TABLE OF CONTENTS
Page
TITLE PAGE i
APPROVAL PAGE ii
CERTIFICATION iii
DEDICATION iv
ACKNOWLEDGEMENTS v
TABLE OF CONTENTS vi
LIST OF TABLES vii
LIST OF FIGURES viii
ABSTRACT ix
CHAPTER ONE: INTRODUCTION
Background of the Study 1
Statement of the Problem 17
Purpose of the Study 18
Significance of the Study 18
Research Questions 20
Hypotheses 21
Scope of the Study 21
CHAPTER TWO: REVIEW OF RELATED LITERATURE
Conceptual Framework 23
Historical Development of Nigerian Banking System 23
Commercial banks in Nigeria 29
Customer Relationship Management 31
Customers’ Satisfaction 43
Demographic variables of Customers: Age; Gender; and Education 49
Conceptual relationship among the variables 54
Theoretical Framework
The Stakeholders’ Theory by R. Edward Freeman (1983) 55
Disconfirmation theory by Szymanski and Henard (2001) 58
The Gap-model by Parasuraman, Berry & Zeithaml (1988) 59
Related Empirical Studies 63
Studies on CRM and Customer Satisfaction 63
Studies on Influence of Demographic variables and customer satisfaction 72
Summary of Literature Reviewed 76
CHAPTER THREE:METHODOLOGY
Design of the Study 79
Area of the Study 79
Population for the Study 80
Sample and Sampling Techniques 80
Instrument for Data Collection 81
Validation of the Instrument 82
Reliability of the Instrument 82
Method of Data Collection 82
Method of Data Analysis 83
CHAPTER FOUR: RESULTS
Presentation of Data Analysis 84
Findings of the Study 97
Discussion of Findings 100
CHAPTER FIVE: DISCUSSION OF FINDINGS
Restatement of the Problem 106
Summary of Procedure Used 107
Major Findings of the Findings 108
Implications of the Study 109
Conclusion 110
Recommendations 110
Limitations of the Study 111
Suggestion for Further Studies 112
REFERENCES 113
APPENDICES
A: Instrument for Data Collection 129
B: Reliability Estimates 135
C: Output 143
LIST OF TABLES
Tables
- Mean Ratings and Standard Deviations of Respondents on the influence of technology infrastructure on customer satisfaction. 85
- Mean Ratings and Standard Deviations of Respondents on the influence of human analytics on customer satisfaction towards banking services. 86
- Mean Ratings and Standard Deviations of Respondents on influence of business architecture on customer satisfaction towards banking services. 87
- Mean Ratings and Standard Deviations of Respondents on influence of age on customer satisfaction towards banking services 88
- Mean Ratings and Standard Deviations of Respondents on influence of Gender on customer satisfaction towards banking services 89
- Mean Ratings and Standard Deviations of Respondents on influence of Educational qualification on customer satisfaction towards banking services 91
- Paired Sample t-test Analysis of the Significant Influence of Technology Infrastructure on Customer Satisfaction towards Banking Services 92
- Paired Sample t-test Analysis of the Significant Influence of Human Analytics on Customer Satisfaction towards Banking Services 93
- Paired Sample t-test Analysis of the Significant Influence of Business Architecture on Customer Satisfaction towards Banking Services 93
- ANOVA of the significant difference in satisfaction towards banking services among customers from different age groups 94
- Post Hoc Test of the comparison between the mean responses of respondents on satisfaction towards banking services among customers from different age groups95
- t-test analysis of the significant difference between the mean ratings of male and female teachers on customers’ satisfaction towards banking services 96
- ANOVA of the significant difference in satisfaction towards banking services among customers from different educational background 97
LIST OF FIGURES
Figures
- Customer Relationship Model by Ruth & Crina (2006) 39
- Conceptual Relationship among the Variables 55
- Stakeholders’ Theory 57
- Disconfirmation Theory Framework 59
- Service Quality (SERVQUAL) Model 63
ABSTRACT
The study investigated the influence of customer relationship management practices of commercial banks on customers satisfaction in Edo State, Nigeria. Influence of demographic variable such as age, gender and education attainment of the customers were also investigated. To achieve the purpose of the study, six research questions were posed and six null hypotheses were tested at 0.05 level of significance. The population of the study comprised of all the commercial banks’ customer in Edo State. A sample of 600 customerswhich consisted of 336maleand 264 female customers were used for the study. The sample also consisted of 36 SSCE holders, 166 OND/NCE holders, 398 BSc/HND holders and age range of 15-30 years = 262, 31-45years =212 and 46years and above = 126. The sample was obtained using multi-stage sampling procedure. Instruments used for data collection were structured questionnaire named Bank Customer Relationship Management Questionnaire (BCRMQ) and Customer Satisfaction Measurement Scale (CSMS). The instruments were validated by three experts: two from the Department of Business Education, University of Nigeria, Nsukka and one expert from Measurement and Evaluation Unit of the Department of Science