Effect Of Customer Relationship Management On Organizational Performance (A Case Study Of Access Bank Plc)

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Effect Of Customer Relationship Management On Organizational Performance (A Case Study Of Access Bank Plc)


Abstract


This study analyses the effect of customer relationship management on organizational performance. This research views customer relationship management as an enterprise approach to developing full-knowledge about customer behavior and relationship marketing

To achieve the purpose of this research work the survey method using the questionnaire instrument was adopted. Data were collected from primary and secondary source. The instrument were administered to 93 respondents drawn as the sample for the study. The output from those sources were analyzed by the use of chi-square analysis.

The result shows effective customer relationship management have significant relationship with organization performance .And that customer relationship management as strategy that helps companies to refine interactions and ultimately improve a company’s relationship with customers that will enable a mutually profitable relationship between buyer and seller.

It’s therefore relevant that customer relationship management should be focal point of organization in order to gain superior customer relationship management capability that will lead to improved performance.


Table of Contents


  • Front Page
  • Certification
  • Dedication
  • Acknowledgment
  • Abstract
  • Table of Content

Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problems
  • 1.3 Objectives of the Study
  • 1.4 Research Questions
  • 1.5 Statement of Hypotheses
  • 1.6 Significance of the Study
  • 1.7 The Scope and Delimitation of the Study
  • 1.8 Plan of the Study

Chapter Two:

Literature Review

  • 2.1 Introduction
  • 2.2 Concept of Customer Relationship Management
  • 2.2.1 Goals of Customer Relationship Management
  • 2.2.2 Customer Relationship Management Process
  • 2.2.3 Customer Relationship Management Process Theory and Relationship between the Elements
  • 2.3 Concept of Marketing
  • 2.4 Customer Retention
  • 2.4.1 Customer Satisfaction
  • 2.4.2 Customer Perceived Value
  • 2.5 Customer Value and Satisfaction
  • 2.5.1 Conceptual Differences between Satisfaction and Customer Perceived Value
  • 2.6 Conceptual Differences between Satisfaction and Value
  • 2.7 Summary

Chapter Three:

Research Methodology

  • 3.1 Introduction
  • 3.2 Research Design
  • 3.3 Data Collection
  • 3.4 Sample Size
  • 3.5 Questionnaire Administration
  • 3.6 Questionnaire Design
  • 3.7 Questionnaire Assumption
  • 3.8 Reliability and Validity of Data Reliability

Chapter Four:

Data Analysis and Discussion of Findings

  • 4.1 Introduction
  • 4.2 Analysis of Personal Data
  • 4.3 Analysis of Variables
  • 4.4 Testing of Hypotheses and Discussion of Finding

Chapter Five:

Summary, Conclusion and Recommendation

  • 5.1 Summary
  • 5.2 Conclusion
  • 5.3 Recommendation
  • References
  • Appendix

Chapter One


Introduction

1.1 Background of the Study

Customer relationship management has attracted the expanded attention of practitioners and scholars. More and more companies are adopting customer-centric strategies, programs, tools, and technology for efficient and effective customer relationship management. They are realizing the need for in-depth and integrated customer knowledge in order to build close cooperative and partnering relationships with their customers. The emergence of new channels and technologies is significantly altering how companies interface with their customers, a development bringing about a greater degree of integration between marketing, sales, and customer service functions in organizations. For practitioners, customer relationship management represents an enterprise approach to developing full-knowledge about customer behavior and relationship marketing, these are not distinguished from each other in the marketing literature (Parvatiyar&Sheth, 2000).

The ability to identify profitable customers and then customize marketing on the basis of customer value has enabled many banks to punch above their weight in today’s competitive environment. Banks have chosen to compete through superior customer relating capabilities based largely on the customer relationship management programs deployed. It will come as no surprise that vendors are quick to point out that by allocating resources to customer relationship management technologies, all firms in the financial services sector can generate new forms of competitive advantage. Customer relationship management has attracted the expanded attention of practitioner sand scholars. More and more companies are adopting customer-centric strategies, programs, tools, and technology for efficient and effective customer relationship management. They arerealizing the need for in-depth and integrated customer knowledge inorder to build close cooperative and partnering relationships with their customers. Nevin (2005) points out that these terms have been used to reflect a variety of themes and perspectives. Some of these themes offer a narrow functional marketing’ perspective ‘while others offer a perspective that is broad and somewhat pragmatic in approach and orientation.

A narrow perspective of customer relationship management isdatabase marketing; this emphasizes the promotional aspects of marketing linked to database efforts.

Another narrow, yet relevant, viewpoint is to consider customer relationship management only as seeking customer retention by using a variety of after marketing tactics that lead to customer bonding or staying in touch with the customer after a sale is made (Vavra, 1932). A more popular approachwith the recent application of information technology is to focus on individual or one-to-one relationships with customers that integrate database knowledgewith a long-term customer retention growth strategy (Peppers &Rogers, 1933).

