ABSTRACT
Customer
relations is clients oriented and at its root lie the need to create a
convivial atmosphere that will be beneficial to the organization and its sundry
clients. Customer relations entail building or establishing a relationship
between an organization and its customers through excellent service provision
and delivery in other to create an impressionable opinion of the organization
in the minds of the customers. Therefore, this study, “customer relations
practice in the old and new generation banks: A comparative analysis”, compares
and analyses the customer relations practices of both old and new generation
banks in Nigeria with the view to identifying their distinct customer relations
orientation and its implications on banks’ profits and sustenance. Using survey
research and In-depth Interview methods, 384 respondents were sampled through
cluster, quota and systematic sampling techniques respectively. This was from
the total population of 783,047 for Enugu and Awka Metropolis. The
questionnaire and interview were the instruments of data collection. The
findings reveal no bank in Nigeria (both old and new generation banks) has
found lasting solution to the problem of traffic and queuing system, which is
attributed to staff inefficiency. However, new generation banks were found to
do better in terms of service delivery and handling of customers’ complaints.
At the final analysis, it is recommended that since all efforts to eliminate
long queues in Nigeria banks has not yielded much results, banks should employ
more staff as well as open more branches or expand the existing ones where
necessary. Also, the daily withdrawal of the maximum of One Hundred Thousand
Naira (N100, 000) with ATM Cards should be reviewed upwards so that the
customers would have lesser transactions to make inside the banks.
CHAPTER
ONE
INTRODUCTION
1.1
Background
of the Study.
Customer relations is a very
broad field that encompasses customer/client service, corporate social
responsibility, relationship marketing, reputation/image management among
others. Due to its broad scope, it does not have a generally acceptable
definition. However, this notwithstanding, one thing is certain-customer
relations is clients-oriented and at its roots lie the need to create a
convivial atmosphere that will be beneficial to the organization and its sundry
clients. Customer relations entails building or establishing a relationship
between an organization and its customers through excellent service
provision/delivery in order to create an impressionable opinion of the
organization in the minds of the customers. Some organizations that have
thrived in business over the years are those that carved a niche for themselves
as customer friendly enterprises. In most cases, the difference between ailing and
thriving companies or organizations lies in their customer service
orientations. This is because, studies have shown that the perception of
customers towards a particular organization or company goes a long way in
determining the kind of patronage they give the organization. This is why a
small company can grow and outshine its better in the market. Customer
relationship management, as the name implies, is saddled with the
responsibility of establishing, developing and sustaining relational partnerships
between an organization and its clients. It is becoming an important issue in
marketing in order to gain customer loyalty, improve customer relations rates,
as well as increase profits. Customer relations management refers to a
management approach that seeks to create, develop, and enhance relationships
with carefully targeted customers in order to maximize customer value and
corporate profitability… (Kuo-chung and Chin-shan, 2012:64). Customer relations
(also known as customer care or service in some companies) is seen as giving
attention or provision of service before, during and after a transaction.
According to Turban et al. (2002), “customer service is a series of activities
designed to enhance the level of customer satisfaction – that is the feeling that
a product or service 10 has met the customer expectations”. It attempts to make
best utilization of both divides. That is, it is geared towards customer
satisfaction and aims at increased profitability. The importance of customer
service/relations may vary by product or service offered industry and customer.
In the banking sector, customer relations take two dimensions, customer service
(care) and financial relations. Although, in most cases separating them is most
difficult because both of them are geared towards winning customers and
ensuring the loyalty of existing ones. Customer service entails assisting the
customer in making cost effective and correct use of a product or service. It
includes assistance in planning, training, troubleshooting, maintenance,
upgrading and disposal of a product or service. It can be provided by sales or
service representatives, or by automated means. Examples of automated, are the
Internet sites Automated Teller Machines (ATM). ‘Automated means’ in this
instance, can be based entirely on selfservice, or may also be based on service
by more or less means of artificial intelligence.
(www.ehow.com/aboutcustomerrelations.html#1xzz2EikiQ7ss/retreived-4/12/2012).
Financial relations, on the other hand, entails relationship marketing (a new
concept in marketing communication). Relationship marketing has been viewed by
Unegbu (2012:4) as buyer – seller relationship that accumulates over time with
opportunities to transfer individual and discrete transactions into relational
partnerships. She further states. It implies the development of long-term
relationships between the customers and the suppliers, in order to generate
advantages for all those involved and to allow the co-creation of value rather
than its unilateral distribution. It (relationship marketing) aims not only at
attracting but also retaining 11 customers and knowing them better (Unegbu,
2012:3). Customer relations (which is the concern of this work) is “the
frontline between an organization and its customers” (Lawson 2012:1). It
highlights the relationship that is based on the understanding existing between
an organization and its clients. The role of a customer relations person, to
quote Ayo Oyebade, a brand strategist, is mainly to make the client happy and
get into his (or her) good books by meeting every possible demand of the client
or customer. Oyebade further states: In fairness to executives working on the
clients’ side…they (clients) simply want to be part of your business success.