Education, University of Nigeria, Nsukka. The instruments were trial tested on 50 bank customers from Delta state who were not part of the study but had the same characteristics with the target respondents. The scores obtained from the trial testing were used to test for reliability using Cronbach Alpha statistics. The internal consistency estimates of the instrument yielded 0.83 and 0.91 for BCRMQ and CSMS respectively. The data collected were analyzed using mean and standard deviation to answer the research questions, t-test was used to test null hypotheses 1, 2, and 3, t-test statistics was used to test hypothesis 5. Hypotheses 4 and 6 were tested using One Way Analysis of Variance (ANOVA). Findings of the study revealed the following: technology infrastructure, age, gender, education attainment and human analytics have influence on customer satisfaction towards banking services; business architecture has no significance influence on customer satisfaction towards banking services, while demographic variables such as age, gender and educational attainment have influence on customer satisfaction towards banking services. The finding of the study also show that technological infrastructure, human analytics and business architecture have significant influences on customer satisfaction towards banking services. Further findings of the study show that there was a significant difference in satisfaction towards banking services among customers from different age groups; male and female customers differ significantly in their opinions on customers’ satisfaction towards banking services; and there was no significant difference in satisfaction towards banking services among customers from different educational background. Based on the findings, it was recommended that banks should: establish a central data warehouse for new and old data in order to facilitate the decision making process; organize the bank around the CRM in which each employee should work effectively as a team member to support each other; set up an ongoing dialogue between the customers and the employees to learn more about the customers’ interests, needs and priorities in order to share information among employees; and provide conducive physical environment for its customers by providing parking space, ensuring that their air condition is functional, providing means of reducing long queues in the banking hall among others. Some educational implication, suggestions for further studies and limitations were also highlighted.
CHAPTER ONE
INTRODUCTION
Background of the Study
The financial market is a major engine of economic growth and development in any nation.The financial market impacts directly and positively on the economy of the nation by providing financial resources through its intermediation process, for the financing of short, medium and long term projects (AL-Faki, 2007). Finance is one of the basic organic functions through which every nation or organization revolves, be it a profit or non-profit seeking organizations. Therefore the way the finance of a nation or organization is manageddetermines to a very large extent their survival and growth(Ajayi &Kwesiga, 2003). To facilitate financial transactions therefore, banks are provided.
Banks refer to financial institutions which serve as a store of money and other valuable items (Olokoyo, 2011). A broader definition of bank refers to itas a financial institution that receives, collects, transfers, pays exchanges, lends, invests, or safeguards money for its customers (Oladejo & Oladipupo, 2011). This definition includes many other financial institutions such as finance companies, investment companies, investment banks, insurance companies, pension funds, security brokers and dealers, mortgage companies, real estate investment trusts and commercial banks. Hence bank is operationally defined as the most important savings, mobilization and financial resource allocation institution. These services make bank an important phenomenon in economic growth and development. In performing this services, bank has the potential, scope and prospects for mobilizing financial resources andallocating them to productive investments.Banking services are extremely important in a free market economy such as that found inadvanced economics of the world, including Britain, Canada, and the United State. Banks offer financial services to supply customers’ medium of exchange such as cash, cheque, checkingaccounts, credit cards, and to accept funds from depositors and lend it out to borrowers (Afolabi, 2004).This implies that banking services serve two primary purposes, first by supplying customers with the basic media of exchange (cash checking accounts, and credit cards). Banks play a key role in the way goods and services are purchased without which, goods could only be exchanged by barter (trading one good for another) which is extremely time consuming and inefficient.Secondly, by accepting money deposits from savers and lending the money to borrowers, banks encourage the flow of money for productive use and investments which will in turn allow the economy to grow.