Thus, Chatters &Buttle (2003) have defined relationship marketing as “an integrated effort to identify, maintain, and build up a network with individual consumers and to continuously strengthen the network for the mutual benefit of both sides, through interactive, individualized and value added contacts over a long period of time” . Jackson (1985) applies the individual account concept in industrial markets to suggest customer relationship management to mean, “Marketing oriented toward strong, lasting relationships with individual accounts”.

0’Dounel(2000) has professed a more strategic view by putting the customer first and shifting the role of marketing from manipulating the customer (telling and selling) to genuine involvement with the customer (Communicating and sharing knowledge). In somewhat broader terms, also has a strategic viewpoint concerned with customer relationship management. He has stressed that attracting new customers should be viewed only as an intermediate step in the marketing process and that developing closer relationship with these customers and turning them into loyal ones should be equally important aspects of marketing. Thus, he proposed that relationship marketing be seen as “attracting, maintaining, and – in multi-service organizations – enhancing customer relationships”

Berry’s notion of customer relationship management resembles that of other scholars studying services marketing, Gummesson (1987), and Levitt (1983). Although each one of them has espoused the value of interactions in marketing and its consequent impact on customer relationships, Gronroos and Gummesson (2004) take a broader perspective and advocate that relationships with customers be the focus and dominant paradigm of marketing. For example, Gronroos (2006) states: “Marketing is to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved’ by a’ mutual exchange and fulfillment of promises” (p. 138). The implication of Gronroos'(2006) definition is that forming relationships with customers is the “raison de etre” of the firm and marketing should be devoted to building and enhancing such relationships.

Similarly, Chartes and Buttle (2003) draw’ upon the distinction made between transactional exchanges and relational exchanges by to’suggest that relationship marketing “refers to all marketing activities directed toward establishing, developing, and maintaining successful relationships.”

The core theme of all Customer Relationship Management and relationship marketing perspectives is its focus on a cooperative and collaborative relationship between the firm and its customers, and / or other marketing actor. This is characterized by cooperative relationships as being interdependent and long-term orientated rather than being concerned with short-term discrete transactions.


1.2 Statement of the Problems

New market condition sharpens competition among rivalry companies. The number of competitor raises while at the same time the services and products available on the market differ less and less at their core. This has resulted in decreasing· of customer retention and increasing costs to do business. For most business customer relationship management is emerging’ as an important tool and an innovative way to add their products and services. Effective customer relationship management has become a strategic imperative for companies in virtually every business sector. Companies are moving closer to their customers, expanding more effort in finding new ways to create value for their customers and transforming the customer relationship into one of solution finding and partnering rather than one of selling and order taking. In view of the vital place occupied by customers in the realization of its objectives, the following questions become pertinent.

  1. Is there any relationship between customer relationship management and its effectiveness and efficiency?
  2. Is effective customer relationship management any effect on its profitability?
  3. Does customer relationship management any effect on rate of customer’s relationship?
  4. Does customer value create an off short of customer relation management?

1.3 Objectives of the Study

The aim of this study is to examine the effect of customer relationship management on organization performance, while specific objectives are follows;

  1. To examine the effect of customer relationship management on organization efficiency.
  2. To examine whether implementation of customer relationship management promote profitability of the organization
  3. To identified whether customer relationship management contribute to customer value creation in the organization
  4. To identified whether organization has Loyalty program to enhance the Lifetime Value for your Customers

1.4 Research Questions

For the purpose of this research work, the following questions will examine;

  1. Is there any relationship between customer relationship management and efficiency services delivery?
  2. Could implementation of customer relationship management enhances profitability of the organization?
  3. Could customer relationship management contribute to customer value creation in the organization?

1.5 Statement of Hypotheses

Ho1: There is no significant relationship between customer relationship management and efficiency services delivery.

Ho2: There is no significant relationship between of customer relationship management and profitability

H03: There is no significant relationship between of customer relationship management and value creation


1.6 Significance of the Study

The study considers the customer relationship management. This study will guide owners of businesses, managers, researchers and students in the area of customer management. The study will provide basic understanding of the impact of customer relationship management in Lagos and Nigeria in general. It will also contribute knowledge as to how businesses in Nigeria could create and refine their capacity to establish and implement an effective customer relationship management.


1.7 The Scope and Delimitation of the Study

The scope of this study shall be restricted to Access Bank PIc in Lagos State. Due to limited time, the research will make used of interviews and questionnaire method and this will be restricted to staff of Access Bank in Lagos state.


1.8 Plan of the Study

This study is divided into five chapters,

  1. Chapter one sets out the background of the study (Introduction), statement of the problem, significant and relevance of the study, objective of the study, research questions and research hypothesis, scope and limitation of the study’ and’ plan of the study.
  2. Chapter two deals with literature review and theoretical foundation which includes concepts and definitions.
  3. Chapter three undertakes research methodology.
  4. Chapter four looks into data presentation and crucial analysis of data collected and analysis of results.
  5. While chapter five contains summary, conclusion and recommendation.

