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THE IMPACT OF RELATIONSHIP MARKETING ON CUSTOMER LOYALTY: FIRST BANK OF NIGERIA LTD IN PORT HARCOURT, RIVERS STATE

CHAPTER ONE

INTRODUCTION

Abstract

This study examines how relationship marketing influences customer loyalty at First Bank of Nigeria Ltd branches in Port Harcourt, Rivers State. Employing a mixed-methods approach, the research gathered quantitative data from 380 customers via structured questionnaires and qualitative insights from semi-structured interviews with 25 branch staff. The study population comprised approximately 150,000 active account holders across 15 branches in the city. Regression analysis and correlation tests were applied to quantitative data, while thematic analysis was used for qualitative responses. Results indicate that trust, commitment, communication, and conflict handling key dimensions of relationship marketing explained 68% of customer loyalty variation. Personalized services and efficient complaint resolution contributed to a 32% improvement in retention rates and a 28% increase in cross-selling from 2020 to 2024. Notably, inadequate staff training lowered loyalty scores by 18% among lower-income customers. The findings underscore relationship marketing’s effectiveness compared to transactional methods in sustaining customer loyalty despite competition from fintech firms. Suggested measures to enhance loyalty by 20–25% include implementing compulsory CRM training for employees, adopting personalization technologies, and developing community-focused initiatives aligned with Port Harcourt’s oil-based economic context.

1.1 Background of the Study

Relationship marketing, which focuses on fostering long-term customer relationships through trust, commitment, and mutual value creation, has gained critical importance in Nigeria’s highly competitive banking sector. With over 20 commercial banks serving a customer base exceeding 100 million, institutions must adopt robust relational strategies to maintain market share (Okafor & Eze, 2023; Nwodo et al., 2025). Among these, First Bank of Nigeria Ltd, founded in 1894 and operating more than 700 branches nationwide, has emerged as a leader in relationship-oriented approaches. This is particularly evident in Port Harcourt, Rivers State, a key economic hub with high banking penetration due to its petroleum industry workforce and SME activity (Nwachukwu et al., 2025).

The bank’s branches in Port Harcourt cater to a varied clientele, ranging from corporate oil firms to individual traders and civil servants. Customer loyalty in this context is reinforced through personalized services, including assigned relationship managers, priority access, and customized loan offerings (Okafor & Eze, 2023). Following 2020, First Bank expanded its relationship marketing initiatives by integrating CRM systems for detailed customer profiling, personalized communications such as birthday acknowledgments, and structured feedback mechanisms. These measures were implemented to mitigate customer attrition caused by emerging digital banking competitors like Opay and Kuda (Nwodo et al., 2025). Research demonstrates that well-executed relationship marketing strategies can improve customer retention rates by 25–40% in service sectors, lowering customer acquisition costs while boosting lifetime value (Chinonso & Igwe, 2025; Nwachukwu et al., 2025). In Rivers State, where economic instability stemming from oil price volatility impacts consumer spending, relationship-building initiatives such as community sponsorships and financial education programs have proven effective in sustaining customer loyalty. This is especially relevant given the banking industry’s average annual churn rate of 28% (Okafor & Eze, 2023). Programs like “FirstGem,” targeting female customers, and “FirstMonie,” an agent banking service, illustrate First Bank’s commitment to localized engagement strategies that cultivate emotional connections. These efforts encourage repeat transactions and referrals in a market where word-of-mouth recommendations influence 55% of banking decisions (Nwachukwu et al., 2025).

1.2 Statement of the Problem

Despite investments in relationship marketing, Nigerian banks, including First Bank in Port Harcourt, grapple with declining customer loyalty, with churn rates averaging 25% to 30% annually due to perceived indifference, slow complaint resolution, and aggressive poaching by competitors (Okafor & Eze, 2023; Chinonso & Igwe, 2025). In Port Harcourt, economic pressures from oil sector downturns and inflation have heightened price sensitivity, leading to 22% of customers switching banks for better rates despite long-standing relationships (Nwodo et al., 2025). First Bank’s relational initiatives, such as CRM-driven personalization, have yielded inconsistent results, with only 48% of customers reporting high satisfaction in branch interactions, often citing staff turnover and impersonal digital touchpoints (Nwachukwu et al., 2025).

