University of Nigeria Marketing and Custo… · University of Nigeria Research Publications...

University of Nigeria Research Publications

OGEDENGBE, Olamiju Temilola

Aut

hor

PG/EMBA/99/0548

Ti

tle

Relationship Marketing and Customer

Satisfaction in Banks; A Case Study of Magnum Trust Bank

PLC

Facu

lty

Business Administration

Dep

artm

ent

Marketing

Dat

e June, 2001

Sign

atur

e

RELATIONSHIP MARKETING AND CUSTOMER SATISFACTION IN BANKS: A CASE STUDY

OF MAGNUM TRUST BANK PLC

OGEDENGBE, OLAMIJU TEMILOLA, CMD-UNN/PG/EMBA/99/0548

SUBMITTED TO THE DEPARTMENT OF MARKETING

FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF NIGERIA, NSUKKA

(JUNE, 200 1)

RELATIONSHIP MARKETING AND CUSTOMER SATISFACTION IN BANKS: A CASE STUDY

OF MAGNUM TRUST BANK PLC

OGEDENGBE, OLAMIJU TEMILOLA, CMD-UNN/PG/EMBA/99/0548

SUBMITTED TO THE DEPARTMENT OF MARKETING, FACULTY OF BUSINESS ADMINISTRATION, UNIVERSITY OF

NIGERIA IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER OF BUSINESS ADMINISTRATION (MBA)

DEGREE IN MARKETING.

(JUNE, 2001)

I I

CERTIFICATION

OGEDENGBE 0. TEMILOLA, a postgraduate student in the Department of Marketing with Registration Number CMD-UNN/PG/99/0548 has satisfactorily completed the requirements for the course and research work for the degree of Master in Business Administration (MBA) in Marketing.

The work embodied in this project is original and has not been submitted in part or full for any other diploma or degree of this or any other university.

MRS D.A NNOLIM SUPERVISOR HEAD OF DEPARTMENT

DATE

D E D I C A T I O N

THIS PROJECT

IS DEDICATED TO

T H E A L M I G H T Y G O D

A C K N O W L E D G M E N T

1 am gratefill to the people who had in one way or the other contributed to the

success of this work.

My appreciation goes to Mrs. Nnolim who supervised the project, gave

useful suggestions, comments and took the pains of going through all the

manuscripts.

Also, my sincere thanks go to the management and staff of Magnum Trust

Bank Plc that has been used as the case study for this project.

Lastly, I thank all the authors whose texts, articles, projects, etc. have been

used as reference for this research study.

ABSTRACT

The research study attempted to look into how relationship marketing is being used to achieve customer retention and loyalty in banks, especiaIly how this has been applied in the bank used as a case study.

The background of this study is focusing on the idea that an organisation or bank should aim all its efforts at satisfying its customers at a profit.

Relationship marketing is being examined as a vital tool to achieve customer retention and loyalty in banks. Hence, the statement of problem of the research work is centred on the above statement.

The objectives of the research study are to examine the impact of rdationship marketing in achieving customer retention and loyalty in banks and to determine to what extent this factor goes in deciding choice of banks amongst the banking public.

The research inethodoIogy employed for the work is the use of questionnaires, which were administered to the customers, relationship managers and marketing officers of the bank used as a case study.

The responses obtained from the questionnaires were analysed and the findings show that 91% of the respondents were of the opinion that relationship marketing exerts customer retention and loyalty in banks.

The general conclusion of this study is that there is a relationship between marketing and customer retentiodloyalty in banks. These go further to enhance long term customers' satisfaction, patronage and profitability.

To achieve the above benefits, there is that need for bank management to put in place condusive-working environments that enhance performance of its marketing staff.

The recommendation of the research work includes establishment and maintenance of a dynamic and functional marketing department in banks, banks to organise customer forum on regular basis to serve as part of feed back mechanism and opportunity to introduce some salient benefits and awareness about their new products/services.

Also, the need to carry out marketing research on regular basis in order identi@ customer needs and changes in tastes, with a view to not only satisfying them but delighting the customers as well.

vii

TABLE OF CONTENTS Page

CHAPTER ONE

1 . 1 Background of the study 1.2 Statement of the problem 1.3 Objectives of the study 1.4 Relevant research questions 1.5 Statement of hypothesis 1.6 Scope and limitation 1.7 Significance of study 1.8 Historical background of the Bank 1.9 Definition of terms 1.10 References

CHAPTER TWO

Literature Review 2.1 Historical background 2.2 Evolution of Banking in Nigeria 2.3 Types of Banking Institutions 2.4 Business Theories 2.5 Relevance of the Theories to the Banking Industry 2.6 Definitions of Marketing 2.7 Profit Concept versus Customers 2.8 Relationship Marketing in Action 2.9 References

viii

CHAPTER THREE

Research Design and Methodology 3.1 Sources of Data 3 2 Questionnaire Construction 3.3 Validity and Reliability of the Research Instrument 3.3.1 Sample Frame 3.3.2 Sample Size 3.3.3 Sampling Procedures 3.3.4 Questionnaire Administration and Response

CHAPTER FOUR

Data Presentation and Analysis 4.1 Introduction 4.2 Testing of Hypothesis 4.3 Research Hypothesis

CHAPTER FIVE

Recommendations and Conclusion 5.1 Summary of Major Findings 5.2 Recommendations 5.3 Conclusion

Bibliography

Appendix

CHAPTER ONE

I . I BACKGROUND OF THE STUDY

The banking industry over the years has gone through various evolutions. In

the early years, banking activities were characterised by seat-tight customer

management and manned by poorly experienced officers, the bulk of the

customers then walked into the bank and relationship was rarely solicited. The

customer was seen as though important but deserving not too much attention

as the focus was on products mainly. It was an era of product-oriented and not

customer oriented marketing.

Today, the ball game has changed as the industry faces a customer-oriented

market. The marketing concept came in to play a key role in refocusing banks

towards the customer. Stated precisely, this concept is the idea that an

organisation or bank should aim all its efforts at satisfying its customers at a

profit. The sole reason for the existence of the business is the satisfaction of

the customer. According to: Sheth & Garrett (I986:27), it is envisaged that as

business achieves customer satisfaction, patronage will grow with loyalty on

the long run, with profitability implications.

1.2 STATEMENT OF PROBLEM

The banking industry attracts huge domestic and foreign investments. Proper

management of available market to achieve better results becomes imperative

as the operating market continues to stagnate and not expand. Operators in the

banking industry face each other in an unending competitive struggle for

market share.

This clearly created a need for a strategy, aimed at customer retention and

loyalty, based on a well understood market needs. These needs could be

existing, perceived or forecast.

Relationship marketing is being examined as a vital tool to achieve customer

retention and loyalty in banks. This concept goes beyond mere satisfaction of

the customer through value creation for their money, to creation of strong

emotional appeal and sense of recognition. The interplay of emotions and

sentiments works to endear the bank to the mind of the customer.

1.3 OBJECTIVES OF THE STUDY

This piece of work seeks, therefore, to achieve the following objectives from

the above statement.

i. To examine the impact of relationship marketing in achieving customer

retentiodloyalty in banks.

ii. To determine to what extent this factor goes in deciding choice of banks

amongst the banking public.

... 111. To establish whether or not there is a correlation between deep

relationship marketing and customer retentiodloyalty in banks.

iv. Finally, if a correlation exists, to influence the strategic marketing

direction of the industry for better results and value for customer's

money and in the overall, achieve a better customer management and

service culture for the industry.

1.4 RELEVANT RESEARCH QUESTIONS

From the above objective, the following research questions become relevant.

1. Is relationship marketing a vital factor in modern banking?

2. What levels of impact does relationship marketing exert on customer

retentiodloyalty in banks?

3. To what extent does relationship marketing ensure better profitability in

banks?

1.5 STATEMENT OF HYPOTHESIS

From the research questions, the under mentioned hypothesis is raised:

Hypothesis:

Relationship marketing increases customer retentionlloyalty in banks,

and by extension, profitability

1.6 SCOPE AND LIMITATION

This study will examine the impact of relationship marketing in shaping the

customer's choice of banks. It intends to examine into the extent to which this

4

factor contributes to customer retention and loyalty in banks and by extension,

profitability.

Due to constraints, the study shall be limited to only Magnum Trust Bank

Plc.The Bank is one of the new generation banks operating in Nigeria as of

today. Only the bank official as well as the banking public iri Lagos area shall

be covered by this study.

1.7 SIGNIFICANCE OF STUDY

This study becomes imperative when we reflect on the fact that bank officials

these days concern themselves more on marketing and winning a prospect than

retaining it.

In the context of satisfaction of the customer, the study intends to reveal the

fallacy of strict marketing concept, in achieving success in modern banking

environment. The sophistication of the customer is growing daily amid stiff

competition in the industry. Relationship marketing is being advocated as a

true panacea to customer retentionlloyalty as loyalty destroys the impact of

competition because of its emotional impact.

For the bank, this will mean better and continuous flow of business from their

relationships. It will also open up challenges for operators in the industry to

educate and re-dedicate their marketing efforts out from strict marketing

concept for a better value-based marketing.

1.8 HISTORICAL BACKGROUND OF MAGNUM TRUST BANK

Magnum Trust Bank PIC [Magnum] was incorporated in March 1991 and was

licensed to operate as a hll-fledged commercial Bank in June of the same

year. It became a Public Liability Company in June 1999.

The Bank's current authorised share capital is N1 billion out of which N6OO

million has been issued and fully paid in compliance with the minimum paid

up capital stipulated for Banks by the Central Bank of Nigeria and the Federal

Government of Nigeria. Plans are on to further increase the paid up share

capital to N1 billion in order to position the bank to adequately participate in

the financing of its customers' businesses.