The four types of banks that specialize in offering these basic banking servicesare commercial Banks, merchant banks, mortgage banks, savings and loans association, saving banks and credit union (Kamau, 2012). But the present study will focus on commercial banks. Commercial Bank is a specialized type of financial institution that deals in loans to commercial and industrial business (Olokoyo, 2011). It is owned by private investors, called stockholders or by companies called holding companies with the objective of making profit. The profits can either be paid out to bank stockholders or to the holding company in the form of dividends of the profits or can be retained to build capital (net worth). The Central Bank of Nigeria (CBN, 2006) has the following banksas approved or licensed commercial banks in Nigeria:Access bank, Citibank, Diamond Bank, Ecobank, Enterprise Bank, Fidelity Bank, First bank, First City Monument Bank, Guaranty Trust Bank (GTB), Heritage Banking Company Limited, Key Stone Bank Ltd, Mainstream Bank, Skye bank Plc, Stanbic IBTC Bank Ltd, Standard Chartered Bank Nigeria Ltd, Sterling Bank Plc, Spring Bank Plc, Union Bank of Nigeria Plc, United banks for Africa Plc (UBA), Unity Bank Plc, Wema Bank Plc and Zenith bank.The activities of these commercial banks are regulated and closely monitored by the Federal Government of Nigeria through the Central Bank and other agencies, to protect the interest of the public. Thus, commercial banks are defined in the context of this study as financial institutions that accept or demand deposit, give loans and provide other financial services to the public.
In all these banks, the issue of customer is a common feature. Bank customer is a person in the habit of dealing in regular banking business (Naureen & Sahiwal, 2013). A bank customer in this context refers to an individual or a corporate account holder with any of the commercial banks in Nigeria.Thus, from above information, banking business is based on satisfying customers’ needs owing to the emergence of the digital economy. Customers are increasingly demanding more value, 24 hours availability with goods customized to their exact needs at less cost and as quickly as possible (Edemivwaye, 2015). To meet these demands by customers, banks need to develop innovative ways of creating value.
However, Customer confidence in commercial banks has been dampened due to various crises in the banking sector in Nigeria (Ademola, Olusegun & Kehinde (2013). Among these crises are the introduction of Structural Adjustment Programme (SAP) which changed significantly the way banking business was conducted with the licensing of many banks (Bello, 2005). These licensed banks tagged “New Generation Banks” redefined the operations of banking system. Such that competition was redefined through aggressive marketing, increase in employees’ welfare especially in the area of emolument, introduction of information technology that led to online real time banking and aggressive establishment of branchesso as to meet the needs of their customers and to show to the generality of public that their services are unique and better than the others.However, Ezeoha (2007) maintained that these services or branches established have not translated to customer satisfaction as customers experience human traffic while trying to access these services. This could destabilize customers and thereafter force them to open more than one account across the banking industry in order to satisfy their financial need.
Secondly, liquidation of banks has become a commonfeature in Nigeria leading to customers losing their deposits (Ademola, Olusegun & Kehinde (2013). It was reported in the Nigerian Television Authority (2002) that a prominent Nigerian footballer, Austin Okocha who played in the English Premier League with Bolton Football Club lost US1,000,000 (One Million United States Dollars) in Savannah Bank which was one of the banks that was liquidated in Nigeria (Okocha, 2002). Okocha at that time mentioned that he had lost confidence in commercial banks in Nigeria. Thirdly, Ekwueme (2008) and Onyike (2012) are of the view that Nigerian bank reform and government regulation have madebanking industries open to more foreign and local competition through consolidation and globalization.The consolidation exercise was found t, increased the customers’ portfolio of the surviving banks thereby increasing the level of competition (Melodi, Olufayo & Gbadamosi, 2012).
