Customer Service Delivery And Business Performance Of Commercial Bank In River State

Project and Seminar Material for Business Administration and Management BAM

Customer Service Delivery And Business Performance Of Commercial Bank In River State


Abstract


The study of good customer service delivery is very important in the day- to – day activities of an organization. The concept becomes even more complex for organizations in the banking Industry with a high degree of economic instability as day-in and day-out, customers become more and more complex in their choice of product and service they seek. Therefore, the effect of customer service delivery is very important variable to the organization in profitability measurement. I examined the impact of good customer service delivery on the performance of commercial banks in Nigeria- a case study of First bank of Nigeria. 150 customer were used and Simple frequencies and cross tabulation would be used as the methodology in the variable analysis. The result indicated that good customer service delivery have positive impact on performance of commercial bank in Nigeria. The study provides useful recommendation for policy direction and management of these firms.


Table of Content


  • Title Page
  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content
  • List of Tables
  • Abstract

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Objective of the Study
  • 1.4 Research Questions
  • 1.5 Research Hypothesis
  • 1.6 Significance of the Study
  • 1.7 Scope of the Study
  • 1.8 Limitation of the Study
  • 1.9 Definition of Terms
  • 1.10 Organisations of the Study

Chapter Two:

Review of Literature

  • 2.1 Conceptual Framework
  • 2.2 Theoretical Framework
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Population of the Study
  • 3.3 Sample Size Determination
  • 3.4 Sample Size Selection Technique and Procedure
  • 3.5 Research Instrument and Administration
  • 3.6 Method of Data Collection
  • 3.7 Method of Data Analysis
  • 3.8 Validity of the Study
  • 3.9 Reliability of the Study
  • 3.10 Ethical Consideration

Chapter Four:

Data Presentation and Analysis

  • 4.1 Data Presentation
  • 4.2 Analysis of Data
  • 4.3 Answering Research Questions
  • 4.4 Test of Hypotheses
  • 4.5 Discussion of Findings

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • APPENDIX
  • QUESTIONNAIRE

Chapter One


Introduction

1.1 Background to the Study

Organizations are increasingly being customer centric and are embracing customer-driven initiatives that seek to understand, attract, retain and build intimate long term relationship with profitable customers (Kotler, 2006; Gronroons, C 1994; Narver and Slater, 1990). The era whereby firms just concentrate on adding to their customer base has become a thing of the past. Customer retention has been very vital to all businesses of late. Any business with the aim of sustaining growth should not aim at only adding up to its customer base but have a strategy of maintaining them. This will provide the avenue for cross-selling of products and services. Freeman (1999) added that firms should try and keep their customers. And one of the ways of doing this is through good customer service delivery strategy. The telecommunications sector can be divided into three main areas: Telephony (both wired and wireless), Internet services, and value added service (Anandpadmanabhan, 2011).

According to Schneider and Chung (1994), for an organization in the service industry, the most appropriate criterion for organizational performance is customer satisfaction. customer service delivery is basically the relationship that a company builds with its customers. It involves providing support during the purchasing process and after. A company has to make sure that both the service and the purchasing of a product have left the customer satisfied and happy. The reason is that a satisfied customer will not only return without looking at alternatives or comparing prices, but will recommend the store or firm to family members and friends. customer service delivery goes beyond providing products but it is making your clients feel you really care about them. One way to make them feel that way is by getting involved in community activities for instance channeling part of the profit made by the firms from the community to provide good drinking water, Hospitals, Roads and so on. Again, answering questions is another way to make a customer feel you actually take into account their concerns. In other, words whether online or at the business premises, the people in customer service delivery are supposed to have all the answers to the most common questions that customers’ raise. It will not be prudent to tell a customer, for instance, that “I am sorry; I wish I could answer your question.”

Gronroos (1982) defined the term as the total quality as customer’s perception of difference between the expected service and the perceived service. McCleary and Swan (1996) said that it is the difference between customer’s expectations for service performance prior to the service encounter and their perception of the service received. Gafan (2002) concluded that quality service is the subjective comparison that customers make between the quality of the service that they want to receive and what they actually get.

Performance is the accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and speed. In a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract. Frempong (2002) said that poor performance of firms will lead to the deregulation of many of the banking sector in many countries, of which Nigeria is no exception. Thus, it is the responsibility of management to ensure that much attention is given to customers in the area of service so that the firms continue to thrive on the market in the face of the strong competition. This is because it is more expensive to gain a new customer than to retain an existing one. Thus, understanding the needs of your customers and providing them with the best customer service delivery will ensure the sustenance of the business so that in the long run the performance of the firm will be affected.

