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ABSTRACT
The study has examined the relationship between customer relationship management and customer retention in Hotel Presidential Port Harcourt. The survey design was employed. The population of this study constitutes all management and staff of Hotel Presidential Port Harcourt which was unknown. The judgmental sampling technique which is a non-probability sampling technique was used for selecting the sample. The sample size of this study is judgmental sample of 30 respondents which comprise of both the senior and junior staff of Hotel Presidential Port Harcourt. In this study both the primary and secondary data were used. A self-designed questionnaire on customer relationship management and customer retention was used and administered for the collection of data from the respondents. The data collected were processed electronically using Statistical Packages for Social Sciences (SPSS Version 22). The statistical test used in the analysis of the data collected was The Chi-Square. Finding revealed that conflict handling is associated with customer retention in Hotel Presidential Port Harcourt and customer loyalty is associated with customer retention in Hotel Presidential Port Harcourt. Based on the finding of the study, we recommended that firms should ensure that conflicts are handled properly to so that customer retention will be enhanced and management should also ensure that customer are treated with respect, loyal customer should also be given bonuses and discount.
TABLE OF CONTENTS
TITLE PAGE i
COVER PAGE ii
DECLARATION iii
CERTIFICATION iv
DEDICATION v
ACKNOWLEDGEMENTS vi
ABSTRACT viii
TABLE OF CONTENTS ix
CHAPTER ONE 1
INTRODUCTION 1
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF PROBLEMS 3
1.3 OBJECTIVES OF THE STUDY 4
1.4 RESEARCH QUESTIONS 4
1.5 RESEARCH HYPOTHESES 5
1.6 SIGNIFICANCE OF THE STUDY 5
1.7 SCOPE OF THE STUDY 6
1.8 LIMITATION OF THE STUDY 7
1.9 DEFINITION OF TERMS 7
CHAPTER TWO 9
REVIEW OF RELATED EMPIRICAL REVIEW 9
2.0 INTRODUCTION 9
2.1 CONCEPTUAL FRAMEWORK 9
2.1.1 CONCEPT OF CUSTOMER RELATIONSHIP MANAGEMENT 10
2.1.2 DIMENSIONS OF CUSTOMER RELATIONSHIP MANAGEMENT 11
2.1.3 CONCEPT OF CUSTOMER RETENTION 13
2.1.4 RELATIONSHIP BETWEEN CUSTOMER RELATIONSHIP MANAGEMENT AND CUSTOMER RETENTION 15
2.3 THEORETICAL FRAMEWORK 20
2.3.1 ATTRACTION THEORY (AROSON, 1980) 20
2.3.2 SOCIAL EXCHANGE THEORY (THIBAULT & KELLEY, 1959). 20
2.3.1 EQUITY THEORY (MESSICK & COOK, 1983) 21
2.4 REVIEW OF RELATED EMPIRICAL STUDIES 22
2.5 SUMMARY OF LITERATURE REVIEW 24
CHAPTER 3 25
RESEARCH METHODOLOGY 25
3.1 INTRODUCTION 25
3.2 RESEARCH DESIGN 25
3.3 POPULATION OF THE STUDY 25
3.4 SAMPLING TECHNIQUES USED 26
3.5 SAMPLE SIZE 26
3.6 SOURCE OF DATA 26
3.6.1 PRIMARY SOURCE (S) OF DATA 26
3.6.2 SECONDARY SOURCE OF DATA 26
3.7 RESEARCH INSTRUMENT FOR DATA COLLECTION 26
3.8 VALIDITY AND RELIABILITY OF INSTRUMENT 27
3.9 TECHNIQUES FOR DATA ANALYSIS 28
CHAPTER FOUR 29
DATA PRESENTATION AND ANALYSIS 29
4.1 INTRODUCTION 29
4.2 QUESTIONNAIRE ADMINISTRATION AND RETRIEVAL 29
4.3 HYPOTHESES TESTING 32
4.4 DISCUSSION OF FINDINGS 37
CHAPTER FIVE 39
SUMMARY, CONCLUSION AND RECOMMENDATION 39
5.1 INTRODUCTION 39
5.2 SUMMARY 39
5.3 CONCLUSION 39
5.4 RECOMMENDATIONS 40
REFERENCES Error! Bookmark not defined.
