IMPACT OF CUSTOMER SATISFACTION ON BANK PERFORMANCE IN NIGERIA
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IMPACT OF CUSTOMER SATISFACTION ON BANK PERFORMANCE IN NIGERIA
Satisfaction is a customer’s assessment of a product or service in terms of whether it matched their needs and expectations. Customers who are happy and pleased act positively. However, practically all Nigerian banks face comparable challenges in satisfying customer service expectations and ensuring client satisfaction.
Against this setting, this study attempts to assess customer satisfaction and its implications for bank performance in Nigeria. The study collects data from a primary source, a questionnaire designed by respondents and validated by two experts.
This study employs both descriptive and explanatory survey design methodologies. According to the study’s findings, customers like electronic banking services but are dissatisfied with their quality and efficiency.
This is shown in the number of times customers physically visit banks and the amount of time they spend there before such services are assessed.
The study closes by recommending that banks enhance their service delivery in order to justify the benefits of electronic banking goods and services, which would pique the interest of customers.
INTRODUCTION
1.1 Background Of The Study
Every organization’s goal, it is considered, is to meet the demands and requirements of its stakeholders. Meeting the demands and requirements of the stakeholders will not only assure the organization’s existence, but will also allow it to thrive.
Customers are assumed to be one of the most crucial stakeholders in any organisation because organisations are unlikely to succeed without them. As a result, marketers place a premium on research into consumer behaviour, particularly behavioural intention.
Knowledge of consumer behaviour will go a long way towards creating effective marketing practises geared towards the interests of customers, facilitating positive customer attitudes towards organisations. More specifically, because customer behaviour intention is a strong predictor of actual behaviour
The banking sector in Nigeria enjoyed a boom as a result of financial sector liberalisation in the 1980s. The regulatory authority’s low entrance requirements, along with the huge premiums that could be made through foreign exchange trading, resulted in the rapid entry of new players into the profitable banking market.
Between 1985 and 1993, the number of licenced banks increased dramatically, from 41 to 120 (Central Bank of Nigeria, 1995). As a result, the sector’s contribution to GDP and employment increased.
Given the importance of banks in the sector, it may be argued that banks in Nigeria have contributed a large share of the country’s GDP in recent years. Adeoye (2007).
For example, the contribution of the service industry to GDP growth in 2004, 2005, 2006, 2007, and 2008 was 8.8, 8.0, 9.2, 9.9, and 10.5 percent, respectively (CBN, 2009). The importance of the Nigerian banking sector extends beyond Nigeria to the rest of the world. This important contribution of the services industry,
particularly the banking sector in Nigeria, merits more examination in order to improve the sector’s ongoing expansion, which would finally result in improved economic performance. It should be mentioned, however, that understanding customer behaviour is one of the ways in which banks can meet the expectations of their customers, who are the backbone of the banks’ business.
1.2 Statement Of The Problem
Over the years, banks in developing economies such as Nigeria have faced problems such as distress, lack of public confidence, inability of banks to meet customer satisfaction in terms of credit facility granting, average time spent in bank halls for transactions, insufficient capital base, and so on.
The researcher intends to conduct an investigation into the remote causes of banks’ inability to meet their customers’ needs and requirements, as well as how this has affected the banks’ performance over the years.
The results of this investigation should be able to offer solutions to banks’ inability to satisfy their customers in Nigeria, and thus how to impress its performance through total quality management.
1.3 Research Questions
i. To what extent does the bank’s service quality influence its performance?
ii. What is the correlation between customer loyalty and performance?
iii. How does customer satisfaction affect bank performance?
1.4 Objectives of The Study
i. Determine the extent to which service quality and bank performance are related.
ii. Determine whether there is a favourable relationship between customer loyalty and performance.
iii. To discover how high levels of customer satisfaction affect bank performance.
1.5 Research Hypothesis
The following hypotheses are proposed in order to meet the stated aims of this study:
The First Hypothesis
Hello, there is a link between service quality and bank performance.
There is no correlation between service quality and bank performance.
Hypothesis No. 2
Ho: There is a good association between client loyalty and bank performance.
Customer loyalty and bank performance have no positive association, according to HO.
Three Hypothesis
Ho, there is a link between customer pleasure and bank performance.
HO: There is no link between customer satisfaction and bank performance.
1.6 Importance of the Research
This study will seek to investigate the performance of banks in Nigeria. The importance of this study is to investigate the extent to which bank performance has geared up the Nigerian economy’s growth through loan and advances for investment.
For greater clarity, the research is interested in the effect of customer happiness and discontent, service characteristics, assessment and measurement of customer satisfaction in banks.
1.7 Scope Of The Study
This research looks at customer satisfaction with bank performance. A total of sixty (60) people were drawn from the study’s overall population. This study was conducted among employees of a selected bank in Benin City to determine how customer satisfaction affects bank performance between 2010 and 2013.
1.8 Limitations Of The Research
A variety of restrictions have worked against this research endeavour while it was being carried out. Every human attempt is said to be constrained by some reason, and this study work is no exception. The response rate was poor.
It was challenging to acquire information from respondents because they frequently referred to the height schedule and were tired of fitting the questionnaire. This is due to the researcher’s inability to conduct the questionnaire to respondents from other parts of the country.
1.9 Definition of Terms:
An organisation is a social unit of individuals that is structured and managed to meet a need or achieve common goals.
Stakeholders are individuals, groups, or organisations who have an interest or concern in a company.
Customer Satisfaction: A business phrase that describes how well a company’s products and services meet or exceed the expectations of its customers.
When customers grow devoted to your brand and make repeat purchases over time, this is referred to as brand loyalty.
Profitability is the basic goal of all commercial ventures. The business will not exist in the long run if it is not profitable. It is calculated using revenue and expenses.
Competition: The presence of a sufficient number of buyers and sellers in a market for some item or service such that no single market participant has enough influence to decide the going price of the good or service.
Defensive Strategy: A management technique aimed at lowering the risk of loss.
Service Quality: An assessment of how well a service given meets the client’s expectations.
Reliability: A system’s or component’s ability to fulfil its required functions under given conditions over a set amount of time.
Empathy is the ability to recognise emotions experienced by another human or fictitious creature.
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