THESIS TURNITIN.docx - CUSTOMER SERVICE CUSTOMER LOYALTY AND CUSTOMER RETENTION AT NWABIAGYA RURAL BANK LTD By MARY ANINWAH DANQUAH(PG 2638914 1 CHAPTER

THESIS TURNITIN.docx - CUSTOMER SERVICE CUSTOMER LOYALTY...

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CUSTOMER SERVICE, CUSTOMER LOYALTY AND CUSTOMER RETENTION AT NWABIAGYA RURAL BANK LTD By MARY ANINWAH DANQUAH (PG 2638914) 1
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CHAPTER ONE INTRODUCTION 1.1 Background of the Study The banking industry is a significant sector in the business world which has a huge effect on all other sectors of the economy due to the financial services provisions. Financial services in Ghana have seen several transformations over the past decades with a growing focus on customer needs. The function in the growth of all economies by the financial sector cannot be overlooked. Banks as a matter of fact assume a significant role in advancing the performance of businesses in the economy. Banks are the main supplier of credit in Ghana (Petasis and Opoku-Mensah, 2009). Notwithstanding their role, banks could not have done all these without customers. During the past decade, the financial service sector has seen turbulent transformations, leading to market place which is characterized by extreme competition, little growth in primary demand and increased de-regulation with the banking sector. Banks are not left out as they are severely affected by the level of competition both locally and globally. There has been a rapid growth in the banking industry with the proliferation of micro-finance institutions which further increases the competition and complexity among the banks. This makes it necessary for a bank to be customer oriented in its daily activities and relations with its customers in order to be able to retain them (Petasis and Opoku-Mensah, 2009). The complexity in the banking industry has made bank managers to concentrate on how to develop close affiliation with their customers. Hence, Ghanaian banks are required to create effective strategies to improve the interaction between customers and the bank staff. It is not surprising that Ghanaian banks currently establish a separate department in the bank called 2
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customer service department to address customer concerns and complaints so as to guarantee that customers obtain value for their money thereby improving customer retention, building and maintaining customer's cordial relationship (Ehigie, 2006; Gee, Coates and Nicholson, 2008). This will also assist banks to attain an advantage which will eventually lead to customer retention and increase profitability. Additionally, loyal customers can provide the basis for growth which results into competitiveness in the industry. Furthermore, the belief that customer service investment builds firm, more trusting customer relationship and enhances financial performance has resulted into massive spending on customer relationship programmes (Morgan and Hunt, 1994). Good and superior customer service would lead to customers' retention which has to do with creating relationship, customers’ loyalty which has to do with developing relationship, and customer interaction may result into customer retention (Gan et al., 2006).
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