IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT ON FIRM PERFORMANCE, EVIDENCE ON BANKING SECTION IN NIGERIA

CHAPTER ONE

INTRODUCTION

Customer relationship management (CRM) has remained a concern for academics and practitioners in the corporate world. In order to achieve effective and efficient Customer Relationship Management, more businesses are implementing consumer strategies, programs, tools, and technology(Jerry&Ayuba, 2019). Businesses become aware of the necessity of broad and seamless customer understanding in order to forge intimate partnerships and cooperative connections with their clients(Adiele & Justin, 2013). Businesses have begun to incorporate CRM tactics into their corporate apps by inviting users to comment on important marketing-related decision-making issues,especially when it comes to things like item layout, allocation, pricing, or advancement. This is due to the accomplishment that customers have more awareness, more power, and more impacts than every (Bhatia, 2015).

In today's market, clients constitute the business's most precious asset, and maintaining good customer relations is becoming increasingly crucial to business success.Understanding customer wants and wishes is the key to effective customer relationship management. This is accomplished by putting customer demands at the center concerning the company's operating procedures, innovation, and strategic aims (Fox & Stead, 2001). Several companies now use customer relationship management as a strategy to give customers lifetime value since they understand how important it is for bringing in new clients and keeping old ones (Opara, Ayopo & Darogo, 2010).The development of new commodities, such as Automatic Teller Machine (ATM), Point of Sale, Digital Wallets, Web Banking, Wealth Management, and actively taking part in various CSR initiatives, demonstrate that Nigeria did not skip out on the search for enhanced client services to gain a sustainable competitive edgeAll of these were intended to have an impact on relationships and keep customers while making money (Falana, 2011). Despite the importance of customer relationship management to the efficiency of many organizations, Nigerian banks, namely those in Ogun, have not yet fully embraced the idea. This is because of a variety of operational methods, including the banks' inability to develop effective strategies capable of luring new customers and their insufficiently successful services, which leads to customer dissatisfaction and eventually customer forced resignation, which negatively impacts profitability of financial organizations.

In light of this, a study was carried out to determine the effect of customer relationship management on company profitability, with data from the Nigerian banking industry, more specifically from Ogun State.Similar studies have been done in Nigeria (Ayuba, Tolulope, Adiele, & Justin, 2013), but they focused on all the banks there as opposed to the ones in Ogun State, which is one of the industralised states in Nigeria, which is what the research's goal is.To my understanding, only two parts of CRM have received studied(i.e. customer attraction & retention).This inspired decision to focus on the four CRM components (Customer Attraction, Customer satisfaction, Customer Retention & Relationship Management). Additionally, while the majority of studies (such as Ayuba, Tolulope, Adiele, & Justin, 2013) examined a variety of performance indicators, such as return on investment (ROI), percentage of the market, and sales volume, the present research solely employs net profit after tax as a measure of performance, making it unique and novel.

1.2 Aim of the Study

            The primary goal of this study was to determine the influence of customer relationship management on company performance using data from the Nigerian banking sector.

1.2.1 Objectives of the Study

            The specific objectives of the study were as follows;

1. To determine impact of Customer Attraction on the performance of Banks in Ogun State, Nigeria
2. To examine the impact of Customer Satisfaction on the performance of Banks in Ogun State, Nigeria
3. To examine the impact of customer retention on the performance of Banks in Ogun State, Nigeria.
4. To determine the impact of relationship management on the performance of Banks in Ogun State, Nigeria.

1.3 Research Questions

            The following are the clearly stated research questions for this study:

1. DoesCustomer Attraction have impact on the performance of Banks in Ogun State, Nigeria.
2. Does customer satisfaction have impact on the performance of Banks in Ogun State, Nigeria.
3. Does customer retention have impact on the performance of Banks in Ogun State, Nigeria.
4. Does relationship management have impact on the performance of Banks in Ogun State, Nigeria.

1.4 Research Hypotheses

The hypotheses for this study are stated as follows:

Hypothesis One

H0: There is no significant impact of Customer Attraction on the performance of Banks in Ogun State, Nigeria

H1: There is a significant impact of Customer Attraction on the performance of Banks in Ogun State, Nigeria.

Hypothesis Two

H0: There is no significant impact of Customer Satisfaction on the performance of Banks in Ogun State, Nigeria

H1: There is a significant impact of Customer Satisfaction on the performance of Banks in Ogun State, Nigeria

Hypothesis Three

H0: There is no significant impact of customer retention on the performance of Banks in Ogun State, Nigeria

H1: There is a significant impact of Customer Satisfaction on the performance of Banks in Ogun State, Nigeria

Hypothesis Four

H0: There is no significant impact of relationship management on the performance of Banks in Ogun State, Nigeria

H1: There is a significant impact of relationship management on the performance of Banks in Ogun State, Nigeria

2.0 Literature Review

2.1 The Concept of Customer Relationship Management

            Customer Relationship Management (CRM) is a fundamental organizational strategy that combines internal processes and operations with outside connections in order to build and provide value to potential customers.It is regulated by Information technology and concentrates on high-quality consumer data (Buttle, 2015). In order to provide differentiated benefits to both the company and the client, Oluto et al. (2010) assert that CRM is a comprehensive approach that covers the hiring, keeping, and communicating with clients processes.To offer value to the consumer with the highest level of competence and efficiency, this strategy combines marketing, production, customer support, and transparency chain operations.CRM is seen as a technique with the main objective of giving consumers a distinguishing profit by boosting worker efficiency and consumer's happiness, as the term implies.