Under this dispensation, marketing of bank services only through advertising and market drive could no longer help banks to retain customers as they defect at the slightest prompt to competitors, as most banks are now embarking on marketing campaign more in the area of customer loyalty through various promotion strategies.In the same vein, Awolusi (2012) asserts that consolidation and government regulations has led banks to face further deregulation, increasing competition, and continuously evolving customer demand and expectations in the work services. This could be easily observed from slow pace of work services resulting in long queues, leaving the banking hall stuffy, untidy and choking as the air conditioners are rendered ineffective. Owing to the problem of long queues in banks, Khong and Mahendiran (2006) asserts that when a customer is allowed to be on the queue for many hours individual will be discouraged and will like to look out for where customer service is faster.
Commercial banks in Edo State are not immune from this ugly situation. For instance,Osunde(2014)is of the view that bank customers within the state are still being treated with laxity and in most cases, the workers exhibit poor attitude to work.Most banks in Edo State, rather than being customer oriented, are product or even profit oriented.The banks in Edo State are competing more on products rather than on customers, and the market was replete with different kinds of products because their basic competitive strategy then continued to be product differentiation (Ajayi, 2005). At the extreme, they tend to become a chameleon in nature thereby changing from one service provision to the other. They most times tend to combine many services together relocating or establishing another branch so as to meet the needs of their customers and to show to the generality of public that their services are unique and better than the others. However, these services or branches established have not translated to customer satisfaction as customers’ experienced human traffic while trying to access these services. This has destabilized customers thereby forcing them to open more than one account across many banks in order to satisfy their financial need.
To restore customer confidence in commercial banks in Nigeria and ensure best CRM practices by commercial banks, CBN established the Customer and Financial Protection Department to provide a platform through which customers can seek redress. In the first month of its operation as a division, it received over 600 customer complaints, which was a manifestation of the absence of an effective customer complaints resolution mechanism in the banks (Sanusi, 2012). Also, CBN directed money deposit banks or commercial banks to establish customer help desks at their head offices and branches. More so, the apex bank has commenced the review of the Guide to bank charges to make the charges realistic and customer-friendly (Sanusi, 2012). With this review, customers have options of relishing to banks that were capable of meeting their satisfaction.
This movement of customers from one bank to the other has created serious apprehension among the banks executives thereby leading to the provision of various strategies to produce products and services designed to match customer specifications. Among these strategies are supply-push and demand-pull, which were replaced by customer centric strategy called Customer Relationship Management (CRM) owing to their inefficiency (Salim, 2014). This was geared towards creating customers’ service point in most bank branches across the country, for the purpose of having a relationship that can lead to a consistent patronage by their customers. Olawale, Folarin and Yusuph (2014) defined Customer Relationship Marketing (CRM) as an aspect of relationship marketing (RM) which has to do with theprocess of identifying, developing, maintaining and terminating relational exchange with customers in order toenhance performance. Opara and Opara (2016) defined Customer Relationship Management as a broad spectrum of organizationaland operational business strategy that provides overall integration of all areas of business (marketing, production, finance, personnel).
Customer Relationship Management according to Dyche (2010) is an infrastructure that allows an increase in customer value, and a correct means by which to motivate valuable customers to remain loyal. Infrastructure here implies that CRM involves using technology to organize, automate, and synchronize banks’ business processes, mainly sales activities, marketing, customer service, and technical support (Kotler, 2000). Thus Pedron and Saccol (2009) defined CRM as a business philosophy, strategy and technology with a mediated strategy through data driven technologies that laid emphasis on the creation of two way communications in relation with customers to create some intimate knowledge in the firm about the needs of the customers, things that they want along with the patterns of banking.This is to say that CRM is a technology integrated business strategy, which aims to understand, anticipate and manage the needs ofthe banks’ current and potential customers.These technologies range from teller printers, Automated Teller Machines (ATMs), Smart Cards, Magnetic Ink Character Reader (MICR), internet Banking, Mobile Banking, e-Banking and Telephone Banking.
