The shift in global consumer preferences toward products oriented toward sustainability principles has driven increased demand for environmentally friendly natural materials, one of which is bamboo. Over the past five years, the bamboo-based industry in Indonesia has shown significant growth as part of the creative economy and green industry sectors. The Indonesian bamboo market size was estimated to reach USD 1.7 billion in 2020 and is projected to experience a compound annual growth rate (CAGR) of 6.2% from 2021 to 2028, as bamboo use increases in the construction, furniture, pulp and paper, and food industries (Grand View Research, 2023; Fortune Business Insights, 2024). 
Bamboo's characteristics as an economical, renewable resource, high compressive strength, lightweight, and natural aesthetics make it an increasingly popular alternative material for construction and household products. This phenomenon is fueled by growing public awareness of eco-friendly lifestyles and the growing trend of natural aesthetics through digital social media. Bamboo craft products such as bamboo baskets (besek), rice baskets (wakul nasi), bamboo food containers (rantang bambu), winnowing baskets (tampah), and decorative weaving are now used not only in traditional contexts but also for hampers, interior decoration, and eco-friendly culinary packaging.
These changes in consumption patterns have opened up vast market opportunities for bamboo craft-based Micro, Small, and Medium Enterprises (MSMEs), particularly in the Special Region of Yogyakarta, a national center of culture and creative industries. According to data from the Badan Pusat Statistik Daerah Istimewa Yogyakarta (2025), the number of MSMEs in this region has increased significantly and contributed to local employment (see Table 1 and Figure 1).

Table 1. Data on the Number of MSMEs and Labor Absorption in Yogyakarta in 2025
Source: Badan Pusat Statistik Daerah Istimewa Yogyakarta (2025)

Figure 1. Data on the Number of MSMEs and Labor Absorption in Yogyakarta in 2025

Source: Badan Pusat Statistik Daerah Istimewa Yogyakarta (2025)
This data shows that the handicraft sector, including bamboo handicrafts, is a leading regional commodity that significantly contributes to the local economy and job creation. However, an increase in the number of business actors is also accompanied by increased competition, both in terms of price, product design, and service quality. Along with the development of digital marketing through platforms such as Instagram, TikTok Shop, and various marketplaces, business competition patterns no longer solely rely on product quality but also on customer experience and the ability of business actors to build long-term relationships with consumers. This condition has triggered a brand-switching phenomenon among bamboo craft MSME customers, who tend to easily switch to other producers because of the ease of access to information and product alternatives available online.
Based on initial observations at the local Distro Bamboo business in Dlingo, Bantul Regency, several problems were identified in customer relationship management, including a lack of follow-up after the first purchase, general product communication via social media, and inconsistencies in customer service. These conditions indicate that customer relationship management practices have not been implemented systematically and with a long-term focus. In this context, the Customer Relationship Management (CRM) approach becomes relevant as a business strategy focused on managing customer interactions to create sustainable value. Payne and Frow (2013) define CRM as the integration of business strategy, organizational processes, and technology aimed at creating long-term customer relationships. Furthermore, Kotler and Keller (2021) emphasize that CRM plays a role in building consistent and personalized customer experiences, thereby increasing customer loyalty. However, there is a gap between the ideal concept of CRM and its implementation in practice, particularly in the MSME sector. In the context of bamboo craft MSMEs, this empirical gap is reflected in CRM practices that are still reactive, not based on integrated data systems, and the minimal use of digital technology due to limited literacy and resources (Rulinawaty et al., 2021) (see Table 2).

Table 2. Empirical Phenomena of CRM Implementation in Bamboo Craft MSMEs
Source: Field Observations (2025)

Based on this phenomenon, this research is important to conduct an in-depth understanding of CRM implementation strategies to increase customer loyalty in bamboo craft MSMEs, specifically at Distro Bamboo in Dlingo, Bantul Regency, Yogyakarta Special Region. The following is the formulation of the research questions: (1) what is the CRM implementation strategy for increasing customer loyalty at Distro Bamboo in Dlingo, Bantul Regency, Yogyakarta Special Region?; (2) what is the impact of CRM implementation on Distro Bamboo's customer loyalty?; and (3) what are the obstacles and opportunities in implementing CRM at Distro Bamboo?. The research objectives are to (1) analyze CRM implementation strategies to increase customer loyalty at Distro Bamboo; (2) identify the impact of CRM implementation on customer loyalty; and (3) identify the obstacles and opportunities for CRM implementation at Distro Bamboo. The research benefits are as follows: (1) practical benefits, (a) to provide strategic recommendations for customer relationship management, (b) to serve as a basis for developing customer membership programs and personalized services, and (c) to improve service quality and customer retention, and (2) theoretical benefits: (a) to add to the literature on CRM in bamboo craft MSMEs, (b) to serve as a reference for qualitative research related to customer loyalty based on service experience, and (c) to enrich CRM studies in the context of the local creative industry.

