impact of customer relationship management on customers loyalty

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1 CHAPTER ONE INTRODUCTION 1.1 OVERVIEW OF THE STUDY Understanding how to effectively manage customer relationships has become a very important topic to both academicians and practitioners in recent years. Also, organizations are realizing that customers have different economic value to the company and are subsequently adapting their customer offerings and strategies accordingly. (Roya and Salmiah, 2010). We need to learn more about the leading indicator of customer value tomorrow (measurable today) and to understand better the strong tie between customer equity and we must learn about how companies successfully change their strategies to increase customer loyalty or decrease customer turnover (Roger, 2005). It is apparent that managing customer relationships, coupled with building the value of the customer base, is no longer a

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A survey research on the impact of Customer Attraction , Customer retention, Customer satisfaction programs on Customers loyalty. In Asaba, Delta State, NIgeria .

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CHAPTER ONE

INTRODUCTION

1.1 OVERVIEW OF THE STUDY

Understanding how to effectively manage customer

relationships has become a very important topic to both

academicians and practitioners in recent years. Also, organizations

are realizing that customers have different economic value to the

company and are subsequently adapting their customer offerings

and strategies accordingly. (Roya and Salmiah, 2010).

We need to learn more about the leading indicator of

customer value tomorrow (measurable today) and to understand

better the strong tie between customer equity and we must learn

about how companies successfully change their strategies to

increase customer loyalty or decrease customer turnover (Roger,

2005).

It is apparent that managing customer relationships, coupled

with building the value of the customer base, is no longer a

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business management term based on the latest consultant speak

but rather a fruitful avenue of business composition that has been

rendered necessary by permanent innovations in the technological

landscape. (Roya and Salmiah, 2010).

Customer relationship management is the establishment,

development, maintenance and optimization of long term

mutually valuable relationship between consumers and the

organization (Berry,1983). successful customer relationship

management focuses on understanding the needs and desires of

the customers and is achieved by placing these needs at the heart

of the business by integrating them with the organization‟s

strategy, people, technology and business processes (Fox, Stead,

2001).

The concept of relationship interface is centered on where

and how individuals and organizations exchange information

whether informally as well as externally (Berry, 1983). It

empirically means an organizations ability of getting in touch with

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both the internal and external customers in responsive and

flexible manner (Abdullateef et al. 2010).

The current global competitions threatened by the financial

arises has continued the need for both manufacturers and services

marketers to monitor how their customer feel about their goods

and services, and particularly when there is enormous evidence in

support of relationship managements as the alternative means of

soling the global market fluctuation (Aihie 2007,)

Many businesses such as banks, insurance and other service

providers realize the importance of customer relationship

management and its potential to help them acquire new customer

retain existing ones and maximize their life time value (Opara et

al 2010).

The functional activities of Nigeria banks like those of other

countries is premised on the acceptance of deposits, lending,

affect domestic and foreign payment and provide property

management and trustee services among other wide range of

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financial services (Firpo, 2006). while, these services are rendered

efficiently and with utmost trusts and commitment in developed

nations due to the relational and interactive approach adopted,

same cannot be said of most banks in Nigeria before year 2000

(Opara et al 2010). The financial service industry in Nigeria has

undergone major transformations in recent times, most especially

with the introduction of reformation programs from 1999 to 2007.

In this past manager consolidation era, banks are introducing

new products, such as ATM, telephone banking, investment

banking and actively participating in social responsibilities. All

these were meant to influence relationship and thereby retain

their customers at a profit and this can best be done through CRM

as prevalent in today‟s global business environment.

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1.2 STATEMENT OF PROBLEM

Within the rapid expanding literature of relationship

marketing, business–to–business marketing and customer

relationship management, there is relatively little attention paid

to the value of the organization can get from such business

strategies.

Neglect in customer relationships has lead to a lot of

organization having a reducing figure in the count of customers in

their customer data base. This study will look at impact of

customer relationship management on customer‟s loyalty.

1.3 OBJECTIVES OF STUDY

Among the vast studies that has been done in the field of

customer relationship management. Although they have focused

on different aspect of the customer relationship management.

Less research is found in this area.

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The main objective of this study is on the impact of

customer relationship management and its relational variables on

customer‟s loyalty.

a. To ascertain the impact of customer attraction progammes

on customer‟s loyalty.

b. To determine the impact of relationship management on

customer‟s loyalty.

c. To find out the effect of customer retention programs on

customer‟s loyalty.

d. To determine the impact of customer‟s satisfaction on

customer‟s loyalty.

1.4 RELEVANT RESEARCH QUESTIONS

The following research question will be answered is this

study. The questions include the following.

i. Is there a significant impact of customer attraction

programs on customer‟s loyalty?

ii. To what extent does customer retention programs affect

customer‟s loyalty?

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iii. Does customer‟s satisfaction programs leads to customer‟s

loyalty?

iv. To what extent does relationship management programs

leads customer‟s loyalty

1.5 STATEMENT OF HYPOTHESIS

In the view of the impact of customer relationship

management on customer‟s loyalty the hypothesis will be as

follows.

(1) Ho: Good customer attraction programs do not lead to

customer‟s loyalty.

.H1: Good customer attraction programs leads to

customer‟s loyalty

(2) Ho: Good relationship management does not lead to

customer‟s loyalty.

H1: Good relationship management leads to customer‟s

loyalty.

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(3) Ho: A good customer retention program does not necessarily

leads to customer‟s loyalty.

H1: Good customer retention program leads to customer

loyalty

(4) HO: Good customer‟s satisfaction will not always lead to

customer‟s loyalty.

H1: Good customer‟s satisfaction will lead to customer‟s satisfaction

1.6 SIGNIFICANCE OF STUDY

This study‟s academic contribution hinges on the fact that it

offers a significant advancement to the body of the current

literature of customer relationship management, most especially

in the Nigerian banking industry, as it reveals customer attraction

programs, customer retention programs, relationship management

and customer‟s satisfaction as influencing factors for customer‟s

loyalty.

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1.7 SCOPE OF STUDY

This study is focused on the impact of customer relationship

management on customer‟s loyalty in financial services providing

organizations. It is desirable to extend as possible, but this is not

possible because of time constrains.

This study does not cover the whole financial service

providing organization in Nigeria, but it only covers one selected

organization in Asaba, Delta state, Nigeria. The population size

will be the Asaba populace in this selected organization.

1.8 LIMITATIONS OF STUDY

The concept of customer relationship management amongst

Nigerian firm is yet to gain full implementation. It should be noted

that the use of commercial banking industry as the sample could

lead to a potential industry specificity of the result.

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The radials being of measured as well are just some selected

variables of customer relationship management which pose a

restriction on some other testable ones.

The analysis of data will be done with the multiple

regression analysis which also poses a limitation on any other

analysis that can be used as well. Other limitations to this study

are non-response from respondents and as well inadequate

resources.

1.9 DEFINITION OF TERMS

Customer’s Loyalty: Costumer‟s loyalty is the totality of

feelings or attitudes that would incline a customer to consider

the re-purchases of a particular product, service or bond or

revisit a particular company (Kottler and Keller 2006)

Customers: A customer can be define as one that purchases a

commodity or service (Kottler .P. and Keller .K. (2006).

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Customer Relationship Management (CRM): Customer

relationship management is attracting maintaining and

enhancing customer relationship in multi-service organizations

(Berry 1983).

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REFERENCES

Abdullateef, A .O, Morhtar, S.S. and Yuseff, R.Z. (2010): Driver of efficient service Delivery and caller satisfaction: A Model of CRM Customer contact Cantors in Malaysia: International of Management Studies.

Aihie .O. and Bennani, A.E (2007). An Exploratory Study of Implementation of Customer Relationship Management of Strategy Business Process Management. Journal 13 (1) 2007 pp 139-164.

Berry, L.L. (1988) Relationship marketing in Shostack, G.L et al (Eds), Emerging perspectives, Journal of Marketing Science Vol. 23(A), pp, 236-45.

Berry, L.L. (1995) Relationship Marketing of Service. Growing Interest, Emerging Perspectives. Journal of the Academy of Marketing Science 23(4), 236 - 45.

Firpo, Y. (2006), “Bonking the Embarked Technology‟s Royal in Delivering Accessible Financial services to the poor, Samba Consulting 5.

Fox, T. and Stead .S. (2001) customer relationship management delivering the bone fits, white paper, CRM (UK) and SECOR consulting, new Malden

Gummesson E. (2004) Return on Relationships (RoR), the Value of Relationship marketing and CRM in Business –to-Business context. Journal of Business and Industrial Marketing Vol 19 (2), PP, 136-148.

Levitt (1983), “After Sales is over...” Harvard Business Review, 101- 61, No. 2, pp-81-93.

