Artificial Intelligence-Based Customer Relationship Management (CRM) and Its Role in Customer Retention: Evidence from Retail Businesses in Sulaymaniyah

Abstract

The incorporation of Artificial Intelligence (AI) in Customer Relationship Management (CRM) has become a revolutionary feature in enhancing customer retention, especially in competitive retail environments. This paper examines how AI-based CRM systems can be used to increase customer retention in retail companies in Sulaymaniyah, Kurdistan Region. A structured questionnaire was created, which included 25 items to measure four dimensions, including personalization, predictive analytics, customer service automation, and customer engagement. The questionnaire was sent to 220 employees and managers who were employed in retail businesses, and 187 valid responses were obtained. The data were interpreted with the help of SPSS 26 by means of descriptive statistics, reliability test (Cronbach Alpha = 0.912), correlation, and multiple regression analysis. The findings indicated that there is a high positive correlation between AI based CRM practices and customer retention (r = 0.681, p < 0.01). Regression analysis also revealed that the most important predictors of customer retention were predictive analytics (beta = 0.312, p < 0.001) and customer service automation (beta = 0.289, p < 0.001). These results indicate the importance of AI-based CRM systems in helping retailers in Sulaymaniyah to develop better customer loyalty, satisfaction, and maintain competitiveness in a fast-changing market. The study presents valuable lessons to managers who want to use AI technologies in customer relationship practices and adds to the scarce empirical literature on the adoption of AI in the Kurdistan Region.