This study employed a descriptive research design with a qualitative approach. The qualitative approach was chosen because this study aims to deeply understand the phenomenon of Customer Relationship Management (CRM) implementation in the context of social interactions between business actors and customers in bamboo craft MSMEs.
According to Moleong (2019), qualitative research is an approach that aims to understand social phenomena from the perspective of the research subjects, emphasizing the process of meaning-making, experiences, and interpretations of social reality. In the MSME business context, CRM implementation is related to both the technical aspects of service and customer perceptions, emotional experiences, interpersonal communication, and the quality of long-term relationships.
Similarly, Creswell and Poth (2018) state that qualitative research is an exploratory process to understand the meanings individuals or groups attach to social or human issues, particularly in answering research questions of a "how" and "why" nature. This approach allows researchers to explore the dynamics of customer relationships contextually and naturally. Furthermore, Denzin and Lincoln (2017) emphasize that reality in qualitative research is complex, dynamic, and constructed through social interaction. Therefore, a qualitative descriptive approach is deemed appropriate for analyzing CRM implementation at Distro Bamboo, which involves customer experience, digital communication, and ongoing service interactions. Therefore, the qualitative descriptive research in this study aims to provide a factual overview of the CRM implementation strategy implemented by Distro Bamboo in Dlingo, Bantul Regency, Yogyakarta Special Region, as an effort to increase customer loyalty.
This research was conducted at Distro Bamboo's business unit located in the Dlingo District, Bantul Regency, Yogyakarta Special Region. The location was selected purposively, considering that Distro Bamboo is a bamboo craft-based MSME that relies on long-term relationships with customers as a business sustainability strategy. The characteristics of the research location are as follows (see Table 3):

Table 3. Characteristics of the Research Location
Source: Primary Data (2026)

These conditions make the research location representative of examining CRM practices in MSMEs in the creative industry sector.

2.1. Data Sources
The data sources in this study consist of primary and secondary data. First, primary data were obtained directly through in-depth interviews and field observations with research informants, namely, (1) the owner of Distro Bamboo, (2) customer service employees, and (3) regular customers of Distro Bamboo. Second, secondary data were obtained from business documents, sales archives, activity photos, scientific literature, and reports related to CRM practices in MSMEs.

2.2. Data Collection
Data were collected using three main techniques:

2.2.1. In-depth Interviews
Semi-structured interviews were conducted to obtain subjective data regarding customer experiences and perceptions of the quality of service relationships. Kvale (2007) explains that in-depth interviews are professional conversations designed to comprehensively explore the meaning of individual experiences.

2.2.2. Direct Observations
Observations were conducted directly during customer service activities at the business location to understand the context of naturally occurring interactions. According to Spradley (2016), observation allows researchers to understand the behavior of subjects within their social environment contextually. Documentation was used as a data triangulation technique through the collection of activity photographs, transaction records, and evidence of customer communication.

2.2.3. Research Informants and Informant Selection Techniques
The informants in this study were selected using purposive and snowball sampling techniques. According to Miles, Huberman, and Saldaña (2014), informants in qualitative research are the primary source of narrative data that reveal social meanings in depth (see Table 4).

Table 4. Research Informants
Source: Primary Data (2026)

Snowball sampling is used to reach customers who have had repeated interactions with a business through recommendations from previous informants (Creswell & Poth, 2018) (see Figure 2).
Source: Creswell and Poth (2018)

2.3. Data Analysis Technique
The data analysis technique used in this study adopts the interactive analysis model proposed by Miles, Huberman, and Saldaña (2014). This model is widely applied in qualitative research in the social sciences and management studies because it allows researchers to analyze data systematically and continuously throughout the research process. According to Miles, Huberman, and Saldaña (2014), qualitative data analysis is conducted through an interactive and cyclical process consisting of three main stages: data reduction, data display, and conclusion drawing and verification. These stages occur simultaneously during the data collection and analysis processes.

2.3.1. Data Reduction
Data reduction refers to the process of selecting, focusing, simplifying, and transforming raw data obtained from interviews, observations, and documentation. At this stage, the researcher selects relevant information related to the research focus while eliminating irrelevant data. In this study, the data reduction process was conducted through the following steps: (1) transcribing interview data obtained from business owners and customers; (2) grouping data based on research themes, such as customer identification, customer communication, after-sales service, and CRM technology utilization; (3) simplifying information related to CRM practices within MSME operations; and (4) coding the data to identify categories and key themes emerging from the findings. Through this process, the researcher focused the analysis on data that are directly related to the implementation of CRM strategies to improve customer loyalty in MSMEs.

2.3.2. Data Display
Data display refers to the process of organizing reduced data into a structured form that enables researchers to interpret and understand patterns of relationships among research variables. In this study, the data were presented in several forms: (1) descriptive narratives explaining the findings related to CRM practices implemented by MSME actors, (2) analytical tables and matrices presenting comparisons between ideal CRM conditions and the actual conditions found in the studied business, and (3) conceptual diagrams illustrating the relationship between CRM strategies, customer service quality, and customer loyalty. By presenting the data systematically, the researcher was able to identify patterns, relationships among categories, and behavioral trends related to CRM implementation.