Magnum Trust Bank Plc is a professionally managed Bank providing a wide

range of Commercial Banking services and products to customers at its various

locations.

The establishment of Corporate and Investment Banking, Funds Management

and Currency Trading Units has complemented, appropriately, the exceIIent

services provided to customers at our 24 locations nationwide [19 in Lagos

metropolis and five up-country branches; nameiy, Abuja, Onitsha, Ore, Kano

and lately Port Harcourt]. The up-country branches are developed consciausly

in order to support our integrated approach to customer service.

Our Corporate and Investment Banking Group comprising of Energy [Solid

Mineral, Oil & Gas], Structured Finance [Export, Leases and Trade finance]

and other corporate units provide corporate banking services tcj these preferred

sectors. It is also being positioned to utilise the investment options provided

by the introduction of Universal Banking.

On the other hand, the various branch locations provide superior retail services

to our customers [consumer and retail] by exploiting Magnum's "Loop"

strategy which emphasizes the concept of adding value to customers

businesses, by being available to serve them at most locations important to

their businesses.

The Currency Trading Unit, meanwhile, continues to provide essential and

complimentary financial intermediation services.

The Bank also supports its services with up-to-date and modern technology,

which we pride as being responsive to customers' needs.

Magnum Trust Bank Plc has also developed competencies in the area of

collection services. The Bank is a designated agent of various Government

agencies for the collection of Corporate Incoine Tax, Value Added Tax

(VAT), Education and Withholding Tax on behalf of Federal Inland Revenue

Services, as well as collection of all Taxes on behalf of Lagos State

Government. The Bank is also involved in the collection of Customs Duties

on behalf of the Federal Government. The competence of Magnum in

collection services was amply demonstrated with our appointment as the sole

collecting Bank for the Lagos State Govei-nment MOT collections, which the

Bank continues to discharge creditably.

As at year-end February 2001, the Bank's balance sheet grew from N7.7

billion in the previous year to N10.4 billion. Deposits grew from N6.7 billion

to N8.8 billion while Gross Income increased from N1.06 billion to N1.92

billion, with a Profit Before Tax of N362 million (a growth OF approximately

8

121%).

Magnum currently has staff strength of 412 of which 35 are in the

management cadre. The Bank intend to continue to spread to all areas of

viable commercial activities in the country, while remaining predominantly a

retail Bank to all sectors of the economy.

1.9 DEFINITION OF TERMS

Relationship Marketing: Relationship marketing is seen as the process of

creating endearment and delight to the customer, in

such a manner that emotions are built into the

relationship based on a continuous flow of

satisfaction and value chain, overtime.

It is that marketing effort involving various

personalised services, creation of new and

additional services, and customising a company's

offering to the needs of a special buyer.

Marketing Concepts: This explains the idea that an organisation should

Market:

Value:

Target:

aim all its efforts at satisfying its custorrler-s - a~ a

profit.

A market is defined as a group of potential

customers with similar needs and sellers offering

various products/services - that is, ways of

satisfying those needs or a group of sellers and

buyers who are willing to exchange goods and/or

services for something.

The word value connotes the quality of being

useful or worthwhile or important or viewed as

worth of something.

Target is seen as fairly homogenous (similar) group

of customers to whom a company wishes to appeal.

Market Strategy: A market strategy specifies a target market and a

related marketing mix and includes all

Needs:

Marketing Mix:

Customer:

planslactions aimed directly at achieving the

specific targetslobjectives.

Needs are the basic forces that motivate a person to

buy or do something else.

The marketing mix explains the controllable

variables that the company puts together to satisfy a

targeted group. These are the product, price, place

and promotion (advertisement).

The customer is defined as somebody that has a

need for a producthervice or one who buys

regularly from a producer or firm.

REFERENCES

Jagdish N. Sheth & Dennis E. Garret (1986), Marketing Management A

Comprehensive reader, Dallas: South Western Publishing Co. pp. 27.

E. Jerome McCarthylWilliams D. Perreault, Jr. (1990), Basic Marketing USA

IRWIN, Pg. 728.

CHAPTER TWO

LITERATURE REVIEW

This chapter will examine in great detail some of the various theories upon which

this research was based. An insight will be made into the customer paradigm and

elevate this to that height acceptable by theory, at Ieast. In talking theory

nonetheless, attempt will be made to relate discussion to practical realities for more

better and meaningful contribution.

The chapter will start with a background information that seeks to give a synopsis of

what the situation on hand is and moves ahead to an acceptable definition of

marketing but gradually build up to other topical issues that are relevant to the

research.

Before going into the forgoing, however, it wilI clearly examine banking business

from evolution in 1842 when the first commercial bank opened for business in

Nigeria to date. Theories relevant to the research will also be looked into particularly

that of customer satisfaction and retention/loyalty. Other new concept namely

relationship marketing and value-based marketing will be mentioned to show their

efficiency in achieving customer loyalty and profitability.

13

2.1 HISTORICAL BACKGROUND

The economic turbulence of the past decade has posed great challenges to

customer management.

The increasing competition amongst Nigerian banks has created enormous

challenges, which have made survival a difficdt one. To survive and be a

successful provider of financia1 services, banks must see the customer as the

king whose peculiar needs and expectations have grown in both depthlbreath

and should form the focus of banks activities. This is purely because of

increasing sophistication and awareness of the customer. To ignore them,

therefore, in the search for competitive advantage makes survival a futile

effort.

Changing growth rates, relatively high inflation, high interest rate, rapid

technological changes in the banking sector and stiff competition challenge

banks to adopt and respond to survival and profitability. Success is viewed

from the standpoint of being able to design and actualise ways of achieving

maximum effectiveness in the deployment of human, capital and material

resources to satisfy customers' needs, for a profit.

Bank managers have employed various strategic microscopes and aimed at

obtaining clear and specific approach. Perhaps the most outstanding of these

had been the unmistakable recognition of the central role of customer in

determining the success of a business and as a corollary, bank.

THE BANKING BUSINESS

First, we shall define 'bank' and give a description of a banker.

Section 2(1) of the Bill of Exchange Act Cap. 35 1990 defines a banker as a

"body of persons whether incorporated or not who carry on banking business".

However, Section 377 of Companies Act, only permitted the cai-rying on

business through a company, partnership or association.

According to the Banks and other Financial Institutions Decree (BOFID)

(199 1 : I ) , no person shall carry on any banking business in Nigeria except it is

a company duly incorporated in Nigeria with a valid banking !icence.

From the foregoing, it has been shown that all these "esusu" coIIectois found

around Lagos markets would not qualify to be described as bankers or termed

to be carrying on banking business as such are running an unincorporated,

unorganised and informal businesses.

In Nigeria, therefore, the law designates what a banking business I s and

defined it as a company duly incorporated and holds a valid banking licence

issued under Decree No. 199 1, to do "banking business".

The Decree No. 25, 1991, went to redefine "banking business to mean the

business of receiving deposits on current account, savings account or similar

account, paying and receiving of cheques drawn or paid in by its customers. It

also extends to provision of finance and such other business, which the Central

bank of Nigeria designate as banking business, by order published gazettes".

ConceptuaIly, however, banks are financial institutions set up by its owners to

play the role of financial intermediation, i.e. pooling funds from surplus units

and distributing the same to deficit units, in an inter-related chain of economic

activities. They are called money market institutions because they operate in

the short/inedium term ends of the financial markets.

16

The surplus units consists of those individuals and firms with incomes they

cannot completely consume and therefore require investment outlets, while the

deficit spenders are those individuals and households with incomes that are not

enough to meet their investment needs.

The banker consist of, inter-alia, the human stock that manage the satisfaction

of the needs of both the surplus and deficit units in an economy.

These are done by pooling of funds in form of deposits, which couId be

savings, current, and deposit accounts; and they distribute same as loans,

overdrafts and other forms of deposit accounts; and they distribute same as

loans, overdrafts and other forms of credit instruments. According to: Reed,

Cotter, Kgill and Smith (1993:5), the saver is induced to save because he is

paid interest for his savings and the borrower is penalised for having access to

the pooled funds by paying interests to the banks. The differential between

what the bank pay their depositors and the interest, which they receive from

the borrowers, constitute interest income for the bank.

THE NATURE OF FINANCIAL INTERMEDIATION

According to: Nwankwo (1991:68), by the nature of banking, financial

intermediation, which is the hallmark of banking business, has to satisfy five

main constituencies.

The surplus units from which it boi~ows. These units demand the best

possible terms: rates of interest, maturity profiles and maximum

liquidity to enable them have the funds at maturity.

The deficit unit that borrow from the bank and who needs funds as

cheaply as possible and equally strong liquidity base to enable them

access these facilities when required.

The sharehoIders formed the third ledge of the constituencies that has to

be satisfied as they require maximum or adequate return on their

investments.

The regulatory authorities, whose interest it is to ensure that banks do

not take excessive risks but operates prudently within the ambit of its

rules and regulations, needs also to be satisfied.

The final constituency is the community at large that provides the

environment. The bank owes it an obligation to operate as good

corporate citizens, capable of taking up opportunities, maximising their

benefits and minimising threats in the operating environment.

The satisfaction of all these constituencies apparently poses great challenges to

banking business as conflicts will occur in an effort to satisfy it all. There

brings up the issue of good bank management. As the product and services

being offered today is increasing in both length and depth, customer

sophistication continue to rise such that competition has tended to be strife and

sometimes cruel as banks strategically position and scramble for a better share

of a sluggish and/or stagnant market economy.

In modern times, the roles of banks have widened to accommodate private and

personal banking, funds transferdremittances, use of credit cards, managing

certain accounting transactions for their clients, debt factoring, great

involvement in leasing in the energy/other sectors and what have you.

