FACTORS AND THE IMPACTS EXHIBITING AND INFLUENCING CUSTOMERS LOYALTY IN THE NIGERIAN BANKING INDUSTRY
ABSTRACT
The emphasis of business organizations across all sectors has shifted from short-term and transactions focus to longer-term and relational focus. Among many benefits of relational approach to marketing is development ofcustomer loyalty. The objective of the study therefore was to empirically investigate the effect of relationship marketing on customer loyalty in Nigeria’s banks. Data were collected from a cross-section of customers (consisting of 672 sample) of four leading banks (United Bank for Africa, First Bank, Guaranty Trust Bank and Zenith Bank in Nigeria.. The data were analyzed through SPSS Version 17.0, using Pearson Product Moment Correlation. The findings revealed that all the four measures of relationship marketing (service quality, trust, complaint handling and customer satisfaction) significantly positively correlated with customer loyalty. This means that they all have significant effect on customer loyalty in Nigerian banks. It was concluded that RM by banks pays off because it has effect on customer loyalty. Based on this conclusion, it was recommended that all banks in the country should develop and maintain a long-term relationship with their customers.
1. INTRODUCTION
Though the term relationship marketing (RM) was initially introduced in business to business (B2B) market, where relationship is critical to the success of organizations, the emphasis of marketers in business to consumer (B2C) market and services market is shifting from transactional marketing to relationship marketing. Some scholars have described this shift as a paradigm shift (Anderson, 1994; Groonros, 1994; Lindgree, 2001; Gummesson, 2008). Over the years relationship marketing has been extended into service sector generally, and bnking particularly. Credit for this extension is due to some scholars (Berry, 1983; Christopher, Payne & Ballantyne, 1991; Gummesson, 1991; Ndubisi, 2005). Therefore, with this growing evidence of the application of RM to services marketing, it becomes imperative to assess the impact of RM on customer loyalty in Nigeria’s banking (a major and important) sector of the Nigerian economy. This is because not much research appears to hae been done in this area in Nigeria. Historically, early banking in Nigeria was characterized by “arm chair banking,” an act where bankers sit back, in expectation that any customer desirous of their services will seek and visit them in the office.
CHAPTER ONE
GENERAL INTRODUCTION
1.1 BACKGROUND
The banking industry, a service provider contributes to a country’s development in diverse ways. Not only does it ensure economic growth by contributing to the GDP growth of the country, it also provides job opportunities for different kinds of people such as tellers, managers, cleaners, security personnel, etc. Thus, for a country such as Ghana to develop, much depends on the banking industry. For instance, banks which are part of the service sector added 51.4% to Ghanaian GPD. (United States Central Intelligence Agency Report, 2012). In recent times, due to the increasing competition in the market, corporate strategies have been deployed by banks to increase profit and also to gain higher shares in the market. These strategies aim at providing solutions to global issues that affect organizations which includes customer service excellence, customer pleasure and consumer patronage. In other words, for a bank to have a competitive edge over the other, unique resources which cannot be imitated must be developed by the organization. Also, in today’s fast-paced competitive markets, banks are in the customer centric position instead of product centric position since they all provide the same products with different names. Ojo (2010) is with the view that more attention should be given to service as quality of service and customer expectation are very important factors that have a positive and direct influence on customer satisfaction. In view of this, firms should seek and address customer suggestions and also put more effort in designing programs which can assess 3 Page service quality and customer satisfaction.
1.2 PROBLEM STATEMENT
Large deregulation program of the Ghanaian government which has encouraged the springing up of financial institutions in the Ghana and this has led to a substantial rise in competition among these institutions. (Addai-Minkah, 2011). Almost all the banks in the 21st century see customer service as an important strategic tool for survival. The sudden shift of concentration on customer service quality is as a result of the point that consumers are dissatisfied with service delivered and can switch to another bank very easily. The dissatisfaction is as a result of higher bank charges, bad and rude attitudes from staff, long time network breakdown, queuing or delay in service delivery and limited or no access to loan, vehicle or mortgage facilities. Customer service for that matter cannot be underestimated since it is a primary way of survival for banks, therefore, they have a keygoal to pull advances in information and technology in order to form and preserve enduring interactions with their customers through the acceptance of innovative networks that enable electronic banking (Fouad, 2013). However, there are many views regarding the effect of ICT adoption on customer service.
