CHAPTER ONE
1.0 INTRODUCTION
1.1 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.
1.10STATEMENT 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.