CHAPTER ONE

INTRODUCTION
1.1

OVERVIEW OF THE STUDY

Understanding

how

to

effectively

manage

customer

relationships has become a very important topic to both

academicians and practitioners in recent years. Also, organizations
are realizing that customers have different economic value to the
company and are subsequently adapting their customer offerings
and strategies accordingly. (Roya and Salmiah, 2010).
We need to learn

more about the leading indicator of

customer value tomorrow (measurable today) and to understand

better the strong tie between customer equity and we must learn
about how companies successfully change their strategies to
increase customer loyalty or decrease customer turnover (Roger,
2005).
It is apparent that managing customer relationships, coupled
with building the value of the customer base, is no longer a
1

business management term based on the latest consultant speak

but rather a fruitful avenue of business composition that has been
rendered necessary by permanent innovations in the technological
landscape. (Roya and Salmiah, 2010).
Customer relationship management is the establishment,
development,

maintenance

and optimization

of long term

mutually valuable relationship between consumers and the

organization (Berry,1983). successful

customer relationship

management focuses on understanding the needs and desires of

the customers and is achieved by placing these needs at the heart
of the business by integrating them with the organizations
strategy, people, technology and business processes (Fox, Stead,
2001).
The concept of relationship interface is centered on where
and how individuals and organizations exchange information
whether informally as well as externally (Berry, 1983). It
empirically means an organizations ability of getting in touch with

both the internal and external customers in responsive and

flexible manner (Abdullateef et al. 2010).
The current global competitions threatened by the financial
arises has continued the need for both manufacturers and services
marketers to monitor how their customer feel about their goods
and services, and particularly when there is enormous evidence in
support of relationship managements as the alternative means of
soling the global market fluctuation (Aihie 2007,)
Many businesses such as banks, insurance and other service
providers

realize

the

importance

of

customer

relationship

management and its potential to help them acquire new customer

retain existing ones and maximize their life time value (Opara et
al 2010).

The functional activities of Nigeria banks like those of other

countries is premised on the acceptance of deposits, lending,
affect domestic and foreign payment and provide property
management and trustee services among other wide range of

financial services (Firpo, 2006). while, these services are rendered

efficiently and with utmost trusts and commitment in developed
nations due to the relational and interactive approach adopted,
same cannot be said of most banks in Nigeria before year 2000
(Opara et al 2010). The financial service industry in Nigeria has
undergone major transformations in recent times, most especially
with the introduction of reformation programs from 1999 to 2007.
In this past manager consolidation era, banks are introducing
new products, such as ATM, telephone banking, investment
banking and actively participating in social responsibilities. All
these were meant to influence relationship and thereby retain
their customers at a profit and this can best be done through CRM
as prevalent in todays global business environment.

1.2

STATEMENT OF PROBLEM
Within the rapid expanding literature of relationship

marketing,

businesstobusiness

marketing

and

customer

relationship management, there is relatively little attention paid

to the value of the organization can get from such business
strategies.
Neglect in customer relationships has lead to a lot of
organization having a reducing figure in the count of customers in
their customer data base. This study will look at impact of
customer relationship management on customers loyalty.

1.3

OBJECTIVES OF STUDY
Among the vast studies that has been done in the field of

customer relationship management. Although they have focused

on different aspect of the customer relationship management.
Less research is found in this area.

The main objective of this study is on the impact of

customer relationship management and its relational variables on
customers loyalty.
a.

To ascertain the impact of customer attraction progammes

on customers loyalty.

b. To determine the impact of relationship management on

customers loyalty.
c.

To find out the effect of customer retention programs on

customers loyalty.

d. To determine the impact of customers satisfaction on

customers loyalty.

1.4

RELEVANT RESEARCH QUESTIONS

The following research question will be answered is this

study. The questions include the following.

i.

Is there a significant impact of customer attraction

programs on customers loyalty?

ii.

To what extent does customer retention programs affect

customers loyalty?

iii.

Does customers satisfaction programs leads to customers

loyalty?

iv.

To what extent does relationship management programs

leads customers loyalty

1.5

STATEMENT OF HYPOTHESIS
In the view of the impact of customer relationship

management on customers loyalty the hypothesis will be as

follows.
(1)

Ho :

Good customer attraction programs do not lead to

customers loyalty.

.H1:

Good

customer

attraction

programs

leads

to

customers loyalty
(2)

Ho :

Good relationship management does not lead to

customers loyalty.

H1:

Good relationship management leads to customers

loyalty.

(3)

Ho: A good customer retention program does not necessarily

leads to customers loyalty.
H1: Good customer retention program leads to customer
loyalty

(4) HO: Good customers satisfaction will not always lead to

customers loyalty.
H1: Good customers satisfaction will lead to customers
satisfaction

1.6

SIGNIFICANCE OF STUDY
This studys academic contribution hinges on the fact that it

offers a significant advancement to the body of the current

literature of customer relationship management, most especially
in the Nigerian banking industry, as it reveals customer attraction
programs, customer retention programs, relationship management
and customers satisfaction as influencing factors for customers
loyalty.
8

1.7

SCOPE OF STUDY
This study is focused on the impact of customer relationship

management on customers loyalty in financial services providing

organizations. It is desirable to extend as possible, but this is not
possible because of time constrains.
This study does not cover the whole financial service
providing organization in Nigeria, but it only covers one selected
organization in Asaba, Delta state, Nigeria. The population size
will be the Asaba populace in this selected organization.

1.8

LIMITATIONS OF STUDY
The concept of customer relationship management amongst

Nigerian firm is yet to gain full implementation. It should be noted

that the use of commercial banking industry as the sample could
lead to a potential industry specificity of the result.

The radials being of measured as well are just some selected

variables of customer relationship management which pose a
restriction on some other testable ones.
The analysis of data will be done with the multiple
regression analysis which also poses a limitation on any other
analysis that can be used as well. Other limitations to this study
are non-response from respondents and as well inadequate
resources.

1.9

DEFINITION OF TERMS
Customers Loyalty: Costumers loyalty is the totality of
feelings or attitudes that would incline a customer to consider
the re-purchases of a particular product, service or bond or
revisit a particular company (Kottler and Keller 2006)

Customers: A customer can be define as one that purchases a

commodity or service (Kottler .P. and Keller .K. (2006).

10

Customer

Relationship

relationship

management

Management
is

attracting

(CRM):

Customer

maintaining

and

enhancing customer relationship in multi-service organizations

(Berry 1983).

11

REFERENCES
Abdullateef, A .O, Morhtar, S.S. and Yuseff, R.Z. (2010): Driver of
efficient service Delivery and caller satisfaction: A Model of
CRM Customer contact Cantors in Malaysia: International of
Management Studies.
Aihie .O. and Bennani, A.E (2007). An Exploratory Study of
Implementation of Customer Relationship Management of
Strategy Business Process Management. Journal 13 (1) 2007
pp 139-164.
Berry, L.L. (1988) Relationship marketing in Shostack, G.L et al
(Eds), Emerging perspectives, Journal of Marketing Science
Vol. 23(A), pp, 236-45.
Berry, L.L. (1995) Relationship Marketing of Service. Growing
Interest, Emerging Perspectives. Journal of the Academy of
Marketing Science 23(4), 236 - 45.
Firpo, Y. (2006), Bonking the Embarked Technologys Royal in
Delivering Accessible Financial services to the poor, Samba
Consulting 5.
Fox, T. and Stead .S. (2001) customer relationship management
delivering the bone fits, white paper, CRM (UK) and SECOR
consulting, new Malden
Gummesson E. (2004) Return on Relationships (RoR), the Value of
Relationship marketing and CRM in Business to-Business
context. Journal of Business and Industrial Marketing Vol 19
(2), PP, 136-148.
Levitt (1983), After Sales is over... Harvard Business Review,
101- 61, No. 2, pp-81-93.
Opara, B.C. Ayopo.O.O, Darogo. W. M. (2010), Analysis of Impact
of Technology on Relationship marketing orientation and

12

Bank performance. European Journal of Scientific Research

ISSN 1450-216x 101.45 no 2 (2010), Pp, 291-300.
Rogers, M. (2005), Customer strategy observation from the
ranched journal of marketing 69,262-263.
Roya .A. and Salmiah M. (2010), The Customer Relationship
Management Strategies: Personal needs assessment of
Training and Customer turnover 14, Number 1 (2010).

13

CHAPTER TWO
REVIEW OF RELATED LITERATURE
2.1

INTRODUCTION
This chapter is concerned with the review of literature. It is

a systematic analysis and appraisal or evaluation of studies, works

and documents containing information about the problem under
study.
This chapter provides the background and the problem
discussion of the area of this study, leading down to the specific
research questions. This chapter

is also aimed at

giving

authenticity and credibility to the research study through the

citing of works of different institutions, scholars and experts
whose works and findings are as well as a contribution to the
major relational variables of this study under consideration.