BANKING IN RETROSPECT

The story had been told that the earliest "Bankers" were the priests. They had

the trust of the society and with secured sanctuaries people deposited valuables

- gold and silver - with them for safekeeping.

What developed into modern banking, however, was started in London by

goldsmiths in the 1 7 ' ~ century. These goldsmiths, who primarily were

craftsmen in gold and silver, took deposits of these items for safekeeping and

made their living through sorting of coins deposited with them, latching out

the fill-weight coins and exporting them.

For all the gold and silver deposited with them, they issued receipts which

used to be presented whenever the depositors wanted their valuables back.

Because the goldsmiths were well known and trusted, the receipts began to be

accepted for settlement of debts and thus passed from hand to hand. It should

be noted in parenthesis that the concept of general acceptabdity of money

started f ro~n the earliest times.

Subsequently, banking developed from the above practice when the goldsmiths

became aware that not all the deposits of silver and gold are withdrawn at the

same time. In other words, only a small percentage of them are demanded

back by the depositors at any time. They, therefore, started to give out the

proportion that was not demanded as loans, charging interest for this service.

This then led to the beginning of banking at its rudimentary stage. The above

practice became so rewarding that in time, the goldsmiths gave up their line of

business and concentrated on accepting deposits and lending money. They

were to be joined later by other types of merchants and industrialists who by

their commercial activities had become well-known.

2.2 EVOLUTION OF BANKING IN NIGERIA

The historical antecedents of banking in Nigeria depicts that banking business

started in Nigeria in 1892 with the establishment of African Banking

Corporation. The Bank of British West Africa and Barclays Bank (DCO)

closely followed this in 1894 and 1917 respectively. These were seen as

colonial banks and as such served the interest of the colonial government with

respect to banking.

Aside from serving the interest of their creators, they distributed sterling coins,

facilitated foreign trade and catered for expatriates.

Little attention was paid to the support and development of indigenous

enterprises/activities.

However, between 1914 and 1959, a period described in the annuals of

Nigerian history as the free banking era, several indigenous banks were

established. However, owing to lack of manpower and requisite training in

banking activities, so many of them collapsed including erstwhile strong ones

like National Bank of Nigeria (NBN), African Continental Bank (ACB), and

Bank of the North.

Other reasons adduced for the failure of these banks were:

The financial of muscle of foreign banks which dominated deposit and

credit in the economy.

Bank services were tailored to meet the needs of foreigners.

Inadequate capitalisation of most of the banks

The regulatory apparatus and framework was totally unavailable to

check, supervise, direct and control the activities of these banks majority

of which were manned by poorly trained and inadequate personnel.

The failure resulted in loss of depositors' funds, loss sf confidence in the

system and widespread concern for the future of banking in Nigeria. It was

clear that a set of rules to streamline the practice of banking was necessary.

This led, in 1952, to the enactment of the first Banking Ordinance, following

the Patton Commission Report, to check the maIpractices and abuses that

brought about the massive failure of years,

according to: Onyechere (989:4&5).

In spite of the good intentions of the not until 1959

that banking regulation in real sense became evident through the establishment

of the Central Bank of Nigeria (CBN). The CBN7s Act of 1958 and its

subsequent amendments in 1962 together with the Banking Decree of 1969

specified the powers of the CBN to include:

1. Issuance of legal tender currency in Nigeria, maintenance of external

23

reserve and promotion of monetary stability and sound financial system.

2. Prescription of various reserve requirements in form of liquidity and

minimum cash reserve ratios, and what have you, to properly control the

banks and by implication the macro-economic variables in the economy.

3 . Buyinglselling, discounting and rediscounting government securities.

Follo~iing the successful establishment of a relatively strong CBN, the

enactment of the Treasury Bill Ordinance and establishment of Lagos Stock

Exchange in 1959, the Nigerian Money and Capital markets got a development

boost.

THE IMPACT OF CIVIL WAR AND PROSPEROUS OIL SECTOR ON

BANKING

The aftermath of the devastating civil war between 1967-1970 and the

fortuitous gains from a developed oil sector, greatly affected the development

of banking in Nigeria, and worthy of mention.

The war affected the banks in two ways: The first impact was that the deficit

financing employed to prosecute resulted in sharp increases in the rate

inflation. Secondly, those banks such as African Development Bank that had

high concentration of branches in the war ravaged areas lost substantiaI part of

their assets.

For the boom in the oil sector from the late 70s down to 80s, it also played

both a catalystic and damaging roles in the country's economic development

of the country and banking to be specific, as it became the main foreign

exchange earner and the major source of government revenue. Hence, it can

be safely said that, the great deficit financing of the war ye ~ n d the

ambitions economic expansion in the early seventies led to fBr-reaching

economic poIicy initiatives and a rigid regulation of the banking sector, that

ensued therefrom. It was during this period, 1969 to the precise, that the

Banking Decree, which among other things, increased the proportion of net

profit to be transferred to statutory reserves from 12% to 25% and

consequently, reduced the proportion of profits accrued to owners of

capital/investors. This was quite discouraging to the woutd-be investor then.

The era equally saw the CBN starting to stipulate interest rate ceilings for

25

banks and providing guidelines on credit allocation to various sectors of the

economy. The Nigerian Enterprise:; Promotions Decree which transferred

60% ownership of banks to Nigerians was also introduced in 1972 and 1977, a

development that later saw the indigenisation of the management of the

existing banks.

This highly dynamic period of banking business witnessed a renewed interest

in the establishment of indigenous banks. Consequently, twenty-six banking

institutions, ten owned by state governments, were established between I970

and 1986.

Although, the problem which characterised the free banking era persisted,

these indigenous banks played a major role in the expansion of banking

services to the rural areas and in nurturing of indigenous businesses which

hitherto, received little or no attention.

The Rural Banking Programme, aimed at reducing the concentration of banks

in commercial centres and spreading banking services to a greater percentage

of the populace, was established in 1976, following the Pius Okigbo

Commission's report. Three phases of the programme with specific iirnings,

during which the CBN mandated banks to open specified rural banks, were

implemented. As a result, close to 800 branches of commercial banks were

established between 1977 and 1980.

Experts have described the period 1970 - 1986 as a very dynamic and yet

highly regulated era in the evolution of banking in Nigeria because apart from

setting qualifications for operating licenses, the authorities equally specified

the range of products and services that banks offered their clients and prices

for such products and services. They also specified the geographical

expansion of banks' activities, sectoral allocation of credit and available

foreign exchange resources on yearly basis.

IMPACT OF STRUCTURAL ADJUSTMENT PROGRAMME (SAP) ON

BANKING

The introduction of SAP by the then Military Government in 1986 literally

changed the landscape of banking. SAP affected the banking industry in two

ways as it:

27

i. liberalised entry conditions into banking related activities;

. . 11. revised the operating framework as embodied in Decrees 24 and LS 01

1991.

These two major developments resulted in a tremendous growth in the number

of banks. From 40 in 1986, the number ballooned to 120 in 1 !XU. Added to

this was the growth of Non-bank Financial Institutions (NBF) and other

specialised banks like Peoples bank, Community Bank, Mortgage Institutions

and Urban Development Bank. The various roles played in banking and

general economic development/growth by these institutions will form the next

topic in this chapter.

The result of these has been intensified competition, which has compelled

banks to be more aggressive, inarketi~g oriented and innovative. The terrain

was made tougher for banks by the efforts of the Federal Government to bring

Nigerian Banking to international standards through the introduction of

measures such as the Prudential Guidelines, Uniform Accounting Standards

and the Nigerian Deposit Insurance Corporation (NDIC).

To survive, banks adopted strategies such as rationalisation of volume and

structure of deposits in order to enhance the returns on their investments new

marketing strategies, automation aimed at improving speed of delivery, and

aggressive product delivery, innovation and differentiation Ieading to market

segmentation and even branding.

2.3 TYPES OF BANKING INSTITUTIONS

The law created different types of banking institutions that engages in various

forms of financial intermediation.

At the apex is the Central Bank of Nigeria, which oversees and regulates the

establishment/operation of other banking institutions. It is the government and

bankers bank. It maintains close association with the govei-nment and the

banking sector. In USA, it is referred to as Federal Reserve Bank or the Bank

of England in United Kingdom. As :i banker to the government the Central

Bank of Nigeria essentially handles government transactions, coordinate and

control the other banks and more importantly, the money supply/credit

situations in the economy. According to: Ekezie (1997:69), it has four key

roles namely:

- to issue the national currency,

- conduct monetary policies

- act as lender of last resort to other banks

- manage the exchange rate position in the economy.

The commercial and merchant banks form another important financial

institutions. The commercial banks engage in the retail end of banking dealing

with personal as well as corporate customers and most importantly, financial

institutions. Commercial banks perform critical functions to the survival of

nation's money supply. They are the only financial intermediaries whose

demand deposit circulates as money. Through lending activities, they create

bank deposits as borrowers redeposit the fund it borrowed, unless the public

holds the currency the more. In fact, they have the power to create money

through monetisation of debt, 'I.O.Usf and also power to destroy money.

Merchant banks, on the other hand, are Acceptance Houses or Issuing Houses

and engage in deposit banking, underwriting and clientsf management. They

are seen as wholesale bankers that deal with corporate institutions and

so1netim.e~ high netwoi-th individuals.

As specified in BOFID, a merchant bank is that bank whose business includes

receiving deposits on deposit account, provision of finance, consultancy and

advisory services relating to corporate and investments matters making or

inanaging investment on behalf of any person. Nigerian Acceptance Limited

(NAL) Merchant Bank established in 1960 was the first merchant bank in

Nigeria. Merchant Bank engages in medium to long-term lending activities

and usually shy away from short-term lending activities that are the heart of

commercial banking.