Using these technologies, customers tend to have the benefit of speedy service delivery, abridged rate of going to banks to carry out transactions, and abridged rate of carrying physical cash to make payment for goods and services, which gives ascend to higher rate of profit for the banks (Edojariogba, 2014). Thus, the use of technologies in CRM practices will enable banks to identify, attract, and increase retention of profitable customers by managing relationships with them and further identifying their strategic capabilities for quality service delivery (Buttle, 2001). Thus, CRM includes customer satisfaction, service quality, relationship quality, market orientation, trust, loyalty, commitment, customer retention, etc (Dadzie, Winston & Afriyie, 2003).
In redesigning strategy for quality service delivery, Olokoyo (2011) identified three main components of CRM strategic capabilities banks need to ensure for quality delivery. These are technology infrastructure, human analytics and business architecture. The componentsare the power indicators that directly influence CRM’s overall studies (Shamsuddoha, Tasnuba & Alamgir, 2011).The role of IT is to help redesign CRM processes, to facilitate changes to work practices, and to establish innovative methods to link marketers with customers, suppliers and internal stakeholders. By using IT, CRM can optimize interactions with customers based on historical data.The key components of technology infrastructure are the front office applications that support banking services such as: sales, marketing; data repository that supports collection of customer data; and back office applications that help integrate and analyze data (Greenberg, 2001).
TheHuman analytics are the information technology literate personnels and analysts who install and use the IT technologies in the banks to ensure quality service delivery (Osunde, 2014). Human analytic in CRM programmes require people who are responsible for CRM initiatives to demonstrate abilities and skills in dealing with customers.Human analytic involves staff responsibility and willingness to help customers and provide prompt serviceto them (Davenport. Harris, Long & Jacobson, 2001). The authors maintain that human analytics capture the human processes and procedures used to extract raw data and convert them into customer knowledge. The application of human analytic in CRM help provide information to the customer. Service propositions like “what can I do foryou” clearly underline the importance of customers. It is also involved in understanding the needs and wants of the customers, convenient operating hours, individual attention given by the staff, attention to problems and customers safety (ArunKumar, Tamilmani, Mahalingam & Mani, 2010).
Business architecture ensures stronger and deeper relationships with the right set of customers, banks need to identify the right approaches that will enable them to gain knowledge and insight for enhancing the customer value significantly and to create a customer centric approach (Barney & Mackey, 2005). Business architecture involves the physical environment of the banking premises, the building, parking spaces for customers, size of the banking hall, provision of seats in the banking hall and provision of working air condition in the bank among others. The provision of business architecture will portray to the customers that banks really care for their welfare and that banks’ CRM is efficient.
Previous studies had also shown that CRM improves financial efficiency of marketing effort and pricing,Jones, Sundaram and Chin (2002); improves product differentiation, customer commitment, satisfaction and loyalty Park and Kim,(2003); enhances long-term profitability Akroush, Dahiyat, Gharibeh and Abu-Lail(2011); enables knowledge management Ahmad and Zalina (2008); enhances customer acquisition, development, retention and decision making Obasi(2007); and brings about increased firm performance Nwankwo and Durowoju (2010).Kotler, Amstrong, Brown and Adam (2001) noted that CRM in the banking sector helps to find, attract and win new customers, nurture and retain those the bank already has, entice former customers back into the fold, and reduce the costs of marketing and customer service. To the customers, Okpara and Okpara (2016) maintained that through CRM they develop a sense of familiarity and a social relationship with their service providers which make it less likely for them to switch even if they learn about a competitor that might have better quality service, product or a lower price.
