The Effects of Customer Relationship Management on Customers Retention in Nigeria Banking Sector: A Study of Fidelity Bank Plc, Lagos Nigeria
Chapter One
Objectives of the Study
The broad objective of this study is to examine the effects of customer relationship management on customers retention in Nigeria Banking sector, a study of Fidelity Bank Plc, Lagos Nigeria while the specific objectives are to;
- To examine the effects of customer orientation on customer retention in Fidelity Bank.
- To evaluate the effects of knowledge management on customer retention in Fidelity Bank.
- To determine the effects of technology-based CRM on customer retention in Fidelity Bank.
CHAPTER TWO
LITERATURE REVIEW
Introduction
In this chapter, which is titled literature review is divided into four sections. Section one covers conceptual review of the independent and dependent variables while the second section covers a review of relevant theories. The third section covers a review of empirical studies in relations to researches study. Fourth Section explains the researcher conceptual model.
Conceptual Review
This section focus on discussing and explaining by gathering various concepts and literatures to better explain the variables (dependent and independent variables), this section entails concepts on customer relationship management, concept on customer orientation, concept on knowledge management, concept on Technology based on CRM (CRM technology) and concept on Customer retention
Concept on Customer Relationship Management
Customer Relationship Management (CRM) is a comprehensive strategy and process of acquiring, relating and partnering with selective customers to create a value for the company and the customer (Parvatiyar and Sheth, 2016). CRM as a concept is the technology face of the business processes that aims to establish enduring and mutually beneficial relationships with customers in order to drive customer retention, value and profitability (Kennedy et.al, 2017).
Customer relationship management is a, “Management process of acquiring customers by understanding their requirements, retaining customers by fulfilling their requirements more than their expectations and attracting new customers, through customer specific strategic marketing approaches” (Kennedy et.al, 2017).
The main function of the organization is to bring buyers and sellers together to create customer. Keeping or maintaining the customers is also equally important for the long term relations and ultimately benefit the organization. The term relationship management communicates to the customers the long – term vision of the organization in maintaining the relations. Marketers should be able to understand that the sale is not the process. Rather, it is the beginning of the relations between the organization and the customers (Reichheld, 2016).
In a globalized firm’s environment and with severe competition in the banking sector, an organization can survive only with its customer-centric strategies. The organization should focus on customer relationship management (CRM) in order to be customer friendly, enhancement of customer satisfaction and the resultant growth of the firm. A proper and timely platform is required to achieve this (Knox, 2008. Traditionally, marketing has been seen from the perspective of managing relationship with customer groups. Relationship marketing, however, takes a much broader view of the business. It emphasizes on a wider range of markets to provide the best value proposition in terms of both the product and also the customer service (Coviello et al., 2012).
The CRM is the latest idea of managing and propagating banking business more successfully. It is a tool that helps to design banking products, which match with the customer expectations. It also helps to build customer trust and develop loyalty of the customer, marketing channels, uniform quality outlets and identification of target market and also customer groups (Sheth, 2016).
The new generation companies claim to grow by improving customer services by tuning up technology, training of staff and tackling existing markets. Private players are picking up market share from competitors. With better prospects offered in the technology sector, the capacities and capabilities of the life insurance sector to retain and improve customer base is strengthened (Sheth, 2016).
CRM is a defensive marketing strategy that focuses on managing the customer’s experience by better understanding their needs and buying behaviour. It is a systematic way to strengthen the relationship between a company and its customers and transforming acquaintance. Given the importance of CRM in business success, customers many times were eager to adopt the latest technology in different service applications, which will provide a competitive edge. But, the actual success lies in the proper and careful adoption of the latest technology (Gronroos, 1991). Employees are crucial to the success of CRM. Hence, they are to be trained effectively to handle changes.
CHAPTER THREE
RESEARCH METHOD
Introduction
Research methodology refers to the research process, the procedural framework within which the research is conducted. This methodology as defined by Leedey and cited by Remenyi et al, (2015) is ‘an operational framework within which the facts are placed so that their meaning may be seen more clearly’.
Some methods provide data, which are quantitative and some that are qualitative.
This study is mainly based on quantitative research methods. Quantitative methods are those, which focus on numbers and frequencies rather than on meaning and experience. Quantitative methods (e.g. experiments, questionnaires and psychometric tests) provide information, which is easy to analyze statistically and fairly reliable. Quantitative methods are associated with the scientific and experimental approach and are criticized for not providing an in depth description.
Qualitative methods are ways of collecting data, which are concerned with describing meaning, rather than with drawing statistical inferences. What qualitative methods (e.g. case studies and interviews) lose on reliability, they gain in terms of validity. They provide a more in depth and rich description.
Research Design
This design allows statistical inferences to be made from the study through the sample of the population. Survey research design has been applied in many previous studies (Abogan&Fagbemi, Obasan & soyebo, 2012). In this study, the researcher will collect data on each of the thtree dimensions of customer relationship management which represents the independent variables of this study and customer retention which is the dependent variable
Population of the Study.
