Customer Relationship Management And Survival Of Small And Medium Enterprise In Anambra State

Project and Seminar Material for Business Administration and Management BAM

Customer Relationship Management And Survival Of Small And Medium Enterprise In Anambra State


Abstract


This study was carried out to examine customer relationship management and survival of small and medium enterprise in Anambra State. The study was specifically carried out to determine whether customer orientation has a positive effect on the survival of SMEs in Anambra State, determine whether service quality/customer service has a positive effect on the survival of SMEs in Anambra State, determine whether complaint handling has a positive effect on the survival of SMEs in Anambra State, and determine whether CRM as an effective and efficient mechanism for responsiveness in customer service delivery aids the survival of SMEs in Anambra State. The survey design was adopted and the simple random sampling techniques were employed in this study. The population size comprise of SMEs owners in Akwa, Anambra State. In determining the sample size, the researcher conveniently selected 57 respondents and 50 were validated. Self-constructed and validated questionnaire was used for data collection. The collected and validated questionnaires were analyzed using frequency tables, and mean scores. While the hypotheses were tested using Pearson Correlation statistical tool, SPSS v23. The result of the findings reveals that customer orientation has a positive effect on the survival of SMEs in Anambra State. The study also revealed that CRM as an effective and efficient mechanism for responsiveness in customer service delivery aids the survival of SMEs in Anambra State. Therefore, it is recommended that the management of SMEs should instruct their frontline staff to treat customers politely and attentively, particularly those who have complaints about the services they received and emphasise the value of apologies and explanations to them. To mention but a few.


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

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

Small and medium-sized enterprises (SMEs) need to implement a solid information technology solution that supports their customer database, production, sales, and marketing management to build trusting working relationships with their clients. Customer Relation Management (CRM) is one of the information technology applications that SMEs may use. According to Sin & Tse (2015), An organisation can find, attract, retain, and develop profitable customers using the comprehensive strategy and process known as CRM. The methodical approach of CRM optimises communications with all clients and the wider environment. According to Krishnamoorthy et al. (2016), the acquisition, management, and regain of management activities are covered to maximise the value of the relationship portfolio at the initiation stage, maintenance stage, and termination stage.

CRM is both a new method of doing business and a piece of technology. CRM is a business strategy, process, culture, and technology that, according to Ndubisi et al. (2016), enables organisations to maximise revenue and increase value by understanding and meeting each customer’s unique needs. According to Ndubisi and Nwankwo (2022), CRM takes the form of customer-focused services, knowledge management, knowledge creation, customer touch points, information and communications technology, timely service delivery, friendly staff, competitive prices for usefulness, and ease of adopting policies. Alhakimi & Ghaleb (2019) concluded that CRM is the process of gathering and analysing information about a company’s interactions with customers to increase those customers’ value to the company. CRM aids businesses in keeping customers and fostering positive relationships with them to win their loyalty and long-term commitment, build sustainable competitive advantage, enhance customer relations, and improve employee performance, employee satisfaction, productivity, profitability, and goal attainment (Okeke, 2017). CRM, however, is a crucial idea that shouldn’t be disregarded in either theory or practise. In this study, CRM was defined as the organization’s integration of marketing, sales, customer service, and supply-chain functions to boost effectiveness and efficiency in delivering value to the customer.

SMEs are organisations with total capital expenditures (excluding land) of between N2 million and N5 million, according to the Central Bank of Nigeria (CBN). A SME is also defined by the SMIEIS as any industry with a maximum asset base of N200 million, excluding working capital and land, and no fewer than ten nor more than 300 employees employed by businesses (Imoughele, 2014). Nwankwo and Kanyangale (2020) argued that because they aid in fostering a nation’s economic growth, SMEs serve as a breeding ground for innovations, inventions, and employment. Gwadabe & Amirah (2017) added that SMEs’ significance was primarily driven by their characteristics. As a result, their growth is typically viewed as a realistic option for the sustainable development of any given economy. The academics also argued that the growth of SMEs will be a useful tool for promoting the development and expansion of Nigeria’s economy because they will create jobs, foster entrepreneurship and management skills, prevent a small amount of rural-urban migration, advance technology, develop a number of related industries, and increase income equality. For the purposes of the study, a small, informal business, or SME, is one with few employees, little capital, and a number of bases that operates at the micro level of the economy.