However, the Nigerian banking industry is also faced with problems such as congestion of banking halls, faulty equipment, long queues in the banking halls, pressure selling, among others (Ogunnaike & Olaleke, 2010; Adeoye & Lawanson, 2012; and Mohammad(2015). Also, unlike other departments like ‘Operations and Marketing,’ CRM was relegated to the background in most commercial banks. Reports have shown that many commercial banks have not completely harness their customer data and optimize customer relationships (Capgemini, 2007). These may be due to poor IT facilities in the banks, shortage or the use of inexperienced staff in service delivery and nonchalant attitudes of staff of the banks. To enforce a strategy towards customer management, commercial banks have tobe ready to invest in modern technology to assist them: understandthe customer and their behaviour; put customers to identify groupswith similarities that can be aimed jointly; assign values to segmentedcustomer, predict behaviour of customers and implement techniquesthat accomplish satisfaction.Operationally, CRM could be defined as a banking coordinating strategy mediated by a set of information technologies, which focuses on creating produces and services the view to acquire, retain and grow profitable customers. Suffix to say that banks use customer relationship management as a tool for gaining competitive advantagebecausethey stand to lose important customers if their services do not satisfy or meet the needs of the customers.
As competition intensifies, customers find themselves relishing the options and alternatives various banks can offer them if they are not satisfied with the services.Kotler and Armstrong (2013) define customer satisfaction as the extent to which a product’s perceived performance matches a buyer’s expectation. Terpstra Kuijlen and K. Sijtsma (2014) defined customer satisfaction in banks to refer to the balanced state of mind, concerning the bank, and evoked by the customer’s experiences with the bank throughout time. The authors further stated that customer satisfaction in the banking sector can be characterized within three contexts.First,the consumption of products and services from a bank is an ongoing process, which results from accumulation of encounters with the banks over time leading to customer satisfaction. This is known as a summary satisfaction. Second, customer satisfaction is a manifest of feelings about a bank, for instance through cognition on evaluation of whether a bank is doing well. Third, assumes that satisfaction and dissatisfaction isone-dimensional and ranges from a very dissatisfied to a very satisfied.
However, satisfaction is based on the customer’s experience of both contact with the organizations and personal outcomes. Simply put, a customer is satisfied based on his or her high personal assessment, which is largely influenced by individual expectations. When these expectations are met, a customer is said to be satisfied but when the opposite is the case,dissatisfaction is the result. Deductively, customer satisfaction can be viewed as a relationship of perceived value of service provided by banks and the expected value by customers. If the perceived value of services provided matches customer expected value, then customer is said to be satisfied.
Hence, it is virtually impossible for a business organization to survive without building customer satisfaction and loyalty. Research has shown repeatedly that, customer satisfaction influences organizational outcome such as performance superiority (Portela & Thanassoulis, 2005) increasing sales profit (Kish, 2000; Duncan & Elliot, 2002) and market share (Fisher, 2001), improves customer relations, enhance corporate image and promote customer loyalty (Newman, 2001; Caruana, 2002; Ehigie, 2006). Thus, customer satisfaction seems to hold significant importance in the banking sector development. Accordingly, Adewusi, (2008) maintained that a high level of customer satisfaction will decrease customer perceived need to switch service provider. This is because satisfied customers in most cases choose to remain with their service providers as well as to make referrals to the service provider, which means more business growth for the bank involved. On the other hand, the inability of some banks to determine what drives their customers banking behaviour may result in serious customer dissatisfaction thereby leading to their defection which may affect the banks’ ability to increase future business growth. This, according to Almossawi (2000), suggests that dissatisfaction drives customers away and is a key factor in customers switching behaviour.
The highly competitive Nigerian
banking industry has made banks to be proactive ininnovating different
products, offering incentives, deploying new distribution platforms
massively, indulging in promotional acts, training employees, building branches
and increasinguse of technology in order to satisfy customers. Others factors
such as fast and efficient service, confidentiality of bank, speed of
transaction, friendliness of bank staff, accuracy and timeliness of billing
system, competitive pricing and service quality have been found to relate with
customer satisfaction (Newman, 2001;Caruana,
2002; Ibok, 2009). Also, Alfred and Addams
(2000) contend that the currently relevant factors determining customer
satisfaction in the banking industry include: fast and effective service
delivery, competitive pricing, service quality, staff competence and ability of
the bank to maintain confidentiality. These factors are of course moderated by
the bank reputation in terms of credibility, trustworthiness, reliability, service
delivery, speed and accuracy.