2.3.3. Conclusion Drawing and Verification
The final stage of the Miles, Huberman, and Saldaña (2014) analysis model involves drawing conclusions and verifying the findings. At this stage, the researcher interprets the displayed data to identify patterns, themes, and relationships between concepts. In this study, the conclusion-drawing process included the following: (1) identifying relationship patterns between CRM strategies and customer loyalty, (2) analyzing factors influencing the effectiveness of CRM implementation in MSMEs, (3) comparing research findings with CRM and relationship marketing theories proposed by scholars, and (4) verifying the findings through data triangulation by comparing interview data, observational data, and documentation. The verification process ensures the validity and consistency of the research findings so that they accurately reflect the implementation of CRM strategies to improve customer loyalty in MSMEs (see Table 5).

Table 5. Interactive Model Data Analysis Flow
Source: Primary Data (2026)

3.1. Overview of the Research Location

This research was conducted at the bamboo craft business unit, Distro Bamboo, located in the Dlingo area of Bantul Regency, Yogyakarta Special Region. Data were collected through participatory observation, in-depth interviews, and documentation of the business owner, employees, and active customers. The field research approach used a direct, field-based qualitative inquiry with the aim of identifying customer relationship management (CRM) implementation strategies that are contextually applicable to the local craft-based MSME sector.

3.2. A Brief History of Distro Bamboo

The Dlingo area has long been known as a center for traditional bamboo crafts integrated with the natural tourism sector, such as the Mangunan Pine Forest, Becici Peak, and Little Tokyo Dlingo. In this context, Distro Bamboo was founded in 2020 as a family business focused on preserving the cultural value of bamboo crafts while adapting to the needs of the modern market. The superior products produced include Tambir, Sokase, Besek, Awak-ul nasi, Bamboo trays, and Besek food containers. These products are used for household needs, MSME packaging, traditional gifts, and even eco-friendly culinary hampers (see Figure 3 and Figure 4).

Figure 3. Location of the Bamboo Distro Business
Source: Research Documentation (2026)

Figure 4. Bamboo Distro Business Logo
Source: Research Documentation (2026)

In addition to its economic function, this business empowers the local Dlingo community by absorbing labor from farm laborers into productive bamboo craftsmen.

3.3. Results
3.3.1. Research Informant Profile
For clarity, see Table 6 and Figure 5.

Table 6. Profile of Consent Informants
Source: Research Results (2026)

Figure 5. Profile of Consent Informants
Source: Research Results (2026)

3.3.2. Reduction and Categorization of Interview Findings
The interview results were analyzed using thematic coding techniques, resulting in four main dimensions of CRM implementation, as presented in the following Table 7.

Table 7. Categorization of CRM Implementation on the Bamboo Distro
Source: Research Results (2026)

3.3.3. Customer Loyalty Indicators
For clarity, see Table 8.

Table 8. Loyalty Indicators Based on Customer Perception 
Source: Research Results (2026)

3.4. Discussion
The research results show that CRM implementation at Distro Bamboo is relational and based on social interactions, not a formal digital system. First, local product quality. Handmade bamboo products provide authentic value (perceived authenticity) that increases customer trust in product quality. Second, empathetic service. Communicative, friendly, and informative service has been shown to increase customer satisfaction during the purchasing decision-making process. Third, personalization approach. Product recommendations tailored to customer needs create an individualized shopping experience (personalized service experience). Fourth, trust-based relationship. Customer loyalty is more influenced by emotional relationships and long-term trust than by price considerations (see Figure 6).
Figure 6. Relational CRM Implementation Model for MSMEs

Theoretically, these findings confirm that CRM implementation in the craft-based MSME sector does not have to rely on high-tech systems but can be achieved through a consistent social relationship approach (social bonding strategy). Thus, the integration of local product quality, personalized service, and ongoing communication has been proven to: (1) increase customer satisfaction, (2) strengthen trust, (3) encourage repeat purchases, and (4) generate word-of-mouth promotion. This is an indicator of the success of a relationship-based CRM strategy in maintaining the sustainability of Distro Bamboo's business amidst price competition from modern plastic substitute products.

4.1. Conclusion

This study concludes that the implementation of CRM at Distro Bamboo was carried out through an organic, personalized strategy, including interaction-based customer identification, responsive two-way communication, solution-oriented after-sales service, and value creation through quality products and flexible ordering. Consequently, this strategy successfully built trust and satisfaction, encouraging repeat purchases, creating customer advocacy (word of mouth), and building strong resistance to competitors' offerings. Distro Bamboo's customer loyalty is not built on low prices, but on a foundation of quality relationships and products. The main obstacle is the lack of a systematic customer data recording system; however, this also presents an opportunity to develop a simple system to increase CRM effectiveness in the future.

4.2. Recommendations

For Distro Bamboo, it is recommended to begin documenting customer data in a simple way, for example, through a digital notebook or spreadsheet, to support more planned service personalization. Product quality and warm service, which are already key strengths, must be maintained and passed on to all employees. Social media optimization also needs to be enhanced, not only as a product showcase but also as a channel for follow-up and value-added communication. For future researchers, it is recommended to conduct quantitative studies to examine the influence of personal variables in CRM on customer loyalty in similar sectors. Comparative research across craft MSMEs in different regions could also be conducted to examine the influence of the socio-cultural context on the effectiveness of CRM strategies.