Development banks, just like the other types of banking institution provide a

specialised like between lenders and borrowers, and between surplus fund

owners and users, came up to provide huge medium and long-term finances to

the priority sectors of the economy to stimulate economic growth and

development. For instance, The Nigerian Industrial Development Bank

(NIDB) was established in 1964 to provide long-term capital for the

manufacturing sector. Other development - oriented banks are the Nigerian

Bank for Commercial and Industrial (NBCI) and the Nigerian Agricultural and

CO-operative Bank (NACB). NACB in particular was designed to provide

loans for agricultural production including direct loans to individual farmers.

There is also the Federal Mortgage Bank, which metamorphosed from the

Nigerian Building Society that was established in 1957 with the sole objective

of providing loanable funds to Nigerians who were interested in investing in

the real estate sector. Adding to this, the FMB is to support mortgage

institutions with institutional loans for on - lending to interested Nigerians.

The Federal Savings Bank came up with the objective of encouraging savings

culture and a means of attracting savings particutarly from the rural areas, for

national development. The FSB which was baptised so, in 1974, from post

office saving bank, has since been changed into full commercial bank with the

name FSB International Bank, as government gradually divestlreduces its

interesthnflow of private funds.

There is also the Peoples' Bank which came up in 1989 and saddled with the

onerous takes of granting basic credit to the underprivileged members of the

country who are engaged in legitimate economic activities but cannot take the

benefit of orthodox banking due to inability to provide required

collateral/sr~pport. Peoples' bank operates like a commercial bank but

prohibited by law to deaI on foreign exchange.

The last is the Community Banks, established in 1 !NO, which were to provide

effective banking purely at the local level. They are to assist the economies of

the rural areas and certain micro-enterprises in the urban centres. The Federal

Government of Nigeria provides loanable funds and technical assistance to

support the banks.

INSTITUTIONS ENGAGED IN

INDIRECT FINANCIAL INTERMEDIATION

Aside fwm those mentioned above, there are other institutions engaged. They

are usually called the Non-bank Financial Intermediaries (NBFI). They pool

funds from net savers and lend same to finance business firms and local

bodies. Thcy issue indirect securities such as Insurance Policies, Savings and

Loans Shares and Time deposits, to obtain funds from surplus units in the

economy. In order to lend funds to uItimate users, they purchase mortgages

and sell savings deposits, insurance policies and commercial papers in case of

finance companies.

The different types of Non-bank financial institutions are:

- Insurance Companies

- Savings and Loans Associations

- Investment and Unit Trusts

- Credit and Co-operative Societies

- Pension Schemes

- Finance Companies

These institutions are classified in line with the use of the funds, which they

generate or borrow.

Bank (Commercial, Merchant, Community and Peoples' and Development

Banks), on the other hand, channel money deposited on curredother deposit

accounts domiciled with them to finance various eIigible economic activities.

By and largc, all play critical and supportive role to the growth and stability of

the financial system.

3 4

2,4 BUSINESS THEORIES

(a) What is a Business Enterprise?

Given that a bank is business enterprise, it would be most appropriate to

start this discussion by supplying a suitable definition of business

enterprise.

According to: Papas & Hirschey (1990:3), a business enterprise is a

combination of people, physical and financial assets and information.

The i'unction of business is to produce goods and services required by

the society. A business has many stakeholders by which is meant, all

those people who would benefit from the business continual existence or

lose i F the business ceases to exist or was not there in the first place.

These stakeholders cut across the society and they include the

shareholders, management and staff, suppliers, customers and the

government. To each of these stakeholders, a business or firm performs

a role - it provides means of livelihood for its staff and management

through salaries and other forms of remuneration; returns for its

shareholders through dividend and retained earnings, pays taxes to

government if operations are profitable and provide output for the

satissaction of most of the societies' needs.

jb) The Place of the Customer in Business

Hitherto, organisation believed that all that matter to be successful was

to have good product/service and a strong saIes force to convince the

customer to buy. This concept, traditionally referred to as the seIling

conccpt, has been dumped due to a series of developments. One of

these developments is the fierce competition in the market place caused

by the existence of so many substitutes. The others are the increasing

sophistication of consumer and availability of information.

Owing to the increasing difficdties encountered by businesses in trying

to sell their products and survive, the marketing concept has evolved.

This concept believes that a business exists principally for one reason,

namely, the customer. It stipulates that the purpose of a business is to

satis@ customers' or clients' needs and not to supply goods and services

that are convenient to produce and might sell or be accepted free. This

concept recognises the customer as the king, such that the production of

goods and services should start from finding out or anticipating the

needs of the customers, designing appropriate products and services that

would meet those needs and working out the right prices, promotional

activities and distribution channels for the products. I will deal with the

concept in greater detail before the end of this chapter.

1

(c) Place of Profit in Business

Earlier, it has been mentioned that business has specific roles for each of

its stakehoIders. To a large extent, these roles cannot be fulfilled unless

a company is profitable Profitability means that a business earns enough

income from its operations to be able to sustain itself as well as provide

substantial returns for its shareholders.

(i) Productivity Models:

This model evolved during the industrial revolution when

technological innovation in manufacturing, creation of regional

and national distribution channels, and mass production of goods

and services were developed. Under the productivity model,

profitability depended on scale of operation and managers

focused on costs and capability.

(ii) Competitive Business Model:

This model was born in the late 1960s and early 1970s when due

to rebuilding of post was commercial infrastructure and

emergence of global competition, capacity began to outstrip

demand. In this era, managers discovered that there was a strong

correlation between market share, Ieadership and profitability. So

their focus changed towards achieving leading market share

positions in their respective industries.

(iii) The Quality Model:

Enunciated in the mid 1980s, this model sought to compete on

quality of products and services, This was the era in which

companies, through conscious process improvement techniques,

identified and reduced the cost of network, inefficiency and waste

in an effort to reduce overall systems costs and increase customer

satisfaction.

This model focused on how to achieve superior financial

performance despite inferior market share.

(iv) VaIue Exchange Model:

This is the latest model whereby business can more easily identify

the customers with the highest profit improvement potential, use

data bases to understand the specific needs of the sub-segments

and take advantage of flexible manufacturing and efficient

delivery to provide cost-effective offerings to each segment.

Features. Features such as price discounts, service arrangements

and purchase warranties were usually employed. According to

Grant & Schelesniger (199559-60), the value exchange model

seeks to optimise the relationship between the financial

investment a company makes in a particular customer relationship

and the return that customer generate by the specific way he

chooses to respond to the company offerings. Companies using

the vaIue exchange model - most new generation companies

including banks apply this model - define their target Market,

Customer base, quantify existing and full potential value of these

relationships and commit company efforts at closing the gap.

CUSTOMER SATISFACTION

For most businesses the overriding objective is to make all available

profit from identified target markets. When a business is involved in

strategic planning, recruitment of skilled personnel, improvement in

operational procedures, restructuring, training of staff, etc., the aim is to

position the company in such a way as to increase its chances of earning

higher levels of profits.

There are three ways in which a company can achieve its full profits

potential. These are:

- Winning of new customers i.e. increasing the number of people,

who use their products or services.

- Deepening the relationship and enhancing the profitability of

existing customers, i-e., motivating people to engage in behaviour

that generates higher returns.

- Maintaining appropriate relationship marketing strategies that will

ensure continuity and loyalty on the long-run.

These three approaches clearly shows that the customer is central to the

existence of business and that the road to profitability is to pay serious

attention to the customer and search far ways of meeting his needs. It

was in order to find out the best ways to service the customer and retain

them that the subject of customer satisfaction came up. This exposition

is summarised in a value-based chart as given below. It seeks to explain

that i f a company is able to go the extra mile to satisfy its customers

through going beyond the basic elements of the products and services it

ordinarily should offer, it will create value and be able to have satisfied

customers. The satisfied customers will continue to do more business

with the company, and since it is cheaper to maintain existing customers

than to acquire new ones, lower costs would result. Lower costs and

more patronage end up in long term performance and profitability for

the company.

The Customer Satisfaction Theorv

1. * Basic elements of the * Elements * Product/Service * Basic Support Services. * Recovery Process.

2. * Completely Dissatisfied. * Dissatisfied * Neutral. * Satisfied * CoinpleteIy Satisfied.

3. * Genuine Loyalty * False Loyalty * Loyalist/Apostle * DetectorITerrorist * Mercenary * Hostage

Lower Cost

4. * Willingness to Repurchase * Easy and therefore cheap * Maintenance Costs * Capital Market * Manifestation

5. * Improved Public Image * Improved Bottom Line

( and Profitability 1 Why Satisfied Customers Defect: (N/D1995)

* Shareholder Satisfaction * More Secure Future FalIout

Harvard Bus. Rev. pp88-89

A further explanation of the diagram shown above is given below:

Valne/Quality and How to Create it

A hypothetical example to illustrate further what is meant by value

creation. Assume there are two car repair shops A and B. The job of a

car repair shop or a inechanic workshop is to fix a car. Workshop A

does .just that: takes a car in when the owner brings it to the garage, fixes

it and hands it back to the owner when he comes back for it. Car repair

shop B goes the extra mile of collecting the car from the customer's

home or office, drops it own car for his temporary use, fixes the car and

returns it in good condition, additionally calling the custo

after to find out how well the repaired car is performing.

Which of the mechanics would the customer patronise more? The

customer satisfaction theory holds that B would be better patronised

because no matter how good A is in fixing cars, it is B that recognises

that the customer wants his car fixed with the least inconvenience and

goes ahead to provide services that would reduce his burden, customers

would patronise B regardless of the fact that its services cost more than

44

those of A. B offers greater value, and A simply does the basic things

for the customer.