CRM enhances SMEs’ capacity to carry out these tasks, which are significant sources of competitive advantage for most SMEs (Ovat, 2016). To improve customer satisfaction and gain a competitive advantage, SMEs frequently use CRM, which many small businesses have identified as the secret to their success (Ejike & Daniel, 2022). SMEs are more familiar with local knowledge and are closer to their customers. As a result, it is simpler for them to gather important data, such as customer preferences and perceptions of the company’s goods and services. Additionally, according to AlQershi et al. (2019), SMEs are more adaptable and innovative. As a result, it makes businesses more receptive to customer needs, which enhances their capacity to provide better customer service.

To add value for chosen customers and achieve short- and long-term goals, CRM integrates internal activities and external networks as a marketing strategy (Isibor et al., 2014). According to this explanation, the CRM concept aids SMEs in retaining current customers, attracting new ones, fostering customer confidence, and informing customers about a variety of goods and services to help them increase profits or avoid losses. This is intended to be supported by AlQershi et al (2019) claim that CRM is an effective marketing tool for connecting with and retaining current customers. Similar to this, Fiiwe et al. (2023) also confirmed that CRM helps businesses find more profitable ways to keep their current customers as opposed to finding new ones. In a different study, Domazet & Neogradi (2023). argued that many companies view CRM systems as a marketing tool to help them give current customers more value and boost customer satisfaction in order to ensure their long-term survival.


1.2 Statement of the Problem

All over the world, academics, researchers, and economists have acknowledged the critical roles that small and medium-sized enterprises (SMEs) play in promoting sustainable economic growth. Due to their contributions to innovation and job creation in both developed and developing nations, SMEs are a major force in modern economies. Due to developing international markets, Nigeria’s SME sector has drastically decreased. According to Ocloo et al. (2014), most African SMEs, particularly those in Nigeria, have reached the declining stage because of increased competitive pressure and quick technological advancements, while those that have survived are ailing and sick. To demonstrate that customers have more supplier options, Ndubisi et al (2015) claim that globalisation increases the likelihood that both large and small businesses will offer low-cost substitute products. The study claims that Nigerian SMEs have a weak foundation, making it challenging for them to compete favourably with their foreign counterparts (Gwadabe & Amirah, 2017). Furthermore, Nwankwo and Kanyangale (2022) confirmed that Nigeria’s underutilised production capacity, industrial backwardness, and SME closures were all results of the global markets.

Both large and small businesses must concentrate on the customer if they want to survive in the global market. CRM can help SMEs establish productive relationships with their clients. SMEs typically strive to excel, target a specific market niche, and develop closer relationships with the clients in this market. Here, CRM is a crucial tool for SMEs. Ejikeet al. (2022) identified specific characteristics of SMEs that impede the effective use of CRM tools, such as a lack of business and information technology (IT) strategy, constrained access to capital resources, a preference for using technology and information systems to automate rather than inform, the influence of significant clients, and limited information skills.
Furthermore, both advanced and developing economies have conducted numerous studies on CRM. While small and medium-sized businesses have not been extensively studied, especially in Anambra State, the majority of studies have concentrated on large organisations. This study aims to investigate the impact of customer relationship management and survival of small and medium enterprise in Anambra State.


1.3 Objectives of the Study

The overall aim of this study is to critically examine customer relationship management and survival of small and medium enterprise in Anambra State. Hence, the study will be channeled to the following specific objectives;

  1. Determine whether customer orientation has a positive effect on the survival of SMEs in Anambra State.
  2. Determine whether service quality/customer service has a positive effect on the survival of SMEs in Anambra State.
  3. Determine whether complaint handling has a positive effect on the survival of SMEs in Anambra State.
  4. Determine whether CRM as an effective and efficient mechanism for responsiveness in customer service delivery aids the survival of SMEs in Anambra State.

1.4 Research Question

The study will be guided by the following questions;

  1. Does customer orientation has a positive effect on the survival of SMEs in Anambra State?
  2. Does service quality/customer service has a positive effect on the survival of SMEs in Anambra State?
  3. Does complaint handling has a positive effect on the survival of SMEs in Anambra State?
  4. Does CRM as an effective and efficient mechanism for responsiveness in customer service delivery aids the survival of SMEs in Anambra State?

