(A CASE STUDY OF SELECTED BANKS IN AKWA IBOM)
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ABSTRACT
This study was designed to investigate the impact of Customer Relationship Management on Business Performance of selected Commercial Banks in Uyo, Akwa Ibom State. The study adopted a quasi-experimental design where forty (40) copies of questionnaires were administered to strategic staff of ten (10) Commercial Banks Operating there at Uyo. This ten (10) Commercial Banks were collectively chosen and are functionally registered with the Cooperate Affairs Commission (C.A.C). Furthermore, the forty retrieved copies of questionnaires were represented in a table and responses and analyzed in simple percentages and the postulated hypothesis were tested with the simple regression. Statistical tool which was further verified with the statistical package for social sciences programme (SPSS). However, the study revealed that amongst the three dimensions of Customer Relationship Management, that customer attraction contributes highest to Bank profitability. Furthermore, it was found that customer retention is a major contributor to Bank Market share. Moreso, the study concludes that Commercial Banks should increase their customer attraction and retention strategies since they significantly impact on their level of business performance. And the study recommends that the Panacea to poor business performance is hinged on the bank’s ability to efficiently, identify, attract, retain and develop their customers better than their competitors.
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Marketing from historical antecedent has various shifts in emphasis from production through sales to marketing orientation. However, the various orientation have failed to engage customs in meaningful relationship mutually beneficial to organizations and customers, with at all forms of the shif t still exhibition the transactional approach inherit in traditional marketing. However, Coltman (2006), indicates that in strategy and marketing literature, scholars have long suggested that a customer-centered strategy is fundamental to competitive advantage and that Customers Relationship Management (CRM) programmes are increasing being used by organizational to support the type of customer understanding and inter-departmental connectedness required to effectively execute a customer strategy.
As managers and academics increasingly raise issues about the real center of Customer Relationship Management, the authors questions is direct and unconditional performance effect. The study advances research on Customer Relationship Management by investigating the role of critical mechanism underlying the Customer Relationship Management Performance level. Drawing from the source, positions, performance framework, the authors build research model in which two strategic postures of form differentiation and cost leadership mediate the effect of Customer Relationship Management on firm performances.
Couldwell (1998), defined Customer Relationship Management as “a combination of business process and technology that seeks to understand a company’s customers from the prospective of who they are, what they do, and what they are like”
It has been said that Customer Relationship Management is not a product service. It is an overall business strategy that enables companies to manage relationship with their customers. It provides an integrated view of company’s customers to everyone in the organization costumers realizes that they have a lot of choices and they do not have to be loyal to any company and company’s in return, realizes that they have to treat their customers with respect. Customer Relationship Management is strategy that can help to build long lasting relationships with their customers and increase their revenues and profits.
Customers Relationship Management begins with the basic premise that firms view customers as manageable strategic assets of the firm (Rust et al, 2003; Blatterg et al, 2001) Moving beyond this basic concept, the customer form relationship has been dissected into stages and firms have attempted to manage and strategize about these relationships stages. Customer Relationship Management is seen as the firms practice to systematically manage their customers to maximize value across the relationship life cycle.
The main goal of Customers Relationship Management is to increase the marketing process productivity. This goal is achieved by increasing the marketing process efficiency and effectiveness.
These days, Banks have realized that customer’s relationship is very important factor for their success. The aim of this study is to explore and analyze the strategic implementation of Customer Relationship Management in selected banks at Uyo, identify the benefits as well as the success and failure factors of the implementation and develop a better understanding of what constitute good customer relationship management of practices.
1.2 STATEMENT OF THE PROBLEM
The level of relationship quality improvement between the firm and its customers affect the implementation of the customer Relationship Management system.
Marketing literature tells us that they will be comfortable at any time. It has been observed that customers still prefer certain banks more than others when making high business transactions, even with the apparent similarities with other banks in their category.
How to design Customer Relationship Management system to automate customer related procedures in such a way as to maximize their perception to a level that will continuously transform the organization into a direction that is increasing satisfying to its stakeholders or customers.
1.3 OBJECTIVES OF THE STUDY
Objectives of any research study are basically centered on what the researcher intends to achieve. The general objective of this study is to ascertain the impact of Customer Relationship Management on business performance of selected commercial banks in Uyo, Akwa Ibom State.
However, the specific objectives of this study include;
- To examine the relationship that exists between customers’ identification and bank profitability.
- To ascertain the extent to which customer identification influences bank market share.
- Also to appraise the relationship that exists between customer attraction and bank probability.
- To investigate the extent to which customers attraction impact in bank share.
- To examine the relationship that exists between customer retention and Bank profitability.
- To establish the extent to which customer retention enhances bank market share.
1.4 RESEARCH QUESTIONS
To achieve the above stated objectives, the following questions provided guide for this study.
- To what extent does customer identification impact on Bank profitability?
- To what extent does customer identification impact on Bank market share?
- Is there any significant relationship that exists between customer attraction and Bank profitability?
- To what extent does customer attraction impact on Bank market share?
- To what extent does customer retention significant increase Bank profitability?
- How significantly does customer retention impact on Bank market share?
1.5 SIGNIFICANCE OF THE STUDY
This study will help the management of any organization, where it is being practiced realized the following:
- Customer relationship management enables firms to shape appropriate responses to customers’ behaviour and needs and effectively differentiate their offerings.
- Recognize the fact that, Customer Relationship Management can affect future marketing decisions, such as communication, price, distribution and brand differentiation.
iii. The study of Customer Relationship Management helps organization to understand that fact that they can increase their customer-knowledge base, which in turn will positively relate to customer satisfaction.
- A major advantage of Customer Relationship Management lies in its potentials to help firms understand customer behaviour and needs in more detail.
- Customer Relationship Management activities has a direct position impact on customer retention rate and customer share.
1.7 SCOPE OF THE STUDY
This study unearths those factors that would make a customer prefer one orientation to another, such as banks. Interviews would be conducted and questionnaires would be distributed to certain selected workers of various commercial banks in Akwa-Ibom State.
1.7 LIMITATIONS OF THE STUDY
There are three (3) limitations to this study that we wish to address.
The methodology employed to test for mediation required that we make important assumptions about the direction of this relationships between the variables under study. While the data support this hypothesis, more research will be needed to confirm a causal relationship.
Finally, this study would be centered on commercial Banks with focus on commercial Banks in Akwa Ibom State.
1.8 DEFINITION OF TERMS
BANKS: An establishment authorized by a government to accept deposits, pay interest, clear checks make loans, act as an intermediary in financial transactions, and provides other financial services to its customers.
BUSINESS: An organization or enterprising entity engaged in commercial, industrial or professional activities.
CUSTOMER: An individual or business that purchases the goods or services produced by a business. The customer is the end goal of businesses, since it is the customer who pays for supply and creates demand.
EFFECT: A changes those results when something is done or happens: an event, condition, or state of affairs that is produced by a cause.
MANAGEMENT: The organization and coordination of the activities of a business in order to achieve defined objectives.
PERFORMANCE: An activity (such as singing a song or acting in a play) that a person or group does to entertain an audience.
RELATIONSHIP: The way in which two or more people or things are connected, or the state of being connected.