CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Studies have shown that in this ever changing and dynamic business environment driven by globalization, service industry needs to develop a good product for the consumer, making the price affordable as well as interact with the customers using a friendly language (Fozia, Shiamwama and Otiso, 2014). This is pertinent because the higher the customers, the higher the sales and in turn the profitability of the company. This is because the quality of the product expected by the customers from the company is very high and it must be of higher quality. To this end, many service industries/organisation engage in stiff competition with one another with a view to satisfying customers’ needs and expectation. For this reason, companies (both foreign and local) are constantly engage in products quality, brand promotion and rendering good customer service in order make their customers remember them and place their product in a rightful position amidst a competitive market. The aforementioned stiff competition among various companies notwithstanding have cost many companies huge amount of money for advertisement and promotion which is detrimental to the profit level of the company.
It is in this regard that many profit oriented companies are looking for a new dimension of achieving brand loyalty for its product from the potential customers in other to increase their sales patronage. To this end, Customer Relationship Management (CRM) has been identified as an effective strategy to maintain both the potentials and new customers.
Customer Relationship Management (CRM) as a concept holds that, for a company to maximize profit, it must increase its customer’s level. To do this, company must develop a relationship with each valued customers and ensure that they have acquired details information about them (Kotler, 2003). Customer Relationship Management (CRM) also presupposes customers’ needs must be identified, satisfied, and influences their behavior with the hope of reining them through effective communication (George, Emmanuel, Christiana, & Rachel, 2011). In the word of Kishore, (2009), CRM has two specific and autonomous important strategies. The first strategy is for a firm to be self-determine the cost and build a long term customer relationship, the second is to maintain this relationship using the following tactics; collection and analysis of accurate data, ensure recent and up to date marketing campaign as well as well as developing a problem solving ability for the customers.
Julita, (2011) opines that there is a thin line between a consumer and a customer, these words were used interchangeable in a business field and is adding to the confusion. When you are talking of a customer, this refer to someone who purchase goods and services from someone else, while a consumer busy goods and services for personal use.
Economics refers to a consumer as either a single person or an entire organization that uses a certain type of service. For instance, someone who is sells a coffee and buys a coffee from a coffee maker; this invariably means that the restaurant buys the said equipment, for the benefit of its patrons or guests. In this situation, the restaurant represents a customer and not the actual consumer. Furthermore, in a resemblance situation, where you directly go to the coffee maker and buy coffee for your family’s use, then you are the real consumer. In simple sentence, any product bought other than for personal use is refers to as a customer. The significance of a customer cannot be underestimated as he/she represents in the office, on phone as well as mail or e-mail. In another dimension, Welsh, (2008) sees customer as a person who is capable of bringing the want of an organisation to their want, and it therefore becomes the primary responsibility of the organisation to handle the customer profitably and the achievement of the organisation and customers. Service provider or organizations that would meet the need of the targeted customers’ audience through various products and service must stay ahead of the competitive companies and forced to turn their attention to the customers and value them as individual customer and the development of personalized relationships. Customers must have knowledge of the products in the market and the company at the same time should adapt their products to the needs and requirement of the customers (Vogt, 2008).
From the foregoing, the overall essence of customer relationship management is contingent upon how effectively a company can manage its potential customers. It is easier for newly established industries with few employees and few customers to satisfy the needs of the customers and satisfy them, the moment your customers increases, you must add links to the customers’ service chain (Khwala, 2016). This is where customer relationship management comes into play. The perception and feeling customers have towards a brand goes a long way in determining the success or failure of the brand. For this reason businesses strive to build good brand equity for their brands using various means in which good customer service is included. It doesn’t just end in good customer service; businesses have taken steps in harnessing the ‘goodness’ of customer relationship management.
.