Opara, B.C. Ayopo.O.O, Darogo. W. M. (2010), Analysis of Impact of Technology on Relationship marketing orientation and

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Bank performance. European Journal of Scientific Research ISSN 1450-216x 101.45 no 2 (2010), Pp, 291-300.

Rogers, M. (2005), Customer strategy observation from the ranched journal of marketing 69,262-263.

Roya .A. and Salmiah M. (2010), The Customer Relationship Management Strategies: Personal needs assessment of Training and Customer turnover 14, Number 1 (2010).

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CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 INTRODUCTION

This chapter is concerned with the review of literature. It is

a systematic analysis and appraisal or evaluation of studies, works

and documents containing information about the problem under

study.

This chapter provides the background and the problem

discussion of the area of this study, leading down to the specific

research questions. This chapter is also aimed at giving

authenticity and credibility to the research study through the

citing of works of different institutions, scholars and experts

whose works and findings are as well as a contribution to the

major relational variables of this study under consideration.

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2.2 HISTORICAL BACKGROUND

As observed by Sheth and Parvatiyar (1998) developing

customer relationships has historical antecedents going back into

the pre-industrial era. Much of it was due to direct interaction

between producers of agricultural products and their customers.

Similarly, artisans often developed customized products for each

customer. Such direct interaction led to relational banding

between the producer and the customer.

In recent years however, several factors have contributed to

the rapid development and evolution of CRM. These include the

growing -intermediation process in many industries due to the

advent of sophisticated computer and telecommunication

technologies that allow producers to directly interact with end-

customers. For example, in many industries such as the airline,

banking, insurance, computer software or household appliances

industries and even consumables the de-intermediation process is

fast changing the nature of marketing and consequently making

relationship marketing more popular.

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These measures created intimacy and cooperation in the

buyer-seller relationship. Instead of purchasing a product a

product or services, customers were more interested in buying a

relationship with a vendor. The key (or national)account

management program designates account mangers ad account

teams that assess the customers need and then husband the

selling company‟s resources for the customer benefit such program

have led to the establishment of strategic partnering within the

overall domain of customer relationship management (Anderson

and Narus, 1991; Shapiro 1988).

Similarly, in the current era of hyper-competition, markets

are found to be more concerned with customer‟s retention and

loyalty (Dick and Basu, 1994; Reichheld, 1996). As several studies

have indicated, retaining customers perhaps offers a more

sustainable competitive advantage than acquiring new ones. What

marketers are realizing is that it costs less to retain customers

than to compete for new ones (Rosenberg and Czepiel, 1984). On

the supply side it pays more to develop closer relationship with a

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few suppliers than to work with more vendors, (Hayer,

Wheelwright and Clarke, 1988; Spekman, 1988). In addition,

several marketers are concerned with keeping customers for life

rather than with only making a one-time sale (Cannie and Caphin,

1991). There is greater opportunity for Goss-selling and up-selling

to a customer who is loyal and committed to the firm and its

offerings. In a recent study, Naidu, Parvatiya, Sheth and Westgate

(1999) found that relational intensify increased in hospitals facing

a higher degree of competitive intensity.

Also, customer expectations have been a changing rapidly

over last the last two decades. Fueled by new technology and the

graving availability of advanced product features and services,

customer expectations are changing almost on a daily basis.

Consumers are less willing to make compromises or trade-offs in

product and services quality. In a world of ever changing customer

expectations, building cooperative and collaborative relationships

with customers seems to be the most prevalent way to keep tack

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of their changing expectations and appropriately influencing them

(Sheth and Sisodia; 1995).

Finally, many large internationally oriented companies are

today trying to become global by integrating their worldwide

operations. To achieve this they are seeking cooperative and

collaborative solutions for global operations from their vendors

instead of merely engaging in transactional activities with them.

Such customers‟ needs make it imperative for marketers

interested in the business of companies that are global to adopt

CRM programs, particularly, global account management programs

(Yip and Madsen 1996). Global Account Management (GAM) is

conceptually similar to national account management programs

except that they have to be global in scope and thus more

complex managing customer relationship around the world calls

for external and internal partnering activities, including

partnering across a firms worldwide organization.

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2.3 CUSTOMER RELATIONSHIP MANAGEMENT

To survive in the global market focusing on the customer is

becoming a key factor for companies big and small. It is known

that it takes up to five times more money to acquire a new

customer then to get an existing customer to make a new

purchase. A second aspect of CRM is that knowing the customer

and his/her problem allows acquiring new customer more easily

and facilitating targeted cross-selling (Taria, 2005).

CRM is based on the basic marketing belief that an

organization that knows its customer like individuals. Its

components may include data warehouse that store all a

company‟s information, customer services system, call centre, e-

commerce, web marketing, operations system (that handle order

entry, invoicing, payments, point of sale, inventory system, etc)

and sales system (mobile sales communication appointment

making routine etc). In practices, CRM system range from

automated customer-contact system to the company wide pooling

of customers information (Kottler – pp. 409 – 410).

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The implementation of CRM needs the close cooperation

between suppliers of one of the many CRM system on offer, such

as avenue and relationship organizer and the user (Kottler– pp.

409 – 410).

CRM is one of the key processes in any firm. Although CRM is

a relatively new business term and therefore, the definition can

vary depending on the background of the individual writing it. The

“F. Dwyer and Tanner” believe tat CRM as those process that

address all aspect of identifying customers, creating customer

knowledge, building customer relationship and shaping their

perception of the organization and its product. (Kottler– pp. 304 –

305).

CRM is a highly fragmented environment and has come to

mean different things to different people. As the thought and

approach to CRM is in the initial stages and not fully matured, one

can find different perspectives and definitions of CRM. According

to Gummesson (1983) CRM Is the valves and strategies of

relationship marketing with particular emphasis on customer

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relationship turned into practical application.CRM is an enterprises

approach to understanding and influencing customer behavior

through meaningful communications in order to improve customer

acquisition, customer retention, customer loyalty and customer

profitability (Kottler– pp. 304 – 305).

In order to have more efficiently managed customer

relationship CRM focuses on effectively turning information into

intelligent business knowledge. This information can come from

anywhere inside or outside the firm and this requires successful

integration of multiple database and technologies such as the

internet, call centre, sales force automation and data warehouse.

(John and Fredrick, 2002)

There is no universal explanation of what CRM is, since the

area is fairly new and still is developing. It is therefore important

to remember that several attempts of defining CRM exist and that

many companies adapt the definition to their own business and

their unique needs. . (John and Fredrick, 2002).

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“The activities a business performs to identify quality,

acquire, develop and retain increasingly loyal and profitable

customers by delivering the right product or services to the right

customer, through the right channel at the right time and the

right cost. CRM integrate sales, marketing services enterprise

resources planning and supplying chain management function

through business process automation technology solution and

information resources to maximize each customer contact. CRM

facilities relationship among enterprises, their customers, business

partner, suppliers and employees”. (John and fredrick,2002).

“However, for CRM to be successful all activities in a

company need to manage in combination to reach success. Stone

Wood and Wilson (1996) note that in some companies there is the

belief that good market planning is equal to good CRM. It must be

clear that CRM is not equal to market planning. Since they are

founded on two different marketing approaches. However, the

authors add that although the information in market research is

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CRM, it is only a small part of the CRM that is needed in order to

create profitable customer relationship” (John and Fredrick,2002).

2.3.1 GOALS OF CRM

Companies can gain many goals from CRM (Arezu and Alieza,

2006).

1. Lower cost of recruiting customers: the cost for recruiting

customers will decrease since there are savings to be made on

marketing, mailing, contact follow-up, fulfillment, services

and so on;

2. No need to recruit too customers to preserve a steady volume

of business: the number of long term customers will increase

and consequently the need for recruiting many new customers

decreases;

3. Reduced cost of sales: the costs regarding selling are reduced

owing to that existing customers are usually more responsive.

In addition, with better knowledge of channel and distributors

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the relationships become more effective as well as that a cost

for marketing campaigns is reduced.

4. Higher customer profitability: the customer profitability will

get higher since the customer wallet share increases, there

are increase in up-selling, cross-selling and follow-up sales

and more referrals comes with higher customer satisfaction

among existing customers.

5. Increased customer retention and loyalty: the customer

retention increases since customer stay longer buy more and

buy more frequently. The customer does also more often take

initiatives, which increase the bounding relationship, and as a

result the customer loyalty increases as well;

6. Evaluation of customer profitability: the company will get to

know which customer are profitable, the ones who never

might become profitable and which ones that might be

profitable in the future. This is very important since the key

to success in any business is to focus on acquiring customers

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who generate profit and once you have found them never let

them go (person – p.11).

2.3.2 CRM PROCESS

The CRM process involved four steps. These steps are to

segments and profile the market, design communication strategy,

impenetrate and evaluate. (Dwyer, 1987).