However, complaints fromcustomers with regards to their dissatisfaction of provided services have increased in recent times owing to poor service delivery. In Africa, high prices of products and services (70%) are the main reason of dissatisfaction in commercial banks(KPMG, 2013). In Nigeria, slow services are the second most important factor of dissatisfaction, hence,Ogunnaike and Ogbari (2008) opined that customer service in Nigerian banking industry can be mistaken to mean customer delay and frustration. Osunde (2014) reported the issue of delay in posting transactions such as money transfer and payments made between customers as a major problem that customers of commercial banks within the state have been made to experience. The author further stated that in most cases, customers hardly receive the notification that an account has been credited or debited immediately, instead, the account holder may have to wait endlessly before seeing the notification or in worse cases, may have to visit the bank to confirm such transaction.Osarenkhoe and Komunda (2013) are of the view that product failure and poor complaint handling cause dissatisfaction. Also, high prices or high bank charges is another factor that causes dissatisfaction leading to change of bank by customers (Manrai and Manrai, 2007).
Furthermore,Housemark and Albinson (2004) noted that poor service quality is a critical factor in causing customer not to be satisfied. Sathanakopoulos (2001) is of the view that most important factors discouraging customers banking behaviour are delay in transaction, staff incompetency, unreliable transaction, poor service delivery, unfriendly staff attitude among other factors.There are also problems of weak services, long queues and huge crowds in the banking halls. Ogunnaike and Olaleke (2010) stated that almost all Nigerian banks encounter similar problems in meeting customers’ expectations of services and customers satisfaction, ranging from problems of money transfer, long queues and huge crowds in the banking halls. Adeoye and Lawanson (2012), state that most of the long queues and huge crowds in the banking halls are as a result of breakdown ofcomputers and at times as a result of cashiers absconding from duty and passing the bulk to someone else.
This situation has led to inefficiency in banking service delivery in Nigeria and has thus caused low customer satisfaction. Many Nigerian banking customers have thus wondered whenthe endless desires of spending the least possible time for banking transactions will be met by banks in the country. Although one of the strong objectives of banks is to attract, retain customers and at the same time optimize profit, however, profit maximization in banking industry is a function of the management’s ability to provide efficient services to customers at little or no time wastage (Klynveld Peat Marwick Goerdeler (KPMG, 2013).
Customer demographic variables such as age, gender, level of income, education, and experience with bank seem to be some services moderator variables of customer satisfaction in a wide range of service industries (Narteh & Kuada, 2014). However, the present study focused on age, gender and level of educationin order to find out the relative importance of factors that construct the demographic background of customers, while assessing customer satisfaction. Tesfom and Birch (2011) stated that young and older bank customers differ significantly in their satisfaction levels. For instance, younger customers are more likely to easily change their banks, but for banks to retain them, they need to offer more meaningful incentives to younger customers than older customers.
Also, fulfillment of customer satisfaction becomes even more complex and intriguing due to intangible nature of the service offering, where the amount of satisfaction derived from a banking transaction varies greatly depending uponhow the outcome of an intangible transaction is interpreted by customers in relation to their gender. Caruana (2002) defined gender as a sociocultural construct, a category that sorts and organizes social relationships between human male and female. Gender is defined as an idea of what it means to be a masculine or feminine are fluid and socially and historically constructed (Weaver-Hightower, 2003). Kimmel (2000) explains that the issue of masculinity in customer satisfaction is not the problem of male versus female customers. It is about rigidly constructed gender roles and stereotypes that negatively impact both genders. Frosh, Phoenix & Pattman (2002) found that many male customers in their research explained that they were faced with contradictions in negotiating their masculine identities and banking relations. The social pressure for gender conformity was evident, hence, gender acquisitiondevelops through a complex, individual social process. Operationally, gender is the outcome of a social, historic and cultural process that develops through practices, symbols, representations and social standards and values, and determines appropriate roles for men and women.
