CUSTOMER RELATIONSHIP MARKETING PRACTICE AND PERFORMANCE
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CUSTOMER RELATIONSHIP MARKETING PRACTICE AND PERFORMANCE
Chapter one
INTRODUCTION
1.1 Background of the Study
The banking industry is a significant business sector that has a rising impact on all other sectors of the economy as a result of financial service provisions. Financial institutions were not spared in this turbulent scenario, since they are severely impacted by both domestic and foreign rivalry.
The banking sector climate today is highly turbulent; consequently, Nigerian banks must develop effective techniques to improve consumer engagement with bank staff. The intricacy of the banking industry has forced bank managers to focus on how to establish intimate relationships with their customers.
It’s no surprise that Nigerian banks have established a separate department within the bank known as the customer care unit to address customer issues and complaints in order to ensure that customers get value for their money,
thereby increasing customer loyalty, building and maintaining cordial relationships with customers, and achieving an advantage that can lead to customer retention and profitability.
Furthermore, committed clients can lay the groundwork for future growth and market competitiveness. Furthermore, the notion that relationship marketing (RM) investment fosters better, more trustworthy customer relationships (Morgan and Hunt 1994) and increases financial success (Schroder and Lacobulli 2001) has resulted in significant spending on customer connection programmes.
Sheth (2005) also believes that customer relationship marketing would result in customer retention, which is related to relationship development, customer loyalty, and customer interaction.
Given the foregoing justifications, Nigerian banks are currently implementing relationship marketing ideas and designing methods to establish and sustain close and long-term relationships with clients.
Customer relationship management has evolved to reflect a more balanced emphasis on ongoing relationships rather than individual transactions. The more frequently an organisation practices good customer relationships, the higher the rate of consumer loyalty to its brands or products.
According to Ragins and Greco (2003), CRM provides organisations with numerous advantages and benefits. They believed that a loyal consumer has an emotional connection to the seller. These emotions may include trust, like, and belief in the organization’s ability to respond effectively and swiftly to a customer’s situation.
A customer might be seen as an organization’s asset because they are likely to provide positive word-of-mouth referrals. A new customer can only be acquired through a complex process of raising awareness of the company’s products and distribution channels (Achumba, 2004).
As a result, an organization’s sales, profit, and market share will increase as client identification and retention improves through effective and efficient CRM. Customer happiness has also been connected to improved organisational financial performance and CRM adoption (Teikomensah, 2014). Chi and Gursoy (2009) found a link between employee customer satisfaction and a variety of company performance metrics at the firm level.
They also discovered that, while customer satisfaction has a favourable influence on financial performance, staff satisfaction has no direct impact on financial performance. Similarly, Anderson et al. (1994) and Ohaka (2015) found a strong positive correlation between customer happiness, market share, and profitability.
The findings of this study will be beneficial to students, scholars, and future researchers. Furthermore, it will inspire employers, employees, and other stakeholders to realise the necessity for customer relationship management, which will increase the bank’s market share and have a beneficial impact on the achievement of the organization’s objectives.
1.2 Statement of the Problem
The complexity of today’s banking sector causes bank managers to be desperate, to the point where ‘Bank A’ manager not only sees ‘Bank B’ manager as a competitor, but a branch manager of the same bank sees them both as competitors.
This level of rivalry has prompted bank managers to focus on how to maintain constant contact with their customers in order to avoid losing active customers to suspected competitors.
Bank services are growing in Nigeria, however the level of failure in their services suggests that ineffective client relationships are prevalent. Such a disparity implies that there is much to learn about how to establish close contact with customers using effective relationship techniques.
Banks have evolved into chameleons, shifting from one service provision to the next, often combining multiple services and relocating or establishing another branch to meet the needs of their customers and demonstrate to the general public that their services are unique and superior to others.
However, the services or branches provided have not resulted in customer satisfaction because clients encountered human traffic when attempting to utilise these services.
This has destabilised customers, pushing them to open many accounts across the banking industry in order to meet their financial needs. This movement of customers from one bank to another has caused serious concern among bank executives,
prompting the establishment of customer service points in most bank branches across the country in order to establish a relationship that will result in consistent patronage by their customers.