Source: Dwyer, R. (1987). “Developing buyer seller relationship-journal of market

“A challenge of defining CRM is that any definition is

contingent in the level at which CRM is practiced in an

Segment and profile the market

Design strategy Evaluate

Implement Figure 1

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organization or for that matter what the researcher or manager

believed about the correct level of CRM (Arezu and Alieza, 2006).

There are three different possible levels;

1. Functional

2. Customer facing

3. Company wide

In CRM process customer facing level is being focused upon.

This perspective includes the building of a single new of the

customer across all contact channels and the distribution of

customer intelligence to all customers facing functions. This view

stresses the importance of coordinating information across time

and contact channels o manage he enter customer relationship

systematically. For example, a bank customer who has both a loan

product and a savings product might interact with the bank

through various channels and different types of interactions (e.g.

Transactions, information request, complaint), which may change

over time (Arezu and Alieza, 2006).

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A CRM process on the customer facing level would be the

basis of the interaction and on the basis of the generated

intelligence, would result in coordinated and well defined action

through different functions (Werner, 2004).

2.4 ATTRACTION, SATISFACTION, RELATIONSHIP

MANAGEMENT

Since CRM includes all activities directed towards the

establishment, development and maintenance of exchange

relationships (Morgan and Hunt, 1994). According to this study,

here are the relationship strategy chosen and to be review in this

literature;

1. Customer attraction

2. Customer retention

3. Customer satisfaction

4. Relationship management

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CUSTOMER ATTRACTION

Attraction as a driver of customer commitment means

something that makes the service provider interested to a given

customer or the other way round so attraction can be based on

financial technology or social constructs.

Consequently, even social contacts that are highly

appreciated may form a source of attraction that can lead to a

business relationship. If attraction exists between two parties, the

basis for a relationship is developing, indeed understanding.

Understanding the role of attraction in a customer commitment

decision is the key issue that little attention has been paid on it

the service marketing area. (Gronroos, 2001).

Gilbert (1996) suggested that quality should play role of the

chief facilitator to achieve the objectives of relationship

management, such a commitment to the brand, emotional

involvement and active interaction.

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Creating strong customer focused relationship requires

understanding the needs, if specific customers and the firms

succeed in meeting these needs, Such serves as a means to

measure the perception of customer‟s experiences in the services

encounter (Parasuramon et al, 1991). Delivering more effective

services quality than others in one of the ways that a firm can be

successful in achieving today‟s business environment. (lai et al,

2007).

Groonros (2000) described service quality in term of seven

perceived scale;

1. Professionalism and skills

2. Attitudes and behavior

3. Accessibility and flexibility

4. Reliability and trust worthiness

5. Service recovery

6. Serviscape

7. Reputation credibility

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Value of a relationship is studied in Wilson and Jantrania

(1995)‟s research which is a very useful contribution in business

relationship and its success issue. In a long term relationship with

the customer the benefit concept takes a deeper meaning (Ravald

and Groonros, 1996).

The customer perceived value needs to get a deeper

meaning which does not relate only to episodes, but to the

expectations of the customer and the company‟s responsibility to

meet these expectations in a long term relationship (Ravald and

Groonros; 1996).

The customer-perceived value needs to get a deeper

meaning which does not the expectations of the customer and the

company‟s responsibility to meet these expectations in a long-

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term relationship. (Ravald and Groonros, 1996).

Figure 2: The effect of value- adding strategies in a long- term relationship

Source: Revald and Gronroos (1996).

According to Wilson and Jantrania (1995), value means a

great many things to great many people. Increasing the benefits

means adding something to the core product that the customer

Relationship

Value

Increasing the benefit/reducing

the sacrifice

Stimulate Repurchasing Activities

Relation

Safety Credibility Security

Trust

Loyalty

Mutually profitable relationship for

supplier and customer

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perceived important, beneficial and of unique value. The problem

is to find an alternative to providing superior value which

improves the performance of the company a well as the benefit of

the customers in the long run. (Wilson and Jantrania, 1995).

It must be examined that how a company can add value to

the offering by reducing the customer-perceived sacrifice.

Companies should look at things from the customers‟ perspective

and this is a core aspect of relationship management. The

company needs a thorough understanding of the customer‟s value

chain in order to be able to reduce the customer perceived

sacrifice. The company should get close to the customer to be

able to understand his needs preferences and all the activities

which constitute his value chain. (Wilson and Jantrania, 1995).

Relationship value is conceptualized in three dimensions,

economic, psychological or behavioral and strategic.

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Economic

Figure 3: Expanding the dimensions of relationship value Source: Wilson and Jantrania, (1995)

CUSTOMER RETENTION

Customer retention is increasingly being as an important

managerial issue especially in the context of saturated market or

lower growth of the number of new customers. It has been

acknowledge as a key objective of relationship marketing

primarily because of its potential in delivering superior

Strategic

Culture

Trust

Social bending

Core competencies

Strategic fit

Time to market

Goals

Cost reduction

Value reduction

Investment quantity

Concurrent Engineering

Behavioral

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relationship economics, i.e. it cost less to retain than to acquire

new customers. The assumption is that generalized theories,

which imply universal applicability, tend to overlook the

distinctive impact of conceptualized business conditions on

effective customer retention strategies, the fact is that both

theoreticians and managers should consider business context in

developing and implementing customer retention developing and

implementing customer retention strategies (Rizal Ahmed and

Francis Buttle pp. 149 – 161).

With the cost of losing customer rising every day, companies

continually seek new ways to acquire, retain and increase

business. Service has long been an important factor in customer

retention, and new research suggests its role in more critical than

ever and will continue to grow throughout the 1990‟s.

CUSTOMER SATISFACTION

Satisfaction and dissatisfaction are seen as two ends of a

scale which are related to each other but only have slightly

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differences from each other where the location is defined by

a comparison between expectations and outcome. (Pantea, 2008).

A customer will be satisfied when the outcome of the source

meets his or her expectations and also when the service quality is

more than those expectations and also when the service quality is

more than those expectations, the service provider is having the

delighted customer contrary when the perceived overall service

quality is below or less than his or her expectation. We can

strongly say that the customer will be dissatisfied (Looy et al.

2003)

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Figure 4: A Service Satisfaction Framework

Source: Based on J.M. Hays and A.V Hill (1999): Cited by Looy et al (2003)

“Overall satisfaction with the providing of a service that is

needed by the customer is a function of the buyer‟s degree of

satisfaction with various aspects of the service offered” (Gounaris,

2005).

Delighted

Customer

Satisfied

customer

Dissatisfied

Customer

Satisfied

Exhausting customer

Not recovered

Recovered

Complaining

Dissatisfied

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Liljander and Strandvik (1995) presented a model which

broadens the discussion on satisfaction, quality and value by

including customer relationship specifications they also draw on

both traditional services quality literature and relationship studies

within industrial marketing.

Instead of saying that satisfaction is linked to transactions

and service quality is linked to a global attitude of the service, it

is suggested that quality precedes satisfaction and the satisfaction

can be measured also for some other transactions (Liljander and

Strandvik, 1995).

Although satisfaction applies to both tangible and intangible

goods the emphasis should be on the services setting. Where the

concept has been the subject of investigation in many studies

(Liljander and Strandvik, 1995).

The expectancy disconfirmation paradigm in process theory

provides the infrastructure for the vast majority of satisfaction

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studies and encompasses four construct (Liljander and Strandvik,

1995).

1. Expectations

2. Performance

3. Disconfirmation

4. Satisfactions

Close relationship does exist between customer‟s loyalty and

high levels of customer‟s satisfaction which brings customer

delight firms should not only meet their customer‟s expectations

but they should try to excite them in one or another way.

(Pantea, 2008) relationship management replaced traditional

transactions oriented approaches of marketing by placing more

emphasis on the creation of customer value by means of

developing and maintaining relationship (Ossel et al, 2003).

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RELATIONSHIP MANAGEMENT

Relationship management is an important strategy and is one

of the important aspects of marketing in these two decades.

Morgan and Hunt (1994) defined Relationship management as “all

marketing activities directed towards establishing developing and

maintaining successful relationship”.

Relationships between customer and business firms have

been consistently encouraged as successful business practices

worldwide. The commotion with marketing has seldom been

established formally in the development of marketing theory (Yau,

2000). Relationship management was known as a strategic

approach to industrial and service markets and was considered to

be unsuitable in other marketing context (O‟malloy and Tynan,

2000).

The idea of relationship and also relationship building being

extended to other area such as distribution, service and consumer

, are as the result of strong interest in relationship between

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companies. So we must also build relationships to middlemen

service supplier and end consumer (Jorgenson, 2001). Liljander

and Strandvik, (1995) proposed that a relationship term should be

defined from the customers point of view as this corresponds to a

market oriented perspective. The customer can be committed

both negatively and positively towards the service provider, or he

can be indifferent. A negatively committed customer will try to

end up the relationship as soon as possible, but is usually unable

to do so in the short period of time because bonds which serve as

exit barrier (Liljander and Strandvik, 1995).