The British Airways has practicalised this theory and is happier for it.

Airline business is a very competitive one and most airlines are every

year declaring huge loses. However, British Airways is rolling in profits

and currently is almost the world's number 1 airline. According to,

Prokmch (1 995:88-1 O l ) , Sir Colin Marshal, 61, Chairman of the

company in an exclusive interview, granted Harvard Business Review,

revealed that the mistake of many airlines that are not doing we11 is that

they think travellers care mainly about price and therefore they keep

cutting cost at the expense of service quality.

The British Airways, contrary to the above approach, believes that if an

organisation is able to provide a service better than competitor, there are

customers who wouId be ready to pay a premium for good service.

So when a situation gets hard for the industry, British Airways does not

get h:ud on its customers by reducing the quality of service it offers.

Indeed, the airline enhances and continues to add new frills, which make

air traveIling "seamless."

British Airways and all the other airlines provide the following basic

services:

- Get passengers to where they want to go.

- Do it safely

- Go when they want to go

- Provide some nourishment.

Let the passengers accrue frequent flying hours.

To beat competition, however, British Airways has gone beyond what

an airline ordinarily does by entering into working agreement with

British Authorities to install fast Track Channels at the Heathrow and

Gatwick Airports to make it easier for premium or full fare passengers

to speed through immigration and customs. The airline, like its

competitors have removed charges for excess luggage.

It is equally very concerned with what kind of impression or feeling

each transaction between it and the customers would generate. And

46

therefore, to foster closer relationship with its passengers, its policy is

not of load up passengers with food and drinks and disappears. The

crew members must be there always to create higher customer

satisfaction levels. The airline also does a series of other customer

delighting things, which other airlines do not care about.

The result of all these has been that at a time when works airlines

industry is making negative returns to investment with billions of

Dollars in losses, British Airways has remained solidly profitable.

The British Airways is a practical exarnpIe of how a company can create

value. Value means worth, intrinsic worth or goodness. In business, a

product is said to have value if it is better than its nearest competitors.

To be perceived of value a product should have the following attributes:

(a) The basic elements of the product or service that customers

expect all competitors to have.

(b) The basic support services such as customer assistance or order

tracking that make the product or service incrementally more

effective and easier to use.

(c) Recovery process for countering bad experience.

(d) Extra-ordinary services that so excelled in meeting up with

customers' personal preferences, in appealing to their particular

problems and in making customized product and services. All

effort aimed at delighting the customers, a phrase superior to just

customer satisfaction.

Companies that have taken leadership positions in their industries

in the last decade typically have focused on delivering superior

customer value in line with one of the three value principles:

(a) Operationat Excellence;

(b) Customer intimacy; and

(c) Product Leadership.

In Operational Excellence, companies provide customers with reliable

products or services at cotnpetitive prices and delivered with minimal

difficulty or convenience.

Customer intimacy means segmenting and targeting markets precisely

and then tailoring offerings to match exactly the demands of those

niches. Companies that excel in customer intimacy combine detailed

customer knowledge with operational flexibility so they can respond

48

quickly to almost any need, from customizing a product to fulfilling

special request. As a consequence, these companies gamer tremendous

customer loyalty.

Product leadership means offering customers leading-edge products that

consistently enhance the customers' use or application of t

thereby making rival products obsolete. According to: Treacy &

Wiersema (1993:84-85), Companies that concentrate on excelling on

one of these value disciplines while meeting the industry standards in

the other two, often gain such a lead that competitors would find it

difficult matching.

2. Satis fnction

For he purpose of this study, a customer is said to a customer is said to

attain satisfaction from services received or product used, if he/she

perceives that product or service to be better than he/she can get

elsewhere or in other words that the product service is worth the price

paid for it.

To satisfy the customer, the product or service should be " seamless"

"easy to use" and "effortless."

An epoch making survey conducted by Rank Xerox on office product

customers have shown that high quality products designed to meet

customer needs and which are associated with quality services often

create high levels of customer satisfaction.

This high levels of customer satisfaction lead to greatly increased

customer loyalty. And increased customer loyalty is the single most

important driver of long term financial performance.

Conventional wisdom holds that the link between satisfaction and

loyalty in markets where customers have choices in linear in nature i.e.

when satisfaction goes up, Ioyatty goes up with it.

However, Rank Xerox was able to prove from this research, that

completely satisfied customers were six times more likely to repurchase

Xerox products over the next 18 months than satisfied customers. The

implication of this is that merely satisfying customers who have the

freedom to make choices in not enough to keep them loyal and that the

only truly satisfied customers are the totally satisfied customers.

Customers' loyalty, broadly speaking is the feeling of attachment to or

affecting for a company's people, products or services. These feelings

result in various forms of customers' behaviour.

Businesses that do not pay attention to loyalty risk losing half their

customers in five years, half their employees in four and half and their

investors in less than one. Moreover the performance of these

companies can be stunted by as mush as 25% to 50%, sometimes more.

Conversely, Businesses that concentrate on winning, maintaining, and

retaining customers, produce quality productive employees, and above

all, continues to generate superior results, according to Reicheld

(1 996: 1)

4. Correlation between Customer Loyalty and Profitability

It has consistently been proven that the longer a customer remains with a

company, the more is the benefit and worth of the customer. Long term

customers are cheaper to maintain and more profitable because they take

less of the company's time or less sensitive to price and bring in new

customers. Best of all they do not have any acquisition or start up costs.

This is why reducing customers' defections rates by as little as five

points - from say, 15% to 10% per year in some industries can double

profit .

When a company spends all its time on profit issue and too little time on

value creation, it is making a fundamental mistake. After a while its

profit will start to fall because customers will defect. Defectors i.e.

those who are convinced that the company offers inferior value may

5 2

eventually outnumber the company's loyal advocates and dominate the

collective voice in the market place. The result: No amount of

advertising, public relation or ingenious marketing will prop up pricing,

new customers' acquisition or the company's reputation (Riecheld F.F.:

1996,57).

CUSTOMER DISSATISFACTION

This is the opposite of the customer satisfaction theory and it holds that

a business that does not care to go the extra mile to satisfy its clientele

offers low value products and service from customers' perception.

Because of their low value, they hardly meet the expectations of the

customer and therefore leave them dissatisfied. A dissatisfied customer

sticks to a product or service only when he has no choice i.e. when

alternatives do not exist or the cost of switching is very high. They are

therelore not loyal, and can defect any time. When they defect, the

busincss loses patronage, suffers poor public image, finds it hard and

expensive to maintain existing customers and attract new ones and

hence suffers declining profitability.

53

2.5 HOW RELEVANT ARE THESE THEORIES TO THE BANKEING

INDUSTRY

1. The Global Situation

In the preceding discussions we have tried to expose business enterprise

and the place of the customer and profits in business. We have equally

examined what customer satisfaction and dissatisfaction implies and

their impact on business. I will then examine how relevant are these

issues to banking - the subject of the paper.

To do this analysis, it is helpful to repeat what has been mentioned

elsewhere in this analysis and that a bank is an institution in the business

of providing services and products to its clients. Its stakeholders include

the banking public, its staff and management, contractors who deal with

it and the government. To each of these stakeholders, the bank has a

role to pay and this role can only be successfully carried out if it is

profitable.

Banks can only achieve healthy levels of profitability if it pays careful

54

attention to the customers' needs, designs products and services at

appropriate prices to meet those needs and bring the products/services

within the reach of customers through branch networking. When a bank

does a good job of the above, its customers will keep coming back, it

enjoys good public image, lower costs of operation and therefore

healthier bottom line.

If it forgets that the customer is king and just carries on business as

usual, over time its clientele wiIl dwindle because alternatives to banks

as depository and credit institutions will emerge. Which is exactly what

happened to banks world over between the '80s and '90s.

Until about two decades ago, banking was a cosy occupation, and

armchair business in which practitioners made little efforts towards

luring the customers not to speak to retaining them. Bankers, by and

large, stayed in their offices and waited while clients requiring banking

services and products sought them out and patronized them.

Banking products and services remained the same depository and credit

55

instruments offered by a11 banks and very few banking institutions

bothered to be flexible in the delivery of these products and services.

Consumers were left with little or no choice.

In the 1980s, several events combined to jolt the banks out of their

complacency. One major event was the removal of barriers into entry of

banking business, which enabled many banking institutions to be

established. Another clear event was that just as barriers into banking

were being removed, many banking financial institutions were eaually

allowed to flourish, removing banks' monopoly over d e p ~ 3 1 ~ ~ I U u d i t

functions. These newer institutions, unlike banks and

meaner, more customer-focused and responded expculLlously and

innovatively to the needs of the banking public. They began to d e e ~ e n

their market share as they created alternative banks. For ii . late 1980s, bank market studies has it that banks were seen as the place

to save in the United Kingdom. Nowadays this is not so and the

building societies have become the clear choice of the consumer. As

banks loose out in the savings competition the building societies have

moved in and exploited the banks' weaknesses nearly doubling the

market share in just less than fifteen years. This has been achieved

through increasing number of outlets, spending sums on advertising

most of which are aimed at savers; convenience in hours of opening and

a higher rate of interest paid.

A similar development in the United States of America was that in the

1980s, America Commercial Banks suddenly woke up to the realisation

that almost half their market share has been tost to competing non bank

financial institutions.

Other reasons why banks lost out were the fact the com~etition started to

come out with improved and more customized g

public became more sophisticated and therefore more dlscrlmlnatlng.

The dilemma, which the industry found itself, resulted in reduced

margins for all banks. Earnings crashed where large margins hitherto

existed.