The target population for this study is made up of the staff of head office of Fidelity Bank, Lagos. This includes both the management and administrative staff of the Bank.
Sample size and Sampling Technique
A sample is a specimen or part of a population which is drawn to show that the rest are alike (Naoum, 2013). The sample size will be arrived at using the Taro Yamane’s formula. The sample frame for this study consists of the list of the Headquarters staff of Fidelity Bank in Lagos
CHAPTER FOUR
DATA ANALYSIS AND PRESENTATION
INTRODUCTION
This chapter provides a statistical analysis and presentation of data collected for the purpose of assessing the reaction of workers to questions raised based on the objectives to the aim of the study.
The focus of this chapter is to present, interpret and discuss the results of the analysis of the staffs (both junior and senior staff in a laid down organization) questionnaire survey conducted on “The Effects of customer relationship management on customers retention in Nigeria Banking Sector: A Study of Fidelity Bank Plc, Lagos Nigeria”. The outcome of the analysis was used to draw up a valid inference.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Summary
The study which is titled; “the effects of customer relationship management on customers retention in Nigeria Banking Sector: a study of Fidelity Bank PLC”. The study believe that the main objective of business organizations is to maximize profit Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer satisfaction and retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment. The problem seen by the researcher was based on the way customers complains and provide bad ratings to the performance of banking sector which has led to reduction of customer patronage and also reduced the retention of customers in banks, therefore, the researcher decided to work on studying Fidelity bank as the focused point for all bank sectors in Nigeria, where the aim of the study is to examine the effects of customer relationship management (CRM) on customer retention.
Therefore, the objectives are to look into the effects of various variables to customer retention in the banking sector; these variables are customer orientation, knowledge management, and CRM technology, furthermore, various past literatures were expressed to better bring understanding to the study and the findings to come. The use of questionnaire and other past literatures were used to bring forth the data for the findings, this data was analyzed using SPSS, excel etc software to better interprets the date generated.
The study shows a lot about the relationship between customer retention and some variables which are Knowledge Management, CRM technology and Customer Orientation; these findings shows based on models;
Hypothesis 1: There is significant relationship between the effects of customer orientation on customer retention in banking sectors: the model were fully accepted and not criticized by the research as it accepts this model.
Hypothesis 2: There is significant relationship between the effects of knowledge management on customer retention in banking sector; the model were fully accepted and not criticized by the research as it accepts this model.
Hypothesis 3: There is significant relationship between the effects of technology based CRM on customer retention in banking sector; the model were fully accepted and not criticized by the research as it accepts this model.
Conclusion
This study investigated the relationship between customer relationship management and customer retention in Fidelity Bank PLC. The result showed that customers’ relationship management is positively related to customers’ retention. The management is an essential strategic tool to gain a competitive advantage in the contemporary global business environment most especially in the service oriented organizations. The effectiveness of the RM strategy may likely determine the positioning of any given organization within its industrial sector. Effective implementation of RM allows organizations to obtain first-hand information on the needs of the society and strategically innovate or create product or service that meet such requirements through competent organizational members. Consistent communication with stakeholders and readiness of the organization to learn through such engagement put them in a completive edge over others, which are both elements of customer relationship management, have positive significant relationship with customers’ retention in Fidelity Bank PLC.
In the highly competitive business environment, customers’ retention becomes a priority and there are convincing arguments for managers of banks to carefully consider the factors that would increase customer retention rates.
Recommendations
Following the findings of this study, the following recommendations are made:
- Banks should improve on their relationship with their customers as this tends to be a more reliable way of retaining a good percentage of their customers. Banks should employ customer experience management and customer portfolio management towards the achievement of the effective management of customer relationship activities which tends to enhance customer retention.
- Banks should train its staff members to be more effective particularly on an interpersonal and business relationship such as complaint handling, devoting enough time to help and understand the dynamic individual customer needs and extend customer lifetime. Banks must work effectively on business relationship and understanding the actions and reactions of customers as it is the key for a long term business relationship.
Contribution to Knowledge
Based on the findings, the study provides empirical information to stakeholders of marketing professionals, and policy makers of the bank. The study also provides relevant information to the Bank management on what customers expect in terms of customer service management as well as customers assessment of the quality of service provided. Management can learn from the study how to guide in their strategic decisions on customer acquisition, customer satisfaction management, and customer retention. In further words; this study would aid more research to increase in knowledge and seek to know more in this field of study.
Limitations of the Study
There is no research without its inherent limitations thus; this study is therefore not an exception. The following limitations of this study that the targeted audience should take note are herein presented; the sample size were a lot to cover, the scope of the study were large which means it was difficult to fully cover but with the help of some friends it was fulfilled and with the help of some experts like the reviewer and research supervisor.
Suggestions for Further Research
With the result of this study, it is brought down that there should be further research and study to better continue the effort done by the research in bringing more light to the knowledge of the relationship between customer retention and other variables related to the growth of this practices in various firms not only banks.
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