Abstract

The topic assessed the influence of customer service relationship management on customer retention and the main objective of this study is to examine the influence of Customer Relationship Management (CRM) on customer retention a study of Fidelity Bank Plc, Lagos Nigeria.

In gathering the data, the research method used was both quantitative and qualitative research method, in which questionnaires were administered. Further, the data were analyzed through descriptive statistics with the aid of Statistical Package for Social Science (SPSS)to adequately verify the data collected for this study. The descriptive and inferential statistics was used to test the hypothesis of the variables that were involved in this study in order to analyze the data.

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. Some variables were taken which are Customer orientation, knowledge management and CRM technology to influence Customer retention in the study firm. Based on the responses (using the mean), all these variables influence customer retention above 75% respectively.

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.

 

Keywords: Customer Relationship Management, Customer Retention, Customer Orientation.

 

CHAPTER ONE

1.0              Introduction

1.1       background of Study

The main objective of business organizations is to maximize profit. Using the same resources (Men, Material, Machine and Money) for the more produce or to reduce available resources for the same produce. Every organization that is willing to survive on the long run should make the needs and requirement of Men (Labour) being a major part of factors of production its priority (Babatunde &Olukemi, 2012).

Meeting the needs and the requirements of the customers will not only ensure the survival of the organization but also allow into flourish of the most important stakeholders in any organization because without them, organizations are not likely to succeed. Hence, marketers emphasize on research in the area of consumer behaviour and particularly behavioural intention (Babatunde &Olukemi, 2012). Knowledge of consumer behavior will go a longwayinensuring effective marketing policies towards the interest of customers which willeventuallyfacilitates positive customer attitude towards the organisations. More especially, since customer behavioural intention is a strong indication of his actual behavior (Babatunde &Olukemi, 2012).

Considering the boom experienced by the banking sector in Nigeria in the 1980s as a result of its liberation banking business is highly competitive, with banks not only competing among each other but also competing with non-banks and other financial institutions (Hull, 2012; Kaynak &Kucukemiroglu, 2019).

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. One strategic focus that banks can implement to remain competitive would be to retain as many customers as possible (Ro King, 2015).

Banks are making tireless efforts to attain high customer satisfaction level and retain their current customers rather than spending additional cost to attract potential new customers. Therefore, the significantcontributionoftheservicesindustryandspecificallybankingsector in Nigeria can never be overemphasized and warrant investigation so as to enhance the growth of the banking sector which will in turn result in better economic development (Sabir, Ghafoor, Akhtar, Hafeez&Rehman, 2014).

Loyalty to a bank can be thought of as continuing patronage over time. The degree of loyalty can be gauged by tracking customer accounts, over defined time periods and noting the degree of continuity in patronage (Yi &Jeon, 2013) During the past decades the financial service sector has undergone drastic changes, resulting in a market place which is characterized by intense competition, little growth in primary demand and increased deregulation (Chaudhuri &Halbrook, 2012).

In the new market place, the occurrence of committed and often inherited relationships between a customer and his or her bank is becoming increasingly scarce (Lee &Feick, 2011). Several strategies have been attempted to retain customers. In order to increase customer loyalty, many banks have introduced innovative products and services (Alam & Khokhar, 2016). Marketing success requires understanding and frequently monitoring the product and service attributes which increase loyalty and share of wallet.

Producers and marketers tried to keep their customer satisfied so that they may become band loyal and in the way companies can get maximum share in the market. This study is an attempt to explore the impact of customer service relationship on customer retention. This will contribute to the growth of banks as banks can seek guidance to improve their service quality in order to retain their customers and seek competitive advantage by getting more loyal customers.

As the producers and marketers keep to satisfy customers in terms of their service and the way it is been managed, this has been a deep and common problem face by many organization, industries, companies, ministries etc therefore, there is a need to enlighten and unleash the ideas which has been on hold for the past many years, these research therefore is looking at bringing out the information behind the influence in which Customer Relationship Management on retention can be established and provided. In Fidelity Bank PLC, Nigeria, there is a need to examine problems faced by the company and how it can be resolved relating to customers satisfaction.

1.2       Statement of the Problem

Since the start of the banking industry in Nigeria, Customer Relationship Management has been an aspect of consideration as it relates to the provision of quality service in the banking industry. CRM has been considered the tool for ensuring customer satisfaction, hence, customer retention (Kotler, 2022). Customers gauge quality of service differently as they have different perceptions about the levels of service they receive from banks (Jobber, 2018).

In view of different perceptions, services provided by banks have also been viewed differently in the extremes of measures of quality between high and poor quality. This situation has posed difficulties in the planning and implementation of the service among banks. Therefore, instead of being the tool for customer satisfaction, retention and competitive edge for service providers, CRM has become the great challenge to service providers in the entire process of service provision.  The challenge is true in that given severe competition among the players in the industry; it has been very difficult to design customer service that is very unique and not imitable one.

There are existing researches about customer service in the banking industry around the world, but there are no clear conclusions as to the most important customer service dimensions and strategies for satisfying bank customers in order to retain them (Owusuah, 2012).  The customer service unit of most banks in Nigeria is more effective than in all other organizations of the economy. It is increasing evidence that despite all resources invested in promotion of customer’s loyalty effort is not yielding any positive effect. Banks still have a long way to go in order to satisfy their customers and make them remain with the banks for a reasonable period of time if not forever.

On the other hand the major focus of instituting customer care is reduction of cost of operations through paid form of marketing communication mix mainly advertising and promotion which is deemed essential methods for customer capture and retention as it obvious that it very difficult to capture new customers than retaining the current ones. For many years banks have been practicing customer service management as an instrument of company performance but players in the industry have continuously been complaining of shrinking of their performances.

The effect of the same is high commitment of big amount of resources in provision of customer services with expectation of high results in customer satisfaction and retention. The banks politicize customers care as competitive tool into high competitive edge in the industry, only to realize shrinking returns. On the other hand the shrink of banks performance has impact on the growth of the national economy. This is true in that poor bank performances demonstrate poor revenue collections by the government. The same results in poor social service provisions which ultimately lead to poor living standards of the people.

In view of the above, a number of studies have been carried out to examine the problem under study. The studies did not cover exactly the influence of customer management in the performance of banking industry, a gap that this study sought to fill. This study assessed the effectiveness of customer relationship management in the performance of banking industry.

1.3       Objectives of the Study

The broad objective of this study is to examine the influence of Customer Relationship Management (CRM) on customer retention a study of Fidelity Bank Plc, Lagos Nigeria        while the specific objectives are to;

1. Toexamine the influence of customer orientation on customer retention in Fidelity Bank
2. To evaluate the influence of knowledge management on customer retention in Fidelity Bank
3. To determine the influence of technology based CRM on customer retention in Fidelity Bank

1.4       Research Questions

In carrying out this study, the following questions were formulated:

1. What is the influence of customer orientation on customer retention in Fidelity Bank?
2. What is the influence of knowledge management on customer retention in Fidelity Bank?