In order to build up a lasting and successful customer

relationship the provider needs to have a deep understanding of

the customer‟s business activities in which the customer created

value for himself (Helander and Hirvonen, 2001).

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2.5 CUSTOMER’S LOYALTY

The degree of customer‟s loyalty is measured as the

percentage of loyal customers, the percentage of incomes

associated with loyal customers and the rise of loyal customers

after the implementation of customer relationship management

activities (izquierdo et al, 2005).

Commitment to customers and service quality enhance

satisfaction which leads to close and successful relationship

(Buttle, 1996; cited by Izquierdo et al, 2005). These loyalty

programs are structural marketing efforts, which reward and

therefore encourage loyal behavior (Izquierdo et al, 2005).

DIMENSION OF CUSTOMERS LOYALTY

Sheth (2002) stated that customer attitude is difficult to

measure for financial and practical purposes; customer retention

is generally used as an indicator of customer loyalty. However,

attitude and behavior can be very different (Sheth and Parvatior,

2002).

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A

ttit

ude

The dimensions of customer loyalty

Source: (Dick, A.S and Basu .K. (1994) Journal of academy of marketing science; cited by Sheth and Parvatror, 2002)

Different loyalty types are shown in the matrix above and can be

matched with different forms of relationships.

1. Truly loyal customers are willing to seek out a particular

service location or brand;

2. Seriously loyal customers tend to be more motivated by

impulse convenience and habit that is if the conditions are

right;

3. Latent loyalty applies to customers who are loyal simply

because they have no other choice;

4. No loyalty obviously there will always be some customers

who display no loyalty to a particular company or brand.

Buying pattern

Latent loyalty No loyalty

True loyalty Spurious loyalty

Positive Negative

Negative

Positive

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2.5.1 CUSTOMER LOYALTY PROGRAM

Commitment to customers and services qualities enhance

satisfaction which leads to close and successful relationship. If we

admit that, it is more profitable holding on to existing customers

than winning new customers (Berry, 1995; Vavra, 1995: cited by

(Izquiordo et al, 2004), the company will try to achieve the

satisfaction of existing customers providing them inducement such

as discount, free product or fidelity card. These loyalty programs

are structured marketing attempts which reward and therefore

encourage loyal behavior, loyalty program customers should show

changes in repeat purchase loyalty which is not evident amongst

non-program brands. A decreased switching to non-program

brands, increased repeat purchase rates, increased used frequency

or greater propensity to be exclusively loyal. (Izquierdo et al

2005). Rauyren et al (2005) provide a practice of how relationship

quantity can influence customer loyalty or loyalty in the business

to business context.

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Satisfaction appears to be an important factor in maintaining

purchase intentions through service quality will strongly enhance

both purchase intentions and attitudinal loyalty. (Rauyren et al

2005).

In order to maintain customer loyalty, a supplier must

enhance also four aspects of relationship quality which are trust,

commitment, satisfaction and services quality. (Pantea, 2008).

Successful loyalty programs need to make offers to encourage

customers to continue to make purchases from the company, but

more important, successful loyalty programs need to manage

loyalty and profitability property ((Pantea, 2008). A recent article

Ramartz and Kumur, 2007: cited by Kumur and Peterson, 2005)

show that the most loyal customers are not necessarily the most

profitable. We can say that loyal customers cost less to serve,

loyal customers pay higher prices for the same goods and loyal

customers do more marketing on behalf of the company (Pantea,

2008).

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These results are shown below where customer are divided

into four different categories; (Kumur and Peterson, 2005)

1. Low profitability and short tenure

2. High profitability and short tenure

3. Low profitability and long tenure

4. High profitability and long tenure

Earlier, the focus of loyalty was brand loyalty with respect

to tangible goods (Caruana, 2002). Brand loyalty defied as the

preparation of a purchase of a household devoted to a brand if

purchase most often. Over time fall have continue to expand,

reflecting the wider perspective of marketing to work into other

types of loyalty such as vendor loyalty. Few studies have discussed

on customer loyalty of services (Caruana, 2002).

2.6 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEM IN

BANKING/FINANCIAL INSTITUTIONS

Panda (2003) observed that “globalization and deregulation,

combined with radically enhanced the managerial context of

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service industries. Watkins, (1992) stated that he financial

services industry is in a transitional stage as the mission of

information technology changes its emphasis from administrative

efficiency to the improvement of service quality and IT becomes

market led. He also mentioned that IT would involve the

installation of new customer administration, marketing

information, and point of sale and branch system to provide better

customer service. Through research is quite old a number of

researchers today have observed that the financial services

industry is in the middle of a structural change (Geib et al, 2004).

Panda (2003) explain that financial services today are facing fierce

and aggressive competition in both domestic and global market

thereby forcing organization to restructure in order to enhance

their chances of growth and survival.

The financial service industry is a seater which is generally

held as being the most advanced in customer relations

management, as they are the traditional users of direct mail and

having extensive information on customer, (Goss and Stone, 2002).

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The relationship which financial service companies such as bank,

hold with their customer is imperative for the growth and survival

of such a business. Hence, the need to adopt new ways of gaining

an advantage over competitors becomes an important part of

business. Geib et al, (2006) explain that due to increasingly

competition and high customer demands financial services

companies are required to focus on core competencies in order to

deliver better value to customers.

Karakostas et al, (2005), asserts that financial services had a

lead in implementing CRM due to the nature of their business, as

business transaction where information technology based and

contained important information about their customers. The

emergence of CRM in the financial services industry was as a result

of three fundamental factors which have been listed as new

technological opportunities increasing competition from new

market emigrants and changing customer behavior (Geib et al,

2006). These factors therefore motivate financial services to focus

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on the development of a good relationship between the business

and its customers.

Panda (2003), states that for a successful CRM

implementation in the financial services sector, it has to

incorporate four main areas of business which include strategy,

people, technology and process. Panda further explains that he

enablers (people and technology) are moved by the organizations

strategic processes through their systematic interaction which

eventually results in a successful CRM implementation.

2.6.1 NIGERIAN BANKING SYSTEM

The financial institutions under investigation are the

commercial banks in Nigeria. Due to this, a literature review was

carried out on the country. This section aims to give knowledge on

the development of banking system in Nigeria and also information

technology in Nigerian banks.

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2.6.2 HISTORICAL DEVELOPMENT OF NIGERIA’S BANKING SYSTEM

The history of Nigeria‟s banking and finance industry can be

viewed as a story of recurring changes in the nature of financial

markets in response to economic, political and in particular,

regulatory policy changes. (Oyejide, 1990). The African banking

corporation, which was Nigeria‟s First Bank, was established in

1892 (Beck et al, 2005).

No banking legislation was present at the time but came into

existence in 1952 and at this point Nigeria had three foreign banks

and two indigenous banks, the foreign banks were the bank of

British west Africa, Barclays bank of Nigeria and the African

continental bank (library of congress country studies) for decades

after 1952, the demand for deposit was showed as Nigerians

preferred cash and distrusted checks for debt settlement (CIA

world fact book).

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The Central Bank of Nigeria began operations on July 1, 1959

(Beck et al, 2005), it was statutorily independent at the federal

government until 1968 (library of congress country studies).

In the 1970‟s the Nigerian financial sector was largely

controlled by the government through to the early 1990‟s (Kano

and Rice, 2001). However, by the end of 1988, the banking system

in Nigeria consisted of the Central Bank of Nigeria Forty – two (42)

commercial bank and twenty-four (24) merchant banks (CIA World

factbook). Both commercial and merchant banks had 1,500

branches together. Merchant banks were allowed to open checking

account for corporations only and could only accept deposits of

N50,000 and above (library of congress country studies). As at

1988 commercial banks had assets of N52.2bilion compared to

merchants banks with assets of N12.6billion (CIA World fact book).

During the 1970‟s the Nigerian government introduced a

number of direct controls in the banking system, through

ownership, as well as through interests‟ rate and credit controls

(Beck et al, 2005). Since there were no Nigerian purchasers,

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foreign-owned banks were nationalized and this was as a result of

an “indigenous wave” which has the goal of “securing domestic

majority ownership of strategically important sectors” (Beck et al,

2005).

Nigeria then undertook a brand program if financial

liberalization in 1986 with the Structural Adjustment Programme

(SAP), this resulted in interest rates and entry into the banking

system being liberalized while credit allocation quotas were also

loosened (Beck et al., 2005). The consequence of this was the

quick entry of many players into the banking system, the number

of banks increased from 40 to about 120 (Beck et al., 2005) the

contribution of the financial sector to GDP also increased (Lewis

and Stein 2002).