In the United States, signs of this started in the 1970s when its banks

started taking rates below the standard minimum "bIue chip rate of 1%

over base rate." This blue development started a highly competitive

environment on the blue chip business with margins being driven down

to extremely small levels. The situation forced banks to reassess their

positioning with the blue chips. Many started putting more emphasis on

small/mediuin size business market and others started introducing value

added fee-based services such as cash managew

effective is seen to take place and look alike p ,,.,,,, ,.., ,,,,,,

has been reduced margins.

. . 11. The Nigerian Situation

Virtually everything that happened globally to banks has happened in

Nigeria. Indeed up till 1986, Nigerian banks were virtually docile as far

as marketing efforts to satisfy their customers were concerned. The

reason for this is the level of development of the banking sector and the

economy as a whole. To start with, of the few banks in existence at that

time (about a dozen) only few can be said to be profit oriented. The

State owned banks were more of the avenues for political patronage

58

dispensation and their government sponsors were more interested in

politics and ownership control and management.

Secondly, banking in Nigeria at that time was a seller's market. The

customers where there for the asking and there was no need to expend

scarce resources, men and materials, in trying to woo and satisfy the

customers. There was no competition. The three big banks namely

Union Bank, First Bank and UBA became too big and complacent while

the rest were simply satisfied with their market share as they were.

Thirdly, the regulatory environment also did not give much room for

marketing gymnastics by the banks because virtually all tools used by

organisation to outdo competition viz. interest rates, exchange rate

advertising and promotion activities were by and large controlled. Result

of all the above was that the banks offered the same type or

undifferentiated products. They saw no need to improve service

delivery, were not computerized and custoiners stayed long hours in

banks' premises to cash their money. Like what happened globally

things began to change when in July 12, 1986, the Structural Adjustment

Programme introduced by the Babangida administration liberalised

entiy into banking resulting in a banking glut. The number of banks

shot up from 45 in 1985 to 90 in 1989 and 120 in 1991. The number of

banks licensed in February 1991, 2 1 in number, were almost equal the

total number of licensed banks between 1960 and 1980,24. The many

new entrants into the business plus government regulation and policies

gave rise to competition. Government regulations for instance, which

were aimed at reducing inflation, led to serious liquidity crises in the

industry. This situation compelled the banks to recognise, for the first

time, the importance of the customers to their business and they started

to do every thing in the books to woo and retain the~n. '

through various means. The new generation banks,

introduced state of the art computerisation into banking, iinprovlng m e

quality of services that the customers received. Because of this and

other personalized services they offered, customers of old generation

banks began to patronise the new. The older banks seeing their domain

threatened, got alarined and threw their weights into the marketing

battle. The attempts by the new generation banks to have a piece of the

60

action and the old to retain their marketing sphere in influence brought

them for aggressive marketing forcefully to 25 banks.

The government regulations which exacerbated the situation were two:

The first was the deregulation of interest rates in August 1987 (circular

21) which resulted in government's liRing of the cap on interest rate and

authorisation of banks to establish their own individual ir

according to prevailing market forces. Because of this, intc~cat, LCILG~,

jumped from 10% in 19988 to 30% in 1990. Although the ~ o l i c v on

interest rates has moved from deregulation to re-regulation tcr ~ ~ ~ u ~ a t e d

de-regulation the price war by banks has continued up till thi

lterest rate

s day.

The second regulation was the 1988 direction, which instructed that all

public sector deposits in commercial and merchant banks shouId be

deposited at the CBN. This particular: military style" directive created

an unprecedented acute scarcity of funds, which had to be ameliorated

for the banks to continue with their operations.

banks, though not in equal intensity, an all - out bar C H ~ L K U LVI U G P W L ~

and the "beautiful brides" were the hitherto ignored customers.

6 1

The banks began to take a critical look at the existing banking products

and services. Majority of them set up product development units to

evolve new products and seek fro ways modify, improved and

personalize existing ones. Beginning from 1998, there was a spate of

new product launching by banks, which was only abated by the distress

syndrome.

The autom ation of b anking servic es enabled customers t

posit at on

I I

N

from their accounts in a matter of minutes as well as to de e

branch of a bank and withdraw form any other branch of the same Dam,

thus reducing the necessity to carry cash. Some banks introduced

private banking and weekend banking - all of which added value to the

products and services of banks.

One other area in which banks fought the competition was is in the area

of advertising and public relations, all of which received a great impetus

during the period under review. The old banks changed the contents and

presentation of their adverts to enable them to be more i ill,

attractive and appealing, and the new generation ones came up with not

62

mpactf

..

only attractive and attention catching advert. onmll*-nA +hn:r

adverts are focused and are consistent in their

In public relations, banks used sponsorships i.e. sponsorsnlp or national

events, socio-cultural and acade~nic activities and television

programmes, to endear themselves to their business environment and

show them as socially responsibk organisations.

To bring banking services as close to their various target markets as

possible, banks began to branch out strategically. Belbre the onset of

competition, it should be noted that banks equally branched out, but the

branching of those days was directed by the Central Bank of Nigeria

under the rural banking programme. Beginning from 1998, banks

located their branches in a strategic manner and in towns where they can

increase their market share an(

development resulted in concentri

Marina in Lagos. Onitsha, Kano, ---, ,.- ---.--,-_ -.-- .. ----

by side with this were the developments of imposing arid state-of- the-

art modern edifices by banks.

Banks also ensure that their clients have adequate parking space with

attractive landscaping artwork in between. Their interiors were

tastefuIly furnished, decorated and optimally air-conditioned all in an

effort to ensure the offices are homely enough. In some cases, satellite

T.V. Systems were installed whiIe smartly dressed guards were at hand

to direct the first time visitors.

Intense competition also jolted the banks from slumber to start facing

other realities in the market place. Originally, Nigerian banks hardly

had clearly identified target markets. Banking was provided for the

"average bank customer." With competition, it became clear that an

average bank customer does not exist and that it was futile striving to be

all things to all people. They therefore started to segment, to identify

from the entire banking market, a portion that they can serve most

effectively and to concentrate on satisfying that segment. The approach

of the banks in this regard was to create units specifically targeted at

specific segments.

Everything that the banks have come up with viz.: innovative products

and services, automation, private banking, catchy adverts, strong public

64

relations, segmentation, strategic banking, marketing concepts, etc., all

were aimed at satisfying the needs of the customer which Droves the

theory of customer satisfaction that says that in a highy L V I I I ~ C C I L I V C

market, where cost of switch is very low, that the only way to more

towards a company's full profit potential is to seek new customers,

retain the existing ones and customise products and services.

2.6 DEFINITIONS OF MARKETING

There are numerous alternative definitions of marketing. Philip Kotler,

provides one of the widest definitions thus: "Marketing is human activity

directed at satisfying needs and wants through exchange p

However, this definition, a11 share certain basic feature- ,--_- -- ---ajar

elements of modern marketing:

- It is operational implying that managers must takl

results and benefits will not emerge from a passtve attituae ro me

exchange.

- It is customer - oriented implying that banks or fi11113 MUX IVVA VUL31LLG

themselves focusing on the need of the customer. Its effectiveness lies

in finding solutions to the challenges posed by these demands.

ices which

It emphasises mutuality of benefit implying that it is in the best interest

of the parties. They continue in the exchange process. Through this,

both prosper as needs are satisfied by productlserv banks

supply because they profit and which are brought btLau;sc Lu3Lc)rners7

benefits exceed cost.

investme:

I

It is value driven. The culture of the bank, values its

leaders as well as the rest of the staff, are based on a desire to build the

business through meeting nef

market.

According to Cannon: (19

marketing relationships is cer~~lal LU ~1113 ~ ~ ~ I U Q L I ~ . 11113 13 UGC~ZUSG LIIG

satisfaction of both partie

investment. That encouli.tg~s UULII pilrucs LU collLlrlut: allu t:~~gitgt: 111

f11rthp7- exchanges for the bank. It will

nt and for the customer, it means greaicr sausrac-uorl ariu valut;

man could be customer retentionlIoyaIty based

66

- -

mean a good return on

--'!-c--*:-- - - A . " - r . - -

relationship management/marketing.

2.7 PROFIT CONCEPT IN BANKS VS. CUSTOMERS

The concept that banks exists; first and foremost, to satisfy c ' needs

has not been internalized into the operation of many banks. urten times, the

notion that 'banks exist to make profit' has been put forward as equally cogent

purpose of existence. Event though, marketing is not the 1 pursuit,

the real power of the marketing concept lies in the followi~

- The reality of the market place. That customer satis~actmn assists banks

to rely their objective stated above.

- The recognition that banks will achieve their targets most effectively if

they understand well their customers' neecis and package

product/services to satisfy them.

- A genera1 awareness that adding value to the customer offering provides

the key to customer retentiordloyalty and a secure U U N U G ~ ~ LUI LK

fi~ture.

The bank can adopt two routes to business development. It can offer

67

product and services to fit its convenience and in a competitive

environment, face the uphill task of marketing them to r

it can use its understanding of the peculiar needs r

segment, to design, develop or even modifj its offerings to meet these

needs.

It then follows, that acceptance and returns will be in proportion to their

understanding of these needs and ability to package product and services

to match them. The power of relationship marketing therefore, lies in

linking the bank's capabilities to the needs of the customers.

BUILDING EFFECTIVE MARKETING TEAM

Marketing of old is seen as a function or activity that are confined solely

to those that work in the marketing groups.

marketing team in the bank is the responsibility if ev

can determine quality of service; the security men at the gate can

influence a prospect ultimate decision to open an account or not; the

customer service offices deal with customer quc

marketing officer move to win, retain and maintam curulal relailurlsiup

management on the account. A11 are part of the marketing term. This

6 8

should be a corporate culture which will emphasis keeping close to

customer; looking outside for cues to business development and

emphasizing quality, service, and pride in the product - offering tailored

to meet the need of the customer.

