ABSTRACT
Due to the rapid expansion in banks and the severe competition for customers’ retention, banks have started using various marketing strategies to achieve their objectives. Customer Relationship Marketing is one of the marketing strategies that may be used in this respect. The study aims to investigate the impact of Customer Relationship Marketing on Customer Retention of first bank customer in Michael Okpara University of agriculture. Questionnaire was designed and sent to 150 customers of First Bank Michael Okpara University of Agriculture, Umudike, creating two sample pools of respondents. A total of 120 of the collected questionnaires were valid. The study findings show medium to high degrees of positive attributes of the two samples toward Customer Relationship Marketing dimensions (trust, commitment, communication, empathy, social bonding and fulfilling promises) on customer satisfaction. The findings also indicate different attitudes regarding the importance of Customer Relationship Marketing dimension between the two samples. The findings also indicate different results regarding the impact of Customer Relationship Marketing on customer’s retention due to gender, age and educational level. Ultimately, the study suggested that first bank Umudike , whether in the study’s two selected school, or in other school where it has branches and operates from, should apply Customer Relationship Marketing in order to maintain its market share in the market.
TABLE OF CONTENTS
Cover i
Declaration
ii
Certification
iii
Dedication iv
Acknowledgement
v
Table
of contents vi
Abstract
x
CHAPTER ONE
INTRODUCTION
1.0
Background of the study 1
1.2 Statement
of the Problem 3
1.3 Research
Objective 4
1.4 Research Questions 4
1.5 Research Hypotheses: 5
1.6 Significance
of the Study 5
1.7 Scope
of the study 5
CHAPTER TWO
LITERATURE REVIEW
2.1 Conceptual
framework 6
2.2
Historical Background 11
2.3 Customer
Relationship Marketing 13
2.3.1 Objectives of
Relationship Marketing 15
2.3.2 Benefits of Relationship Marketing 17
2.3.3
Relationship Marketing Strategies 18
2.3.4 Internal Relationship
Marketing 19
2.4
Reciprocity 20
2.5 Relationship
Duration 22
2.6 Advantages
of Relationship Marketing in Banking 22
2.7 Customer
Satisfaction 24
2.8
The Importance of Customer retention 26
2.9
The Difference between this Study and other Studies 26
2.10
Theoretical Review 27
2.11 Empirical
Review 28
CHAPTER THREE
METHODOLOGY
3.1
Research Design 31
3.2 Area
of study 31
3.3 Population
of the study 31
3.4 Sampling
technique and sample size 31
3.5 Sources
of data 32
3.5.1
Secondary Data 32
3.5.2
Primary Data Collection 32
3.6 Method
of data collection 32
3.7 Method
of data analysis 33
3.8 Validity 33
3.9
Instrument Reliability 33
3.10 Model specification 33
3.11
Decision rule 34
CHAPTER FOUR
RESULTS AND DISCUSSION
4.1Socio-economic characteristics of the
respondents 36
CHAPTER FIVE
Conclusion and Recommendation:
5.0 Summary 41
5.1 Conclusion 41
REFERENCES
CHAPTER ONE
INTRODUCTION
1.1
Background
of the Study
Banking
industry is an important sector in the business world which has a growing
impact on all other sectors of the economy because of financial services
provisions (Chai 2006). In this volatile situation financial institutions were
not left out as they are seriously affected by the level of competition both
locally and internationally.
The
banking industry environment today is highly volatile (Ali 2015); Nigerian
banks therefore needs to develop effective technique to enhance the interaction
of customers and the bank staff (Kotler & Armstrong, 2010). The complexity
in the banking industry has made bank managers to focus on how to create close
affiliation with their customers (Erdem and Hosver, 2007). No wonder why
Nigeria banks now create a separate department in the bank known as customers
care unit to address customer issues and complaint in order to ensure customers
get value for their money thereby enhancing customer loyalty, building and
maintaining customer’s cordial relationship in order to achieve an advantage
that can be add to customer retention and increase profitability.
Furthermore,
loyal customers can provide the foundation for growth which leads to
competitiveness in the industry. Also it is believed that Relationship
Marketing (RM) investment builds stronger and more trusting customer
relationship (Morgan and Hunt 1994) and improves financial performance
(Schroder and Lacobuli 2001) which has led to massive spending on customer
relationship programme.
The
concept of Customer relationship Marketing (CRM) dates back to the 60’s ties
where attraction and retention of customer loyalty was a key factor of business
success.
CRM
as a philosophy gained ground in the 80’s (Raza, Hanif & Saniuk, 2012).
Though a bit old a concept, scholars and managers took interest in this in the
last few decades (Kavitha, 2012). Traditionally, the practice of marketing was
dominated by the marketing mix management paradigm (Brains 1999) where
companies adopted a strategy which enabled them sell more of their goods and
services through strategic pricing, promotion, place and quality products. Kent
(2000) considers it as “the holy quadruple of the marketing faith written in
tablets of stone” .This paradigm however, is gradually fading out with the
globalization of business and the evolving recognition of the importance of
customer retention and market economies and of customer relationship economics
Kin and William (2013); Brains, (2014). Customer relationship management (CRM)
is a widely implemented model for managing a company’s interactions with
customers, clients, and sales prospects Chain (2014). He also stated that CRM
involves using technology to organize, automate, and synchronize business
processes mainly sales activities, but also those for marketing, customer
service and technical support.