On the 6th of July, 2004 the Central Bank of Nigeria (CBN)

announced a N25billion minimum capitalization requirement for

Nigerian Commercial banks with effect from December 31, 2005

(CBN, 2004). The objective was to produce Mega banks which

would be more supportive of an emerging and vibrant private

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sectors, entrance competition on the global markets in addition to

stemming the tide of distress in the banking industry (Skye bank,

2008).

This implementation was the first phase of the most

extensive and intensive banking reforms. Since post-independence

Nigeria (Achua, 2008). This development was met with mixed

reaction in the industry, most banks were in agreement with the

purpose of these returns but felt that the timeline was rather

short for such a large increase in capital base. As a result of the

reform, 89 commercial banks, which existed before. The reform,

where reduced to 25 commercial banks. 76 banks of the 89 banks

merged into 25 mega banks. While 13 banks were liquidated and

this took place in 2005 (Achua, 2008). In early 2008, two of the

twenty-five existing banks also merged thereby bringing the

recent amount of commercial banks to twenty four scenario

electronically and available to all channels” (Oboh, 2005).

However, one of the challenges is the management of the

sprawling database built on customers so that information can be

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made readily, speedily and systematically extracted, shared and

reviewed to aid management decisions and most importantly to

satisfy customer (Oboh, 2005).

2.7 INTEGRATIVE SUMMARY

The review highlights customer relationship management

system, (process, and goals). It also reviews the construct,

customer attraction, customer satisfaction, customer retention,

relationship management and customer‟s loyalty as well.

The literature review also gives insight into the banking

system of Nigeria by explaining the background information of the

country and further explaining the history of the banking system

up to its present state. The review let us know that there has

been a lot of progress in the banking system in Nigeria and due to

the strong financial reforms, competitions amongst banks is on the

increase therefore in order for this banks to survive there has

been quite an increase in the application of customer focus

strategy in their operations.

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The next chapter discusses the methodology of the study.

Concept such as the methodology approach, sample population,

description of the instrument used is presented.

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REFERENCES

Adeoti-Adekeye, W.B. (1997), “Important of Management

Information System”: Journal of the Library review 46 (5),

318 – 327

Anandarajan; M. et al (2002) “Technology acceptance in the

banking industry: A perspective from a less developed

country”: Journal of Information technology and people Vol

13 (4), pg 298 – 312

Arezu .G. and Alieza .O. (2006), “Impact of Customer Relationship

Management of Customer Retention: Master thesis: Julea

University of technology, 2006:02 PB: ISSN: 1653 – 0187

Beck, T. et al (2005), “Bank privatization and performance”:

Empirical evidence from Nigeria’s Journal of Banking and

Finance. 29 (8 – 9), 2355 – 2379.

Caruana, A, (2002) “Service loyalty the effect of service loyalty

and mediating role of customer satisfaction” European

journal of Marketing, 36, 7/8, pp 1 – 2.

Dwyer F.R. Schurr. P.H, and Oh, S. (1987) “Developing Buyer –

Seller Relationship”. Journal of Marketing vol 51, 11 – 27.

Eroke, L. (2008) “Between Banks” Product and Quantity Service”

This Day Newspaper Vol 13 (4694), 33 -34.

Foss, B. and Stone, M. (2002) “CRM in financial services: A

practical Guide to making customer relationship

management: Work Kogan Page Publisher.

Gilbert, D.F, and Buttle, E.D, (1996), “Airlines in Relationship

Marketing: Theory and Practice: pp, 131 – 144, London:

Paul Chapman.

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Gronroos, C. (2000), Service management and marketing A

customer Relationship management Approach, Wiley, New

York, NY.

Gronroos, C. (2001), “The perceived service quality concept a

mistake?” Managing Service Quality, Vol. 11, No. 3

Helandar, N. and Hirvonon, P., (2001), “Towards Joint Value

Creation Processes in Professional Services” The TQM

Magazine Volume 13, Number 4, pp. 281 – 291 (II)

Idowu, P. et al (2002). “The Effect of Information Technology on

the Growth of the Banking Industry in Nigeria” Journal of

Information Systems in Developing Countries. Vol10 (2), 1

– 8.

Izquierdo, C. and Gilan, J. (2004), “Trust as the key to relational commitment”, Journal of Relationship Marketing, 3 (1).

Izquierdo, C. and Gilan, J., Gutierrez, S.S (2005) “Impact of Customer Relationship Marketing on Firm Performance: Spanish Case”, Journal of Services Marketing 1914 – 234 – 244

Johan and Fredrick (2002) “Customer Relationship Management” 2002: 016 SHU. ISSN: 1404 – 5508

Jorgensen, N (2001). “A contingency model for the company‟s use of relationship building”, 17 the IMP Conference

Kottler .P. and Keller .K. (2006). “Marketing Management. 12edition. USA, ISBN 0 – 13 – 145757 – 8

Kumar, U and Peterson, A (2005) “Using a customer – level marketing strategy to enhance firm performance: A Review of Theoretical and Empirical Evidence”, Journal of the Academy of Marketing Science, 4 (4), 507 – 516

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Liljander, .V. and Strandvik, T. (1995) “The Nature of Customer Relationship in Services”, Swart, Teresa A, David E, Bowen and Stephen W. Brown (eds), Advances in Services Marketing and Management, Volume 4, London: JAI Press Inc.

Morgan, R. and Hunt .S. (1994), “The Commitment – trust theory of relationship marketing” Journal of Marketing, Vol. 58, July, pp. 20 – 38

Nigeria Banking, Finance, and other services” The library of congress studies, CIA World Fact book (1991).

Oboh, G.A.T (2005) “Developing an ICT based delivery in the Nigerian Banking Industry. Union Bank Experience” Union Digest Vol.9 (1) Pg 1 -11.

O‟ Malley, L. and Tynam .C. (2000) “Relationship marketing on consumer markets Rhetoric or reality.

Ossel, G. and Gemmel, P. Looy, B. (2003), Service management an integrated approach; Prentice Hall Press.

Panda, T. (2003) “Creating Customer life Time Value through effective CRM in financial services industry” Journal of services Research (Online)

Pantea, P.J (2008) “Impact of Customer Relationship Management on Market Performance: Master thesis: Lulen University of technology: 2008: 0085 – ISSN: 1658 – 0187.

Parasuraman, A, Zelthaml, Valarie A. Barry, Leonard L, (1991), “Retirement and Reassessment of the SERVQUAL Scale”. Journal of Retailing Vol.67.

Peppard, J. (2000) “Customer Relationship Management (CRM) in financial service” European management Journal Vol 18 (3), Pg 312 – 327.

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Petra, P. (2004) “Customer Relationship management and How a CRM System can be used in the Sales Process” 2004. 124 (IV. ISSN: 1402 – 1617. ISRN: LTU – EX – 041121 –SE-LUTH.

Ravald, A and Gronroos C. (1996) “The Value Concept and relationship marketing”, European Journal of Marketing, Innovations Linking purchases, Services recovery, Vol. 30 No. 2, pp, 19 – 30.

Rauyren, P. (2005). “Relationship Quantity as a predictor of B2B Customer Loyalty. IMP Group Journal.

Reinartz, W. and Kumar .V. (2002) “The mismanagement of customer loyalty” Harvard Business review, (July), pp. 86 – 97.

Sheth, J.N. (2002), “The Future of Relationship Marketing” Journal of Service Marketing Vol16, No. 7, pp 590 – 592

Taria, M.A (2005) “Internet and Customer Relationship management in SME’s” 2005: 087 SHU – ISSN: 1404 – 5508 – ISRN: LTU – SHU – EX – 051087. LUTH

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CHAPTER THREE

RESEARCH METHODOLOGY

3.1 INTRODUCTION

Polkinghorne (1985) defines methodology as “Examination of

the possible plans to be carried out the journeys to be undertaken

so that an understanding of phenomena can be obtained. Graziano

and Raulm (2004), explain that since “research” involves a process

of asking and answering questions that may lead to interplay

between inductive and deductive thinking, the methods used in

answering such questions can therefore depend on several factors.

This chapter is concerned with discussing the methodology

used for this research work. It involves the methods and

procedures for carrying out this study consist the following:

Research design, population and sample size, sampling technique,

instrument for data collection, validation of instrument, method

of data collection and technique of data analysis.

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3.1 RESEARCH DESIGN

This is the programme that is meant to guide the researcher

in the process of collecting, analyzing and interpreting

observations.

According to Olannye (2006) research design are the

approaches, framework or plans for carrying out research studies.

The design method adopted for this research takes the form

of a survey study as it allows samples to be selected and

explanatorily studied. The design permit the collection of original

data meant for describing large population with individual as unit

of analysis.

The research is also designed to ascertain the “Impact of

Customer relationship management on Customer‟s loyalty.

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3.3 POPULATION AND SAMPLE SIZE

This research took the form of a field survey: at this

juncture, it is pertinent to mention that the population of this

study is strictly, restricted to the banking or financial industry.