14

2.2

HISTORICAL BACKGROUND
As observed by Sheth and Parvatiyar (1998) developing

customer relationships has historical antecedents going back into

the pre-industrial era. Much of it was due to direct interaction
between producers of agricultural products and their customers.
Similarly, artisans often developed customized products for each
customer. Such direct interaction led to relational banding
between the producer and the customer.
In recent years however, several factors have contributed to
the rapid development and evolution of CRM. These include the
growing -intermediation process in many industries due to the
advent

of

sophisticated

computer

and

telecommunication

technologies that allow producers to directly interact with endcustomers. For example, in many industries such as the airline,
banking, insurance, computer software or household appliances
industries and even consumables the de-intermediation process is
fast changing the nature of marketing and consequently making
relationship marketing more popular.

15

These measures created intimacy and cooperation in the

buyer-seller relationship. Instead of purchasing a product a
product or services, customers were more interested in buying a
relationship with a vendor. The key (or national)account
management program designates account mangers ad account
teams that assess the customers need and then husband the
selling companys resources for the customer benefit such program
have led to the establishment of strategic partnering within the
overall domain of customer relationship management (Anderson
and Narus, 1991; Shapiro 1988).
Similarly, in the current era of hyper-competition, markets
are found to be more concerned with customers retention and
loyalty (Dick and Basu, 1994; Reichheld, 1996). As several studies
have indicated, retaining customers perhaps offers a more
sustainable competitive advantage than acquiring new ones. What
marketers are realizing is that it costs less to retain customers
than to compete for new ones (Rosenberg and Czepiel, 1984). On
the supply side it pays more to develop closer relationship with a

16

few

suppliers than

to

work

with

more

vendors,

(Hayer,

Wheelwright and Clarke, 1988; Spekman, 1988). In addition,

several marketers are concerned with keeping customers for life
rather than with only making a one-time sale (Cannie and Caphin,
1991). There is greater opportunity for Goss-selling and up-selling
to a customer who is loyal and committed to the firm and its
offerings. In a recent study, Naidu, Parvatiya, Sheth and Westgate
(1999) found that relational intensify increased in hospitals facing
a higher degree of competitive intensity.
Also, customer expectations have been a changing rapidly
over last the last two decades. Fueled by new technology and the
graving availability of advanced product features and services,
customer expectations are changing almost on a daily basis.
Consumers are less willing to make compromises or trade-offs in
product and services quality. In a world of ever changing customer
expectations, building cooperative and collaborative relationships
with customers seems to be the most prevalent way to keep tack

17

of their changing expectations and appropriately influencing them

(Sheth and Sisodia; 1995).
Finally, many large internationally oriented companies are
today trying to become global by integrating their worldwide
operations. To achieve this they are seeking cooperative and
collaborative solutions for global operations from their vendors
instead of merely engaging in transactional activities with them.
Such customers needs make it imperative for marketers
interested in the business of companies that are global to adopt
CRM programs, particularly, global account management programs
(Yip and Madsen 1996). Global Account Management (GAM) is
conceptually similar to national account management programs
except that they have to be global in scope and thus more
complex managing customer relationship around the world calls
for

external

and

internal

partnering

activities,

partnering across a firms worldwide organization.

18

including

2.3

CUSTOMER RELATIONSHIP MANAGEMENT

To survive in the global market focusing on the customer is

becoming a key factor for companies big and small. It is known

that it takes up to five times more money to acquire a new
customer then to get an existing customer to make a new
purchase. A second aspect of CRM is that knowing the customer
and his/her problem allows acquiring new customer more easily
and facilitating targeted cross-selling (Taria, 2005).
CRM is based on the basic marketing belief that an
organization

that

knows its customer

like

individuals. Its

components may include data warehouse that store all a

companys information, customer services system, call centre, ecommerce, web marketing, operations system (that handle order
entry, invoicing, payments, point of sale, inventory system, etc)
and sales system (mobile sales communication appointment
making routine etc). In practices, CRM system range from
automated customer-contact system to the company wide pooling
of customers information (Kottler pp. 409 410).
19

The implementation of CRM needs the close cooperation

between suppliers of one of the many CRM system on offer, such
as avenue and relationship organizer and the user (Kottler pp.
409 410).
CRM is one of the key processes in any firm. Although CRM is
a relatively new business term and therefore, the definition can
vary depending on the background of the individual writing it. The
F. Dwyer and Tanner believe tat CRM as those process that
address all aspect of identifying customers, creating customer
knowledge, building customer relationship and shaping their
perception of the organization and its product. (Kottler pp. 304
305).
CRM is a highly fragmented environment and has come to
mean different things to different people. As the thought and
approach to CRM is in the initial stages and not fully matured, one
can find different perspectives and definitions of CRM. According
to Gummesson (1983) CRM Is the valves and strategies of
relationship marketing with particular emphasis on customer
20

relationship turned into practical application.CRM is an enterprises

approach to understanding and influencing customer behavior
through meaningful communications in order to improve customer
acquisition, customer retention, customer loyalty and customer
profitability (Kottler pp. 304 305).
In order to have more efficiently managed customer
relationship CRM focuses on effectively turning information into
intelligent business knowledge. This information can come from
anywhere inside or outside the firm and this requires successful
integration of multiple database and technologies such as the
internet, call centre, sales force automation and data warehouse.
(John and Fredrick, 2002)
There is no universal explanation of what CRM is, since the
area is fairly new and still is developing. It is therefore important
to remember that several attempts of defining CRM exist and that
many companies adapt the definition to their own business and
their unique needs. . (John and Fredrick, 2002).

21

The activities a business performs to identify quality,

acquire, develop and retain increasingly loyal and profitable
customers by delivering the right product or services to the right
customer, through the right channel at the right time and the
right cost. CRM integrate sales, marketing services enterprise
resources planning and supplying chain management function
through business process automation technology solution and
information resources to maximize each customer contact. CRM
facilities relationship among enterprises, their customers, business
partner, suppliers and employees. (John and fredrick,2002).
However, for CRM to be successful all activities in a
company need to manage in combination to reach success. Stone
Wood and Wilson (1996) note that in some companies there is the
belief that good market planning is equal to good CRM. It must be
clear that CRM is not equal to market planning. Since they are
founded on two different marketing approaches. However, the
authors add that although the information in market research is

22

CRM, it is only a small part of the CRM that is needed in order to

create profitable customer relationship (John and Fredrick,2002).

2.3.1 GOALS OF CRM

Companies can gain many goals from CRM (Arezu and Alieza,
2006).
1. Lower cost of recruiting customers: the cost for recruiting
customers will decrease since there are savings to be made on
marketing, mailing, contact follow-up, fulfillment, services
and so on;
2. No need to recruit too customers to preserve a steady volume
of business: the number of long term customers will increase
and consequently the need for recruiting many new customers
decreases;
3. Reduced cost of sales: the costs regarding selling are reduced
owing to that existing customers are usually more responsive.
In addition, with better knowledge of channel and distributors

23

the relationships become more effective as well as that a cost

for marketing campaigns is reduced.
4. Higher customer profitability: the customer profitability will
get higher since the customer wallet share increases, there
are increase in up-selling, cross-selling and

follow-up sales

and more referrals comes with higher customer satisfaction

among existing customers.
5. Increased customer retention and loyalty: the customer
retention increases since customer stay longer buy more and
buy more frequently. The customer does also more often take
initiatives, which increase the bounding relationship, and as a
result the customer loyalty increases as well;
6. Evaluation of customer profitability: the company will get to
know which customer are profitable, the ones who never
might become profitable and which ones that might be
profitable in the future. This is very important since the key
to success in any business is to focus on acquiring customers

24

who generate profit and once you have found them never let
them go (person p.11).

2.3.2

CRM PROCESS
The CRM process involved four steps. These steps are to

segments and profile the market, design communication strategy,

impenetrate and evaluate. (Dwyer, 1987).

Segment and profile the market

Evaluate

Design strategy

Implement

Figure 1

Source: Dwyer, R. (1987). Developing buyer seller relationshipjournal of market

A challenge of defining CRM is that any definition is
contingent in the level at which CRM is practiced in an

25

organization or for that matter what the researcher or manager

believed about the correct level of CRM (Arezu and Alieza, 2006).
There are three different possible levels;
1. Functional
2. Customer facing
3. Company wide
In CRM process customer facing level is being focused upon.
This perspective includes the building of a single new of the
customer across all contact channels and the distribution of
customer intelligence to all customers facing functions. This view
stresses the importance of coordinating information across time
and contact channels o manage he enter customer relationship
systematically. For example, a bank customer who has both a loan
product and a savings product might interact with the bank
through various channels and different types of interactions (e.g.
Transactions, information request, complaint), which may change
over time (Arezu and Alieza, 2006).

