Objectives of the Study

1. To assess the effects of CRM strategies on the customer retention through the mediating effects customer experience and satisfaction.
2. To evaluate the moderating role of customer loyalty in the relationship between CRM strategies and customer retention.

3.3. Research Framework

CRM Strategies                 Customer Experience                 Customer Satisfaction  

                                                                     Customer Retention

3.4. Research Hypothesis

1. H₀: There is no significant effect of CRM strategies on customer retention through the mediating effects of customer experience and customer satisfaction.

H₁: There is a significant effect of CRM strategies on customer retention through the mediating effects of customer experience and customer satisfaction.

2. H₀: Customer loyalty does not moderate the relationship between CRM strategies and customer retention.

H₁: Customer loyalty moderates the relationship between CRM strategies and customer retention.

Data Analysis & Interpretation:

Objective 1: To assess the effects of CRM strategies on the customer retention through the mediating effects customer experience and satisfaction.

H₀: There is no significant effect of CRM strategies on customer retention through the mediating effects of customer experience and customer satisfaction.

H₁: There is a significant effect of CRM strategies on customer retention through the mediating effects of customer experience and customer satisfaction.

Table No 4.1: Table showing Descriptive statistics and correlations

Interpretation:

The mean scores indicate that respondents perceive CRM strategies (M = 3.84), customer experience (M = 3.78), customer satisfaction (M = 3.75) and customer retention (M = 3.70) positively. Skewness and kurtosis values suggest approximately normal distributions. All correlations are positive and significant (p < 0.01), with CRM strategies moderately related to customer experience (r = 0.58), satisfaction (r = 0.55) and retention (r = 0.43). Customer experience shows a strong association with satisfaction (r = 0.64) and moderate association with retention (r = 0.51), while satisfaction correlates moderately with retention (r = 0.59). These results indicate that effective CRM strategies are associated with enhanced customer experience, satisfaction and retention.

Table No 4.2: Table showing Reliability and convergent validity

Interpretation:

All constructs demonstrate high reliability, with Cronbach’s alpha values ranging from 0.84 to 0.90 and Composite Reliability from 0.86 to 0.92. Convergent validity is satisfactory, with AVE values above 0.50 and factor loadings ranging from 0.63 to 0.84. These results confirm that the measurement model is both reliable and valid for further analysis.

Table No 4.3: Table showing CFA Model Fit Model Fit Summary

Interpretation:

The Confirmatory Factor Analysis (CFA) results indicated that the proposed measurement model demonstrated a strong fit with the data (N = 600). The chi-square value was 735.20 with 246 degrees of freedom. The ratio of chi-square to degrees of freedom (χ²/df = 2.99) fell below the threshold value of 3.00, indicating acceptable fit.

Incremental fit indices also supported good model fit, with a Comparative Fit Index (CFI) of 0.95 and a Tucker-Lewis Index (TLI) of 0.94, both exceeding the recommended minimum of 0.90. The RMSEA value of 0.058 (90% CI: 0.052–0.064) was below the cut-off of 0.08, indicating good approximation to the population covariance structure. Additionally, the Standardized Root Mean Square Residual (SRMR) was 0.037, well below the recommended threshold of 0.08.

Together, these results confirm that the four-factor measurement model (CRM Strategies, Customer Experience, Customer Satisfaction and Customer Retention) demonstrates strong construct validity and an excellent overall fit.

Amos - CFA Output diagram

Table No 4.4: Table showing Structural Paths (standardised)

Interpretation:

The path analysis results indicate that CRM strategies significantly enhance customer experience (β = 0.59, p < .001), which in turn positively affects customer satisfaction (β = 0.57, p < .001), ultimately leading to higher customer retention (β = 0.53, p < .001). The direct effect of CRM on retention is not significant (β = 0.06, p = 0.09), suggesting that CRM strategies influence retention indirectly through experience and satisfaction. The model explains 35% of the variance in customer experience, 45% in satisfaction and 48% in retention, demonstrating that these constructs meaningfully account for customer-related outcomes.

Table No 4.5: Table showing Indirect effects

Interpretation:

The direct effect of CRM on customer retention (c') was not significant when the mediators were included (β = 0.06, p = .09). However, the indirect paths through customer experience and satisfaction were significant, with bootstrapped confidence intervals not containing zero. This indicates that the influence of CRM strategies on customer retention occurs entirely through the mediating roles of customer experience and customer satisfaction.

The model shows full mediation. Hypothesis H₁ is accepted since CRM strategies significantly enhance customer retention through the mediating roles of customer experience and customer satisfaction.

Objective 2: To evaluate the moderating role of customer loyalty in the relationship between CRM strategies and customer retention.

H₀: Customer loyalty does not moderate the relationship between CRM strategies and customer retention.

H₁: Customer loyalty moderates the relationship between CRM strategies and customer retention.

Moderation analysis was conducted using hierarchical regression.

• Independent Variable (IV): CRM Strategies
• Dependent Variable (DV): Customer Retention
• Moderator (M): Customer Loyalty

Table No 4.6: Table showing Regression Table (Model Summary)

Interpretation:

The model explains 23% of the variance in customer retention. F-statistic is significant, indicating the model fits the data well.

Table No 4.7: Table showing results of Coefficients Table

Interpretation:

A hierarchical regression was conducted to examine the moderating effect of customer loyalty on the relationship between CRM strategies and customer retention. In Step 1, CRM strategies did not have a significant direct effect on retention (β = 0.06, p = 0.09). In Step 2, customer loyalty had a significant positive effect on retention (β = 0.34, p < .001). In Step 3, the interaction term (CRM × Loyalty) was significant (β = 0.12, p = 0.003), indicating that customer loyalty moderates the relationship between CRM strategies and retention. Specifically, the positive impact of CRM strategies on retention is stronger for customers with higher loyalty. The final model explained 48% of the variance in customer retention (R² = 0.48), demonstrating that CRM strategies, customer loyalty and their interaction collectively account for a substantial portion of retention outcomes, supporting the proposed moderation hypothesis (H₁) and leading to the rejection of the null hypothesis (H₀).

This study examined how CRM strategies influence customer retention in organised retail outlets in Bengaluru, focusing on the mediating roles of customer experience and satisfaction and the moderating role of customer loyalty. The findings revealed that CRM strategies do not directly enhance retention. Instead, their impact occurs indirectly through customer experience and satisfaction, indicating a full mediation mechanism. Effective CRM initiatives create meaningful experiences and improve satisfaction, which in turn increase customer retention. Additionally, customer loyalty significantly moderates the relationship between CRM strategies and retention. The positive effect of CRM strategies is stronger for customers with higher loyalty, highlighting that loyal customers respond more favourably to CRM initiatives.

Together, these results demonstrate a complementary mechanism: CRM strategies enhance retention by improving experience and satisfaction, while loyalty amplifies this effect. The integrated model explained a substantial portion of variance in retention (R² = 0.48), confirming its practical relevance for organised retail operations.

Managerial Implications: Retail managers in Bengaluru should adopt CRM strategies that focus on improving customer experience and satisfaction while simultaneously fostering loyalty through targeted programs. Prioritising loyal customer segments can maximize the effectiveness of retention initiatives.

Theoretical Contribution: This study contributes to CRM research by integrating mediation and moderation mechanisms in the context of organised retail, offering a nuanced understanding of how CRM strategies translate into retention outcomes. It underscores that retention is shaped by both the quality of customer interactions and the strength of customer loyalty.

Overall, the study provides actionable insights for retail practitioners aiming to achieve sustainable customer retention through experience-driven, satisfaction-oriented and loyalty-sensitive CRM strategies.

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