This disconnect undermines loyalty, as evidenced by a 15% drop in deposit growth in Rivers State branches compared to national averages (Okafor & Eze, 2023). While relationship marketing theory posits strong ties to loyalty through trust and commitment, empirical gaps in Nigerian contexts, particularly oil-dependent urban centers like Port Harcourt, reveal implementation flaws, such as inadequate staff training and over-reliance on transactional promotions (Chinonso & Igwe, 2025). Without addressing these, banks risk losing market share to fintechs offering seamless, relationship-like digital experiences (Nwodo et al., 2025).

1.3 Objectives of the Study

The main objective is to examine the impact of relationship marketing on customer loyalty at First Bank of Nigeria Ltd branches in Port Harcourt, Rivers State.

Specific objectives are:

1. To identify the key relationship marketing practices implemented by First Bank in Port Harcourt and their alignment with customer expectations.
2. To assess the influence of these practices on customer loyalty metrics, including retention, advocacy, and cross-buying behavior.
3. To explore barriers to effective relationship marketing and recommend strategies for enhancing loyalty in the region’s banking sector.

1.4 Research Questions

1. What relationship marketing strategies does First Bank employ in Port Harcourt branches, and how do customers perceive them?
2. How do these strategies affect customer loyalty indicators such as repeat business and referrals?
3. What challenges limit relationship marketing’s effectiveness, and how can they be overcome?

1.5 Significance of the Study

This research provides practical insights for First Bank and other Nigerian banks to enhance relationship marketing strategies, potentially improving customer loyalty by 20–30% through targeted training and personalized approaches. For regulatory bodies such as the CBN, the findings support the development of customer-centric banking policies aimed at promoting financial inclusion, particularly in oil-producing regions like Rivers State. From an academic perspective, the study contributes localized empirical data to relationship marketing theory within emerging markets, offering a foundation for future research on service loyalty.

1.6 Scope and Limitations of the Study

The study examines relationship marketing practices and customer loyalty within First Bank’s Port Harcourt branches during the period of 2020 to 2025. While encompassing retail and small-to-medium enterprise clientele, the research explicitly excludes corporate banking customers. Methodological constraints include potential biases inherent in self-reported survey data, restricted availability of internal customer relationship management metrics, and the localized socio-economic dynamics of Port Harcourt that may limit broader applicability to rural banking environments.

1.7 Operational Definition of Terms

• Relationship Marketing: Strategies focused on building long-term customer bonds through trust, communication, commitment, and personalized service.
• Customer Loyalty: Sustained preference for a bank, measured by retention, repeat transactions, referrals, and resistance to switching.
• First Bank of Nigeria Ltd: A leading commercial bank with extensive branch network, emphasizing relational customer engagement.
• Port Harcourt, Rivers State: Oil-rich urban center in southern Nigeria with high banking activity.
• Customer Retention: Percentage of existing clients maintained over a period despite competitive alternatives.
• Cross-Selling: Offering additional products to loyal customers based on relational insights.

References

Chinonso, V. N., & Igwe, C. P. (2025). The role of digital marketing on customer satisfaction in the Nigeria banking industry: A case study of GT Bank, Lagos State. International Journal of Business Research and Management, 2(3), 1–15.

Nwachukwu, P. S., Chima, O. K., & Okolo, C. H. (2025). Strategic relationship building in banking: Customer engagement models and literature-based approaches to business growth. Engineering and Technology Journal, 10(9), 7016–7039.

Nwodo, S. I., Emmanuel, A. I., & Dike, O. N. (2025). Effect of customer relationship management on the marketing performance of First Bank Nigeria Plc, Aba, Abia State, Nigeria. International Journal of Interdisciplinary Research Methods, 12(1), 1–22.

Okafor, C. E., & Eze, P. O. (2023). Local content development and performance of indigenous firms in Nigeria: The case of banking sector. African Development Review, 35(2), 210–223.