The Impact of Customer Relationship Management on Customers’ Satisfaction
The Impact of Customer Relationship Management on Customers’ Satisfaction
Chapter One of The Impact of Customer Relationship Management on Customers’ Satisfaction
INTRODUCTION
BACKGROUND OF STUDY
In this era of sophisticated business environment, it is imperative that organisation should be more interested in satisfying their customers. As a matter of fact, customers nowadays are becoming more sophisticated than before especially in this new economy (Kotler 2002). That is why banks today must take this as a case to consider.
But what is a relationship? A relationship is a situation whereby two parties interact with the motive of enjoying mutual benefits from each other, that is, one complements the other for cohabiting.
The aim of customer relationship management (CRM) is to produce high customer equity. Customer equity is the total of the discounted life-time value of all of the firm’s customers (Day 1994). Clearly, the more loyal the customers, the higher equity.
There are three drivers of customer equity; namely value equity, brand equity, and relationship equity.
Value equity is the customer’s objective assessment of the utility of an offering based on perceptions of its benefits relative to its cost. The sub drivers of value equity are quality, price and convenience.
Brand equity is the customer’s subjective and intangible assessment of the brand, above and beyond its objectively perceived value. The sub drivers of brand equity are customers brand awareness, customer attitude towards brand, and customer perception of brand ethnics.
Relationship equity is the customer’s tendency to stick with the brand, above and beyond objective and subjective assessments of its worth. Sub drivers of relationship equity include loyalty programs, special recognition and treatment programs, community building programs, and knowledge-building programs.
The best relationship marketing going on is driven by technology. A company decides which driver(s) to strengthen for the best pay-off.
As a matter of fact, as CRM has become a necessity in this era of mega-marketing, there are still some bottle necks in the implementation of CRM, these are lack of trust, the lack of understanding, lack of communication, lack of interest and lack of commitment.
STATEMENT OF PROBLEM
Meanwhile, empirical studies on CRM on customers’ satisfactio seems to be scanty. This can be attributed to the fact that most theorist focus on other areas of marketing functions and practices rather than CRM.
Given the economic significance of CRM to the organisation (Banks), it is essential that meaningful research should be undertaken to discover the impact of CRM on customers’ satisfaction.
To address this issue empirically, the main focus of the study is to carryout an empirical research aimed at addressing the following issues:
a. The relationship between the dependency level of banks’ customer satisfaction on customer relationship management.
b. The way banks can monitor their services to ensure effective customer satisfaction.
c. The ways banks could enhance their service delivery so as to meet customers’ need.
d. The ways banks have to go about strengthening their customer relationship.
OBJECTIVE OF STUDY
Empirically, the purpose and objective of this study is:
(i) To identify/examine whether lack of trust in relationship management can bring about customers’ satisfaction.
(ii) To identify/examine whether lack of understanding in relationship management can bring about costumers’ satisfaction.
(iii) To identify/examine whether lack of good communication in relationship management can bring about customers’ satisfaction.
(iv) To identify/examine whether lack of interest in relationship management can bring about customers’ satisfaction.
(v) To identify/examine whether lack of commitment in relationship management can bring about customers’ satisfaction.
RESEARCH QUESTIONS
These research questions would be answered in the course of this research work:
(i) What is the relationship between good communication and relationship management?
(ii) How can banks monitor their services to ensure effective customer satisfaction?
(iii) Does trust affects relationship management on customer satisfaction.
(iv) What can banks do to enhance their service delivery so as to meet customers’ need?
(v) What does banks have to do to strengthen their customer relationship?
(vi) Does interest affect relationship management on customers’ satisfaction?
(vii) Does understanding affect relationship management on customers’ satisfaction?
(viii) Does commitment affect relationship management on customers’ satisfaction?
RESEARCH HYPOTHESES
The following would be tested in course of the research:
HYPOTHESIS 1
Ho: Lack of communication in relationship management may
not significantly affect customer satisfaction.
H1: Lack of communication in relationship management may
significantly affect customer satisfaction.
HYPOTHESIS 2
Ho: Lack of understanding on the part of relationship
management may not significantly affect customer satisfaction.
H1: Lack of understanding on the part of relationship
management may not significantly affect customer satisfaction.
SIGNIFICANCE OF STUDY
This study is significant to the extent that it is able to highlight previous study, an attendant findings carried out by previous scholars in this very are; and to the extent that this study being undertaking attendant’s findings are able to complement previous findings such that both findings can provide bases for corporate policy formulation and decision making.
SCOPE/ DELIMITATION OF THE STUDY
This study relate to the bank sector of the economy and it is virtually impossible to cover all banks in the country or the sector, the study would therefore targeted at fidelity bank as a case study
LIMITATION OF STUDY
During the course of the study there are some constraints experienced by the researcher. These are as follows:
(i) Financial constraint.
(ii) Lack of time
(iii) Unfavourable weather
(iv) The attitude of the respondents, towards questionnaire administration.