Customers are always aiming to get maximum satisfaction not only from the products they buy but also n the way they are treated before and after sale. Winning in today’s marketplace entails the need to build customer relationship and not just building the products; building customer relationship means delivering superior value over competitors to the target customers (Kotler, 2002). Whether an organization provides quality services or not will depend on the customers’ feedback on the satisfaction they get from consuming the products, since higher levels of quality lead to higher levels of customer satisfaction (Kotler & Keller, 2009). Most companies are adopting quality management programs which aim at improving the quality of their products and marketing processes, because it has been proven that “quality has a direct impact on product performance, and thus on customer satisfaction” (Kotler, 2002). The reason for this is to satisfy the customers. But, the question is, are customers satisfied because of the products or service quality? That is, are companies providing the actual qualities perceived by the customers/consumers?

Again, in the market, competition is very high and the products and offerings are more and more comparable. This leads to reduced customer loyalty. Losing an existing high-volume customer means losing lots of revenue. Thus, understanding the needs of your customers and providing them with the best customer service delivery will ensure the sustenance of the business so that in the long run the performance of the firm will be enhanced, (Abiw-Abaidoo , 2011).


1.2 Statement of the Problem

According to Wicks & Roethlein, (2009) an organization that consistently satisfies its customers, enjoy higher retention levels and greater profitability due to increased customer loyalty. A research in 2006 by Harvard Business Review confirmed that by averting 5 percent of customers leaving, a business’ profitability is likely to soar by a margin of between 25 and 95 percent. In 2008, Right Now Technologies found that 87 percent of customers stop doing business with a company due to poor customer service delivery. The study also found that loyal customers do not look at prices for as long as they feel good about a company. Instead they consider customer service delivery as more important. Johnson (2004) added that service, both excellent and poor, has a strong emotional impact upon us as customers, creating intense feeling about the organization, its staff and its services, and influencing our loyalty. Spicuzza (1992) added that Quality customer service delivery is more than offering a smile, a handshake, and “have a nice day”. The importance of customer satisfaction and service quality has been proven relevant to help improve the overall performance of organizations, (Magi and Julander, 1996). Douglas and Conner (2003) also concluded that there is a direct result of expectation by today’s consumer that tangible needs will always be met, and were therefore not consciously considered as a requirement. For this reason every company works hard daily to win the hearts of customers by satisfying them in order that they become loyal customers to their brands in order to increase performance.

However, Ram, Bhargavi and Prabhakar (2011) said that only few studies exist that evaluate climate for service components against a criterion of customer satisfaction. Other researchers like Anderson and Mittal (2000); Johnson et al., (1990); Johnston (1995); Mersha and Adhlaka (1992) Ittner and Larcker (1998); Arthur (1994) also stated that there is an inconsistent relationship between customer service delivery, satisfaction and performance. ITU (2008) added that the banking industry has witnessed a tremendous increase in customer growth rate for all the bank. But no study has been done to examine the impact of customer service delivery in Nigeria. Thus, the aim of this study is to determine the impact of customer service delivery and business performance of commercial bank in River state.


1.3 Objectives of the Study

The study investigates the customer service delivery and business performance of commercial bank in River state. Specific objectives

  1. To determine the impact of good customer service delivery on profitability of commercial banks in Nigeria.
  2. To determine the relationship between good customer service delivery and customer satisfaction in Nigeria.
  3. To determine the relationship between customer satisfaction and the performance of service rendering firms in Nigeria.
  4. To determine the relationship between satisfaction and customer retention.

1.4 Research Questions

  1. What is the impact of good customer service delivery on performance of business organizations in Nigeria?
  2. Does good customer service delivery have a significant positive effect on performance of commercial banks in Nigeria?
  3. Does customer satisfaction have a significant positive effect on performance of commercial banks in Nigeria?
  4. Does good customer service delivery have a positive significant effect on customer satisfaction of commercial banks in Nigeria?