26

A CRM process on the customer facing level would be the

basis of the interaction and on the basis of the generated
intelligence, would result in coordinated and well defined action
through different functions (Werner, 2004).

2.4

ATTRACTION,

SATISFACTION,

RELATIONSHIP

MANAGEMENT
Since CRM includes all activities directed towards the
establishment,

development

and

maintenance

of

exchange

relationships (Morgan and Hunt, 1994). According to this study,

here are the relationship strategy chosen and to be review in this
literature;
1. Customer attraction
2. Customer retention
3. Customer satisfaction
4. Relationship management

27

CUSTOMER ATTRACTION
Attraction as a driver of customer commitment means
something that makes the service provider interested to a given
customer or the other way round so attraction can be based on
financial technology or social constructs.
Consequently,

even

social

contacts

that

are

highly

appreciated may form a source of attraction that can lead to a

business relationship. If attraction exists between two parties, the
basis for a relationship is developing, indeed understanding.
Understanding the role of attraction in a customer commitment
decision is the key issue that little attention has been paid on it
the service marketing area. (Gronroos, 2001).
Gilbert (1996) suggested that quality should play role of the
chief facilitator to achieve the objectives of relationship
management, such a commitment to the brand, emotional
involvement and active interaction.

28

Creating strong customer focused relationship requires

understanding the needs, if specific customers and the firms
succeed in meeting these needs, Such serves as a means to
measure the perception of customers experiences in the services
encounter (Parasuramon et al, 1991).

Delivering more effective

services quality than others in one of the ways that a firm can be
successful in achieving todays business environment. (lai et al,
2007).
Groonros (2000) described service quality in term of seven
perceived scale;
1.

Professionalism and skills

2.

Attitudes and behavior

3.

Accessibility and flexibility

4.

Reliability and trust worthiness

5.

Service recovery

6.

Serviscape

7.

Reputation credibility

29

Value of a relationship is studied in Wilson and Jantrania

(1995)s research which

is a very useful contribution in business

relationship and its success issue. In a long term relationship with

the customer the benefit concept takes a deeper meaning (Ravald
and Groonros, 1996).
The customer perceived value needs to get a deeper
meaning which does not relate only to episodes, but to the
expectations of the customer and the companys responsibility to
meet these expectations in a long term relationship (Ravald and
Groonros; 1996).
The customer-perceived value needs to get a deeper
meaning which does not the expectations of the customer and the
companys responsibility to meet these expectations in a long-

30

term relationship. (Ravald and Groonros, 1996).

Relationship

Increasing the benefit/reducing

the sacrifice

Value

Stimulate Repurchasing Activities

Relation
Safety

Credibility

Security

Trust
Loyalty
Mutually profitable relationship for
supplier and customer

Figure 2: The effect of value- adding strategies in a long- term

relationship
Source: Revald and Gronroos (1996).

According to Wilson and Jantrania (1995), value means a

great many things to great many people. Increasing the benefits
means adding something to the core product that the customer

31

perceived important, beneficial and of unique value. The problem

is to find an alternative to providing superior value which
improves the performance of the company a well as the benefit of
the customers in the long run. (Wilson and Jantrania, 1995).
It must be examined that how a company can add value to
the offering by reducing the customer-perceived sacrifice.
Companies should look at things from the customers perspective
and this is a core aspect of relationship management. The
company needs a thorough understanding of the customers value
chain in order to be able to reduce the customer perceived
sacrifice. The company should get close to the customer to be
able to understand his needs preferences and all the activities
which constitute his value chain. (Wilson and Jantrania, 1995).
Relationship

value

is

conceptualized

in

three

economic, psychological or behavioral and strategic.

32

dimensions,

Economic
Concurrent Engineering
Investment quantity
Value reduction
Cost reduction
Goals
Social bending

Time to market

Trust

Strategic fit

Culture

Core competencies

Behavioral

Strategic

Figure 3: Expanding the dimensions of relationship value

Source: Wilson and Jantrania, (1995)

CUSTOMER RETENTION
Customer retention is increasingly being as an important
managerial issue especially in the context of saturated market or
lower growth of the number of new customers. It has been
acknowledge as a key objective of relationship marketing
primarily

because

of

its

potential

33

in

delivering

superior

relationship economics, i.e. it cost less to retain than to acquire

new customers.

The assumption is that generalized theories,

which imply universal applicability, tend to overlook the

distinctive impact of conceptualized business conditions on
effective customer retention strategies, the fact is that both
theoreticians and managers should consider business context in
developing and implementing customer retention developing and
implementing customer retention strategies (Rizal Ahmed and
Francis Buttle pp. 149 161).
With the cost of losing customer rising every day, companies
continually seek new ways to acquire, retain and increase
business. Service has long been an important factor in customer
retention, and new research suggests its role in more critical than
ever and will continue to grow throughout the 1990s.

CUSTOMER SATISFACTION
Satisfaction and dissatisfaction are seen as two ends of a
scale which are related to each other but only have slightly

34

differences from each other where the location is defined by

a comparison between expectations and outcome. (Pantea, 2008).
A customer will be satisfied when the outcome of the source
meets his or her expectations and also when the service quality is
more than those expectations and also when the service quality is
more than those expectations, the service provider is having the
delighted customer contrary when the perceived overall service
quality is below or less than his or her expectation. We can
strongly say that the customer will be dissatisfied (Looy et al.
2003)

35

Figure 4: A Service Satisfaction Framework

Satisfied

Delighted
Customer
Recovered

Satisfied
customer

Exhausting customer

Complaining

Dissatisfied

Source:

Not recovered

Dissatisfied
Customer

Based on J.M. Hays and A.V Hill (1999): Cited by Looy et al

(2003)

Overall satisfaction with the providing of a service that is

needed by the customer is a function of the buyers degree of
satisfaction with various aspects of the service offered (Gounaris,
2005).

36

Liljander and Strandvik (1995) presented a model which

broadens the discussion on satisfaction, quality and value by
including customer relationship specifications they also draw on
both traditional services quality literature and relationship studies
within industrial marketing.
Instead of saying that satisfaction is linked to transactions
and service quality is linked to a global attitude of the service, it
is suggested that quality precedes satisfaction and the satisfaction
can be measured also for some other transactions (Liljander and
Strandvik, 1995).
Although satisfaction applies to both tangible and intangible
goods the emphasis should be on the services setting. Where the
concept has been the subject of investigation in many studies
(Liljander and Strandvik, 1995).
The expectancy disconfirmation paradigm in process theory
provides the infrastructure for the vast majority of satisfaction

37

studies and encompasses four construct (Liljander and Strandvik,

1995).
1. Expectations
2. Performance
3. Disconfirmation
4. Satisfactions
Close relationship does exist between customers loyalty and
high levels of customers satisfaction which brings customer
delight firms should not only meet their customers expectations
but they should try to excite them in one or another way.
(Pantea, 2008) relationship management replaced traditional
transactions oriented approaches of marketing by placing more
emphasis on the creation of customer value by means of
developing and maintaining relationship (Ossel et al, 2003).

38

RELATIONSHIP MANAGEMENT
Relationship management is an important strategy and is one
of the important aspects of marketing in these two decades.
Morgan and Hunt (1994) defined Relationship management as all
marketing activities directed towards establishing developing and
maintaining successful relationship.
Relationships between customer and business firms have
been consistently encouraged as successful business practices
worldwide. The commotion with marketing has seldom been
established formally in the development of marketing theory (Yau,
2000). Relationship management was known as a strategic
approach to industrial and service markets and was considered to
be unsuitable in other marketing context (Omalloy and Tynan,
2000).
The idea of relationship and also relationship building being
extended to other area such as distribution, service and consumer
, are as the result of strong interest in relationship between
39

companies. So we must also build relationships to middlemen

service supplier and end consumer (Jorgenson, 2001). Liljander
and Strandvik, (1995) proposed that a relationship term should be
defined from the customers point of view as this corresponds to a
market oriented perspective. The customer can be committed
both negatively and positively towards the service provider, or he
can be indifferent. A negatively committed customer will try to
end up the relationship as soon as possible, but is usually unable
to do so in the short period of time because bonds which serve as
exit barrier (Liljander and Strandvik, 1995).
In order to build up a lasting and successful customer
relationship the provider needs to have a deep understanding of
the customers business activities in which the customer created
value for himself (Helander and Hirvonen, 2001).

