The study examines the effect of customer satisfaction strategy on customer retention in First Bank. Out of the total population of 138, 70 persons were selected as the sample size. To determine the sample size the simple random sampling technique was used. Questionnaire design by the researcher in five likert scale constitute the research instrument. The mean scores was used to analyze data. The analysis indicates that First bank Nigerian plc customer retention program are design to offer unique and distinctive products as well as excellent services that will enhance customer satisfaction. As such it was recommended that Complete “paradigm shift” in managerial thinking, in terms of service quality delivery through continuous education and training of staff in field such as customer satisfaction and customer.
1.1 Background to the Study
Customer Satisfaction Strategies in most banks are framework design to attract customers. Most banks do not formulate strategy that would attract and retain customers. This is the reason why most of their sales promotions are done on a short term basis. Most banks, in this regard do not have customer relationship management department which tackles customer complaint on the spot (Egbe, 2007).
The banking industry is highly competitive with bank not only competing among each others, but also with non-banks and other financial institutions. As such most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever increasing banking competitive environment (Okoh,2008).
Therefore, customer retention is an effective and importance tool that banks can use to gain a strategic advantage and survive in today’s ever increasing banking competitive environment. The Subject of customer retention and loyalty is relatively global issue. It is more rational and economical to keep customers instead to looking for new ones. The costs of acquiring customers to replace those who have been lost are high. This is because the expense of acquiring customers is incurred only in the beginning stages of the commercial relationship. In addition, old customers buy more and, if satisfied, may create positive image for company by word-of-mouth promotion. Additionally, long-term customers also take less of the company’s time and are less sensitive to price changes. These findings highlight the opportunity for management to save customers as a competitive advantage. Thus, it is believed that reducing customer defections by as little as five percent can double the profits ( Egbe,2003).
The main factors influencing customers’ selection of a bank include the range of services, rates, fees and prices charged. It is clear that superior service, alone, is not sufficient to satisfy customers. Prices are essential, if not more important than service and relationship quality. Therefore, service excellence, meeting client needs and also providing innovative products are essential to earn success in the banking industry. Most private banks claim that creating and maintaining customer relationships are important to them and they are aware of the positive values that relationships provide.
This is so because it is more economical to keep customers than to acquire new ones. The cost of acquiring customers to “replace” those who have been lost are high. But inspite of the importance of customer retention in the banking industry, formulation and implementation of customer retention strategy is complex sequel to the problem of duplication of banks’ product by other banks which hinder product differentiation that can add value to services of bank. This makes customer retention services in banks to be complex. However, there has been little empirical research examining the construct that could lead to customer retention. Hence the need to assess the impact of customer satisfaction strategy on customer retention in First bank Nigerian plc.
1.2 Statement of the Problem
First Bank is not very diversified in terms of the products and services they offer. This is so because banks in Nigeria offer nearly identical products. This carries the danger of creating a situation where banks fight for customers using all kinds of “unethical strategies”. As such, it becomes apparent that one strategic focus that banks can implement to remain competitive would be to retain as many customers as possible through satisfying their customer.
But the question is, how do banks retain their customers when they offer identical services that encourages customer deflecting from one bank to another? The inability of banks to provide innovative and unique products that will meet individual client needs as against providing similar services like other bank impede against customer loyalty in no small ways and makes customer retention through satisfaction in bank complex and difficult. Hence the need to assess the impact of customer satisfaction strategies on customer retention in First bank Nigerian plc.
1.3 Objectives of the Study
The main objective of the study is to assess the impact of customer satisfaction strategies on customer retention in First bank Nigerian plc.
1.4 Research Questions
To achieve the objective of the study, the question below was answered:
1.5 Statement of Research Hypotheses
For this study the hypotheses below are formulated and tested:
H01: Customer satisfaction strategy is used to retain customers in First Bank.
H02: Customer satisfaction strategy is not used to retain customers in First Bank.
H02: customers of First Bank are not delighted with the quality of services provided to them.
1.6 Significance of the Study
The study will be significant to corporate organization especially commercial banks as they utilize the finding of this research in policy formulation as regards to customer retention strategies.
The study may also contribute to the existing body of knowledge in customer retention on strategy. The study will be a good reference material to students who may wish to use this study as a springboard to undertake their own research.
1.7 Scope of the Study
The scope of this study will cover the empirical examination of customer retention strategies used by First Bank in customer’s retention as well as the reasons why customer stay or leave First bank Nigerian plc. The time frame for this study covers a time from 2006 – 2011.
OTHER SIMILAR HUMAN RESOURCE MANAGEMENT PROJECTS AND MATERIALS