1.3 RESEARCH QUESTIONS
The study tried to find answers to the following questions;
1. What are the effects of customer service on customer patronage in access bank?
2. What are the effects of customer service ICT adoption?
3. What are the effects of ICT adoption on customer patronage?
4. What are the mediating effects of ICT adoption on customer service and customer patronage relationship in Access bank?
1.4 OBJECTIVES OF THE STUDY
The key purpose of this study is to explore customer service as one of the development directions that can help banks ensure customer patronage through the adoption of ICT. That is, customer service as a strategic direction will make one bank be ahead of the rest. Apart from the general objectives mentioned above, the precise objectives include:
1. To determine the effect of customer service on customer patronage in Accessbank
2. To assess the effect of customer service on ICT adoption
3. To determine the effect of ICT adoption on customer patronage
4. To investigate the mediating effects of ICT adoption on customer service and
customer patronage relationship in Access bank
1.5 SCOPE OF THE STUDY
The geographical scope of the study was limited to Access bank limited, Kumasi
Metropolis. There are five branches in Kumasi which are located at Suame, Adum,
Amakom, Asafo and Alabar and the study captured data from all these branches.
Access bank was selected for this study as it has been identified as one of the banks in the
country experiencing rapid and steady growth with regards to certain prime financial
indicators. The objects of study include clients and personnel of the five branches in the
metropolis in order to understand the relationship among the variables of the study.
REFERENCES
Aliyu, A.A & Tasmin, R.B.H (2012) The Impact of Information and Communication
Technology on Banks‟ Performance and Customer Service Delivery in the Banking
Industry International Journal of Latest Trends in Finance & Economic Sciences Vol 2
No. 1 pp 80-90
Almossawi, M. (2001), “Bank Selection Criteria Employed by College Students in
Bahrain: An Empirical Analysis”, International Journal of Bank Marketing, Vol 19 (3), pp
115-125.
Al-Rousan, Ramzi, M., & Mohamed, B. (2010). Customer loyalty and the impacts of
service quality: The case of five star hotels in Jordan. International Journal of Human and
Social Sciences, Vol 5 (13) pp 124-139.
Aregbeyen, O (2011). The Determinants of Bank Selection Choices by Customers: Recent
and Extensive Evidence from Nigeria International Journal of Business and Social Science
Vol. 2 No. 22 pp 276-288
Asiamah, S. (2011) “the Contribution of Information and Communication Technology
Based Products to Customer Satisfaction: Case Study of Barclays Bank Ghana Limited
Retail Customers”, An unpublished thesis submitted to the Institute Of Distance Learning,
Kwame Nkrumah University of Science and Technology in partial fulfillment of the
requirements for the degree of Commonwealth Executive Masters of Business
Administration
79 | P a g e
Caruana, A. (2002). Service Loyalty: The Effects of Service Quality and the Mediating
Role of Customer Satisfaction. European Journal of Marketing, 36(7/8), 811–828.
Chaiyasoonthorn, W., & Suksa-ngiam, W. (2011). Factors Influencing Store Patronage: A
Study of Modern Retailers in Bangkok Thailand International Journal of Trade,
Economics and Finance, Vol. 2, No. 6 Pp. 520-525
Charles Blankson, C., Omar, O.E., & Cheng, J.M. (2009), “Retail bank selection in
developed and developing countries: A cross-national study of students’ bank-selection
criteria” Thunderbird International Business Review, Vol. 51, no. 2, Pp. 183 – 198.
Cheng, T., Lama, D. & Yeung, A (2006). “Adoption of internet banking: an empirical study
in Hong Kong”, Decision Support Systems, 42 (3),1558-72.
Chinakidziwa, M. (2014). Impact of Marketing Communications on Consumer Attitudes
towards Internet Banking Adoption by University Students in Zimbabwe – Case of Harare
Institute of Technology (HIT), Journal of Business Administration and Education Volume
6, Number 1, page 1-14
Dawson, C. (2009) Introduction to Research Methods: A practical guide to anyone
undertaking research. How to Books ltd, Oxford
Dei-Tumi, E. (2005), “Customer Service is an Attitude, not a Department”, 16th edition,
pp 34-35.
Eshun F. A. (2009). Title: The role Telecommunication on banking services in Ghana.