However time constraints directed the focus of this study on

Guaranty Trust Bank Plc Asaba branch where the desired sample

was made.

The population consists of 800 persons to whom the work

would be generalized. The sample size of this research study is a

proportion of individuals drawn from the population in order to

assess the “Impact of Customer relationship management on

Customer loyalty”. The sample size of 80 used for this research

work. These comprises of customers of Guaranty Trust Bank Plc,

Asaba. The sample size therefore is 10% of the population under

study. This is derived with the formula below:

K = N

n

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Where:

N = Total number of population

n = Sample size

3.4 SAMPLING TECHNIQUES

A stratified sampling technique was adopted for this study as

this technique gives every member an equal chance of being

selected or chosen. This was due to the fact that the population

was divided into sub-strata, based on criteria of level of

Customers of Guaranty Trust Bank Plc, Asaba Branch.

3.5 RESEARCH INSTRUMENT

This is a major procedure to be followed in carrying out a

research study. It implies the tools used in the courses of

collecting the need information for the research study.

Questionnaires were the instrument of data collection used

for this study. Olannye (2006) defined a questionnaire as an

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instrument for gathering data from respondents to aid in finding,

solution to research problems. Alasautari (1998), Bryman (2001),

Oppenheim (1992), (Zaja and Blair (2005) gave some points which

a researcher should have in mind when designing a questionnaire.

Some of these points are:

The researcher must have in mind the context and

circumstances of the research situation, that is, the

questions should be aligned with the aims and objectives of

the research.

Slang and colloquialisms should be avoided.

Appropriate choice of closed and open question should be

used.

Question and answer should be kept together. Questions

should not be separated from its respective answers, that

is, the question and answers should follow each other on

the same page as opposed to the question being on one

page and the answers on another page.

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Each question should contain only one idea; two edged

questions should be avoided.

The questions should be neutrally worded, that is, using

conventional language which is easy to understand and

does not arouse strong emotions.

The questionnaire used was divided into two section (A and

B) confirming questions on respondents profile and another on

closed ended questions pattern using the Iinkert scale closed-

ended question as follows:

5 = Strongly Agree (SA)

4 = Agree (A)

3 = Undecided (U)

2 = Disagree (D)

1 = Strongly Disagree (SD)

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3.6 VALIDATION OF THE INSTRUMENT

To establish the reliability of the instrument a test-retest

method was employed. A research instrument can go a long way to

nullify the reliability of the research findings.

To validate the instrument for data collection, the

questionnaire was given to renowned expert from the Department

of Business Administration and Marketing, Delta State University,

Asaba Campus. This was to establish the reliability and content

validity of the instrument.

3.7 METHOD OF DATA COLLECTION

Data was collected through primary and secondary sources.

Questionnaire administered to respondents is of the primary data

source. The internet as well as the library constituted our

secondary data collection medium. This includes journals,

newspapers, magazines, textbooks, research findings reports

e.t.c.

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3.8 TECHNIQUES OF DATA ANALYSIS

In the study, the statistical technique of data analysis is

adopted .The multiple regression analysis will be used through the

spss computer software.

MODEL SPECIFICATION

The most important step in studying any relationship

between variables is model specification. It is to express the

relationship in mathematical form with which the topic will be

explored empirically.

Multiple correlation coefficients (R2) are the correlation

coefficient between the criterion (dependent variable) and several

independent variable and this is the case in this study.

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MODEL

L= ß0+ß1·x1+ß2·x2+ß3·×3+ß4·x4+E1

Where ß1, ß2 and ß3 ……. ßn. are the slope coefficient for

predictors x1, x2,x3……xn

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REFERENCES

Alasautari, P. (1998) An introduction to Social Research Sage Publications: London

Bryman, A. (1988) “Quantity and Quality in Social Research” Union Hyman Ltd – London

Czaja, R. and Blair, J. (2005) Designing Surveys, Pine Forge Press: London

Olannye, P.A (2006) Research Methods for Business: A skill Building Approach, Peejan Publication. Lagos.

Oppenhein, A.N (1992). Questionnaire Design, interviewing and Attitude Measurement London: Printer.

Polkinghorne, D. (1983) Methodology for the Human Science. State University of New York Press – Albany.

Graziano, A.M and Raulin, M.L. (2004) Research Methods: A process of Inquiry Pearson United States of America.

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CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION

This chapter focuses on the presentation and analysis of data

and information collected through the questionnaires administered

to the Customers of Guaranty Trust Bank, Nigeria, Plc, in Asaba.

The data presented and analyzed in this study is dichotomized into

two parts. In this chapter, the primary data adopted through

questionnaires are presented and analyzed. This analysis is used to

validate this analysis is used to validate or nullify the earlier

stated assumptions. In doing so the researcher used simple

percentage to analyze the personal data of respondents and

multiple regressions were used in analyzing the research questions

and testing of research hypothesis.

A total of 80 questionnaires were distributed to the customers and

49 were completed and returned.

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4.2 DEMOGRAPHIC CHARACTERISTICS OF RESPONDENT USING SIMPLE PERCENTAGE

SECTION A

4.1.1 Gender

SEX FREQUENCY PERCENTAGE

Male 19 38.8%

Female 30 61.2%

Total 49 100

The above table shows that males are 19 with 38.8% and

female 30 (61.2%). This shows that females are more amongst

the respondents than male.

4.2.2 Age

FREQUENCY PERCENTAGE

Below 30 31 63.3

31 – 40 13 26.5

Total 49 100

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The above table shows that males 31 (63.3%) of the

respondent are below 30, 13 (26.5%) are between 31 – 40

while 5 (10.2%) are above 40.

4.2.3 Education

FREQUENCY PERCENTAGE

OND/NCE 15 30.6

HND/B.Sc 28 57.1

Masters 6 12.2

Total 49 100

The table above shows that 15 (30.6%) of the respondent are

OND/NCE holder 28 (57.1%) are B.Sc holder while 6(12.2%) have a

masters degree.

4.2.4 Job Experience (years)

FREQUENCY PERCENTAGE

Below 5yrs 38 77.6

5 - 10 6 12.2

Above 10 5 10.2

Total 49 100

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The above table shows that 38 (77.6%) of the respondent

have a job experience which is below 5yrs, 5 – 10years are 6

(12.2%) while 5 (10.2%) are above 10years.

4.2.5 Status in Organization

FREQUENCY PERCENTAGE

Junior Staff 25 51.0

Senior Staff 17 34.7

Management Staff 7 14.3

Total 49 100

From the above table, it shows that 25(51.9%) of the

respondent are junior staff while senior staff are 17(34.7%) and

7(14.3%) for management staff.

SECTION B

Research Question 1: To what degree does customer retention

progammes affect customer‟s loyalty?

Q1: Company open doors to customer‟s complaint on service delivery.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

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Disagree 0 0

Undecided 0 4.1

Agree 26 53.1

Strongly Agree 21 42.9

Total 49 100

From the above table 0(0%) Strongly disagree 0(0%) Disagree,

2(4.1%) were Undecided, 26(53.1) agrees while 21(42.9%) strongly

agree.

Q2: Company has a good pricing system and service change.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 2 4.1

Undecided 3 6.1

Agree 33 67.3

Strongly Agree 11 22.4

Total 49 100

From the above table 0(0%) Strongly disagree 2(4.1%)

Disagree, 3(6.1%) were Undecided, 33(67.3%) agree while

11(22.4%) strongly agree.

Q3: Company shows concern towards customer problem.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 1 2.0

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74

Undecided 6 12.2

Agree 11 22.4

Strongly Agree 30 61.2

Total 49 100

The table above shows 1(2%) Strongly disagree, Disagree

1(2%), 6(12.2%) were Undecided, 11(22.4%) agree while 30(61.2%)

strongly agree.

Research Question 2: Does customer‟s satisfaction leads to

customer‟s loyalty?

Q4: Company focuses to meet customer‟s expectation.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 1 2.0

Undecided 3 6.1

Agree 23 46.9

Strongly Agree 21 42.9

Total 49 100

From the above table 1(2%) Strongly disagree, 1(2%)

Disagree, 3(6.1%) undecided, 23 (46.9%), Agree 21(42.9%) strongly

agree.

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Q5: Company service performance is satisfactory .

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 0 0

Undecided 8 16.3

Agree 15 30.6

Strongly Agree 26 53.1

Total 49 100

The table above show 0(0%), strongly disagree, 0(0%),

disagree 8 (16.3%) are undecided, 15(30.6%) agree, 26(53.1%)

strongly agree.

Q6: I am likely to use their service again

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 7 14.3

Undecided 0 0

Agree 20 40.8

Strongly Agree 21 42.9

Total 49 100

From the above table 1(2.0%) Strongly disagree, 7(14.3%)

Disagree, 0(0%) undecided, 20(40.8%) Agree, 21(42.9%) strongly

agree.