40

2.5

CUSTOMERS LOYALTY
The degree of customers loyalty is measured as the

percentage of loyal customers, the percentage of incomes

associated with loyal customers and the rise of loyal customers
after the implementation of customer relationship management
activities (izquierdo et al, 2005).
Commitment to customers and service quality enhance
satisfaction which leads to close and successful relationship
(Buttle, 1996; cited by Izquierdo et al, 2005). These loyalty
programs are structural marketing efforts, which reward and
therefore encourage loyal behavior (Izquierdo et al, 2005).

DIMENSION OF CUSTOMERS LOYALTY

Sheth (2002) stated that customer attitude is difficult to
measure for financial and practical purposes; customer retention
is generally used as an indicator of customer loyalty. However,
attitude and behavior can be very different (Sheth and Parvatior,
2002).
41

Attitude

Positive

Negative

Buying pattern
Negative

Positive
True loyalty

Spurious loyalty

Latent loyalty

No loyalty

The dimensions of customer loyalty

Source: (Dick, A.S and Basu .K. (1994) Journal of academy of
marketing science; cited by Sheth and Parvatror,
2002)
Different loyalty types are shown in the matrix above and can be
matched with different forms of relationships.
1. Truly loyal customers are willing to seek out a particular
service location or brand;
2.

Seriously loyal customers tend to be more motivated by

impulse convenience and habit that is if the conditions are
right;

3.

Latent loyalty applies to customers who are loyal simply

because they have no other choice;

4.

No loyalty obviously there will always be some customers

who display no loyalty to a particular company or brand.
42

2.5.1 CUSTOMER LOYALTY PROGRAM

Commitment to customers and services qualities enhance
satisfaction which leads to close and successful relationship. If we
admit that, it is more profitable holding on to existing customers
than winning new customers (Berry, 1995; Vavra, 1995: cited by
(Izquiordo et al, 2004), the company will try to achieve the
satisfaction of existing customers providing them inducement such
as discount, free product or fidelity card. These loyalty programs
are structured marketing attempts which reward and therefore
encourage loyal behavior, loyalty program customers should show
changes in repeat purchase loyalty which is not evident amongst
non-program brands. A decreased switching to non-program
brands, increased repeat purchase rates, increased used frequency
or greater propensity to be exclusively loyal. (Izquierdo et al
2005). Rauyren et al (2005) provide a practice of how relationship
quantity can influence customer loyalty or loyalty in the business
to business context.
43

Satisfaction appears to be an important factor in maintaining

purchase intentions through service quality will strongly enhance
both purchase intentions and attitudinal loyalty. (Rauyren et al
2005).
In order to maintain customer loyalty, a supplier must
enhance also four aspects of relationship quality which are trust,
commitment, satisfaction and services quality. (Pantea, 2008).
Successful loyalty programs need to make offers to encourage
customers to continue to make purchases from the company, but
more important, successful loyalty programs need to manage
loyalty and profitability property ((Pantea, 2008). A recent article
Ramartz and Kumur, 2007: cited by Kumur and Peterson, 2005)
show that the most loyal customers are not necessarily the most
profitable. We can say that loyal customers cost less to serve,
loyal customers pay higher prices for the same goods and loyal
customers do more marketing on behalf of the company (Pantea,
2008).

44

These results are shown below where customer are divided

into four different categories; (Kumur and Peterson, 2005)
1. Low profitability and short tenure
2. High profitability and short tenure
3. Low profitability and long tenure
4. High profitability and long tenure
Earlier, the focus of loyalty was brand loyalty with respect
to tangible goods (Caruana, 2002). Brand loyalty defied as the
preparation of a purchase of a household devoted to a brand if
purchase most often. Over time fall have continue to expand,
reflecting the wider perspective of marketing to work into other
types of loyalty such as vendor loyalty. Few studies have discussed
on customer loyalty of services (Caruana, 2002).

2.6

CUSTOMER

RELATIONSHIP

MANAGEMENT

SYSTEM

IN

BANKING/FINANCIAL INSTITUTIONS
Panda (2003) observed that globalization and deregulation,
combined with radically enhanced the managerial context of

45

service industries. Watkins, (1992) stated that he financial

services industry is in a transitional stage as the mission of
information technology changes its emphasis from administrative
efficiency to the improvement of service quality and IT becomes
market led. He also mentioned that IT would involve the
installation

of

new

customer

administration,

marketing

information, and point of sale and branch system to provide better

customer service. Through research is quite old a number of
researchers today have observed that the financial services
industry is in the middle of a structural change (Geib et al, 2004).
Panda (2003) explain that financial services today are facing fierce
and aggressive competition in both domestic and global market
thereby forcing organization to restructure in order to enhance
their chances of growth and survival.
The financial service industry is a seater which is generally
held

as

being

the

most

advanced

in

customer

relations

management, as they are the traditional users of direct mail and

having extensive information on customer, (Goss and Stone, 2002).

46

The relationship which financial service companies such as bank,

hold with their customer is imperative for the growth and survival
of such a business. Hence, the need to adopt new ways of gaining
an advantage over competitors becomes an important part of
business. Geib et al, (2006) explain that due to increasingly
competition and high customer demands financial services
companies are required to focus on core competencies in order to
deliver better value to customers.
Karakostas et al, (2005), asserts that financial services had a
lead in implementing CRM due to the nature of their business, as
business transaction where information technology based and
contained important information about their customers. The
emergence of CRM in the financial services industry was as a result
of three fundamental factors which have been listed as new
technological opportunities increasing competition from new
market emigrants and changing customer behavior (Geib et al,
2006). These factors therefore motivate financial services to focus

47

on the development of a good relationship between the business

and its customers.
Panda

(2003),

states

that

for

successful

CRM

implementation in the financial services sector, it has to

incorporate four main areas of business which include strategy,
people, technology and process. Panda further explains that he
enablers (people and technology) are moved by the organizations
strategic processes through their systematic interaction which
eventually results in a successful CRM implementation.

2.6.1

NIGERIAN BANKING SYSTEM

The financial institutions under investigation are the

commercial banks in Nigeria. Due to this, a literature review was

carried out on the country. This section aims to give knowledge on
the development of banking system in Nigeria and also information
technology in Nigerian banks.

48

2.6.2 HISTORICAL DEVELOPMENT OF NIGERIAS BANKING SYSTEM

The history of Nigerias banking and finance industry can be
viewed as a story of recurring changes in the nature of financial
markets in response to economic, political and in particular,
regulatory policy changes. (Oyejide, 1990). The African banking
corporation, which was Nigerias First Bank, was established in
1892 (Beck et al, 2005).
No banking legislation was present at the time but came into
existence in 1952 and at this point Nigeria had three foreign banks
and two indigenous banks, the foreign banks were the bank of
British west Africa, Barclays bank of Nigeria and the African
continental bank (library of congress country studies) for decades
after 1952, the demand for deposit was showed as Nigerians
preferred cash and distrusted checks for debt settlement (CIA
world fact book).

49

The Central Bank of Nigeria began operations on July 1, 1959

(Beck et al, 2005), it was statutorily independent at the federal
government until 1968 (library of congress country studies).
In the 1970s the Nigerian financial sector was largely
controlled by the government through to the early 1990s (Kano
and Rice, 2001). However, by the end of 1988, the banking system
in Nigeria consisted of the Central Bank of Nigeria Forty two (42)
commercial bank and twenty-four (24) merchant banks (CIA World
factbook). Both commercial and merchant banks had 1,500
branches together. Merchant banks were allowed to open checking
account for corporations only and could only accept deposits of
N50,000 and above (library of congress country studies). As at
1988 commercial banks had assets of N52.2bilion compared to
merchants banks with assets of N12.6billion (CIA World fact book).
During the 1970s the Nigerian government

introduced a

number of direct controls in the banking system, through

ownership, as well as through interests rate and credit controls
(Beck et al, 2005). Since there were no Nigerian purchasers,
50

foreign-owned banks were nationalized and this was as a result of

an indigenous wave which has the goal of securing domestic
majority ownership of strategically important sectors (Beck et al,
2005).
Nigeria then undertook a brand program if financial
liberalization in 1986 with the Structural Adjustment Programme
(SAP), this resulted in interest rates and entry into the banking
system being liberalized while credit allocation quotas were also
loosened (Beck et al., 2005). The consequence of this was the
quick entry of many players into the banking system, the number
of banks increased from 40 to about 120 (Beck et al., 2005) the
contribution of the financial sector to GDP also increased (Lewis
and Stein 2002).
On the 6th of July, 2004 the Central Bank of Nigeria (CBN)
announced a N25billion minimum capitalization requirement for
Nigerian Commercial banks with effect from December 31, 2005
(CBN, 2004). The objective was to produce Mega banks which
would be more supportive of an emerging and vibrant private
51

sectors, entrance competition on the global markets in addition to

stemming the tide of distress in the banking industry (Skye bank,
2008).
This implementation was the first phase of the most
extensive and intensive banking reforms. Since post-independence
Nigeria (Achua, 2008). This development was met with mixed
reaction in the industry, most banks were in agreement with the
purpose of these returns but felt that the timeline was rather
short for such a large increase in capital base. As a result of the
reform, 89 commercial banks, which existed before. The reform,
where reduced to 25 commercial banks. 76 banks of the 89 banks
merged into 25 mega banks. While 13 banks were liquidated and
this took place in 2005 (Achua, 2008). In early 2008, two of the
twenty-five existing banks also merged thereby bringing the
recent amount of commercial banks to twenty four scenario
electronically and available to all channels (Oboh, 2005).
However, one of the challenges is the management of the
sprawling database built on customers so that information can be
52

made readily, speedily and systematically extracted, shared and

reviewed to aid management decisions and most importantly to
satisfy customer (Oboh, 2005).