APPENDIX I 44
APPENDIX II 45
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Customer, retention is defined by different studies in different ways like Gerpott, Rams and Schindler (2001) as that It is the continuity of the business relations between the customer and company. As it has stated that,the vital issue in relationship marketing research was the effects of relationships and quality on customer’s retention(Lin & Wu, 2011). Retention and attraction of new customer are used as drivers for increase in market share and revenues (Rust, Zohorik & Keiningham 1995). In the retention of customer, it is important for firms to know who to serve their customers. Post sales services are the important drivers for customer retentions (Saeed, Grover & Hwang, 2005). It is important for product/service provider to emphasis on the quality of product and service. As it isstated (Lin & Wu, 2011) that there is statistically significantrelationship between quality commitment, trust and satisfaction and customer retention and future use of product, as retention is influenced by future use of product. Lin and Wu (2011) argued that our finding extend previous research that there is solid relationship between customer retention and quality of service/or products. It was examine that loyalty program with monetary compensation is steps toward great customer retention (Verhoef, 2003). Evidence is available in previous literature that Emotional commitment and loyalty program that gave financial incentives have positive impacts on customer retention (Verhoef, 2003). One construct that can enhance customer retention is customer relationship management. Service quality and customer satisfaction are key factors in the battle to obtain competitive advantage and customer retention. Customer satisfaction is the outcome of customer perception of the value received in a transaction or relationship, where value equals perceived service quality, as compared to the value expected from transactions or relationships with competing vendors (Blanchard and Galloway, 1994; Heskett et al., 1990; Zeithaml et al., 1990). In order to achieve customer satisfaction, it is important to recognize and anticipate customers’ needs to be able to satisfy them. Enterprises which are able to rapidly understand and satisfy customers’ needs, make greater profits than those which fail to understand and satisfy them (Barsky and Nash,2003). Organizations must therefore, develop andmanage a healthy and good customer relationship with all the entities they have to deal with.
Peel (2002), CEO of Quadriga Consulting, defines CRM as understanding the nature of the exchange between customer and supplier and managing it appropriately. The exchange contains monetary considerations between supplier and customer – but also communication. The challenge to all supplier organisations is to optimize communications between parties to ensure profitable long-term relationships. CRM is a key focus for many organisations now as a shift away from customer acquisition toward customer-retention and churn reduction strategies dictates a need for best practice CRM processes. Customer Relationship Management is also a concept of identifying customer needs; understanding and influencing customer behaviour through ongoing communications strategies and an effort to acquire, retain and satisfy the customer. Customer Relationship Management is more than simply managing customers and monitoring their behaviour or attitude. It has the potential to change a customer’s relationship with a company and increase revenues in the bargain. It also helps to know the customers well enough to decide whom to choose and whom to lose. The objective of CRM is to recognize and treat each and every customer as an individual. Customer relationship management enables organisations to provide excellent real-time customer service through the effective use of individual account information (Kotler and Keller, 2006). Organisations therefore, need to investigate customer needs, build relationships with both existing and potential customers, and will have to satisfy their customers‟ needs (Rootman, 2006). A lot of researchers have made attempts to define CRM. Here are some definitions, which will hopefully give a better understanding of what CRM is all about.
According to Picton and Broderick (2005), CRM is a view that emphasizes the importance of the relationships developed between an organization and its customers. It involves the strategic and tactical management tasks to achieve positive communications and long-term customer relationships. Berkowitz (2006) also defines customer relationship management (CRM) as “the organization‟s attempt to develop a long-term, cost-effective link with the customer for the benefit of both the customer and the organization.” From the foregoing therefore, the study is determined to examine the relationship between management and customer retention in Hotel Presidential Port Harcourt.
1.2 STATEMENT OF PROBLEMS
Customer relationship is not about understanding the market as it were; it is about understanding people and their individual needs and styles and meeting them.
The best way hotels can do this is to keep the customers in mind and think of them as the real business, instead of the product or services offered. To do this, the hotel must constantly strategize to adapt to the changing circumstances of the society and the behaviour of the customer, which is constantly in a state of flux.
This study is undertaken to do a comparative study of old and new generation hotel customer relations practices to determine their area of convergence, divergence and as well as to find out if their respective successes or failures are attributable to their customer relations practice.