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Research Question 3: Is there a significant Impact of Customer

attraction programs on customer‟s loyalty?

Q7: I got to know about company and its products and services through media advertisement

FREQUENCY PERCENTAGE

Strongly Disagree 2 4.1

Disagree 1 2.0

Undecided 5 10.2

Agree 19 38.8

Strongly Agree 22 44.9

Total 49 100

From the above table 2(4.1%) strongly disagree, 1(2.0%)

Disagree, 5(10.2%) undecided, 19(38.8%) Agree, 22(44.9%) strongly

agree.

Q8: Am attracted to company by friends and superior.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 1 2.0

Undecided 4 8.2

Agree 25 51.0

Strongly Agree 19 88.0

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Total 49 100

From the above table 0(0%) strongly disagree from the

respondent, 1(2%) Disagree, 4(8.2%) undecided, 25(51%) Agree,

19(38.8%) strongly agree.

Q9: I‟ve been doing business with the organization because of their track record.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 1 2.0

Undecided 3 6.1

Agree 22 44.9

Strongly Agree 23 46.9

Total 49 100

From the above table 0(0%) are strongly disagree from the

respondent, 1(2%) Disagree, 3(6.1%) are undecided, 22(44.9%)

Agree, 23(46.9%) strongly agree.

Research Question 4: To what extent does Relationship

management lead to customer loyalty?

Q10: I have a couple of friends and acquaintances.

FREQUENCY PERCENTAGE

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Strongly Disagree 1 2

Disagree 1 2

Undecided 2 4.1

Agree 28 57.1

Strongly Agree 17 34.7

Total 49 100

The table above shows 1(2%) strongly disagree, 1(2%)

Disagree, 2(4.1%) undecided, 28(57.1%) Agree, 17(34.7%) strongly

agree.

Q11: Service officer often show concern about how I fair in each transaction.

FREQUENCY PERCENTAGE

Strongly Disagree 2 4.1

Disagree 3 6.1

Undecided 4 8.2

Agree 24 49.0

Strongly Agree 16 32.7

Total 49 100

From the above table 2(4.1%) Strongly Disagree, 3(6.1%)

Disagree, 4(8.2%) undecided, 24(49%) Agree, 16(32.7) Strongly

Agree.

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Q12: Company encourages us to talk to supervisor anytime

FREQUENCY PERCENTAGE

Strongly Disagree 1 2

Disagree 1 2

Undecided 7 14.3

Agree 24 49.0

Strongly Agree 16 32.7

Total 49 100

From the above table 1(2%) is Strongly Disagree, 1(2%)

Disagree, 7(14.3%) are undecided, 24(49%) Agree, 16(32.7)

Strongly Agree.

CUSTOMER LOYALTY

Q13: Trust consistency in service delivery encourages patronage

FREQUENCY PERCENTAGE

Strongly Disagree 2 4.1

Disagree 2 4.1

Undecided 5 10.2

Agree 26 53.1

Strongly Agree 14 28.6

Total 49 100

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From the above table 2(4.1%) Strongly Disagree, 2(4.1%)

Disagree, 5(10.2%) are undecided, 26(53.1%) Agree, 14(28.6%)

Strongly Agree

Q14: Company has clearly defined customer service policy.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 1 2.0

Undecided 2 4.1

Agree 32 65.3

Strongly Agree 14 28.6

Total 49 100

From the above table 0(0%) Strongly Disagree, 1(2%)

Disagree, 2(4.1%) are undecided, 32(65.3%) Agree, 14(28.6%)

Strongly Agree.

Q15: Company honors their promise.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2

Disagree 2 4.1

Undecided 14 28.6

Agree 16 32.7

Strongly Agree 16 32.7

Total 49 100

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From the table above 1(2%) Strongly Disagree, 2(4.1%)

Disagree, 14(28.6%) are undecided, 16(32.7%) Agree, 16(32.7%)

Strongly Agree.

COMMITMENT

Q16: Company maintain high level of integrity this make me committed to them.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2

Disagree 2 4.1

Undecided 1 2

Agree 23 46.9

Strongly Agree 22 44.9

Total 49 100

From the above table 1(2%) Strongly Disagree, 2(4.1%)

Disagree, 1(2%) are undecided, 22(44.9%) Agree, 22(44.9%)

Strongly Agree.

Q17: Company‟s level of business innovation and creativity encourage my greater patronage.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 1 2

Undecided 3 6.1

Agree 18 36.7

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Strongly Agree 27 55.1

Total 49 100

From the above table 0(0%) Strongly Disagree, 1(2%)

Disagree, 3(6.1%) undecided, 18(36.7%) Agree, 27(55.1%) Strongly

Agree.

Q18: Company‟s passion for service delivery makes me to anticipate more business dealings.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 2 4.1

Undecided 13 26.5

Agree 20 40.8

Strongly Agree 14 28.6

Total 49 100

From the above table 0(0%) Strongly Disagree, 2(4.1%)

Disagree, 13(26.5%) undecided, 20(40.8%) Agree, 14(28.6%)

Strongly Agree.

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SATISFACTION

Q19: Company encourage face to face dealing

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 2 4.1

Undecided 12 24.5

Agree 22 44.9

Strongly Agree 13 26.5

Total 49 100

From the above table 0(0%) Strongly Disagree, 2(4.1%)

Disagree, 12(24.5%) Undecided, 22(44.9%) Agree, 13(26.5%)

Strongly Agree.

Q20: Company responds to message and keep client informed

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 0 0

Undecided 14 28.6

Agree 14 28.6

Strongly Agree 21 42.9

Total 49 100

From the above table 0(0%) Strongly Disagree, 0(0%)

Disagree, 14(28.6%) undecided, 14(28.6%) Agree, 21(42.9%)

Strongly Agree.

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Q21: Company‟s employees are friendly and approachable.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 1 2.0

Undecided 1 2.0

Agree 18 36.7

Strongly Agree 28 57.1

Total 49 100

From the above table 1(2%) strongly disagree, 1(2%)

disagree, 1(2%) undecided 18 (36.7%) agree, 28(57.1%) strongly

agree.

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TABLE 4.3 REGRESSION TABLE

Descriptive Statistics

N Minimum Maximum Mean Std.

Deviation Sum of Trust,

Commitment and

Satisfaction

49 21.00 44.00 32.2857 4.66815

Sum of CR, Cs, CA and

RM

49 33.0 60.00 50.8163 5.11401

Valid N (listwise) 49

Model Summary

Mode

I

R

R square

Adjusted

R Square

Std. Error of the

Estimate

1 .659a .435 .383 3.66550 a. Predictors: (Constant), Relationship management, Customer‟s

satisfaction, Customer‟s attraction, Customer‟s retention [

Coefficientsa

Unstandardized Coefficients

Standardized

Coefficients

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Model B Std. Error Betta t Sig.

1 (Constant) 9.518 5.481 1.736 .089

Customer Relation .411 .474 .136 .868 .390

Customer’s Satisfaction .747 .386 .305 1.935 .059

Customer’s attraction .077 .329 .030 .234 .816

Relationship management .967 .292 .419 3.308 .002

a. Dependent Variable: TCS

4.4 TEST OF HYPOTHESIS

Hypothesis testing is aimed at giving the research a stand point

to make definite and concrete inference from the analysis carried

out depending on the result of the analysis, the hypothesis is

subject to acceptance or rejection.

TESTING HYPOTHESIS 1

This hypothesis was tested with the research question 3 which

states “is significant impact of customer attraction programs on

customer loyalty?” .Hypothesis was tested with the under list

questions

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Q7: I got to know about company and its products and services through media advertisement

FREQUENCY PERCENTAGE

Strongly Disagree 2 4.1

Disagree 1 2.0

Undecided 5 10.2

Agree 19 38.8

Strongly Agree 22 44.9

Total 49 100

From the above table 2(4.1%) strongly disagree, 1(2.0%)

Disagree, 5(10.2%) undecided, 19(38.8%) Agree, 22(44.9%) strongly

agree.

Q8: Am attracted to company by friends and superior.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 1 2.0

Undecided 4 8.2

Agree 25 51.0

Strongly Agree 19 88.0

Total 49 100

From the above table 0(0%) strongly disagree from the

respondent, 1(2%) Disagree, 4(8.2%) undecided, 25(51%) Agree,

19(38.8%) strongly agree.

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Q9: I‟ve been doing business with the organization because of their track record.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 1 2.0

Undecided 3 6.1

Agree 22 44.9

Strongly Agree 23 46.9

Total 49 100

From the above table 0(0%) are strongly disagree from the

respondent, 1(2%) Disagree, 3(6.1%) are undecided, 22(44.9%)

Agree, 23(46.9%) strongly agree.

MODEL

L= ß0+ß1·x1+ß2·x2+ß3·×3+ß4·x4+E1`

The Hypothesis is stated thus

H0: Good customer attraction programs do not lead to customer‟s

loyalty

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H1: Good customer attraction programs leads to customer‟s

loyalty.