They expect to be appreciated, we all love to be loved…we are human beings with
affinity for affection. We usually take interest in those who are interested in
us…the onus is on the client service person to understand this feeling and
fashion a way that will work for his organization in dealing with the client
that surpasses collecting a local purchasing order (LPO). Your organization
must deliver all the deliverables with professionalism. It must develop
reputation for excellence in service delivery. The above presupposes that customers
have vested interest in the organizations (banks) they patronize. The customer
relations person’s duty is therefore to ensure that the customers’ welfare is
not undermined. The golden rule here is “to do unto the customers what you
would have them do unto you”. They are the ones that ensure your target sales
are met and possibly ensure that the employer delivers dividends to the
shareholders. Without the customers (clients) business is doomed. The customer
12 remains an asset and his importance to the survival and growth of banks is
portrayed in the words of Mahatma Gandhi quoted in (Onah & Thomas,
1993:14): A customer is one of the most important visitors on our premises. He
is not dependent on us. We are dependent on him. He is not an interruption on
our business. He is the purpose of it. He is not an outsider on our business.
He is part of it. We are not doing him a favour by serving him. He is doing us
a favour by giving us an opportunity to do so. The importance of the customer
to any business cannot be over-emphasized. In marketing, for instance, it is
believed that the customer is always right. Ekwueme (2008:264) puts it more
succinctly, “the simple lesson to be learnt is that if you wish your bank to
survive and thrive, pay good attention to your customer even if he is
irrational, aggressive or foolish. He is the king and is always right. You need
him. He does not need you. Without him, you are out of business”. In Nigeria,
customer relations department is a specially carved out section in banks to cater
for the need of customers. But unlike other departments like ‘Operations and
Marketing,’ customer relations was relegated to the background. “Apart from the
issuance of deposit/withdrawal slips to customers”, to quote Megwa Stella, a
banker with one of the old generation banks, not much was heard from this
department prior to the “ Consolidation exercise” carried out by the Central
Bank of Nigeria (CBN) in 2006. The consolidation exercise (bank
re-capitalization) led to the demise of many banks (89 banks in 2004 were
shrunk into 24 banks in 2006) as well as the establishment of more vibrant ones
(Ekwueme, 2006:255; Onyike, 2012:21). Such banks as First Bank, United Bank for
Africa (UBA), and Union Bank are among the old generation banks that survived the
CBN’s hammer, while the new generation banks 13 (also called the post
consolidation mega-banks) may include Guaranty Trust Bank (GTB), Keystone Bank,
Zenith Bank, Access Bank and others. Consequent upon increased competition,
which was the after-math of the consolidation, banks resorted to aggressive
marketing by becoming more customer friendly. Customer relations as
aforementioned is at the head of the broad spectrum of public relations
activities which Ogundipe (1990:241) says, “is sine qua non for the survival of
such a corporate body…” According to Ogundipe (1990), public (customer)
relations in banks is expected to fulfill the following: …Serving as a central
information source about the organization and the publics, bringing to public
attention significant facts, opinions and interpretations that will serve to
keep the public aware of its policies and actions; co-ordinating the activities
which affect its relations with the general public as well as with special
public groups; collecting and analyzing information on the changing attitudes
of key public groups towards it. The centrality of customer relations in banks’
survival in contemporary society from Ogundipe’s standpoint is not ruled out.
Of all profit making enterprises, financial institutions depend almost entirely
on public perception and trust for their survival and success. This is because
banking is predicated on confidence. So you must effectively manage information
about banking services in every facet (Rhody, 1991:569-570; Ebiseniju &
Okungbowa, 1998:29). After the consolidation exercise, one thing had remained –
the need to stay afloat and ahead of competition. The need therefore arose for
banks to continuously research 14 into and review their customer relations
practice to know the perception of the customers with a view to retaining
existing loyal customers and wooing prospective ones. While some banks cashed
in on this, others may have underestimated its importance to their corporate
existence. Just recently, Bank PHB, Spring Bank, Oceanic Bank, Intercontinental
Bank and Afri Bank were either sold or forced into merger with other banks. The
problem of these banks, experts argue, is not insufficient capital/asset base
but bad customer relations orientations. Research in the past has delved into
the area of public relations, advertising and marketing, but none known to this
researcher, was narrowed down to customer relations management (CRM) in banks.
And neither has any study undertaken to do a comparative analysis of banks’
customer relations. This study was therefore motivated to fill the void in
literature by undertaking to do a comparative study of the customer relations
practices of both old and new generation banks in Nigeria with a view to
identifying their distinct customer relations orientations and its implications
on banks’ profits and sustenance.