1.3 OBJECTIVES OF THE STUDY
The main objective of the study is to examine the relationship between management and customer retention in Hotel Presidential Port Harcourt. The specific objectives are follows:
1. To examine the extent to which conflict handling associate with customer retention in Hotel Presidential Port Harcourt.
2. To examine the extent to which customer loyalty associate with customer retention in Hotel Presidential Port Harcourt.
3. To examine the extent to which empathy associate with customer retention in Hotel Presidential Port Harcourt.
4. To examine the extent to which communication associate with customer retention in Hotel Presidential Port Harcourt.
1.4 RESEARCH QUESTIONS
From the above research purpose, this study seeks to answer the following questions:
1. Does conflict handling associate with customer retention in Hotel Presidential Port Harcourt?
2. Does customer loyalty associate with customer retention in Hotel Presidential Port Harcourt?
3. Does empathy associate with customer retention in Hotel Presidential Port Harcourt?
4. Does communication associate with customer retention in Hotel Presidential Port Harcourt?
1.5 RESEARCH HYPOTHESES
Based on the objectives of the study, the following hypotheses were postulated to guide the study.
HO1: There is no significant relationship between conflict handling and customer retention in Hotel Presidential Port Harcourt.
HO2: There is no significant relationship between customer loyalty and customer retention in Hotel Presidential Port Harcourt.
HO3: There is no significant relationship between empathy and customer retention in Hotel Presidential Port Harcourt.
HO4: There is no significant relationship between communication and customer retention in Hotel Presidential Port Harcourt.
1.6 SIGNIFICANCE OF THE STUDY
The researchers consider the study very significant on the following basis.
The organizations and marketing department will benefit for, the study since the recommendations will help the company serve the better. The finding of the study will enable organization solve their problems relating to customer relationship management and customer retention and as well as correcting whatever mistakes they have made or are still making in line with their operations. The study will also help future researcher in area of literature on the field of customer relationship management and customer retention. This study will be meaningful in a lot of ways to the government, manager, business, academics also to student organizations since it provides them with some vital data in the area of banking and client/customer relations as well as help them to make policies and strategies that will be of help to business especially in the area of customer service or customer relations management.
1.7 SCOPE OF THE STUDY
The study is delimited under the following heading: content scope, geographical scope and unit of analysis.
Content Scope: The content scope of this study is to examine the relationship between customer relationship management and customer retention. The dependent variable is customer retention, measured by frequent communication, customer services. While independent variable is customer relationship management measure by conflict handling, customer loyalty, empathy and communication.
Geographical Scope: This study is delimited in Port Harcourt with special references to Hotel Presidential, Rumuola, Port Harcourt.
Unit of Analysis: The unit of analysis in this research involves both senior and Junior staffs of Hotel Presidential, Rumuola, Port Harcourt at the time of carrying out the study.
1.8 LIMITATION OF THE STUDY
The study was limited by the following:
The level of frankness in response to questions by the respondents is quite doubtful.
Finance: Accessing fund for the research work as difficult and this limited the quality of research activity.
Time: The time allocated to the research work was not sufficient to give room for further intensive work on the field of study.
Organization Policy: Policies of the organization limited the level of information received. The personnel of the firms were not willing to give information, stating that it was against the organization’s policy.
1.9 DEFINITION OF TERMS
Customer: This is a person who buys a product or service from a person or organization, usually a seller. In banking, a customer is a client who patronizes the bank either to make deposits, withdrawals, or get a loan or other banking services.
Customer Relations: This is the effort made by banks to establish and maintain goodwill between these organizations and their customers and prospective customers.
Customers’ Retention: Customer retention is the action or movement an organization undertakes for the main purpose of reducing consumers’ anxiety and fear about a product or service in order to increase the lifespan of a customer.
Loyalty: Is a positive (or negative) attitude of the customer toward the business organization and its products and services. It is considered important because the loyal customer will contribute to organization in long-range.
Direct Mailing: Is the process of exchange or swap conducted by the customer between the benefits obtained from the product or service and the cost of obtaining in terms of product benefits.
Commitment: The notion of commitment is then central to understanding better the mental processes underlying the repeat purchasing of a brand.
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