ABSTRACT
The research examine customer
relationship management and customer loyalty with focus on Ayodele Vistal
Logistics Limited. The study adopted descriptive survey research design. Simple random sampling technique is
employed in selecting the respondents from the population. A sample of one
hundred and twenty (120) was drawn from the population. Data were collected
mainly through primary source with the aid of a well-structured questionnaire. The
data gathered were presented on table using percentile and the formulated
hypotheses where tested using chi square statistical analysis and pearson’s correlation coefficient analysis. The outcome of result of hypothesis 1
proofs customer
relationship management has significant effect on customer loyalty, based on the result where the X2
= 27.735, and p-value (.034). shows
a significant association since the p-value (.034) is
lesser than the standard alpha value (0.05). It
was evident with the result of hypothesis 2 that Customer Relationship
Management (CRM) has impact on customer satisfaction. The result shows X2 = 12.433, and p-value (.014). shows a significant association since
the p-value (.014) is lesser than the standard alpha value
(0.05). The analysis of hypothesis 3 proofs that
Customer Relationship Management practice has influence customer retention. The
result shows strong
positive correlation between Customer Relationship
Management practice and customer retention. Also, 2-tailed significance value of the variables
are less than the standard alpha value is < 0.05. The result of hypothesis 4 proved that use
of technology and customer relationship performance in Ayodele Vistal logistics
limited. This is based on the result where strong positive correlation between Customer
Relationship Management practice and customer retention, moreso, 2-tailed significance value
of the variables are less than the standard alpha value is < 0.05. It was
concluded in the study that; customer relationship management has
significant effect on customer loyalty in Ayodele Vistal logistics limited; Customer Relationship
Management (CRM) has impact on customer satisfaction; Customer Relationship
Management practice has influence customer retention; and use of technology and customer relationship
performance in Ayodele Vistal logistics limited. It was recommended among other
recommendations that management of the organisation should increase its level
of commitment in developing a good relationship with the customer by adjusting
and personalizing services to suit the needs of an individual customer, and
ensuring flexibility in serving the needs of customers and when there are
changes in services offering to customers.
TABLE
OF CONTENTS
Front
Page i
Certification ii
Dedication iii
Acknowledgement iv
Abstract v
Table
of Contents vi
CHAPTER ONE
INTRODUCTION
1.1 Background of the study 1
1.2. Statement of the Problem 4
1.3 Objectives of the study 5
1.4 Research
Question 6
1.5 Statement
of Hypotheses 6
1.6 Significance of the study 7
1.7 Scope of the study 8
1.8 Operational Definition of Terms 8
References 10
CHAPTER
TWO
LITERATURE REVIEW
2.0
Preamble 11
2.1 Theoretical Framework 11
2.1.1 Social Exchange Theory 11
2.1.2 Customer Service
Theory 14
2.2 Conceptual Framework 15
2.2.1
Customer Relationship Management Concept 16
2.2.2 Customer Loyalty Concepts 20
2.2.3 Customer Satisfaction 24
2.2.4 Customer
Retention 25
2.2.5 Technology Use 28
2.3 Empirical Literature 31
2.5 Gap in Literature 35
References 37
CHAPTER THREE
METHODOLOGY
3.0 Preamble 42
3.1 Research Design 42
3.2 Population of the Study 43
3.3 Sampling technique / Sample Size 43
3.4 Data Collection Method 44
3.5 Data Analysis Method 44
3.6 Test of Validity and Reliability of the Research Instrument 45
3.7 Model Specification 46
CHAPTER FOUR
DATA PRSENTATION AND
ANALYSIS
4.0
Preamble 48
4.1 Personal
Characteristics of Respondents 48
4.2 Response of
Respondents to the Problem Areas. 50
4.3 Testing and Interpretation of the
Hypotheses. 61
4.3.1 Test of Hypothesis One 62
4.3.2 Test of Hypothesis Two 63
4.3.3 Test of Hypothesis Three 64
4.3.4 Test of Hypothesis Four 66
4.4 Discussion of Findings 67
CHAPTER
FIVE
SUMMARY,
CONCLUSION AND RECOMMENDATIONS
5.1 Summary 69