From the regression table 4.3, it shows that customer attraction

has a positive Beta coefficient of (.077) but with a .816 level of

significance. .816 is greater than .05 which is the level of

significance and this makes it insignificant.

DECISION

Since customer attraction has a figure of .816 which is

insignificant, we will accept Null hypothesis (H0) and reject

Alternate hypothesis (H1).

TESTING HYPOTHESIS 2

This hypothesis was tested with research question 4 which states

“to what extent does Relationship management leads to

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customer‟s loyalty?” Hypothesis was tested with the under list

questions

Q10: I have a couple of friends and acquaintances.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2

Disagree 1 2

Undecided 2 4.1

Agree 28 57.1

Strongly Agree 17 34.7

Total 49 100

The table above shows 1(2%) strongly disagree, 1(2%)

Disagree, 2(4.1%) undecided, 28(57.1%) Agree, 17(34.7%) strongly

agree.

Q11: Service officer often show concern about how I fair in each transaction.

FREQUENCY PERCENTAGE

Strongly Disagree 2 4.1

Disagree 3 6.1

Undecided 4 8.2

Agree 24 49.0

Strongly Agree 16 32.7

Total 49 100

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From the above table 2(4.1%) Strongly Disagree, 3(6.1%)

Disagree, 4(8.2%) undecided, 24(49%) Agree, 16(32.7) Strongly

Agree.

Q12: Company encourages us to talk to supervisor anytime

FREQUENCY PERCENTAGE

Strongly Disagree 1 2

Disagree 1 2

Undecided 7 14.3

Agree 24 49.0

Strongly Agree 16 32.7

Total 49 100

From the above table 1(2%) is Strongly Disagree, 1(2%)

Disagree, 7(14.3%) are undecided, 24(49%) Agree, 16(32.7)

Strongly Agree.

MODEL

L= ß0+ß1·x1+ß2·x2+ß3·×3+ß4·x4+E1`

The hypothesis is stated thus

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H0: Good relationship management does not have any relationship

with customer‟s loyalty.

H1: Good relationship management has a relationship with

customer‟s loyalty.

From the regression table 4.3, it shows that relationship

management has a positive Beta coefficient of (.967) and with

.002 level of significances. .002 is less than .005 and this makes it

significant.

DECISION

Since relationship management has a figure of .002 which is

significant. We accept alternate hypothesis (H1) and reject null

hypothesis (H0).

TESTING HYPOTHESIS 3

The hypothesis was tested with research question 1 which states

“To what degree do customer retention programs affect customer‟s loyalty?”

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This hypothesis was tested with the under listed questions

Q1: Company open doors to customer‟s complaint on service delivery.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 0 0

Undecided 0 4.1

Agree 26 53.1

Strongly Agree 21 42.9

Total 49 100

From the above table 0(0%) Strongly disagree 0(0%) Disagree,

2(4.1%) were Undecided, 26(53.1) agrees while 21(42.9%) strongly

agree.

Q2: Company has a good pricing system and service change.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 2 4.1

Undecided 3 6.1

Agree 33 67.3

Strongly Agree 11 22.4

Total 49 100

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From the above table 0(0%) Strongly disagree 2(4.1%)

Disagree, 3(6.1%) were Undecided, 33(67.3%) agree while

11(22.4%) strongly agree.

Q3: Company shows concern towards customer problem.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 1 2.0

Undecided 6 12.2

Agree 11 22.4

Strongly Agree 30 61.2

Total 49 100

The table above shows 1(2%) Strongly disagree, Disagree

1(2%), 6(12.2%) were Undecided, 11(22.4%) agree while 30(61.2%)

strongly agree.

MODEL

L= ß0+ß1·x1+ß2·x2+ß3·×3+ß4·x4+E1`

The hypothesis is stated thus

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H0: A good customer retention program does not have a significant

relationship with customer‟s loyalty.

H1: Good customer retention programs have a significant

relationship with customer‟s loyalty.

From the regression table 4.3 it shows that customer retention has

a positive Beta coefficient of .411 and with .390 level of

significance. .390 is greater than .005 and this makes it

insignificant.

DECISION

Since customer retention has a figure of .390 which is

insignificant. We will accept null hypothesis (H0) and reject

alternate hypothesis (H1).

TESTING HYPOTHESIS 4

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This hypothesis was tested with the research question 2 which

states “Does customer satisfaction leads to customer‟s loyalty?”

This hypothesis was tested with the under listed questions:

Q4: Company focuses to meet customer‟s expectation.

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 1 2.0

Undecided 3 6.1

Agree 23 46.9

Strongly Agree 21 42.9

Total 49 100

From the above table 1(2%) Strongly disagree, 1(2%)

Disagree, 3(6.1%) undecided, 23 (46.9%), Agree 21(42.9%) strongly

agree.

Q5: Company service performance is satisfactory.

FREQUENCY PERCENTAGE

Strongly Disagree 0 0

Disagree 0 0

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97

Undecided 8 16.3

Agree 15 30.6

Strongly Agree 26 53.1

Total 49 100

The table above show 0(0%), strongly disagree, 0(0%),

disagree 8 (16.3%) are undecided, 15(30.6%) agree, 26(53.1%)

strongly agree.

Q6: I am likely to use their service again

FREQUENCY PERCENTAGE

Strongly Disagree 1 2.0

Disagree 7 14.3

Undecided 0 0

Agree 20 40.8

Strongly Agree 21 42.9

Total 49 100

From the above table 1(2.0%) Strongly disagree, 7(14.3%)

Disagree, 0(0%) undecided, 20(40.8%) Agree, 21(42.9%) strongly

agree.

MODEL

L= ß0+ß1·x1+ß2·x2+ß3·×3+ß4·x4+E1`

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The hypothesis is stated thus:

H0: Good customer satisfaction programs does not lead to

customer„s loyalty

H1: Good customer‟s satisfaction programs leads to customer‟s

loyalty

From the regression table 4.3 it shows that customer‟s satisfaction has a positive Beta coefficient of (.747) and with .059 level of significance. .059 is of the range of .05 and this makes it significant.

DECISION

Since customers satisfaction programs has a figure of .059 which is significant. We accept alternate hypothesis (H1) and reject null hypothesis (H0)

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CHAPTER FIVE

DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATION

5.1 DISCUSSION OF FINDINGS

This research provides both theory development implication

for academics and practical implication. The main contribution to

theory development involves the confirmation of some

hypothesized relationships amongst the constructs of customer

relationship management – Customer attraction, Customer

retention, Customer satisfaction and Relationship management on

Customers loyalty amongst the Customers of Guaranty Trust Bank.

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In this research primary data was elicited through

questionnaire and simple percentage was use to analyze the

questions and multiple regression analysis was used in testing the

entire hypothesis.

The major finding was that amongst all the construct of

Customer relationship management, Customer satisfaction and

Relationship management has greater Impact on Customer‟s

Loyalty. This means when customers are satisfied with an

organizations products and services there is a measure of loyalty

that is going to be created. A good Relationship management

program from the firm and its employees to customers will also

create loyalty.

The effect of the four antecedent (i.e., customer attraction,

customer retention, customer satisfaction, Relationship

management ) accounted for 65.9% (R) variance in customers

loyalty, while 43.5%(R2) of other non-listed variables accounted for

the variance in customer‟s loyalty .

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5.2 CONCLUSION

The main aim of this research was to understand the Impact

of Customer relationship management on Customers Loyalty in a

Commercial Bank using Guaranty Trust Bank, Asaba.

In reviewing the literature for this research it was observed

that the commercial banks in Nigeria are currently competing to

gain and maintain market share. These banks are constantly

combating and devising plans that aim to put them above their

rivals.

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For the financial institutions, their main asset are the

customers and therefore these customers are meant to be treated

very well, and in a way that services are structure and tailored to

fit the varied needs of the customers while also providing quality

service. In this modern world CRM have been noted as admirable

solution.

The research work shows that relationship management and

customer satisfaction has greater impact on customer‟s loyalty

amongst the relational variable of CRM (i.e. customer attraction,

customer retention).

However, in order for a good customer loyalty to be built a

good customer satisfaction and Relationship program should be

adopted into the organization‟s operation, policy and service

delivery.

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5.3 RECOMMENDATION

Based on the result of this study, it is the opinion of the

researcher that the under listed recommendations it implemented

will help in ganging customer‟s loyalty.

1. Customer satisfaction programs in the organization if

adopted will effectively build a loyalty mindset in the

customers which will lead to customer loyalty.

2. Relationship management programs from management and

employees will effectively build customer‟s loyalty.

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5.4 FUTURE RESEARCH

Future research is mainly based on the current

limitations. Therefore, future research will seek to generalize the

model developed in this study to other services.

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