WHO ARE OUR CUSTOMERS?

In a typical from, there is always this assumption about th , their

location, nature and likely purchase behaviour. Amongst U ~ I ~ K S ivuay, it is

frequently assumed that;

- All customers are the same, equally important, seek similar satisfactions

from producthervice, and that customers and consumers are the same.

Their assumptions often time are untrue. The 80:20 rule is central to

modern marketing thinking and tries to t I in

relative importance between customers. It std~cs irlai L I C ~ U C I K Y , 0 ~ 7 b of

the banks fortunes are created by 20% of its customer base. Failure to

recognize this can mean that 80% of the customers generate 20% of

your profit and will get vastly disproportionate attention. The

phenomenon, called the pare, to effect could work to the disadvantage of

the key accounts.

The same product can mean very different things to its many buyers. A

car can be a means of movement, status symbol, an employee perk, etc.

Understanding this is vital if the design, presentation pricing and service

supports are to appeal to potential customers.

Frequently, mistakes are made because the bank assumes that the

customer making the decision and the user are family will influence her

buying decision. In banks. illusions about knowledge of the customer

have turned to be fatal unle

is regularly and systemat

customer will assist the

product/service offerings that are acceprame to nis cllenrs our, also to aaa

value, which is the surest way to customer retentioi

business development.

It is a general belief that working with users will help LIB I G ~ ~ U ~ K I LU uru

needs.

In the words of Peters and Waterman in (Peter, T.J. & Waterman, R.J.,

1982: pp 25), "Of eleven major innovations, all came from users. Of 66

85% came from users and of 83 minor

---- , - - . - --------, - - . _ -ame from users."

The notions of partnership, quality delivery and response as highlighted

above are central to good relationship marketing and to the success of

virtually all the most successful banksifirms.

2.8 RELATIONSHIP MARKETING IN ACTION

In December 1978, Alitalia lost a DC9 airliner into the Mediterranean Sea and

the Italian national carrier vita

Nordio, AIitalia's president teler

time there was a two-year wait period for such aircraft, but Boeing juggIed its

delivery schedule and Alitalia got the plane in a month. Mr. Nordio returned

the favour six months later when Alitalia cancelled plans to buy McDonaId

DC10s (Boeing fierce competitor) and ordered nine 747 jumbos from Boeing

valued at about $575 million.

As a means of deepening relationship, the discerning banker has embraced

value-based marketing, and creativity in banking. To buttress this point, a

blue-chip New Generation Bank, in order to secure the account of one of the

major oil coinpanies in Nigeria,

and above the regular stuff the 011 uperawr was accusiumeu iu gelling. l r put

together a team that consisted of em~lovees from even non-marketing. units.

whic :d and proposed

customized software that elec ,

transactions.

It was a deal clincher immediately because it had been a major headache Tor

the high-transaction-generating oil and no bank were offering the service. And

of course, dreading reconciliation, the company accounts officer ensured most

transactions went to the bank. Becoming the bank's most profitable account

for that year, the solution team members were rewarded with handsome year-

end bonuses. It was a classic "win-win" solution.

REFERENCES

Bank and other Financial Institutions Decree (BOFID), 199 1.

Edward W. Reed, Richard V.Cotter, Edward Kgill and Rechard K. Sminith (1993) Commercial Banking Second Editor, New Jersey: Rentice Hall M, Eagle Wood Cliff.

Green Nwankwo (1991) Bank Management, Principles & Practice; MaIthouse Press Ltd. Ike Onyechere, ed ( 1 992) One hundred years of Banking in Nigeria ( 1 892 - 1 992), lessons for Today's Bankers, Benson and Edward 1 Edition.

Ekezie E.S, (1 997) The Elements of Banking, Onitsha: African FEP Publishers Limited.

James L. Papashdark Hirschery (1990) Management Economics bth Edition, The Dryden Press, Harcourt Brace Jodanourch College Publications.

Alan WH Grant and Loenard A. Schlesinger (1995) Harvard Business Review September - October

Steven E. Prokesch (1995) Harvard Business Review - November - December

Michael Fred Wiersema (1993) Harvard Business Review, January- February.

Frederick F. Reicheld (1 996) The Loyalty Effect: The Hidden Force Behind Growth Profits and Last Inc. ing Value Bain and Company

1 nn3\ a,,:, ~n,,t,+;,, a,;,, Cannon Tom 771) YnalC lvIaIhbLlllK, illlciple~ and Practice. lrd Edition. Cassel Publishers.

73

CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

This chapter will give an exposition on how this study was carried out. It explains

the type of data, primary or secondary that was applied. It will also specify the

appropriate quantitative or scientific method applied in testing the research

hypothesis. Relationship marketing as a vital tool in customer management and

retention is being examined in this study.

As a basic requirement of every systematic research, the researcher employed the use

of scientific enquiries in data collation and analysis.

Empirical and descriptive designs were adopted and data analyses using appropriate

quantitative method such as frequency distribution and simple percentage. Z-test of

statistic was also adopted in testing the research hypothesis.

3.1 SOURCES OF DATA

Both primary and secondary data were used for this study.

1 . PRIMARY DATA

Questionnaires and oral interviews were the instruments

collection of relevant information for this study.

74

used for the

The questionnaires were administered to customers, customers'

relationship managers and other marketing officers of the branches of

the bank within Lagos State.

To complement the questionnaires which were limited to corporate

client and high net worth individuals, an oral interview was adopted

which involved detailed conversation with other classes of customers.

This enabled the researcher to establish whether or not there is a

correlation between deep relationship marketin!

retentiodloyalty in banks. And if the relationship W I K I wn=l P Y I P ~ I I

does it lead to long term customers' satisfaction and 1

reflect in the banks profitability.

2. SECONDARY DATA

The desk research includes experts from published and unpublished

materials such as textbooks, journals, magazines, new

from libraries. These sources contributed immensely L I ~ I U U ~ I ~ WI ILC -

ups in chapter one and two of this study.

3.2 QUESTIONNAIRE CONSTRUCTION

The questionnaire used in this study was designed bearing in mind the

technical nature of the object of study. Thus effort was focused on designing

clear and unambiguous questions. To make true exposes as specific as

possible, patrons were provided for each question. Questionnaire is divided

into two sections with a total number of 17 questions.

3.3 VALIDITY AND RELIABILITY OF THE RESEARCH INSTRUMENT

(QUESTIONNAIRE)

The draft questionnaire was subjected to pre-test of four (4) respondents. This

allowed for a thorough judgement of the questions therein. At the end of

which some questions were dropped and replaced with new ones and some

modified.

However, in an attempt to ensure validity and reliability of the research

instrument the data need for the study was not compromised.

3.3.1 SAMPLING FRAME

The sample frame for the study includes, customers, marketing officers odand

relationship managers of the selected branches of the bank within Lagos

metropolis.

3.3.2 SAMPLESIZE

The sample size of two hundred (200) respondents was adopted whose

composition is as shown below: The rational for selection is purely to

ensure timely response from a ~ro~ort ionate sarn~le of the customer base of

the Lagos branchc

Table 3.1 - Snvn,

Corporate

High networth Individuals

Others

Source: Field Survey: 2001

77

100

25

Total 200

3 .3 .3 SAMPLING PROCEDURS

Selection of sample organisation and individual respondent were based on

simple random sampling method.

3.3.4 QUESTIONNAIRE A DMINISTRA TION AND RESPONSE

Questionnaires were administered personally making use of bank

officials and customers. To ensure maximum response, the respondents

were followed up to ensure timely completion and return.

This effort yielded appreciable result of 92.5% effectivt: I G ~ ~ U I ~ X ~

representing 185 respondents upon which our analysis was based.

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.1 INTRODUCTION

This chapter will focus on data collation, analysis and presentation. The hypothesis

of the data collated for the study will equally be tested using the Z-test of hypothesis.

Data shall be presented and analysis using simple percentage and frequency

distribution.

Table 4.1 Analysis of returned Questionnaire

Alternative

Frequency

Percentages

Sample Size Returns Dropped for I I - - Inconsistencies Kesponse -

-

Source: 2001 Survey

Table 4.1 shows that 94.5% of the questionnaires administered wtxc returned

and 3% dromed because of inconsistencies such as selection of two options

fc ling of

response rate of 9 1.5%.

Table 4.2 Distribution of Respondent by Sex

Alternative

Male

Female

I Total

Frequency Percentage

Table 4.3 Distributions by Respondent by Age

I Alternative

I Below 20 years

20 - 30 years

1 30 - 40 years

1 40- 50 years

50 - 60 years

1 60 years and above

Total

Source: 200 1 Survey.

Frequency

Table 4.3 shows that 1.64% of the respondents are

9.29% are below 20 - 30 years, 13.66% are below 30 - 40 years, 34.43% are

80

below 40 - 50 years, 22.95% are below 50 - 60 years and 18.03%

years.

Table 4.4 Respondents' Marital Status

Percentage Alternative

Single

Frequency

68

Married

I Widowed I 7

96 I

Source: 2001 Survey

It is shown in table 4.4 that 37.16% of thl

married, while 6.56% are divorced. 3.8270 or rne responaenls cur~lpr-1st;~ UL

men and women who have lost their spouse.

Divorced 12

Table 4.5 Respondents' Educational Qualification

I Alternative I Frequency

I FSLC I 5 I

1 DIPLOMA I 13 I

PROFESSIONAL

QUALIFICATION

Source: 2001 Survey

28

TOTAL

As shown in table 4.5, 2.73% of the respondents hold only first U~UW leaving

certificate, 10.38% hold GCE or SSCE and 7.10 hold Diploma certificates.