5.2 Conclusion 69
5.3 Recommendations 70
5.4 Suggestions for Further
Studies 72
Bibliography 73
Appendix A: Questionnaire Introduction Letter 79
Appendix B: Questionnaire 80
CHAPTER
ONE
INTRODUCTION
1.1
Background of the study
Business Organization, either small or medium
scale, has the main challenge of keeping and maintaining a good relationship
with customers. It is now a known fact that customers in any organization are king
because an organization can only stay and remains in business as long as the
customers are happy to transact business with the organization. Customers
determine and influence the growth and the viability of any business. And
because the business environment has changed by the economic globalization and
liberalization, the increasing competition, enlightened and demanding
customers, and the emphasis on quality and value of purchase, make it
imperative for business owners to move from the traditional way of marketing to
the modern system of marketing. And this modern means of marketing includes the
introduction of a value-added relationship with the customers in order to win
their hearts and gain their loyalty.
Several organizations spend a
significant part of their time, energy and resources on new business ideas. Growing
business and expanding into new markets is important but one of the primary
goals is to keep existing customers and enhance customer bonding (Weinstein,
2002). A firm’s primary strategic objectives are to minimize customer regress
and to maximize customer intention rates to buy, as evidenced by the recent
emphasis on customer relationship management. Thus, previously satisfied buyers
may help firms both reduce marketing costs and develop more stable levels of
sales when a large number of satisfied buyers are retained to purchase again in
the future, this is what we call Customers’ loyalty.
Experience shows that an old customer
with the company is much more likely to repurchase than a new customer – one
cannot really determine which customers are profitable and should be retained.
Although finding new customer is very important, the emphasis is shifting
towards retaining profitable customers and building lasting relationship with
them. Companies have also discovered that when a customer is lost, it means they
are not just losing a single sale but also a life time’s worth of purchase and
referrals. In effect, the double goal of marketing is to attract new customers
by promising superior value and retain current customers by delivering
satisfaction (Kotler & Armstrong, 2011).
“Customers are the center for all business
activities this is as a result of increased competition for greater market
share. Customers are becoming harder to please. They are smarter, more
price-conscious, more demanding and less forgiving and are approached by many
more competitors with equal or better offers.” (Kelly & Kotler, 2006: 146).
Companies can only be distinguished based on effective customer relationship management
(CRM). CRM has customer loyalty as its central concern. Customer satisfaction,
which is the comparison of customers’ expectations with his or her perception
of being satisfied, is the essential condition for retaining customers
(Kracklauer et al., 2004). Therefore, customer loyalty is an effective and
importance tool that can be used by both small and medium scale enterprises to
gain a strategic advantage and survive in today’s ever-increasing logistics
competitive environment.
CRM represents an activity to
developed full-knowledge about customer behavior and preferences in order to
initiate programs and strategies that encourages customers to continually
enhance their business relationship with the company (Parvatiyar A & J. N.
Sheth, 2001). Verhoef (2003), study demonstrates that, CRM positively affect
customer loyalty. Verhoef & Donkers (2001), confirm that CRM allows small
and medium enterprises to employ strategies with the help of customer databases
in administrating personal customer bonding effectively towards retention.
Customer bonding has typically been viewed as an important determinant
affecting customer loyalty. The connection between customer bonding and
customer loyalty is worth studying in the competitive market.
