ABSTRACT
This research The effects of Customer Service on Customer Loyalty:
A Study of First bank Plc, Umuahia. The general objective of the study was to
determine the effects of customer service on customer loyalty in the Nigerian
banking industry while specific objective 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 customer loyalty to the
bank. In order to
solve the research
problem hypotheses were formulated and
tested using chi-square statistical tool. Primary data
were collected through the use of questionnaire. The respondents comprised of
the customers' of the bank. Tables, frequencies and percentages were used in analyzing
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
contribute to their loyalty. Based on the findings of the study, the following
recommendations were made, that banks should start to widening their clientele
base by providing
anywhere, anytime, any channel banking service to customers and that human resource development standard
should be maintained in the
recruitments, at all level and all times. The effects of the findings, is that any
bank that does not meet up with customers wants and
expectations in a competitive
market situation will be losing its customers to its competitors
gradually.
TABLE OF CONTENTS
Title page i
Approval page ii
Certification Dedication iii
Acknowledgment iv
Abstract v
Table of Contents vi
List of Tables vii
CHAPTER
ONE: INTRODUCTION
1.1 Background of the
study 1
1.2 Statement of the
Problem 2
1.3 Objectives of the
Study 3
1.4 Research Questions 3
1.5 Statement of
Hypotheses 4
1.6 Significance of the
Study 4
1.7 Scope of the Study 5
1.8 Limitations of the
study 5
CHAPTER
TWO: LITERATURE
REVIEW
2.1 Introduction 6
2.2 Empirical Review 6
2.3 Operative Quality of a Service
Organization. 8
2.4 Determinants of
Customer Service in Banking 9
2.5 Relationship
Marketing, a Strategy in the Banking
Industry 10
2.6 Some Variables that Enhance
Relationship
Marketing in the Bank Industry 11
2.7 Relationship Marketing Investments as a Key Issue in Banking Industry 14
2.8 Customer Satisfaction
a. Major Antecedent of Customer Loyalty in Banking
Industry 15
2.9 Theoretical Framework 17
2.10 Summary of Literature Review 18
Suggestion for
Further Studies 18
CHAPTER
THREE: METHODOLOGY
3.1 Introduction 19
3.2 Research Design 19
3.3 Area of Study 19
3.4 Population of Study 19
3.5 Sampling and Sample
Size Determination 19
3.6 Sources of Data 20
3.7 Instrumentation 20
3.8 Validation of
Research Instrument 20
3.9 Reliability of Research
Instrument 20
3.10 Data Analysis 21
CHAPTER
FOUR: FINDINGS
4.1 Questionnaire
Analysis 22
CHAPTER
FIVE: SUMMARY, CONCLUSION
AND RECOMMENDATIONS
5.1 Summary 39
5.2 Conclusion 40
5.3 Recommendations
40
References
42
Appendix 40
LIST OF TABLES
Table 1: Response on the Number of Questionnaire
distributed and Returned by Customers.
Table 2: Response: On The Age Range Of
Respondents.
Table 3: Response On The Gender Of Respondents
Table 4: Response on Occupation of Respondents
Table 5: Response On Marital Status Of Respondents
Table 6: Response on Whether Respondents Have An Account
Table 7: Response on How Long Respondents Have
Operated With The Bank.
Table 8: Response on How Long It Took The Bank
To
Open Respondents Account.
Table 9: Response On How Respondents Rate
The Reliability Of The Bank Services
Table 10: Response On Whether
Bank Listens To Customers
Complaints
Table 11: Response On How
Fast Bank Responds To customers complaints
Table 12: Response On The Basis Customers Receive Statement
Of Accounts
Table 13: Response On How Fast they Issue Customers Statement
Of Account.
Table 14: Response On Whether Customers Has Intentions
To Leave The Bank. .
Table 15: Response On/Whether Customers would Introduce
The Bank To Friends.
Table 16: Response On Whether Customers Have To Queue Whenever They Want To Obtain A Service
Table 17: Response On Whether Customer agree That speed
of Service Affect Customer Loyalty.
Table 18: Response On Whether Customers agree that Accuracy Affects
Customer Loyalty. .
Table 19: Response On Whether Customers agree that prompt
attention to Customers Complaints
Contribute To Customer Loyalty.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND 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 benefits the
organization and its
stakeholders. And the
marketing concept holds that the key to achieving
organizational goals is more effective than competitors in creating, delivering
and communicating superior customer value to
the chosen target market. (Kotler and kelier, 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 services
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) notes 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
service training, customers' consulting and so
on. Commercial banks rendering
services are therefore expected to improve on their
service quality in
order to satisfy
their numerous customers'. In addition
Cittomer (2008) specified
that the
challenge is not to produce
satisfied customers' but to produce delighted and loyal customers'. And this is where Kotler (2001) maintained that
profitable organizations are
those that are shifting from the marketing concept to the customer concept by
shaping separate offers, services and messages to suit individual taste and
preferences. From the foregoing therefore it becomes imperative that the
relationship between service quality and customer satisfaction be recognized
and appreciated, because of its significant value to service providers such as
banks. It is in the light of the foregoing that the study is attempting to
examine the effects 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
products, 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 discouraging
in the Nigerian banking industry.
Moreover, one also notices
that customers 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 their staff
regular training especially in the area of relationship marketing skills and
their attitude to customers services generally. This has affected the quality
of service customers receive.
Many banks have failed to
recognize that service loyalty is determined by the degree to which a customer
exhibits repeat purchasing behaviour, 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's customers are more enlightened, better educated 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 effects of customer service on customer loyalty in the
Nigerian banking Industry. The specific objectives of the study are as follows:
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 questions
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 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 SIGNIFICANCE OF THE STUDY
The study 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 Bachelor 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 was limited to First
Bank Nigeria Plc located in Umuahia metropolis and their customers.
1.8 LIMITATIONS OF THE
STUDY
The following constraints were
encountered by the researcher in carrying out this study. Unco-operative attitude of
bank customers’ coupled with their illiteracy level which made it
difficult for them to respond to the questionnaire and also getting the true customers of the bank was not easy.
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