CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Relationships are the soul of life. It is hard to think regarding any society or organization to survive without relationships. They are the imperceptible threads, which make a unique bond between the individuals and organizations. On the one side these bonds can be as strong as iron pillars lasting for lifetime, whereas on the other hand they are as delicate as feather which may be broken in no time. Controlling relationships is a very difficult phenomenon.
Organizations understand the importance of the vital role played by relationships in achieving and maintaining the cutting edge at the market place. Previously Peter F. Drucker had suggested that the purpose of any business is to create customers, which gives an opportunity to the organization to serve them. The success of any organization mainly depends upon sustaining the customer advantage that is retaining the customers for lifetime. Rising of complexities and uncertainties at the market place along with intensifying global competition are forcing the business organization to invest in building customer relationships. Newly sophisticated marketing tool kits are being designed to satisfy and keep hold of customers to accomplish sustainable competitive advantage.
Customer satisfaction is a business philosophy which tends to the creation of value for customers, anticipating and managing their expectations, and demonstrating ability and responsibility to satisfy their needs, (Dominici and Guzzo, 2010). Qualities of service and customer satisfaction are critical factors for the success of any business (Parasuraman et al., 1988). As Dominici and Guzzo, (2010), points out: enterprises exist because they have a customer to serve. The key to achieve sustainable advantage lies in delivering high quality service that result in satisfied customers.
Companies are facing their toughest competition ever. To win customers and encourage them to stay loyal or repurchase the service, most companies have resorted to meeting and satisfying customer needs by not being only reactive but proactive. They are also interested in finding new ways and means to satisfy the customer. Most companies are aiming for good customer relationship which means better service to the customer thereby preventing the customer from being promiscuous. A lot of companies are not just attracting customers, but are working at building long term relationships with customers (both local and foreign customers), suppliers, employees, distributors and the general public. These companies are striving to satisfy the maximized expectations of each stakeholder group. Based on the nature of marketing, it involves voluntary “exchange” relationship where both sides must be willing parties. The parties must be able to communicate which could be through different instruments. Therefore, in today’s highly competitive environment, businesses need better understanding of their customers. This understanding meets different channels of which one is customer relationship management.
1.2 STATEMENT OF PROBLEM
Considering the competitive nature of the banking industry, the question that comes to mind is how to develop good customer relations in order to create intimacy and a level of confidence that will promote sustainable growth and profitability. The problem is to develop a differential strategy to promote a consistent positive return on investment. It is against the background that all the competitors in the industry are offering very similar products and services. Technology also has consistently enhanced the service delivery system and by the nature of it, it only serves as a short term strategy to attain competitive advantage. It eventually becomes affordable with time and all other competitors adopt it to augment their service. The question again will be how banks could differentiate themselves from the competition and gain customer attention, patronage and loyalty. It cannot be over emphasized that in the service delivery system it is the people that makes the difference. Service from one person to another could vary even with the same product features. Therefore there is the need for an integrated service marketing approach that will seek to provide a uniform service as well as creating the convenient environment for customers to do business with the bank. The proper response to this problem will be in the area of customer relationship. Hence the study is to know the effects of customer relationship on performance and using it also as a differential advantage, how it can help promote good bank-customer relationship.
1.3 OBJECTIVES OF THE STUDY
1. To identify the impact of effective customer relationship on organizational performance.
2. To investigate the relationship between effective customer relationship and organizational performance.
3. To identify customer relationship strategies used by most banks in Nigeria.
4. To identify the issues involves in creating an effective customers relationship.
1.4 RESEARCH QUESTIONS
1. Are there positive impacts of effective customer relationship on organizational performance?
2. Are there significant relationship between effective customer relationship and organizational performance?
3. What is the best customer relationship strategy that has been used by most banks in Nigeria?
4. What are the issues involves in creating an effective customers relationship?
1.5 RESEARCH HYPOTHESES
The following research hypotheses formulated will be empirically tested and result gotten will serve as a spring hoard for recommendations.
HYPOTHESIS I