Gender influence on customer satisfaction is important due to its role in socialization, decoding ability, differences in information processing, traits, and the importance placed on the core or peripheral services in relation to being male or female (Dittmar, Long, & Meek, 2004; Mattila, Gradey, & Fisk, 2003). In banking literature, studies showed that female customers tend to rate service quality lower when a comparison is made between genders (Lin, Chiu &Hsieh, 2001; Tan & Kek, 2004; Snipes, Thomson & Oswald, 2006; Juwaheer, 2011). Omar (2008) did a research on determinants of commercial bank choice in Nigeria with respect to gender. The results showed that there are some differences in choice factors used by male and female customers in selecting commercial banks for patronage. However, the issue has not been examined in the context of CRM, particularly among customers in Edo State. It is vitally important for bank CRM providers to understand potential gender influence on customer satisfaction. Thus, if the relative importance of the service quality delivery to customers is likely to vary depending on their gender, resource allocation on those attributes should be contingent on the importance attached to them by customers.
It is necessary for banks to strive hard to retain their customers in the face attracting new customers.Almossawi (2001)has strongly arguedthat customer’s knowledge is also one of the most importantfactors which can affect satisfaction. Customer knowledge is measured in terms of their educational attainment in the context of the present study. Cengiz (2010) has strongly argued that customer’s education attainment and knowledge is one of the most important factors which can affect their banking satisfaction.U.S. Department of Education, National Center for Education Statistics. (2017) defined educational attainment as the highest level of education completed (example a high school diploma or equivalency certificate, an associate’s degree, a bachelor’s degree, or a master’s degree).
Educational attainment of customers could influence their level of satisfaction in bank services. Education attainment varies from Primary School Certificate (FSLC), Senior School Certificate (SSCE), Diploma/National Certificate of Education (Dip/NCE), Higher National Diploma/ University Degree (HND/BSC) and Postgraduate Certificates (PGD(s), MSC, M.Ed and Ph.D). The level of customer education attainment chronologically depends on the acquisition of the above mentioned certificates. Empirical evidence confirms that more educated people are more likely to trust banks (Molina, Martín-Consuegra, & Esteban, 2007). This implies that more educated customers feel more satisfied with bank services more than the less educated customers. In the same vein, a research by Meyer et al. (2005) for Deutsche Bank on online banking found that individuals with higher formal education are more satisfied with the use of internet and are therefore, likely to do financial transactions online.Cengiz(2010) conducted a study on identifying the major reasons for dissatisfaction with public sector banks. Their study revealed that the high educated customers are more likely to be dissatisfied with banks services irrespective of the variations in their age range.
Age is a human attribute that has long been taken for granted. However, we know very little about the age beneath the skin and beyond the body. Gerontologists defined age and aging in four dimensions (Hooyman & Kiyak, 2011). The dimension most of us think of is chronological age which is defined as the number of years since someone was born. A second dimension is biological aging, which refers to the physical changes that “slow us down” as we get into our middle and older years. For example, our arteries might clog up, or problems with our lungs might make it more difficult for us to breathe. A third dimension, psychological aging, refers to the psychological changes, including those involving mental functioning and personality, that occur as we age. Gerontologists emphasize that chronological age is not always the same thing as biological or psychological age. Some people who are 65, for example, can look and act much younger than some who are 50. The fourth dimension of aging is social. Social aging refers to changes in a person’s roles and relationships, both within their networks of relatives and friends and in formal organizations such as the workplace and houses of worship. Going by these distinctions in the definition of age, the present study focused on chronological age which is deductively, defined as the number of years since one is allowed to personally open an account in the bank to his current age as at the time of this research study.
At the same time, while a vast amount of organizational studies have covered almost every angle of the demographic theme, the concept of age has largely been ignored. The almost untouched area of the conceptualization of age, and as a consequence of it, the discursive perception of a customer as well as his or her banking satisfaction needs to be explored and unmasked further. Thus, the age of customers in the context of present study will range from 15-30years, 31-45years and 46 and above.
Drawing from the literature, it is hypothesized that demographic variables such as age, gender and education dictate a person’s needs and preferences. The amount of satisfaction derived by customers is highly dependent upon the degree to which their needs and preferences in relation to gender, level of education and age are fulfilled. Therefore, there is need to provide evidence on the extent to which CRM, age, gender and education influence customer satisfaction in Nigeria commercial banks particularly in Edo State.
Statement of Problem