2.7

INTEGRATIVE SUMMARY
The review highlights customer relationship management

system, (process, and goals). It also reviews the construct,

customer attraction, customer satisfaction, customer retention,
relationship management and customers loyalty as well.
The literature review also gives insight into the banking
system of Nigeria by explaining the background information of the
country and further explaining the history of the banking system
up to its present state. The review let us know that there has
been a lot of progress in the banking system in Nigeria and due to
the strong financial reforms, competitions amongst banks is on the
increase therefore in order for this banks to survive there has
been quite an increase in the application of customer focus
strategy in their operations.
53

The next chapter discusses the methodology of the study.

Concept such as the methodology approach, sample population,
description of the instrument used is presented.

54

REFERENCES
Adeoti-Adekeye, W.B. (1997), Important of Management
Information System: Journal of the Library review 46 (5),
318 327
Anandarajan; M. et al (2002) Technology acceptance in the
banking industry: A perspective from a less developed
country: Journal of Information technology and people Vol
13 (4), pg 298 312
Arezu .G. and Alieza .O. (2006), Impact of Customer Relationship
Management of Customer Retention: Master thesis: Julea
University of technology, 2006:02 PB: ISSN: 1653 0187
Beck, T. et al (2005), Bank privatization and performance:
Empirical evidence from Nigerias Journal of Banking and
Finance. 29 (8 9), 2355 2379.
Caruana, A, (2002) Service loyalty the effect of service loyalty
and mediating role of customer satisfaction European
journal of Marketing, 36, 7/8, pp 1 2.
Dwyer F.R. Schurr. P.H, and Oh, S. (1987) Developing Buyer
Seller Relationship. Journal of Marketing vol 51, 11 27.
Eroke, L. (2008) Between Banks Product and Quantity Service
This Day Newspaper Vol 13 (4694), 33 -34.
Foss, B. and Stone, M. (2002) CRM in financial services: A
practical Guide to making customer relationship
management: Work Kogan Page Publisher.
Gilbert, D.F, and Buttle, E.D, (1996), Airlines in Relationship
Marketing: Theory and Practice: pp, 131 144, London:
Paul Chapman.
55

Gronroos, C. (2000), Service management and marketing A

customer Relationship management Approach, Wiley, New
York, NY.
Gronroos, C. (2001), The perceived service quality concept a
mistake? Managing Service Quality, Vol. 11, No. 3
Helandar, N. and Hirvonon, P., (2001), Towards Joint Value
Creation Processes in Professional Services The TQM
Magazine Volume 13, Number 4, pp. 281 291 (II)
Idowu, P. et al (2002). The Effect of Information Technology on
the Growth of the Banking Industry in Nigeria Journal of
Information Systems in Developing Countries. Vol10 (2), 1
8.
Izquierdo, C. and Gilan, J. (2004), Trust as the key to relational
commitment, Journal of Relationship Marketing, 3 (1).
Izquierdo, C. and Gilan, J., Gutierrez, S.S (2005) Impact of
Customer Relationship Marketing on Firm Performance:
Spanish Case, Journal of Services Marketing 1914 234 244
Johan and Fredrick (2002) Customer Relationship Management
2002: 016 SHU. ISSN: 1404 5508
Jorgensen, N (2001). A contingency model for the companys use
of relationship building, 17 the IMP Conference
Kottler .P. and Keller .K. (2006). Marketing Management.
12edition. USA, ISBN 0 13 145757 8
Kumar, U and Peterson, A (2005) Using a customer level
marketing strategy to enhance firm performance: A Review
of Theoretical and Empirical Evidence, Journal of the
Academy of Marketing Science, 4 (4), 507 516

56

Liljander, .V. and Strandvik, T. (1995) The Nature of Customer

Relationship in Services, Swart, Teresa A, David E, Bowen
and Stephen W. Brown (eds), Advances in Services Marketing
and Management, Volume 4, London: JAI Press Inc.
Morgan, R. and Hunt .S. (1994), The Commitment trust theory
of relationship marketing Journal of Marketing, Vol. 58,
July, pp. 20 38
Nigeria Banking, Finance, and other services The library of
congress studies, CIA World Fact book (1991).
Oboh, G.A.T (2005) Developing an ICT based delivery in the
Nigerian Banking Industry. Union Bank Experience Union
Digest Vol.9 (1) Pg 1 -11.
O Malley, L. and Tynam .C. (2000) Relationship marketing on
consumer markets Rhetoric or reality.
Ossel, G. and Gemmel, P. Looy, B. (2003), Service management an
integrated approach; Prentice Hall Press.
Panda, T. (2003) Creating Customer life Time Value through
effective CRM in financial services industry Journal of
services Research (Online)
Pantea, P.J (2008) Impact of Customer Relationship Management
on Market Performance: Master thesis: Lulen University of
technology: 2008: 0085 ISSN: 1658 0187.
Parasuraman, A, Zelthaml, Valarie A. Barry, Leonard L, (1991),
Retirement and Reassessment of the SERVQUAL Scale.
Journal of Retailing Vol.67.
Peppard, J. (2000) Customer Relationship Management (CRM) in
financial service European management Journal Vol 18 (3),
Pg 312 327.

57

Petra, P. (2004) Customer Relationship management and How a

CRM System can be used in the Sales Process 2004. 124 (IV.
ISSN: 1402 1617. ISRN: LTU EX 041121 SE-LUTH.
Ravald, A and Gronroos C. (1996) The Value Concept and
relationship marketing, European Journal of Marketing,
Innovations Linking purchases, Services recovery, Vol. 30 No.
2, pp, 19 30.
Rauyren, P. (2005). Relationship Quantity as a predictor of B2B
Customer Loyalty. IMP Group Journal.
Reinartz, W. and Kumar .V. (2002) The mismanagement of customer
loyalty Harvard Business review, (July), pp. 86 97.
Sheth, J.N. (2002), The Future of Relationship Marketing Journal of
Service Marketing Vol16, No. 7, pp 590 592
Taria, M.A (2005) Internet and Customer Relationship management in
SMEs 2005: 087 SHU ISSN: 1404 5508 ISRN: LTU SHU EX
051087. LUTH
Umar, S.D (2005) Implications of Technological Innovations in the
banking industry Paper and proceedings of the Bank Directors
Seminar pg 82 91.
Usman, S. (1990) Responses of the Finance Sector to Environmental
changes:-Past, Present and Future Innovation, Technology and
the Nigerian Finance Sector pg 30 37.
Werner, R. Manfred, K. Wayne, D. (2004), The Customer Relationship
Management Process Journal of Marketing Research: Vol XLI
August 2002.
Sheth, J.N AND Parvatiyar .A. (1992) Towards a Theory of Business
Alliance formation Scandinavian International Business Review,
1 (3) 17 - 7

58

CHAPTER THREE
RESEARCH METHODOLOGY
3.1

INTRODUCTION
Polkinghorne (1985) defines methodology as Examination of

the possible plans to be carried out the journeys to be undertaken

so that an understanding of phenomena can be obtained. Graziano
and Raulm (2004), explain that since research involves a process
of asking and answering questions that may lead to interplay
between inductive and deductive thinking, the methods used in
answering such questions can therefore depend on several factors.
This chapter is concerned with discussing the methodology
used for this research work. It involves the methods and
procedures for carrying out this study consist the following:
Research design, population and sample size, sampling technique,
instrument for data collection, validation of instrument, method
of data collection and technique of data analysis.

