IMPLICATIONS OF CUSTOMER SERVICE ON CUSTOMER LOYALTY IN THE NIGERIAN BANKING INDUSTRY. (A CASE OF FIRST BANK NIGERIA PLC, UMUAHIA, ABIA STATE)

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This research “Implication of Customer Service on Customer Loyalty” A study of First Bank Plc, Umuahia. The general objective of the study was to determine the Implication of Customer Service on Customer Loyalty in the Nigerian banking industry while specific objectives were to determine the extent to which speed of service affects customer loyalty to the bank, to determine the extent to which prompt attention to customers’ complaints contribute to the customer loyalty to the bank. In order to solve the research problem, hypothesis were formulated and tested using Chi-square statistical tool. Primary data were collected through the use of quesionnaire. The respondents comprised of the customers of the bank. Tables, frequencies and percentages were used in analysing the data collected. Data interpretation gave the following findings, speed of service affects customer loyalty to the bank. Accuracy affects customers’ loyalty to the bank, while prompt attention to customers’ complaints contributes to their loyalty. Based on the findings of the study, the following recommendations were made, that banks should stay to widening their clientele base by providing anywhere, anytime, any channel banking service to customers and that human resource developpment standard should be maintained in the recruitments, at all level and all times. The implications of the findings is that any bank that does not meet up with customers wanta and expectations in a competitive market situation will be losing its customer to it competitions gradually.

TABLE OF CONTENTS

Title Page i

Declaration ii

Certification iii

Dedication iv

Acknowledgement v

Table of Contents vi

List of Tables vii

Abstract viii

CHAPTER ONE 1

1.0 INTRODUCTION   1

1.1 BACK GROUND OF THE STUDY 1

1.2   STATEMENT OF PROBLEM 3

1.3 OBJECTIVES OF THE STUDY 4

1.4 RESEARCH QUESTIONS 4

1.5 STATEMENT OF HYPOTHESIS 4

1.6 SIGIFICANCE OF THE STUDY 5

1.7 SCOPE OF THE STUDY   6

1.8 LIMITATION OF THE STUDY 6

CHAPTER TWO 7

2.0 REVIEW OF RELATED LITERATURE. 7

2.1      INTODUCTION 7

2.2 EMPIRICAL REVIEW 7

2.3 OPERATIVE QUALITY OF A SERVICE ORGANIZATION 10

2.4 DETERMINATS OF CUSTOMERS SERVICE IN BANKING 10

2.5 RELATIONSHIP MARKETING , A STRATEGY  IN THE BANKING   INDUSTRY . 11

2.6 SOME VARIABLES THAT ENHANCE RELATIONSHIP MARKETING IN THE BANKING INDUSTRY 13

2.7 RELATIONSHIP MARKETING INVESTMENTS AS A KEY ISSUE IN BANKING INDUSTRY. 16

2.8 CUSTOMER SATISFACTION A MAJOR ANTECEDENT OF CUSTOMER LOYALTY IN BANKING INDUSTRY 17

2.9 THEORETICAL FRAMEWORK 19

2.10 SUMMARY OF LITERATURE REVIEW 20

CHAPTER  THREE 22

3.0 METHODOLOGY 22

3.1  INTRODUCTION   22

3.2   RESEARCH  DESIGN: 22

3.3 AREA OF THE STUDY 22

3.4 THE POPULATION OF THE STUDY 22

3.5  SAMPLE SIZE DETERMINATION 23

3.6   SOURCES   OF DATA 23

3.7   INSTRUMENTETION 23

3.8   VALIDATION AND RELIABILITY OF RESEARCH INSTRUMENT. 24

3.9 DATA ANALYSIS: 24

CHAPER FOUR       25

4.0 FINDINGS 25

4.2 HIPOTHESIS TESTING 35

CHAPTER FIVE 41

5.0 SUMMARY, CONCLUSION AND RECOMMENDATIONS 41

5.1 SUMMARY 41

5.2 CONCLUSION 42

5.3 RECOMMENDATION 42

REFERENCES 44

APPENDIX                    48

LIST OF TABLE

Table 1: Questionnaire distributed and returned by customers 25

Table 2: Response on the age range of customers 25

Table 3: Response on the gender of the respondents. 26

Table 4: Response on the occupation of the respondents 26

 Table 5: Response on the marital status of respondents 27

Table 6: Response on whether respondents have an account. 27

Table 7: Response on how long customers have operated

with the bank. 28

Table 8: Response on how long it took the bank to open your account.   28

Table 9: Response on how customers rate the reliability

of the bank services 29

Table 10:  Response on whether bank attends to customers’

complaints. 29

Table 11: Response on how first bank response to customers’

complaints. 30

Table 12: Responses on the basis customers’ receive

statement of accounts. 30

Table 13: Response on how fast they issue customers

statement of account. 31

Table 14: Response on whether customers have

intension to leave the bank. 31

Table 15: Response on whether customers would want to

introduce the bank to friends 32

Table 16:   Response on whether customers have to

queue whenever they want to obtain a service. 32

Table 17: response on whether customers’ agree that

speed of service affects their loyalty. 33

Table 18:  Response on whether customers Agree

that accuracy affects customers’ loyalty to the bank. 34

Table 19:     Response on whether Customers Agree that

Prompt Attention to customers’ Complaints contribute

to their loyalty. 34

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACK GROUND OF THE STUDY

Marketing has been defined as organizational function and set of processes for creating, communicating and delivering value to customers and for managing customer relationship in ways that benefit the organization and its stake holders.