1.5 Hypothesis of the Study

  1. Ho: there is no significant relationship between good customer service delivery and performance of business organizations in Nigeria
  2. Hi: there is a significant relationship between good customer service delivery and performance of business organizations in Nigeria

1.6 Significance of the Study

It is believed that the result of this study can:

  1. Serve as a source of evaluation for further research into customer service delivery Studies;
  2. Encourage service rendering firms with problems in customer service delivery to implement the researcher’s findings so as to enjoy the perpetual loyalty of their customers and in the long run increase the profitability of the business;
  3. Help to further investigate whether theories about the relationship between good customer service delivery and firms performance by other researchers are applicable to Nigeria situations or not;
  4. Help address issues of good customer service delivery from the Nigeria perspective, to boost customers, investor and other stakeholders confidence in the service sector and to encourage investing in this sector;
  5. Help to find out more on the statement that good customer service delivery play a major role in the success of any organization of any kind both in developed and developing countries in the world, in order to demonstrate due diligence and place confidence in customers and stakeholders, by putting in place appropriate control policies and implementation plan to ensure that good customer service delivery continues to exist in the organization.

1.7 Scope of the Study

The scope is on commercial banks but specifically on First bank of Nigeria PLC. The study will make use of questionnaires and face-to-face interviews.


1.8 Limitation of study

Finance, inadequate materials and time constraint were the challenges the researchers encountered during the course of the study.


1.9 Definition of Terms

  • Customer service is the assistance and advice provided by a company to those people who buy or use its products or services. Each industry requires different levels of customer service, but towards the end, the idea of a well-performed service is that of increasing revenues.
  • Business organization, an entity formed for the purpose of carrying on commercial enterprise. Such an organization is predicated on systems of law governing contract and exchange, property rights, and incorporation.
  • Business performance can be defined as the ability of a business to implement a strategy to achieve organizational objectives and is considered as an important tool for businesses to analyze how effective management is at achieving business goals.

1.10 Organization of the Study

The research work will range from chapter one to chapter five.

  • Chapter one: this will be made up of the background of the study, problem statement, and purpose, objectives of the study, significance of the study, hypothesis, the research question and the scope and organization of the study.
  • Chapter two: will contain the literature review which will be made up of both the theoretical and empirical literature of the study, operational definition and constructs. The theoretical literature will deal with theories underlying customer service delivery and the role it plays in the development of an organization, in this case, Nigeria.
  • Chapter three: this chapter will focus on the Methodology that is, the research design that will be used to conduct the study, the population and sampling, instrumentation and data analysis.
  • Chapter four: this chapter will examine or evaluate the discussions and results of the findings.
  • Chapter five: will summarize and give recommendations based on the findings and conclusion. It will also talk about the limitations of the study.

Chapter Five


Summary, Recommendations and Conclusion

5.0 Introduction

This chapter deals with summary, conclusions and recommendations based on the findings of the study. It also reveals some limitations to the study and finally proposes topics for further studies.


5.1 Summary of the Study

The issue of customer service delivery has been identified as one of the immediate reasons why businesses in developing countries fail to perform well. It is imperative for firms in developing countries to be able to give the best customer service delivery to their customers, if they are ever to play an increasing and predominant role in providing employment so as to contribute to the growth of the Nation. In this study, the researcher examined the impact of good customer service delivery on the performance of commercial banks in Nigeria- a case study of First banks. The study concluded that customer service delivery, satisfaction and customer retention have positive impact on performance of commercial banks in Nigeria.


5.2 Conclusion

The study made use of customers and managers to reveal whether good customer service delivery has any significant effect on performance. The above findings indicate clearly that customer service delivery have positive impact on performance of First banks of Nigeria. The research therefore accepted the entire null hypothesis; that Good customer service delivery has a significant positive effect on performance of commercial banks in Nigeria; Customer satisfaction has a significant positive effect on performance of commercial banks in Nigeria; Good customer service delivery has a positive significant effect on customer satisfaction of commercial banks in Nigeria but reject the idea that good customer service delivery has no positive effect on performance of commercial banks in Nigeria.

The study thus, concluded that good customer service delivery have positive impact on performance of commercial banks in Nigeria.


5.3 Recommendations

After a careful study of the findings, researcher came out with the following recommendations:

  1. Managers of commercial banks in Nigeria should concentrate on improving on the existing products and developing new ones that will meet the need of every customer so that they can widen the customer base.
  2. Looking at the importance of customer service delivery to the organization, commercial banks in Nigeria should pay critical attention to customers’ needs.
  3. Commercial banks in Nigeria should ensure that customers’ satisfaction is met at any given time to maintain their customer base.
  4. To encourage retention of customers and increase profitability of the organization, commercial banks should ensure that they respond to customer need swiftly.

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