  How Do Automobile Companies Use CRM To Improve Customer Loyalty? A Study Of Volkswagen (2006) Ref: busman0018 As the cost of acquiring a new customer is five times more than retaining an existing customer, encouraging brand loyalty is an ultimate goal for any business. Customer Relationship Management (CRM) is a newly evolved phenomenon that, if applied correctly, can transform an organisation’s outlook on the customer and improve their loyalty to the brand enormously. Volkswagen is currently Europe’s number one automobile brand and is a globally renowned distributor of motor vehicles. In fact, one in five cars on the road in Europe is a Volkswagen. However, Toyota are emerging as a major threat, and the dominance of Volkswagen is beginning to diminish slowly but surely. This study seeks to establish what CRM procedures Volkswagen have in place (whether intentional or without actually realising it), with an evaluation of current customer loyalty in the UK among Volkswagen consumers. This was done by using a combination of primary and secondary research, with the primary techniques being focus groups, interviews and questionnaires. The outcome of the research was that Volkswagen has plans to bring in a refined CRM approach to improve customer loyalty rates. The construction of a sophisticated database to record all consumer behaviour is well underway and will bring a tailored approach to each consumer, which is a key indicator of a successful CRM strategy. However, at the time of the study the organisation was doing very little along the lines of CRM intentionally, although basic models (such as the 4 P’s) grasped certain elements of CRM. The questionnaire results provided sufficient evidence from Volkswagen consumers that loyalty is not as high as you would expect for Europe’s leading automobile supplier. 1.0 INTRODUCTION 1.1 Insight into this Paper 1.2 Reasons for Research Topic 1.3 Academic Objectives of the Paper 1.4 Chapters Overview 2.0 SETTING THE SCENE 2.1 Volkswagen Background 3.0 LITERATURE REVIEW 3.1 Introduction 3.2 Definitions of CRM 3.3 Reasons for the Emergence of CRM 3.4 The Growth of CRM 3.5 CRM in the 21st Century 3.5.1 The Emergence of the Internet – Opportunities and Challenges 3.6 The Use of a Database in CRM 3.6.1 The Database and Resulting Analysis 3.6.2 Measuring the Success of the Database 3.7 Criticisms of CRM 3.8 The Effects of CRM on Customer Loyalty 3.8.1 Loyalty Defined 3.8.2 Positive Aspects of Customer Loyalty 3.8.3 Ways in Which CRM Can Achieve Improved Customer Loyalty 3.9 Conclusion of Literature 4.0 METHODOLOGY 4.1 Introduction 4.1.1 Case Study Approach 4.2 Research Methods 4.2.1 Secondary Research 4.2.2 Primary Research 4.3 Quantitative Research – Questionnaires 4.3.1 Pilot Questionnaire 4.3.2 Final Questionnaire 4.3.3 Limitations of Questionnaires 4.4 Qualitative Primary Research – Interviews 4.4.1 Limitations of Interviews 4.5 Ethical Considerations 5.0 ANALYSIS & FINDINGS 5.1 Introduction 5.2 Interview A 5.2.1 Question 1 5.2.2 Question 2 5.2.3 Question 3 5.2.4 Question 4 5.2.5 Question 5 5.2.6 Question 6 5.2.7 Question 7 5.2.8 Question 8 5.2.9 Question 9 5.2.10 Question 10 5.2.11 Question 11 5.3 Interview B 5.3.1 Question 1 5.3.2 Question 2 5.3.3 Question 3 5.3.4 Question 4 5.3.5 Question 5 5.3.6 Question 6 5.3.7 Question 7 5.3.8 Question 8 5.3.9 Question 9 5.4 Questionnaires 5.4.1 Question 1 5.4.2 Question 2 5.4.3 Questions 3, 8 & 9 5.4.4 Question 4 5.4.5 Question 5 5.4.6 Question 6 5.4.7 Question 7 6.0 CONCLUSION 6.1 Introduction 6.2 Focus Group (Interview A) 6.3 Interview B 6.4 Questionnaires 6.5 Limitations 6.6 Possible Areas of Future Study and Recommendations REFERENCES BIBLIOGRAPHY APPENDICES A Statement of Learning B Interview A (Focus Group) Transcripts C Interview B Transcripts D Pilot Questionnaire E Covering Letter F Final Questionnaire G Questionnaire Results H Setting the Scene I Validity & Reliability J Case Study K The Likert Approach 
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