There is a need for businesses to maximize
customer value which is to cultivate long-term customer relationships which can
only be achieved when customers are satisfied. “Customer Relationship
Management is the process of managing detailed information about the individual
customer and carefully managing all customer touch points to maximize customer
loyalty.” (Aturu et al, 2017). Customer loyalty is as a result of the programs
of customer retention. Although the marketing manager’s primary concern is
maintaining and increasing brand loyalty, there is no guarantee for loyal
buyers, because today’s buyers might not be so in the future since loyalty is
considered so transient. Loyalty is very complex. Javalgi & Moberg, (1997),
defines loyalty concept as being an extremely difficult task. The American
Marketing Association over-simplifies the concept by defining it as “the
situation in which a consumer generally buys the same manufacturer-originated
product or service repeatedly over time rather than buying from multiple suppliers
within the category” (Moisescu & Vũ, 2011). Moreover, Aaker (1991) defines
brand loyalty as a reflection of how likely a consumer is to switch to another
brand, especially when that brand makes a change in price, product features,
communication, or distribution programs. Nevertheless, loyalty is much more
than just repeat purchases, as a consumer who keeps buying a certain brand may
be doing it because of inertia, indifference, switch or exit barriers and other
motives, rather than actual loyalty (Reichheld, 2003).
1.2.
Statement of the Problem.
Customer Relationship Management is growing
in importance due to the challenging business environment faced by
organizations throughout the world today. It is therefore a means of address increasing
competition, changing economic conditions and promotional dependence through
the use of intimate customer knowledge, gained through relationship development
and past marketing programs. CRM is increasing in prominence because it focuses
on current users.
Organizations realize that they don’t just
focus on transactions; they turn them towards opportunity to sell products with
good service experiences to established long term one to one relationship with
each customer. In recent years, organizations had to quickly decide the right
way to build the long-term relation with customer through different tools and
techniques. Customer Relationship Management (CRM) was also a tool having
different techniques to attract, acquire, retain and build a strong
relationship with customers. Customer Relationship Management was a dual
creation process in which information was captured, integrated, accessed then
exchanged to create value for future customer from current customer (Boulding,
Staelin, Ehret, & Johnston, 2005).
CRM aims at establishing new relationships
and developing them to best serve the interest of the company and shareholders
through profitability, and the interest of the customer through value added.
CRM creates long-lasting relationships by combining modern technology with
modern way of thinking. Thus, CRM enables companies to really focus on one or
several groups of customers, which isn’t possible in traditional marketing. The
current trend is that customers no longer stay in one company but easily switch
to another. They have triggered a new era of creating competitive advantage
through customer orientation. Customer retention is one part of CRM where the
most profitable, or in some other way valuable relationships are being focused
on. (Payne 2005, 4–38.)
CRM is a way of building a long-term
relationship with customers to nurture its stability in today’s blooming
market. Customers’ expectations are now not only limited to get best products
and services, they also need a face-to-face business in which they want to
receive exactly what they demand and in a quick time. CRM is a business
strategy directed to understand, anticipate and respond to the needs of an
enterprise's current and potential customers in order to grow the relationship
value. (Aturu-Aghedo, et al, 2017)
Customer relationship management was not only
associated with technology. It was combination of Human, technology and process
at the same time. Some organizations think that customer relationship
management was only sale force or technological driven software fail to
implement customer relationship management and this is because they do not
fully understand customer relationship management. To understand CRM and its
capabilities fully is the key to business performance. Customer relationship
management has a great influence on business performance positively.
Competition intensity was also enhancing the relationship between customer
relationship management capabilities and business performance. (Roger,
Christopher &
Michael, 2011)
1.3
Objectives of the study
The objective of this study is to find out
how Customer Relationship Management and Customer Loyalty impact or influence
business performance in a logistics business world using Ayodele Vistal
logistics limited as a case study. The specific objectives include:
i.
Evaluate the customer relationship experience
with customer loyalty;
ii.
Identify the interrelationship that exists
between Customer Relationship Management (CRM) and customer satisfaction;
iii.
Determine if Customer Relationship Management
practice has effect on customer retention in Ayodele Vistal logistics limited;
iv.
