Literature Review On Customer Management And Customer Retention


The literature review is the segment which deals with the assessment of the past and proposed theories given in respect of the given topic. The review here will deal with and Help in academic theories proposed for the effective customer management and customer retention by the retail stores in Australia. The proposed theories will help the researcher to understand the factors that influence the customer loyalty, customer retention and customer satisfaction level in the different retail stores of Australia. The chapter concerns the critical analysis of the relevant theories so as to help the researcher to apply the relevant facts of the theories in the present scenario and increase the customer satisfaction levels in the literature review.

1.0 Theories and Models in literature review

1.0.1Customer relationship Management (CRM)

The CRM is the technique that combines all aspects of the interaction of the company management along with the customers. According to Rhyne (2009), a literature review is a customer oriented tool which is based and redesigned on the basis of the customer’s response to the services provided to them. Hence it helps to provide better customer service. However MacMillan and Venkataraman (2009), is of the opinion that in some of the organisations it is seen that the employees and the managers of that organisation are not knowledgeable about the benefits of the CRM system hence they tend to create a resistance in accepting the technology and using it to evaluate the customer’s requirements. () are of the opinion that the CRM also helps the companies to establish better communication channels for the marketers to understand the requirements of the customers. The revenue of the company also increases if the customers are satisfied with the company. The marketing of the company is also based on the customer relationship management.

1.0.2 Customer loyalty

The customer loyalty theories are based on the social and the experimental psychology theories. According to Ireland and Sexton (2010), the customer loyalty towards the service or the product is generally of three types namely emotionally loyal, attitudinally loyal and behavioural loyal. The emotionally loyal customers will not take into regard any negative aspects in the service or the product quality. Burtonshaw and Gunn (2010), states that these types of customers are emotionally connected with the company and are hence taken to remain loyal for the rest of their life irrespective of any defects in the service or the product of the company. However, Morris et al. (2011), opined that the attitudinally loyal customers will be largely influenced by the good image of the company and the word of the mouth advertisement. Hence the retention of these types of customers will be fluctuating for the company. Rhyne (2009), states that the organisational behavior loyal customers are the typical range of customers who are accustomed to the particular company for the product or the service hence they don’t change their mind frequently. The retention of these types of customers depends upon the tenure of the relation of the customer with the company. According to Barney (2009), various companies along with different retail shops have introduced the concept of loyalty cards to measure the number of visits of the customers. These programmes have helped both the customers as well as the companies to increase their customer relationship base. The loyalty cards provide discounts and points to the customers on their each purchase and the record of the visit and the amount of purchase is recorded by the companies to keep a track of the type of customer engagement (Morris et al. 2011).

Literature Review

Figure 1: Customer loyalty model

(Source: Barney, 2009, pp-90)

1.0.3Management of customer grievances

According to Burtonshaw and Gunn (2010), the literature review and customer grievances comes in form of the complaints. In simple words, a complaint is an expression of dissatisfaction made by the customer when the fulfilment of the expectations does not occur. The complaints are a form of blessing for the companies because the effective management of the grievances by a company ensures that the company is trying to improve the level of the service or the product and the retention capability of the company to retain the loyal customers increase. The major customer grievances are a result of the following factors namely the poor communication between the assignment service provider and the customer, lack of adequate information from both the concerned parties, poor customer service, overpricing of goods and services and delivery of wrong information provided in the literature review. According to Barney (2009), effective management of customer grievances will help the companies to reduce the number of service failures, gain a competitive advantage over the competitor firms and most importantly retain the customer base and create a loyal customer base. Rhyne (2009), adds that the creation of loyal customer base will not only help the company to generate revenue but also help the company to understand the demand of the goods and the services. According to Matthias and Timothy (2012), if a customer is complaining about some service or product then it is chance to the company to retain that particular customer. However Burtonshaw and Gunn (2010), are of the opinion that the companies are at times least bothered about increasing the effective management of the customer grievances. They leave no option to record the customer’s feedback and hence this creates gap between the service or the product provided and the expectation of the customers. In this respect the companies must conduct extensive market research before launching a new product and understand the expectations for the customers regarding the product. Accordingly the company can set the benchmark and on attaining the benchmark the company will be able to satisfy the customers.

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1.0.4Total quality management (TQM)

The concept of TQM initially developed by the US Navy to develop a uniform war strategy during the late 80’s.  According to () the TQM is the process of managing all the parts of the business effectively. It is a long term process of managing the customer base so as to achieve customer satisfaction. The main focus of the manufacturing process and the service delivery process generally remains upon the quality control. According to Rhyne (2009), the most effective way to satisfy the customers is to control the quality of the product or the service delivery for a company. The main features of this system are:

  • Definition of the quality is set by the customer’s not by the company.
  • The development and the keeping the uniformity of the quality for longer times is the sole responsibility of the top management.
  • The organizational Justice should practice the quality development as a continuous process.

However, the study by MacMillan and Venkataraman (2009), showed that to achieve the complete customer satisfaction one organization must deploy TQM techniques in Strategic Planning, Workforce development, Operation management, customer development and in knowledge management. The same study reviled that to achieve the optimum customer satisfaction it is very much important to deploy the TQM in all the sections otherwise the entire business delivery process may get disrupted due to the part-wise implementation of the system. The major advantage of this system is that it helps one organization to provide the quality in accordance with the customer demand. But the major issue within this system is that it is not always very much feasible to develop a product or a service delivery mechanism taking only the customer view point. The latest development of this system has been done through the implementation of the lean system and the six-sigma process. According to Matthias and Timothy (2012), the TQM is an advantageous tool for the management because the company by using the TQM can strengthen the competitive position, increase the productivity and also increase customer loyalty.

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1.0.5 Customer gap model

According to Rhyne, (2009), the customer gap model is the model which shows the relation between the customers’ expectations and the customers’ perception. It is a customer oriented model that deals with identifying the gap between the customers’ expectations and the customer’s perception. The companies with the help of this model try to understand the expectation that the customers have the services and the products that are delivered to them. The gap model helps the companies to analyse the gap which is present between the expectation and the actual service that is received. Barney (2009), are of the opinion that this gap can be from the customer’s high perception level. Hence it is the duty of the business to analyse the expectations of the customers. A business can benefit from the gap model because the model will provide various situations for the scope of improvement of the services of the customers.

According to Rhyne, (2009), to reduce this gap between the service quality and the expectation of the customers the companies should set a bench mark for the service to be provided. The achievement of that standard will help the companies to reach the expectation level of the customers. Moreover, Matthias and Timothy (2012), is of the opinion that the five important factors that the service providers should take a note to while determining the service quality are namely the Reliability, responsiveness, assurance, empathy and tangibility.


This part of the chapter gives a brief description of the various proposed theories relating to the customer loyalty and management assignment help. This chapter will help the researcher to evaluate the results of the research thus conducted with the application of these theories.

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