59

3.1

RESEARCH DESIGN
This is the programme that is meant to guide the researcher

in

the

process

of

collecting,

analyzing

and

interpreting

observations.
According to Olannye (2006) research design are the
approaches, framework or plans for carrying out research studies.
The design method adopted for this research takes the form
of a survey study as it allows samples to be selected and
explanatorily studied. The design permit the collection of original
data meant for describing large population with individual as unit
of analysis.
The research is also designed to ascertain the Impact of
Customer relationship management on Customers loyalty.

60

3.3

POPULATION AND SAMPLE SIZE

This research took the form of a field survey: at this

juncture, it is pertinent to mention that the population of this

study is strictly, restricted to the banking or financial industry.
However time constraints directed the focus of this study on
Guaranty Trust Bank Plc Asaba branch where the desired sample
was made.
The population consists of 800 persons to whom the work
would be generalized. The sample size of this research study is a
proportion of individuals drawn from the population in order to
assess the Impact of Customer relationship management on
Customer loyalty. The sample size of 80 used for this research
work. These comprises of customers of Guaranty Trust Bank Plc,
Asaba. The sample size therefore is 10% of the population under
study. This is derived with the formula below:
K

N
n

61

Where:

3.4

Total number of population

Sample size

SAMPLING TECHNIQUES
A stratified sampling technique was adopted for this study as

this technique gives every member an equal chance of being

selected or chosen. This was due to the fact that the population
was divided into sub-strata, based on criteria of level of
Customers of Guaranty Trust Bank Plc, Asaba Branch.

3.5

RESEARCH INSTRUMENT
This is a major procedure to be followed in carrying out a

research study. It implies the tools used in the courses of

collecting the need information for the research study.
Questionnaires were the instrument of data collection used
for this study. Olannye (2006) defined a questionnaire as an

62

instrument for gathering data from respondents to aid in finding,

solution to research problems. Alasautari (1998), Bryman (2001),
Oppenheim (1992), (Zaja and Blair (2005) gave some points which
a researcher should have in mind when designing a questionnaire.
Some of these points are:

The researcher must have in mind the context and

circumstances of the research situation, that is, the
questions should be aligned with the aims and objectives of
the research.

Slang and colloquialisms should be avoided.

Appropriate choice of closed and open question should be

used.

Question and answer should be kept together. Questions

should not be separated from its respective answers, that
is, the question and answers should follow each other on
the same page as opposed to the question being on one
page and the answers on another page.
63

Each question should contain only one idea; two edged

questions should be avoided.

The questions should be neutrally worded, that is, using

conventional language which is easy to understand and
does not arouse strong emotions.
The questionnaire used was divided into two section (A and

B) confirming questions on respondents profile and another on

closed ended questions pattern using the Iinkert scale closedended question as follows:
5

Strongly Agree (SA)

Agree (A)

Undecided (U)

Disagree (D)

Strongly Disagree (SD)

64

3.6

VALIDATION OF THE INSTRUMENT

To establish the reliability of the instrument a test-retest

method was employed. A research instrument can go a long way to

nullify the reliability of the research findings.
To validate the instrument for data collection, the
questionnaire was given to renowned expert from the Department
of Business Administration and Marketing, Delta State University,
Asaba Campus. This was to establish the reliability and content
validity of the instrument.

3.7

METHOD OF DATA COLLECTION

Data was collected through primary and secondary sources.

Questionnaire administered to respondents is of the primary data

source. The internet as well as the library constituted our
secondary data collection

medium. This includes journals,

newspapers, magazines, textbooks, research findings reports

e.t.c.

65

3.8

TECHNIQUES OF DATA ANALYSIS

In the study, the statistical technique of data analysis is

adopted .The multiple regression analysis will be used through the

spss computer software.
MODEL SPECIFICATION
The most important step in studying any relationship
between variables is model specification. It is to express the
relationship in mathematical form with which the topic will be
explored empirically.
Multiple correlation coefficients (R2) are the correlation
coefficient between the criterion (dependent variable) and several
independent variable and this is the case in this study.

66

MODEL
L= 0+1x1+2x2+33+4x4+E1
Where 1, 2 and 3 . n. are the slope coefficient for
predictors x1, x2,x3xn

67

REFERENCES
Alasautari, P. (1998) An introduction to Social Research Sage
Publications: London
Bryman, A. (1988) Quantity and Quality in Social Research Union
Hyman Ltd London
Czaja, R. and Blair, J. (2005) Designing Surveys, Pine Forge Press:
London
Olannye, P.A (2006) Research Methods for Business: A skill Building
Approach, Peejan Publication. Lagos.
Oppenhein, A.N (1992). Questionnaire Design, interviewing and
Attitude Measurement London: Printer.
Polkinghorne, D. (1983) Methodology for the Human Science. State
University of New York Press Albany.
Graziano, A.M and Raulin, M.L. (2004) Research Methods: A
process of Inquiry Pearson United States of America.

68

CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
4.1

INTRODUCTION
This chapter focuses on the presentation and analysis of data

and information collected through the questionnaires administered

to the Customers of Guaranty Trust Bank, Nigeria, Plc, in Asaba.
The data presented and analyzed in this study is dichotomized into
two parts. In this chapter, the primary data adopted through
questionnaires are presented and analyzed. This analysis is used to
validate this analysis is used to validate or nullify the earlier
stated assumptions. In doing so the researcher used simple
percentage to analyze the personal data of respondents and
multiple regressions were used in analyzing the research questions
and testing of research hypothesis.
A total of 80 questionnaires were distributed to the customers and
49 were completed and returned.

69

4.2

DEMOGRAPHIC CHARACTERISTICS OF RESPONDENT USING

SIMPLE PERCENTAGE
SECTION A

4.1.1 Gender
SEX

FREQUENCY

PERCENTAGE

Male

19

38.8%

Female

30

61.2%

Total

49

100

The above table shows that males are 19 with 38.8% and
female 30 (61.2%). This shows that females are more amongst
the respondents than male.

4.2.2 Age
FREQUENCY

PERCENTAGE

Below 30

31

63.3

31 40

13

26.5

Total

49

100

70

The above table shows that males 31 (63.3%) of the

respondent are below 30, 13 (26.5%) are between 31 40
while 5 (10.2%) are above 40.

4.2.3 Education
FREQUENCY

PERCENTAGE

OND/NCE

15

30.6

HND/B.Sc

28

57.1

Masters

12.2

Total

49

100

The table above shows that 15 (30.6%) of the respondent are

OND/NCE holder 28 (57.1%) are B.Sc holder while 6(12.2%) have a
masters degree.

4.2.4 Job Experience (years)

FREQUENCY

PERCENTAGE

Below 5yrs

38

77.6

5 - 10

12.2

Above 10

10.2

Total

49

100

71

The above table shows that 38 (77.6%) of the respondent

have a job experience which is below 5yrs, 5 10years are 6
(12.2%) while 5 (10.2%) are above 10years.

4.2.5 Status in Organization

FREQUENCY

PERCENTAGE

Junior Staff

25

51.0

Senior Staff

17

34.7

Management Staff

14.3

Total

49

100

From the above table, it shows that 25(51.9%) of the

respondent are junior staff while senior staff are 17(34.7%) and
7(14.3%) for management staff.
SECTION B
Research Question 1: To what degree does customer retention
progammes affect customers loyalty?
Q1: Company open doors to customers complaint on service
delivery.
Strongly Disagree

FREQUENCY
0

72

PERCENTAGE
0

Disagree
Undecided
Agree
Strongly Agree
Total

0
0
26
21
49

0
4.1
53.1
42.9
100

From the above table 0(0%) Strongly disagree 0(0%) Disagree,

2(4.1%) were Undecided, 26(53.1) agrees while 21(42.9%) strongly
agree.
Q2: Company has a good pricing system and service change.
FREQUENCY
0
2
3
33
11
49

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

PERCENTAGE
0
4.1
6.1
67.3
22.4
100

From the above table 0(0%) Strongly disagree 2(4.1%)

Disagree,

3(6.1%)

were

Undecided,

33(67.3%)

agree

while

11(22.4%) strongly agree.

Q3: Company shows concern towards customer problem.

Strongly Disagree
Disagree

FREQUENCY
1
1
73

PERCENTAGE
2.0
2.0

Undecided
Agree
Strongly Agree
Total

6
11
30
49

12.2
22.4
61.2
100

The table above shows 1(2%) Strongly disagree, Disagree

1(2%), 6(12.2%) were Undecided, 11(22.4%) agree while 30(61.2%)
strongly agree.

Research Question 2: Does customers satisfaction leads to

customers loyalty?
Q4: Company focuses to meet customers expectation.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
3
23
21
49

PERCENTAGE
2.0
2.0
6.1
46.9
42.9
100

From the above table 1(2%) Strongly disagree, 1(2%)

Disagree, 3(6.1%) undecided, 23 (46.9%), Agree 21(42.9%) strongly
agree.