Examine
how the use of technology influence customer relationship performance in
Ayodele Vistal logistics limited.
1.4 Research
Question
In
order to achieve the purpose of this research study, the study will attempt to
provide answers to the following research questions:
i.
Do customer relationship management correlate
with customer loyalty in Ayodele
Vistal logistics limited;
ii.
How do Customer Relationship Management (CRM)
impact customer satisfaction;
iii.
To what extent does Customer Relationship
Management practice influence customer retention in Ayodele Vistal logistics limited;
iv.
Do
relationship exist between the use of technology and customer relationship
performance in Ayodele Vistal logistics limited.
1.5 Statement
of Hypotheses
The following are the hypotheses tested in the
course of the study:
Ho1: Customer relationship management has no
significant effect on customer loyalty;
Ho2:
Customer Relationship Management
(CRM) does not impact customer satisfaction;
Ho3:
Customer Relationship Management
practice has no influence customer retention;
Ho4: There is no significant relationship exist between the use of technology
and customer relationship performance in Ayodele Vistal logistics limited.
1.6
Significance of the study
The
study is expected to contribute to the study of CRM practices, on the effect of
customer relationship management and the various motivational factors which
could be harnessed to motivate customers to retain them to increase and sustain
productivity.
The
study will also help to know of the CRM that are properly done and the ones
that need to be improved on for successful implementation of CRM and their
effect on customer loyalty. In addition, this paper will give insights to other
researchers who want to assess the level of the application of CRM and its
effect on loyalty in the Logistics industry.
1.
Academic:
2.
Practitioners:
3.
Industry:
4.
Government:
The
study which focuses extensively on Ayodele Vistal Logistics Limited as a case
study will contribute to the existing knowledge on customer relationship management
and customer loyalty. The study will serve as a foundation for future research
work to be conducted in this area and other Logistic Service Providers as
inducing factors to customer loyalty and the importance of CRM in everyday
activities.
1.7 Scope
and limitations of the study
The scope of this study is premised on customer
relationship management and the loyalty of the customer with focus on logistic
industry. The study covers
staff and customers of Ayodele Vistal Nigeria Limited in Lagos State.
The choice of logistic industry is because no research in logistic industry has
been carried out on customer relationship management and customer loyalty. Also
Lagos State was focus of the study because logistic business is fast growing in
the state.
The major limitation of the study was non
readiness of customers to partake in the survey. Administering the
questionnaire took more time as customers’ were persuaded to fill the
questionnaire.
1.8 Operational
Definition of Terms
KEY CUSTOMER: The crucial customer that provide a means
of company’s achievement.
CUSTOMER RELATIONSHIP: Customer relations is the company-wide process of
nurturing positive relationships with your customers — the sum of all customer
interactions and experiences.
CUSTOMER SATISFACTION: When customers are pleased with
the goods or services offered them.
COMMUNICATION: Exchange of information between the
business, employees and customers.
LOYALTY: Faithfulness to commitment, allegiance or
support.
KNOWLEDGE MANAGEMENT: Fact, Information and skill acquired. Customer
knowledge management refers to acquiring, sharing, and developing the customer
knowledge among employees for making profit to the organization and customers.
INFORMATION TECHNOLOGY: Refers to the information-based technologies
that utilize information technologies for creating relationships with
customers. Technology Development of every organization in information
technology area improves its capability in collecting, saving, analyzing, and
sharing knowledge about customer.
VALUE: The importance, worth, or usefulness
of something.
PROCESS: A series of actions or steps taken in order to
achieve a particular end.
CUSTOMER SERVICE: The way companies behave towards their
customers. Supports or care offered to customers’ needs before and after they
buy product and use products or services.
QUALITY SERVICE: Service quality that meet or
exceed customer expectation while remaining economically competitive
STRATEGY: plan/action designed to achieve a
long-term or overall aim.
COMPETITIVE ADVANTAGE:
Factors that helps to distinguish a business from competitors.
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