Sheth (2005) also
opines that customer relationship marketing would result into customers
retention which has to do with creating relationship, Customers loyalty which
has to do with developing relationship, and customer interaction may lead to
customer retention.
Considering
the above arguments, Nigeria banks now adopt relationship marketing principles
and design strategies to achieve and maintain close and long lasting
relationship with the customers.
Customer
satisfaction as a concept has been included in various theoretical and
conceptual frameworks and models (Chan et al., 2003). These models or
frameworks have addressed measurements of customer satisfaction, drivers of
customer satisfaction, as well as measurements of related variables (Bruce,
1999). Customer satisfaction is achieved through customer’s experiences with a
product/service as compared with expectations. Customer satisfaction has been
defined in various ways: an overall feeling, or attitude, a person has about a
product after it has been purchased (Solomon, 1994) or as a summary, affective
and variable intensity response centered on specific aspects of acquisition
and/or consumption and which takes place at the precise moment when the
individual evaluates the object” (Giese and Cote, 2000)
Customer
loyalty can be said to have occurred if people choose to use a particular shop
or buy one particular product, rather than use other shops or buy products made
by other companies (Lovestock and Wirtz 2011).
Customers
exhibit customer loyalty when they consistently purchase a certain product or
brand over an extended period of time. As an example, many customers stick to a
certain travel operator due to the positive experiences they have had with
their products and services.
Customer
loyalty is the key objective of customer relationship management and describes
the loyalty which is established between a customer and companies, persons,
products or brands. The individual market segments should be targeted in terms
of developing customer loyalty (Oliver and Richard 1997).
1.2 Statement
of the Problem
Complexity
experienced in banking industry today makes bank managers to be desperate such
that ‘’Bank A manager does not only see ’’Bank B manager as competitor but a
branch manager of the same Bank sees each other as a competitor. This level of
competition has made bank managers to focus on how to be in a close contact
with their customers in order not to lose their active customer to their
presumed competitors.
Banks generally
today has become a chameleon in nature thereby changing from one service
provision to the other, most time combining many services together relocating
or establishing another branch so as to meet the needs of their customers and
to show to the generality of public that their services are unique and better
than the others. However, these services or branches established have not
translated to customer satisfaction as customers experienced human traffic while trying to access these
services. This has destabilized customers thereby forcing them to open more
than one account across the banking industry in order to satisfy their
financial need.
This movement of
customers from one bank to the other has created serious apprehension among the
banks executives thereby leading to the provision of customers service point in
most bank branches across the country for the purpose of having a relationship
that can lead to a consistent patronage by their customers.
Bank services are
increasing in Nigeria, yet the level of failure in their services indicate that
ineffective relationship with customers seems to be pronounced Jude (2015).
Such a gap indicates that there is much to learn about how to develop close
contact with customer using the appropriate relationship strategies.
It
is on the basis of the inability of Nigerian bank managers to take cognizance
of the impact of customer relationship marketing on bank performance that this
study is being carried out.
1.3 Research
Objective
The general objective is to evaluate the effect of Customer
Relationship Marketing on Customer Retention of First Banks Customers of
Michael Okpara University of Agriculture, Umudike. However, the study seeks to
achieve the following specific objective they are to;
i.
determine the effect of commitment on customer loyalty
ii.
determine the effect of
promise fulfilment as customer satisfaction
iii.
determine the effect of communication on customers
satisfaction
iv.
determine the effect of
conflict handling on customer loyalty
v.
determine the effect of trust on customer satisfaction
1.4 Research Questions
i.
to what extent does commitment affect customer
loyalty?
ii.
to what extent (if any) does promise fulfilment
affect customer satisfaction?
iii.
to what extent does communication affect
customer satisfaction?
iv.
to what extent does conflict handling affect
customer loyalty?
v.
to what extent does trust affect customer
satisfaction?
1.5 Research Hypotheses:
H01;
There is no significance difference between commitment and customer loyalty
H02; Promise does not have any significant
difference with customer satisfaction
H03; Communication
does not have any significant difference with customer satisfaction
H04; There is no
significant difference between conflict handling and customer loyalty
H05; Trust does not have any significant difference with customer satisfaction.
1.6 Significance of the Study
This
study is expected to be of importance to the Management of banks in Nigeria. It
will help them to highlight areas of improvement for the banks and the need for
managers to try to deepen their relationship with their customers as a way of
ensuring sustained profitability in a highly competitive industry. To the Government
and policy makers, the study would provide insights at different levels on how
best to tap into the vital role of banks/other financial institutions as
drivers of economic growth.
1.7 Scope of the Study
The
scope of the study will focused on Effect of Customer Relationship Marketing on
customer Retention of some First Banks Customer in Michael Okpara University of
Agriculture, Umudike.
There
are many dimensions of CRM but this work
will be focused on only five (5) dimensions which include, commitment and loyalty, promise Fulfilment and customer satisfaction,
communications/ customer satisfaction, conflict
handling and customer loyalty and trust. Also measuring customer retention, we
are going to use, customer satisfaction and customer loyalty.
Login To Comment