74

Q5: Company service performance is satisfactory .

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
0
8
15
26
49

PERCENTAGE
0
0
16.3
30.6
53.1
100

The table above show 0(0%), strongly disagree, 0(0%),

disagree 8 (16.3%) are undecided, 15(30.6%) agree, 26(53.1%)
strongly agree.

Q6: I am likely to use their service again

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
7
0
20
21
49

PERCENTAGE
2.0
14.3
0
40.8
42.9
100

From the above table 1(2.0%) Strongly disagree, 7(14.3%)

Disagree, 0(0%) undecided, 20(40.8%) Agree, 21(42.9%) strongly
agree.
75

Research Question 3: Is there a significant Impact of Customer

attraction programs on customers loyalty?

Q7: I got to know about company and its products and services
through media advertisement
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
2
1
5
19
22
49

PERCENTAGE
4.1
2.0
10.2
38.8
44.9
100

From the above table 2(4.1%) strongly disagree, 1(2.0%)

Disagree, 5(10.2%) undecided, 19(38.8%) Agree, 22(44.9%) strongly
agree.

Q8: Am attracted to company by friends and superior.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree

FREQUENCY
0
1
4
25
19
76

PERCENTAGE
0
2.0
8.2
51.0
88.0

Total

49

100

From the above table 0(0%) strongly disagree from the

respondent, 1(2%) Disagree, 4(8.2%) undecided, 25(51%) Agree,
19(38.8%) strongly agree.
Q9: Ive been doing business with the organization because of
their track record.
FREQUENCY
0
1
3
22
23
49

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

PERCENTAGE
0
2.0
6.1
44.9
46.9
100

From the above table 0(0%) are strongly disagree from the
respondent, 1(2%) Disagree, 3(6.1%) are undecided, 22(44.9%)
Agree, 23(46.9%) strongly agree.

Research

Question

4:

To

what

extent does Relationship

management lead to customer loyalty?

Q10: I have a couple of friends and acquaintances.
FREQUENCY

77

PERCENTAGE

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

1
1
2
28
17
49

2
2
4.1
57.1
34.7
100

The table above shows 1(2%) strongly disagree, 1(2%)

Disagree, 2(4.1%) undecided, 28(57.1%) Agree, 17(34.7%) strongly
agree.
Q11: Service officer often show concern about how I fair in each
transaction.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
2
3
4
24
16
49

PERCENTAGE
4.1
6.1
8.2
49.0
32.7
100

From the above table 2(4.1%) Strongly Disagree, 3(6.1%)

Disagree, 4(8.2%) undecided, 24(49%) Agree, 16(32.7) Strongly
Agree.

78

Q12: Company encourages us to talk to supervisor anytime

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
7
24
16
49

PERCENTAGE
2
2
14.3
49.0
32.7
100

From the above table 1(2%) is Strongly Disagree, 1(2%)

Disagree, 7(14.3%) are undecided, 24(49%) Agree, 16(32.7)
Strongly Agree.

CUSTOMER LOYALTY
Q13: Trust consistency in service delivery encourages patronage
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
2
2
5
26
14
49

79

PERCENTAGE
4.1
4.1
10.2
53.1
28.6
100

From the above table 2(4.1%) Strongly Disagree, 2(4.1%)

Disagree, 5(10.2%) are undecided, 26(53.1%) Agree, 14(28.6%)
Strongly Agree
Q14: Company has clearly defined customer service policy.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
1
2
32
14
49

PERCENTAGE
0
2.0
4.1
65.3
28.6
100

From the above table 0(0%) Strongly Disagree, 1(2%)

Disagree, 2(4.1%) are undecided, 32(65.3%) Agree, 14(28.6%)
Strongly Agree.

Q15: Company honors their promise.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
2
14
16
16
49

80

PERCENTAGE
2
4.1
28.6
32.7
32.7
100

From the table above 1(2%) Strongly Disagree, 2(4.1%)

Disagree, 14(28.6%) are undecided, 16(32.7%) Agree, 16(32.7%)
Strongly Agree.

COMMITMENT
Q16: Company maintain high level of integrity this make me
committed to them.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
2
1
23
22
49

PERCENTAGE
2
4.1
2
46.9
44.9
100

From the above table 1(2%) Strongly Disagree, 2(4.1%)

Disagree, 1(2%) are undecided, 22(44.9%) Agree, 22(44.9%)
Strongly Agree.
Q17: Companys level of business innovation and creativity
encourage my greater patronage.
Strongly Disagree
Disagree
Undecided
Agree

FREQUENCY
0
1
3
18

81

PERCENTAGE
0
2
6.1
36.7

Strongly Agree
Total

27
49

55.1
100

From the above table 0(0%) Strongly Disagree, 1(2%)

Disagree, 3(6.1%) undecided, 18(36.7%) Agree, 27(55.1%) Strongly
Agree.

Q18: Companys passion for service delivery makes me to

anticipate more business dealings.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
2
13
20
14
49

PERCENTAGE
0
4.1
26.5
40.8
28.6
100

From the above table 0(0%) Strongly Disagree, 2(4.1%)

Disagree,

13(26.5%)

undecided,

Strongly Agree.

82

20(40.8%)

Agree,

14(28.6%)

SATISFACTION
Q19: Company encourage face to face dealing
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
2
12
22
13
49

PERCENTAGE
0
4.1
24.5
44.9
26.5
100

From the above table 0(0%) Strongly Disagree, 2(4.1%)

Disagree,

12(24.5%) Undecided,

22(44.9%) Agree,

13(26.5%)

Strongly Agree.
Q20: Company responds to message and keep client informed
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
0
14
14
21
49

PERCENTAGE
0
0
28.6
28.6
42.9
100

From the above table 0(0%) Strongly Disagree, 0(0%)

Disagree,

14(28.6%)

undecided,

Strongly Agree.

83

14(28.6%)

Agree,

21(42.9%)

Q21: Companys employees are friendly and approachable.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
1
18
28
49

PERCENTAGE
2.0
2.0
2.0
36.7
57.1
100

From the above table 1(2%) strongly disagree, 1(2%)

disagree, 1(2%) undecided 18 (36.7%) agree, 28(57.1%) strongly
agree.

84

TABLE 4.3 REGRESSION TABLE

Descriptive Statistics

Sum of Trust,
Commitment and
Satisfaction
Sum of CR, Cs, CA and
RM
Valid N (listwise)

Minimum

Maximum

Mean

Std.
Deviation

49

21.00

44.00

32.2857

4.66815

49

33.0

60.00

50.8163

5.11401

49

Model Summary

a.

Mode
Adjusted
Std. Error of the
I
R
R square
R Square
Estimate
a
1
.659
.435
.383
3.66550
Predictors:
(Constant),
Relationship
management,
Customers
satisfaction, Customers attraction, Customers retention

Coefficientsa
Unstandardized Coefficients

85

Standardized
Coefficients

Model

Std. Error

Betta

Sig.

(Constant)
Customer Relation

9.518
.411

5.481
.474

.136

1.736
.868

.089
.390

Customers Satisfaction

.747

.386

.305

1.935

.059

Customers attraction

.077

.329

.030

.234

.816

Relationship management

.967

.292

.419

3.308

.002

a. Dependent Variable: TCS

4.4 TEST OF HYPOTHESIS

Hypothesis testing is aimed at giving the research a stand point
to make definite and concrete inference from the analysis carried
out depending on the result of the analysis, the hypothesis is
subject to acceptance or rejection.
TESTING HYPOTHESIS 1
This hypothesis was tested with the research question 3 which
states is significant impact of customer attraction programs on
customer loyalty? .Hypothesis was tested with the under list
questions

86

Q7: I got to know about company and its products and services
through media advertisement
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
2
1
5
19
22
49

PERCENTAGE
4.1
2.0
10.2
38.8
44.9
100

From the above table 2(4.1%) strongly disagree, 1(2.0%)

Disagree, 5(10.2%) undecided, 19(38.8%) Agree, 22(44.9%) strongly
agree.