And the marketing concept holds that the key to achieving organizational goal is very effective than competitors in creating , delivery and communication superior customer value to the chosen target market.

(kotler  and keller,2009).

To enhance the level of customer service deliverable to the target audience, marketers are exposed to various strategies aimed at ensuring that the bundle of economic, functional and psychological benefits derivable  from transaction by the  customer far exceeds expectations. One sure ways of achieving this, is through the implementation of effective customer service programme.

Customer service simply connotes all the "Extra" services rendered to the customer in the process or after exchange relationships to enhance his level of satisfaction.

Such service would also be offered to delight the target   audience and retain them as loyal customers .

In the banking industry where services are rendered to customers’ coupled with the similarity of products, the  only differentiating strategy becomes the crafting of customer service .

Gremler  and Brown (2009) note that when the  physical

Product cannot easily be differentiated ,the  key to competitive success may lie in adding value services and improving the quality. They identify the main services differentiation to include ordering ease listening, customer training, customers consulting and so on.

Commercial banks rendering financial services are therefore expected to improve on their services quality in order to satisfy their numerous customers in addition cittomer (2008) specified that the challenges is not to produce satisfied customers but to produce delighted and loyal customers . And this is where kotlar(2001) maintained that profitable organizations are those that are shifting from the marketing concept to the customers concept by shading separate offers, service and messages to suit individual taste and preference .

From the foregoing therefore, it become imperative that the relationship  between service quality and customer satisfaction be recognized  and appreciated because of its significant value to service provider such as banks. It is the light of the foregoing that the study is attempting to examine the implications of customer service on customer loyalty in the Nigeria banking industry with first bank plc Umuahia in focus.

1.2   STATEMENT OF PROBLEM

It is observed that banks in Nigeria are not emphasizing on quality of customer service. Customer Service quality relates to customer perceptions or judgment of service Harrison, 2003. In view of the fact that banks do not provide tangible product, their service quality is usually assessed by measures of the service provider’s relationship with customers, speed of service, expertise, accuracy in the issue of statement of account and so on. This is often very encouraging in the Nigerian banking industry.

Moreover, one also notices that cutomers will wait for long hours in the banking hall just to obtain a service, despite the adoption of modern technology.

Moreover, bank management are not giving much attention to bank staff skill possession, knowledge acquisition, prompt attention to customer’s complaints and their needs, offering of fast and efficient services, they are not giving them staff regular training especially in the area of relationship marketing skills and their attitude to customers service generally. This has affected the quality of service customers receive.

Many banks have failed to recognize that service loyalty to determined by the degree to which a customer exhibits repeat purchasing behavior, possesses a positive attitudinal disposition toward the provider and considers using only the provider when a need for such service arises.

Unfortunately to the banking industry, today customers are more enlightened, bitter education and aware of their needs, they are approached by other competitors with equal or better offers to provide such services. the big challenge to banks is not to get customers but, to produce delighted and loyal customers that will be happy for doing business with them at any point in time.

1.3 OBJECTIVES OF THE STUDY

The general objective of the study is to examine the implications of customer service on customer loyalty in the Nigerian banking industry.

The specific objectives of the study are as follow

1. To determine the extent to which speed of service affects customer loyalty in the Nigerian banking industry.

2. To determine the extent to which accuracy affects customer loyalty.

3. To determine the extent to which prompt attention to customers complaints contribute to customer loyalty.

1.4 RESEARCH QUESTIONS

The following research question are formulated in order to achieve the research objectives of this study

1. To what extend does speed of service affects customer loyalty in the Nigerian banking industry.

2. To what extent does accuracy affects customer loyalty?

3. To what extent does prompt attention to customers complaints contribute to customer loyalty

1.5 STATEMENT OF HYPOTHESIS

1. Ho : there is no significant relationship between speed of service and customer loyalty in First Bank.

Hi: there is significant relationship between speed of service and customer loyalty in First Bank

2. Ho: there is no significant relationship between accuracy and customer loyalty in First Bank

Hi: there is no significant relationship between accuracy and customer loyalty in First bank.

3. Ho: there is no significant relationship between prompt attention to customers complaints and customer loyalty in First bank.

Hi: there is significant relationship between prompt attention to customers’ complaints and customer loyalty in First bank.

1.6 SIGIFICANCE OF THE STUDY

The study will helped the researcher to apply his knowledge of marketing in the practice of marketing in the marketplace the researcher also benefited from the study as it qualifies him to earn a B. Sc degree from the University.

Customers; the study will be of great benefit to customers as it will improve their knowledge in area of interpersonal relationship. It will also assist them adjust their behavioural disposition to their own advantage. First Bank; it will help the bank to develop more customer service programmes capable of engendering customer satisfaction and hence customer loyalty. This will help to reduce customer deflection. The public who dislike banking owing to poor customer service will be more attracted to the bank for their services.

1.7 SCOPE OF THE STUDY

This study is limited to First bank of Nigeria Plc located in Umuahia Metropolis and their customers.

1.8 LIMITATION OF THE STUDY

The following constraints are encountered by the researcher in carrying out this study. Unco-operative attitude of bank customers coupled with the illiteracy level which made it difficult for them to respond to the questionnaire and also getting the true customers of the bank is not easy.  

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