Chapter Five


Summary, Conclusion and Recommendation

5.1 Summary

This study focused the impact of customer relationship management and how this has enhanced the organization performance chapter one of the study looked into customer relationship management, its nature, definitions, importance and the extent to which they contribute to the customer satisfaction. Five research questions was asked while three hypotheses was postulated to guide the study. Chapter two was on the review of related literature as it affects the variable selected for the study.

Authors were consulted on this research topic and also made good use of the internet, journal and library. Their views were critically examined such that relevant insights were adequately made use of. Also, various theories and terms of their contribution and importance customer relationship management. Other marketing concepts were also examined.

Chapter three was on the methods and procedures adopted 4 for the study. The study made use of the survey research design and all staff of Access Bank PIc formed the population however a purposely selected one-hundred (100) staff formed the sample. The instrument for generating data was a self structured and validated questionnaire designed in line with the variables selected for the study).

Out of the One-hundred copies of the questionnaire administered, one (7) representing 7% was not found usable; therefore, the remaining ninety-three (93) representing 93% that were found usable were finally subjected to analyses in the study. Frequency counts and simple percentage were employed in analyzing demographic information while inferential statistics of Chi-square (X2) was used to test the postulated hypotheses. The decision criteria for acceptance or rejection of the hypotheses were set at 0.05.Chapter four was on the analysis of results and discussion of findings, All analyses were presented in table and figures and discussion made under them. Form the analysis it discovered that effective customer relationship management have significant relationship with organization performance and this in line with Kotter (2003) who view customer relationship management as strategy that helps companies to refine interactions and ultimately improve a company’s relationship with customers that will enable a mutually profitable relationship between buyer and seller. Also, revealed that there is significant relationship between customerrelationship management and marketing technique. This also in line with Gummesson (2004) which view customer relationship management as the values and strategies of marketing, with particular emphasis on customer relationships turned to practical application. Therefore it could be said that customer relationship management is enhanced by marketing techniques and organization performance.


5.2 Conclusion

Prior to the industrial revolution, producers knew their customers, many times by name, and generally understood their needs. Mass production built a wall between buyers and sellers where the main concept was to find customers for standardized products. Customers are more empowered today than ever before and banking is accelerating the trend toward greater customer empowerment.

Customer relationship management applications attempt to focus on the customer first, specifically one customer at a time, to build a long-lasting mutually beneficial relationship. Customer relationship management is a comprehensive approach that promises to maximize relationships with all customers, including internet or “e-customers”, distribution channel members, and suppliers, getting to “know” each customer through data mining techniques and a customer-centric business strategy helps the organization to proactively and consistently offer (and sell) more products and services for improved customer retention and loyalty over longer periods of time. Peppers and Rogers (2003) refer to this as maximizing “lifetime customer share”, resulting in customer retention and customer profitability. On the other hand, advanced customer data analysis also allows a company to identify the customers it does not want to serve.

Beside the technological advances, customer relationship management initiatives represent a fundamental shift in emphasis from managing product portfolios to managing portfolios of customers, necessitating changes to business process and people. As companies start to re-engineer themselves around customers, individual employees must also come to terms with changing business process, organizational culture and, thus, the ways they view their customers and how they treat them.

Organizations today must focus on delivering the highest value to customers through better communication, faster delivery, and personalized products and services. Since a large percentage of customer interactions will occur on the internet rather than with employees technology must adapt to the changing and unpredictable market. Organizations that implement customer relationship management and e-business applications will have the greatest gains (Lange, 1999) the future of customer relationship management ise-relationship management or customer relationship management that will synchronize cross-channel relationships it is also envisioned as an “e-partnering ecosystem” with a complex network of partners that operate as an interconnected whole, spanning entire markets and industries.

Customer relationship management implementations and the changing effect of the internet offer abundant research opportunities. The identification of some implementation issues in this study raises several important research questions. In particular, what are the roles of suppliers and supply chain partners in customer relationship management? How does ¬customer relationship management strategies affect brick and mortar companies? What business processes, integration challenges and organization structures are common throughout successful customer relationship management implementations? Research in these areas will contribute to building thriving customer relationships and long-term corporate survival. Years of academically researched topics of relationship marketing and customer retention are now practical and cost-effective to implement due to emerging technology. It is time to put academic theories to practice.


5.3 Recommendation

Customer relationship management suffers when it is poorly understood, improperly applied, and incorrectly measured and managed. Prior empirical work implies that more relationship building is not necessarily better, but rather building the right type of relationship is the key to performance improvement. In this study of customer relationship management we show that a superior customer relationship management capability does lead to improved performance. The first implication for managers is that customer relationship management programs should be directed towards an adroit combination of capabilities that competitors may struggle to match. On this point the results are quite clear: high performing banks base their customer relationship management program success on business structures first, human skills second, and it third. Bringing these capabilities together is not easy, but that is exactly why effective customer relationship management can be a source of competitive advantage. A challenge that the senior manager of a global market leading bank acknowledged: “until recently we have been somewhat restricted because we really haven It had the total customer relationship management and life cycle relationship management capabilities that we really needed to manage life cycle and to measure life cycle profitability with the accuracy required.


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