Q8: Am attracted to company by friends and superior.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
1
4
25
19
49

PERCENTAGE
0
2.0
8.2
51.0
88.0
100

From the above table 0(0%) strongly disagree from the

respondent, 1(2%) Disagree, 4(8.2%) undecided, 25(51%) Agree,
19(38.8%) strongly agree.
87

Q9: Ive been doing business with the organization because of

their track record.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
1
3
22
23
49

PERCENTAGE
0
2.0
6.1
44.9
46.9
100

From the above table 0(0%) are strongly disagree from the
respondent, 1(2%) Disagree, 3(6.1%) are undecided, 22(44.9%)
Agree, 23(46.9%) strongly agree.
MODEL
L= 0+1x1+2x2+33+4x4+E1`

The Hypothesis is stated thus

H0: Good customer attraction programs do not lead to customers
loyalty

88

H1: Good customer attraction programs leads to customers

loyalty.
From the regression table 4.3, it shows that customer attraction
has a positive Beta coefficient of (.077) but with a .816 level of
significance. .816 is greater than .05 which is the level of
significance and this makes it insignificant.

DECISION
Since customer attraction has a figure of .816 which is
insignificant, we will accept Null hypothesis (H0) and reject
Alternate hypothesis (H1).

TESTING HYPOTHESIS 2
This hypothesis was tested with research question 4 which states
to what extent does Relationship management leads to
89

customers loyalty? Hypothesis was tested with the under list

questions

Q10: I have a couple of friends and acquaintances.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
2
28
17
49

PERCENTAGE
2
2
4.1
57.1
34.7
100

The table above shows 1(2%) strongly disagree, 1(2%)

Disagree, 2(4.1%) undecided, 28(57.1%) Agree, 17(34.7%) strongly
agree.
Q11: Service officer often show concern about how I fair in each
transaction.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
2
3
4
24
16
49

90

PERCENTAGE
4.1
6.1
8.2
49.0
32.7
100

From the above table 2(4.1%) Strongly Disagree, 3(6.1%)

Disagree, 4(8.2%) undecided, 24(49%) Agree, 16(32.7) Strongly
Agree.
Q12: Company encourages us to talk to supervisor anytime
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
7
24
16
49

PERCENTAGE
2
2
14.3
49.0
32.7
100

From the above table 1(2%) is Strongly Disagree, 1(2%)

Disagree, 7(14.3%) are undecided, 24(49%) Agree, 16(32.7)
Strongly Agree.

MODEL
L= 0+1x1+2x2+33+4x4+E1`

The hypothesis is stated thus

91

H0: Good relationship management does not have any relationship

with customers loyalty.
H1: Good relationship management has a relationship with
customers loyalty.
From the regression table 4.3, it shows that relationship
management has a positive Beta coefficient of (.967) and with
.002 level of significances. .002 is less than .005 and this makes it
significant.
DECISION
Since relationship management has a figure of .002 which is
significant. We accept alternate hypothesis (H1) and reject null
hypothesis (H0).

TESTING HYPOTHESIS 3
The hypothesis was tested with research question 1 which states
To what degree do customer
customers loyalty?
92

retention

programs

affect

This hypothesis was tested with the under listed questions

Q1: Company open doors to customers complaint on service

delivery.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
0
0
26
21
49

PERCENTAGE
0
0
4.1
53.1
42.9
100

From the above table 0(0%) Strongly disagree 0(0%) Disagree,

2(4.1%) were Undecided, 26(53.1) agrees while 21(42.9%) strongly
agree.
Q2: Company has a good pricing system and service change.
Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
0
2
3
33
11
49

93

PERCENTAGE
0
4.1
6.1
67.3
22.4
100

From the above table 0(0%) Strongly disagree 2(4.1%)

Disagree,

3(6.1%)

were

Undecided,

33(67.3%)

agree

while

11(22.4%) strongly agree.

Q3: Company shows concern towards customer problem.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
6
11
30
49

PERCENTAGE
2.0
2.0
12.2
22.4
61.2
100

The table above shows 1(2%) Strongly disagree, Disagree

1(2%), 6(12.2%) were Undecided, 11(22.4%) agree while 30(61.2%)
strongly agree.

MODEL
L= 0+1x1+2x2+33+4x4+E1`
The hypothesis is stated thus

94

H0: A good customer retention program does not have a significant

relationship with customers loyalty.
H1: Good customer retention programs have a significant
relationship with customers loyalty.

From the regression table 4.3 it shows that customer retention has
a positive Beta coefficient of .411 and with .390 level of
significance. .390 is greater than .005 and this makes it
insignificant.
DECISION
Since customer retention has a figure of .390 which is
insignificant. We will accept null hypothesis (H0) and reject
alternate hypothesis (H1).

TESTING HYPOTHESIS 4
95

This hypothesis was tested with the research question 2 which

states Does customer satisfaction leads to customers loyalty?
This hypothesis was tested with the under listed questions:

Q4: Company focuses to meet customers expectation.

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
1
3
23
21
49

PERCENTAGE
2.0
2.0
6.1
46.9
42.9
100

From the above table 1(2%) Strongly disagree, 1(2%)

Disagree, 3(6.1%) undecided, 23 (46.9%), Agree 21(42.9%) strongly
agree.

Q5: Company service performance is satisfactory.

Strongly Disagree
Disagree

FREQUENCY
0
0

96

PERCENTAGE
0
0

Undecided
Agree
Strongly Agree
Total

8
15
26
49

16.3
30.6
53.1
100

The table above show 0(0%), strongly disagree, 0(0%),

disagree 8 (16.3%) are undecided, 15(30.6%) agree, 26(53.1%)
strongly agree.

Q6: I am likely to use their service again

Strongly Disagree
Disagree
Undecided
Agree
Strongly Agree
Total

FREQUENCY
1
7
0
20
21
49

PERCENTAGE
2.0
14.3
0
40.8
42.9
100

From the above table 1(2.0%) Strongly disagree, 7(14.3%)

Disagree, 0(0%) undecided, 20(40.8%) Agree, 21(42.9%) strongly
agree.

MODEL
L= 0+1x1+2x2+33+4x4+E1`

97

The hypothesis is stated thus:

H0: Good customer satisfaction programs does not lead to
customers loyalty
H1: Good customers satisfaction programs leads to customers
loyalty

From the regression table 4.3 it shows that customers

satisfaction has a positive Beta coefficient of (.747) and with
.059 level of significance. .059 is of the range of .05 and this
makes it significant.

DECISION
Since customers satisfaction programs has a figure of .059
which is significant. We accept alternate hypothesis (H1) and
reject null hypothesis (H0)

98

CHAPTER FIVE
DISCUSSION OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1

DISCUSSION OF FINDINGS
This research provides both theory development implication

for academics and practical implication. The main contribution to

theory

development

involves

the

confirmation

of

some

hypothesized relationships amongst the constructs of customer

relationship

management

Customer

attraction,

Customer

retention, Customer satisfaction and Relationship management on

Customers loyalty amongst the Customers of Guaranty Trust Bank.
99

In

this

research

primary

data

was

elicited

through

questionnaire and simple percentage was use to analyze the

questions and multiple regression analysis was used in testing the
entire hypothesis.
The major finding was that amongst all the construct of
Customer relationship management, Customer satisfaction and
Relationship management has greater Impact on Customers
Loyalty. This means when customers are satisfied with an
organizations products and services there is a measure of loyalty
that is going to be created. A good Relationship management
program from the firm and its employees to customers will also
create loyalty.
The effect of the four antecedent (i.e., customer attraction,
customer

retention,

customer

management ) accounted for 65.9%

satisfaction,

Relationship

(R) variance in customers

loyalty, while 43.5%(R2) of other non-listed variables accounted for

the variance in customers loyalty .

100

5.2

CONCLUSION
The main aim of this research was to understand the Impact

of Customer relationship management on Customers Loyalty in a

Commercial Bank using Guaranty Trust Bank, Asaba.
In reviewing the literature for this research it was observed
that the commercial banks in Nigeria are currently competing to
gain and maintain market share. These banks are constantly
combating and devising plans that aim to put them above their
rivals.

101

For the financial institutions, their main asset are the

customers and therefore these customers are meant to be treated
very well, and in a way that services are structure and tailored to
fit the varied needs of the customers while also providing quality
service. In this modern world CRM have been noted as admirable
solution.
The research work shows that relationship management and
customer satisfaction has greater impact on customers loyalty
amongst the relational variable of CRM (i.e. customer attraction,
customer retention).
However, in order for a good customer loyalty to be built a
good customer satisfaction and Relationship program should be
adopted into the organizations operation, policy and service
delivery.

102

5.3

RECOMMENDATION
Based on the result of this study, it is the opinion of the

researcher that the under listed recommendations it implemented

will help in ganging customers loyalty.
1.

Customer satisfaction programs in the organization if

adopted will effectively build a loyalty mindset in the
customers which will lead to customer loyalty.

2.

Relationship management programs from management and

employees will effectively build customers loyalty.

103

5.4

FUTURE RESEARCH

Future research is mainly based on the current

limitations. Therefore, future research will seek to generalize the
model developed in this study to other services.

104

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