Also 22.95% possess either NCE or

HND, 1 5.30% of the respondents pos

183

Table 4.6 Banking Status of Respondent

Alternative Frequency

Operates bank account

I account I

156

Does not operate bank

Total

27

Source: 2001 Survey

Table 4.6 shows that about 85% of the respondents

accounts either savings current, deposit or combination of LWU UI I I I U I ~ ; .

Table 4.7 Monitoring of Accounts By Bank Official

1 options Frequency Percentage

Monitor Accounts

Do not monitor accounts

Source: 2001 Survey

120

I Total 183

Table 4.7 shows that for almost 66% of the respondents, there are bank

officials keeping watch on their accounts

66

63

100

34

Table 4.8 Respondents' Pos tion in Organisation

Options Frequency I Percentage

Relationship Managers

Customers

Marketing Officers

Total

Source: 2001 Survey

Table 4.8 shows that 28.96% of the respondent co.

5 1

managers, 27.87% marketing officers/managers and 43.1 1% customers or tne

27.87

mprised of relationshi

n 4 - n , P . s

selected banks.

Table 4.9 Role of relationship ma1

1 Yes

Options

1 Undecided

Frequc

Source: 2001 Survey

Total 183

From table 4.9, it can be seen that 74.86% of the respondent acknowledge that

relationship marketing is a vital factor to the success of modem ba

22.40% did not see relationship marketing as a vital factor in modem DanKlng

while 2.73% were undecided as to the impact of relationship marketing in the

success of modem banking.

Table 4.10 The level of impact relationship marketing exerts on customer

retention in banking.

A1 ternative Frequency

High impact

Undecided

Total

168

Low

Source: 2001 Survey

It is seen from table 4.10 that majority of the respondenrs or Y I .a70 agreed that

relationship marketing exert a high impact on customers rc

respondents agreed that relationship marketing exert low irnpac~ un reLenuon.

15

- :tention, 82% of the

I I

Table 4.11 Impact of Relationship Marketing on B ank Profitability.

Alternative r----

1 Total

Frequency -----I- Percentages

83.06

Source: 2001 Survey

Table 4.1 1 reveals that 83.06% of the respondent cllc V L LIIC. V ~ I I I I ~ that

relationship marketing exert a high impact on banks profitability, 14.75%

believes that it only exert an average by low impact, while 2.19% that is has

nil impact.

4.2 TESTING OF HYPOTHESIS

The null hypothesis (Ho) is to be tested using hypothesis given

Z = X-np

vm (1 -P)

Where X = Respondents supporting the null hypothesis

N = Sample size

P = Researchers probability of Ho acceptance.

At 0.05% level of significance, our acceptance region is + 1.8 12.

DECISION RULE:

Our decision rule is to accept Ho if the computed Z value falls within the

acceptance region + 1.8 12, otherwise we reject and accept HI

4.3 RESEARCH HYPOTHESIS:

Ho There is no reIationship between relationship marketing and increase in

customers' retentiodloyalty in banks.

HI There is a relationship between relationship marketing and increase in

customers' retentiodloyalty in bank.

87

With 91.8% of the respondents accepting tk

exert a very high impact on customers' r e t e n i ~ ~ ~ ~ ~ ~ ~ a l ~ ~ 111 uarlrrs, "Illy

8.2% supported Ho. This then translated to only 15 respondents in

favour of Ho.

If we let PHo represent the probability for accepting Ho, thererore

PHo = 0.40

P HI = 0.60

Z = 15-183(0.40)

Decision : ---

The Z (- 8.75) is not within the acceptance region

reject Ho and accept that there is a relationship betweeri 1-elaiiorlsnip marmilrig

and increase in customers' retentiordloyalty in banks.

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

S1 JMMARY OF FINDINGS

Rclationship marketing is a vital factor in the :

banking.

Relationship marketing exerts a very high imp

retentiodloyalty in banks.

Effective relationship marketing enhances customers satisraccion,

patronage and profitability of banks.

There is a correlation between relationship marketing and customers

retention and loyalty.

Rclationship marketing sharpens the competitive potent~il~s UL LUG key

players within the banking industry.

Finally, it influences the strategic marketing direction of the industry

90

and in turn, leads to better customer management and service culture for

the industry.

5.2 CONCLUSION

The general conclusion of this study is that there is a relationship between

marketing and customers retentiodloyalty in banks. These goes further to

enhance long term customers' satisfaction, patronage and bank profitability.

To achieve the above

in place a conducive

marketing staff.

Because marketing is

bank management to

benefits, there is that need for bank management to put

working environment that enhance-s formance of its

a dynamic strategic

continue to search for better and effec

marketing strategies that would ensure long-term customers ~ ~ L C I ~ L ~ U I U luyalLy.

By implication, marketing strategies must be able to fulfil the above objective

by establishing a long-term strategic objective for the entire organisation and

including relationship marketing as an essential ingredient of such obiective.

5.3 RECOMMENDATIONS

Relationship marketing has been identified as a vital marketing management

tool in modern banking.

Apart from achieving customers' retentionlloyalty, it contributes immensely to

increase customers' patronage and long term profitability of the banks. To

boost thc level of relationship marketing so as to achieve and increase its long

term benefits to the banks, the folIowing are further I

1. Creation of a conducive and enabling en1 e

relationship management amongst marketing ana non-rnarlterinn srarr of

banks,

2. Establishment and maintenance of dynamic all, ,ull,Ll,ll,l ,, LILIE

departments in banks.

3. Each bank should put in place effective

procedures to ensure that only well oualifiea ana rnarKetrng onentea

personnel are seIected into its mark

The need to carry out marketing research or rpnlllor h ~ c in nr+- to

identify customer needs and changes in taste: bnly

satisfj/ing them but delighting the customers' 2

L I ~ ~ U l U l U U J I O L l l U L U W I

s, with a view to not c

is well.

Marketing staff should be adequately c o m p l a a ~ ~ u auu ~ c ; ~ l l ~ l l ~ ~ d t e d

through a progressive review of salaries and :

of living index.

Emphasis should be placed on training and aeveloDment or mameting

personnel in order to keep them technically u it

are relevant to their work.

Marketing departments should be equipped W ~ L I I IIIUUCIII L ~ I I I I ~ I U I ~ ~ L ~ ~ I ~ ~

, to equipment such as computers, telephone, fi

ensure easy access to different category of bar

Banks should organize customer forum on regl

of feedback mechanism and opportunity to intr

benefitslawareness about their new products/se

BIBLIOGRAPHY

Bank and other Financial Institutions Decree(BOFID), 199 1.

Cannon Tom (1992) Basic Marketing, Principles and Prac Publishers

Ekezie, E.S, (1997), The Elements of B a n k h Onitsha: FEP Pu'- ..--___-

Grant WH AIain and Schlesinger A Leonard (199.5) Harvard Business Review October.

Cassel

nber -

McCarthy E. JeromePerreault, D. Williams Jr: (1990) Basic Marketing USA: IKWIN.

Onyeche~ for Toda~

Papas, L. Press, Ha

Reed, W. Edward, Cotter V. Richard, Kgill, Edward and Commercial Banking. Second Edition New Jersey: Prentice Ha

Reicheld, F. Fredrick (1996) The Loyalty Effect: The Hidden FvlbL ublLlllu ulLrvvL1l, lvllrJ

and Lasting: Value Bain and Company Inc.

Sheth, N. Jagdish & Garrett E. Dennis (1986) Marketing Management: A Comprehensive Reader. Dallas: South - Western Publishing Co.

Treacy, Michael and Wiersema, Fred (1993) "Customer Intimacy and Other ' "' Disciples" Harvard Business Review, January-February.

APPEA RESEARCH Q

UAWERSITY OF NIGERIA, N,

TOPIC: RELA TIONSHIP MARKETING AND SA TfSFACTf ON IN BANKS": A CASE STUDY OF MAGNUM TRUST BANK PLC.

Please, this questionnaire is designed to evaluate without bias, the imp

relationship marketing on customer loyalty & patronage.

It will be highly appreciated if your honest opinion is given against the quesnons.

Please, be rest assured that any information supplied will be treated in strict

confidence and heId without any liability on your part.

Section A

Question 1 : Please indicate your sex:

Male 0 Female 0 2: How old are you?

Bellow 20 years 1-1 20 30yrs TI

50-60yrs 60 & above

Divorced Widowed T I

4. Please indicate clenrly your Ievel of education as given below:

First School Leaving Certificate 1-1

General Certificate of Education 1 I

Diploma

BScMND other Professional Qualifi

5 . Are you operntinga a bank account?

Yes 1-1 6. If your response to above question is yes, is there n bonk official

attach ed to monitor your nccount ?

yes 17 U 7. What is your relationship with the bonk?

Customer El Staff I I

8. If-your response to 5 above is staffi what is v o w current status?

10. wnar is your opinion on zne impucz UJ marKeriplg on R prurzuct or

service?

Yes I] Section B

I I . What is your relationship with your bank or your cuslvrrrcr ;

(please delete as appropriate).

Cordial Intimate 11 Not Close TI 12. Does relationship mnrketing influence your attitude towards your

bunk or customer (plesxse delete us appropriate)

Yes Undecided I]

13. Do you agree that existence of relationship officers in banks impacts

positively on the delivering qualitative banking?

y e s TI NO I 7 Undecided L A 14. Can you say that Nigerian economy is under-banked?

Yes L_I

Can the establishment

attitude of Nigerians?

of relationship officers ' change banking

What level of impuct does relationship marketing play in influencing

your continuous stay with your bank or customer?

High Low 0 Undecided 0 As a marketing staff of your bank, to what extent does relationship

marketing impact on long-term profitability?

High TI Low Nil

Date post:	10-Jun-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

University of Nigeria Marketing and Custo… · University of Nigeria Research Publications...

Documents