1.5 Research Hypotheses

  • Ho: There is no significant relationship between customer relationship management and survival of small and medium enterprise.
  • Ha: There is a significant relationship between customer relationship management and survival of small and medium enterprise.

1.6 Significance of the Study

The results of this study will be helpful from a theoretical and practical standpoint. The study will theoretically serve as the foundation for analysing how CRM and SMEs’ survival are related. This study will broaden our understanding of CRM and SMEs, especially in the context of Nigeria. The study will be extremely valuable to academics and SME policymakers/formulators practically speaking. The results of this study will aid the major players in SMEs in understanding how CRM will affect their ability to survive. The conclusions will aid SMEs in making well-informed decisions about enhancing their survival strategies through efforts at customer relationship management. The findings of the study will help SMEs’ management better satisfy their customers and meet their needs quickly and effectively.


1.7 Scope of the Study

This study is structured to generally examine customer relationship management and survival of small and medium enterprise in Anambra State. Hence the study will be delimited to SMEs owners in Akwa, Anambra State.


1.8 Limitation of the Study

Like in every human endeavour, the researcher encountered slight constraints while carrying out the study. Insufficient funds tend to impede the efficiency of the researcher in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. More so, the researcher simultaneously engaged in this study with other academic work. As a result, the amount of time spent on research will be reduced.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.


1.9 Definition of Terms

CRM:

Is refers as a strategic approach to improving shareholder value through the development of appropriate relationships with key customers and customers segments’.


1.10 Organizations of the Study

The study is categorized into five chapters. The first chapter presents the background of the study, statement of the problem, objective of the study, research questions and hypothesis, the significance of the study, scope/limitations of the study, and definition of terms. The chapter two covers the review of literature with emphasis on conceptual framework, theoretical framework, and empirical review. Likewise, the chapter three which is the research methodology, specifically covers the research design, population of the study, sample size determination, sample size, abnd selection technique and procedure, research instrument and administration, method of data collection, method of data analysis, validity and reliability of the study, and ethical consideration. The second to last chapter being the chapter four presents the data presentation and analysis, while the last chapter(chapter five) contains the summary, conclusion and recommendation.


Chapter Five


Summary, Conclusions and Recommendations:

5.1 Introduction

This chapter summarizes the findings on customer relationship management and survival of small and medium enterprise in Anambra State. The chapter consists of summary of the study, conclusions, and recommendations.


5.2 Summary of the Study

In this study, our focus was to examine customer relationship management and survival of small and medium enterprise in Anambra State. The study was specifically carried out to determine whether customer orientation has a positive effect on the survival of SMEs in Anambra State, determine whether service quality/customer service has a positive effect on the survival of SMEs in Anambra State, determine whether complaint handling has a positive effect on the survival of SMEs in Anambra State, and determine whether CRM as an effective and efficient mechanism for responsiveness in customer service delivery aids the survival of SMEs in Anambra State.

The study adopted the survey research design and randomly enrolled participants in the study. A total of 50 responses were validated from the enrolled participants where all respondent were SMEs owners in Akwa, Anambra State.


5.3 Conclusions

Based on the findings of this study, the researcher concluded that;

  1. Customer orientation has a positive effect on the survival of SMEs in Anambra State.
  2. Service quality/customer service has a positive effect on the survival of SMEs in Anambra State.
  3. Complaint handling has a positive effect on the survival of SMEs in Anambra State.
  4. CRM as an effective and efficient mechanism for responsiveness in customer service delivery aids the survival of SMEs in Anambra State.

5.4 Recommendations

Based on the findings of the study, the following recommendations are proffered.

  1. The main component behind customer relationship management/service is the implementation of technology. Computer systems and software can help the customer managers do what they do best and allow the customer’s information to be integrated into a single database that can be accessed by other departments. For example the SPSS package can be used to analyze customer retention, frequency and purchase cycle. This will help the customer manager to have a dataset on how the customer patronizes the organization.
  2. SMEs should teach their staff members how to design and build a customer database and use it effectively so that it increases customer loyalty.
  3. SMEs would have to simultaneously qualify and quantify the customer database. To stay competitive in their industry.
  4. Managers of SMEs must make sure that the quality of their goods and services is given top priority
  5. The management of SMEs should instruct their frontline staff to treat customers politely and attentively, particularly those who have complaints about the services they received and emphasise the value of apologies and explanations to them.

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