1.2
Statement
of the Problem
Customer relations is not
about understanding the market as it were; it is about understanding people and
their individual needs and styles and meeting them. The best way banks can do
this is to keep the customers in mind and think of them as the real business,
instead of the product or services offered. To do this, the banks must
constantly strategize to adapt to the changing circumstances of the society and
the behaviour of the customer, which is constantly in a state of flux. To
achieve customer loyalty and attract prospective ones, banks have introduced
innovations into their operations. “Customer help lines, E-banking, queue
efficiency and management, Automated Teller Machines (ATM)” and other customer
friendly packages and dispositions are some of the innovations that endear
customers to their banks. However, notwithstanding these ‘post consolidation’
initiatives in commercial banks one still finds customers who complain of poor
customer service in banks. In such situations, these dissatisfied customers
usually compare their banks with others and as such may consider switching over
to the banks they consider better. In most of the cases, financial analysts say,
these arguments tow generational lines’. That is, while some argue in favour of
old generation banks for their “long standing policies of customer
satisfaction”, others favour new generation banks for their “youthful and
flexible” customer service orientation. Is this so? Are all the perceptions
about the banks correct? And how does this affect the customers’ preference of
banks? This study is undertaken to do a comparative study of old and new
generation banks’ customer relations practices to determine their area of
convergence, divergence and as well as to find out if their respective
successes or failures are attributable to their customer relations practice.
1.3
Objectives
of the Study
The objective of this study
is to assess the customer relations practices of old and new generation banks
to determine their areas of convergence and divergence as well as to ascertain
if their respective successes or failures are attributable to their customer
relations. Specifically, the study intends: 1. To find out the differences
between old and new generation banks customer relations packages. 2. To find
out if the customer relations packages of old and new generation banks are
accessible to customers. 3. To find out if the customers’ perception of the
customer relations packages of old and new generation banks influence their
choice of a particular bank.
1.4 Research Questions
1. What difference exists
between old and new generation banks’ customer relations packages? 2. How
accessible are these customer relations packages to customers? 3. What
influence does customers’ perceptions have on their choice of any particular
bank in the country?
1.5 Significance of the Study
The major problem most government and
corporate organizations face in policy formulation is the dearth of empirical
data in the area of interest. This study will be meaningful in a lot of ways to
the government, and corporate organizations since it provides them with some
vital data in the area of banking and client/customer relations as well as help
them to make policies and strategies that will be of help to business
especially in the area of customer service or customer relations management. It
will further assist in developing an understanding of research about the 17
banking industry by finding out what are actually involved in the banking and
client service world. It may also help in educating other financial and
non-financial organizations on the relevance of adopting good customer/client
relations that is based on value reorientation and customer satisfaction. The
study will as well provide data for the research activities of bankers,
financial experts, students, lecturers, as well as other corporate bodies and
public/customer relations practitioners.
1.6 Scope of the Study
This study is confined only
to just all the customer relations activities aimed at retaining valued
customers and winning new ones. Geographically, it covers all the old and new
generation banks in the southeast geopolitical zone. However, First Bank, UBA,
Guaranty Trust Bank (GTB), and Zenith Bank were selected to be studied. In
order to get the perception of the public about the customer relations packages
of the old and new generation banks, Enugu and Awka metropolis were selected.
These cities were selected based on their strategic importance in the heart of
the people. While Enugu serves as the capital territory of the old Eastern region
as well as the regional headquarters of the banks, Awka is the nearest city to
Onitsha, the commercial nerve center of the Eastern region. N: B. Please note
that public perception was chosen in place of customers’ perceptions because
the perception of the public, especially those that are not on the 18 banks
clientele list can go a long way in influencing prospective customers choice of
banks.
1.7 Operational Definition of
Terms
Certain terms have been used
in this research work, which may not be fully understood by all who come across
it. It becomes pertinent therefore, to define some of these terms. Hence, we
have them as follows: Customer: This is a person who buys a product or service
from a person or organization, usually a seller. In banking, a customer is a
client who patronizes the bank either to make deposits, withdrawals, or get a
loan or other banking services. Customer Relations: This is the effort made by
banks to establish and maintain goodwill between these organizations and their
customers and prospective customers. Bank: A bank is a financial institution
set up purposely for the safe keeping of money, valuable goods and documents to
be made available at the request of the depositor. It is also charged with the
responsibility of accepting deposits, granting of loans and over draft
irrespective of interest paid on them. Old Generation Bank: These are the banks
that were established in the country during colonialism. These are First Bank
(established in 1894), Union Bank (1917) and United Bank for Africa (1948). New
Generation Banks: These are the banks that preceded Nigeria’s independence in
1960. These include Fidelity Bank, Zenith Bank, Guaranty Trust Bank (GTB),
Access Bank, Keystone Bank, Stanbic IBTC Bank etc.