It is based on Nigerian bank managers‘ reluctance to recognise the influence of customer relationship marketing on bank performance in unity banks.
1.3 Object of the Study
The primary goal of this study is to determine the influence of customer relationship marketing practices on bank performance in Nigeria. However, for the purpose of the study, the researcher seeks to fulfil the following objectives:
i) Determine the effect of customer relationship marketing on bank performance.
ii) To initiate
iii) To investigate the influence of client relationship marketing on the growth of Unity Bank.
iv) To determine the relationship between customer relationship marketing and profitability of banks.
v) Determine the impact of customer relationship marketing on the efficiency of banks.
1.4 Research Hypotheses
The researcher formulates the following research hypotheses for the study:
H0: customer connection marketing has no meaningful impact on banks’ performance.
H1: Customer relationship marketing has a substantial impact on banks’ performance.
H02: There is no substantial association between customer relationship marketing and banks’ profitability.
H2: Customer connection marketing has a substantial impact on bank profitability.
1.5 Significance of the Study
It is expected that when the study is completed, the findings will be very important to the management of unity banks because the study will emphasise the significant benefits of customer relationship marketing that the bank may take advantage of.
The study will also be of great importance to the head of the marketing unit in the banks, as the marketing technique adopted must change from a traditional marketing technique to a more focused customer relationship-driven marketing technique in order to compete with other banks.
The study will also be beneficial to researchers who intend to embark on research in a similar topic, as the study will serve as a guide for their research. Finally, the study will benefit both academic students and general public schools.
1.6 Scope and Limitations of the Study
The subject of this study includes the customer relationship marketing practices and performance of unity banks. However, in the course of the study, the researcher faces several constraints that limit the scope of the study.
(a)Research material availability: The researcher has insufficient research material, which limits the investigation.
(b)Time: The study’s time frame does not allow for broader coverage because the researcher must balance other academic activities and examinations with the study.
(c)financing: The financing available for the research effort does not allow for greater coverage because resources are quite limited as the researcher has other academic bills to pay.
1.7 Definition of Terms
Customer
A customer (also known as a client, buyer, or purchaser) is a person who receives an item, service, product, or idea from a seller, vendor, or supplier in exchange for money or another useful consideration.
An ultimate derivation of “client” may mean someone who is just inclined to do business, whereas a purchaser obtains goods or services on occasion, whereas a customer engages in transactions on a regular or routine basis. Such distinctions have no current semantic weight.
Marketing
Marketing is a method of communication between you and your clients that aims to offer them your product or service. Communicating the value of your product or service is an essential part of marketing.
Banks
A bank is a financial entity that accepts public deposits and issues credit. Lending activities can be carried out directly or indirectly via capital markets. Most countries have strict regulations on banks because of their relevance to a country’s financial stability.
1.8 Brief History of Unity Bank
Unity Bank was founded in January 2006 through the merger of nine financial institutions specialising in investment, corporate, and retail banking. Unity Bank is now one of Nigeria’s biggest retail banks, having 240 business offices in 36 states and the Federal Capital Territory. We are Nigeria’s seventh-largest bank by business locations.
Unity Bank is one of Nigeria’s top employers and contributes significantly to the country’s GDP. The Bank employs more than 2,000 individuals. Our vision is to be the Retail Bank of Choice for all Nigerians, and it underpins everything we do.
Our new headquarters is in Plot 42, Ahmed Onibudo Street, Victoria Island, Lagos, with a Head Office Annex at 290A Akin Olugbade Street, Victoria Island, Lagos. Welcome to a bank that does business by succeeding together.
1.9 Organisation of the Study
This research study is organised into five chapters for simple understanding, as follows: The first chapter is concerned with the introduction, which includes the (overview of the study), statement of problem,
aims of the investigation, research question, significance of the study, research methods, term definitions, and historical backdrop of the study.
The second chapter focuses on the theoretical framework that underpins the study, as well as a review of relevant literature. Chapter three discusses the research design and technique used in the study.
Chapter four focuses on data gathering, analysis, and presenting of findings. The fifth chapter includes the study’s summary, conclusion, and recommendations.
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