CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Customer Relationship Management (CRM) has become a cornerstone strategy for organizations operating in highly competitive service industries, particularly banking, where the cost of acquiring new customers typically far exceeds the cost of retaining existing ones. CRM encompasses the strategies, technologies, and processes that organizations use to manage and analyse customer interactions throughout the customer lifecycle, with the ultimate goal of strengthening relationships, improving satisfaction, and fostering long-term loyalty. In banking specifically, CRM often manifests through personalised service delivery, customer segmentation, multi-channel engagement, and responsive complaint handling.

The Nigerian banking industry has faced considerable competitive pressure over the past two decades, driven by deregulation, technological disruption, and shifting customer expectations. Within this environment, customer loyalty has become an increasingly important strategic concern for deposit money banks, as loyal customers not only generate repeat business but also serve as a source of referrals and long-term profitability. Empirical research on deposit money banks in Lagos State found that customer relationship management adoption in Nigeria has historically been constrained by implementation costs, even though the practice has a demonstrable effect on customer loyalty (Itai & Onamusi, 2020). Related studies have found that CRM strategy positively impacts customers’ brand commitment and loyalty behaviours in the Nigerian financial sector, with continuance loyalty loyalty driven by the costs of switching found to be a stronger predictor of customer advocacy than affective loyalty in some contexts.

Other Nigerian-focused CRM research has examined the construct from a resilience and retention perspective. A study of deposit money banks found that customer relationship management, when assessed across people, process, and technology dimensions, had a significant positive effect on organisational resilience (Edeh et al., 2019). Similarly, research on CRM strategies among deposit money banks found that customer segmentation and personalised marketing significantly influenced customer retention, although multi-channel engagement alone did not show a statistically significant effect, suggesting that the specific configuration of CRM practices matters more than the mere presence of multiple channels (Odor et al., 2025). Relationship quality research has further established those dimensions such as trust and communication effectiveness are key determinants of customer loyalty in Nigeria’s retail banking market (Izogo, 2017).

Access Bank Plc, one of Nigeria’s largest and most geographically diversified deposit money banks, has pursued an aggressive customer-centric growth strategy, particularly following its merger with Diamond Bank in 2019, which significantly expanded its retail customer base. Given the scale of its operations and the diversity of its customer segments, ranging from retail to corporate and institutional banking, understanding how Access Bank’s CRM practices influence customer loyalty offers valuable insight into the practical application of CRM theory within a large, rapidly evolving Nigerian financial institution. It is against this backdrop that the present study examines the relationship between customer relationship management and customer loyalty at Access Bank Plc.

1.2 Statement of the Problem

Nigerian deposit money banks, including Access Bank, have made considerable investments in CRM systems and personalised service strategies with the expectation that these investments will translate into stronger customer loyalty and reduced customer attrition. However, customer loyalty in Nigerian retail banking remains fragile, with many customers maintaining accounts across multiple banks and switching primary banking relationships in response to service failures, technology disruptions, or more attractive offerings from competitors.

While a number of studies have examined the general relationship between CRM and customer loyalty across Nigerian deposit money banks, there remains limited firm-specific evidence isolating which particular dimensions of CRM such as personalised service, trust and relationship quality, CRM technology, or complaint handling most strongly influence customer loyalty specifically at Access Bank Plc. Without such focused evidence, Access Bank’s management may find it difficult to prioritise CRM investments in ways that most effectively strengthen customer loyalty. This study seeks to close this gap by empirically examining the effect of CRM on customer loyalty at Access Bank Plc.

1.3 Objectives of the Study

1.3.1 General Objective

The general objective of this study is to examine the effect of customer relationship management on customer loyalty at Access Bank Plc.

1.3.2 Specific Objectives

The specific objectives of the study are to:

1. examine the effect of personalised customer service on customer loyalty at Access Bank Plc;

2. determine the influence of trust and relationship quality on customer loyalty at Access Bank Plc;

3. assess the effect of CRM technology and multi-channel engagement on customer loyalty at Access Bank Plc;

4. examine the relationship between complaint handling and customer loyalty at Access Bank Plc.

1.4 Research Questions

1. What is the effect of personalised customer service on customer loyalty at Access Bank Plc?

2. What is the influence of trust and relationship quality on customer loyalty at Access Bank Plc?

3. What is the effect of CRM technology and multi-channel engagement on customer loyalty at Access Bank Plc?

4. What is the relationship between complaint handling and customer loyalty at Access Bank Plc?

1.5 Research Hypotheses

The following null hypotheses were formulated to guide the study:

• H₀1: Personalised customer service has no significant effect on customer loyalty at Access Bank Plc.

• H₀2: Trust and relationship quality have no significant influence on customer loyalty at Access Bank Plc.

• H₀3: CRM technology and multi-channel engagement have no significant effect on customer loyalty at Access Bank Plc.

• H₀4: There is no significant relationship between complaint handling and customer loyalty at Access Bank Plc.

1.6 Significance of the Study

This study will be of value to the management of Access Bank Plc in identifying which CRM dimensions most strongly influence customer loyalty, thereby supporting more targeted investment in customer relationship strategies. Other Nigerian deposit money banks will find the findings useful as a benchmark for evaluating and refining their own CRM practices. Customers stand to benefit indirectly from improved service quality and more responsive banking relationships informed by the study’s findings. Regulators, such as the Central Bank of Nigeria, may find the study useful in understanding customer-facing dynamics within the banking sector. Finally, the study contributes to the growing academic literature on CRM and customer loyalty within Nigerian banking and provides a foundation for further research.

1.7 Scope of the Study

This study is focused on examining the relationship between customer relationship management and customer loyalty, using Access Bank Plc as a case study. The content scope covers personalised customer service, trust and relationship quality, CRM technology, and complaint handling as they relate to customer loyalty. The study population comprises Access Bank Plc customers and relationship management staff within selected branches in Nigeria. The study covers recent CRM practices and customer loyalty patterns over the past few years.

1.9 Operational Definition of Terms

Customer Relationship Management (CRM): The strategies, technologies, and processes an organization uses to manage and analyse interactions with current and prospective customers.

Customer Loyalty: The tendency of a customer to consistently patronise a particular bank and recommend it to others, rather than switching to competitors.

Customer Retention: The ability of an organization to keep its existing customers over a given period.

Relationship Quality: The overall strength and depth of the relationship between a customer and a service provider, often assessed through trust, satisfaction, and commitment.

Multi-Channel Engagement: The use of multiple communication and service channels, such as mobile apps, call centres, and social media, to interact with customers.

Complaint Handling: The process by which an organization receives, manages, and resolves customer complaints.

References

Edeh, F. O., Ugboego, C. A., & Chibuike, O. N. (2019). Effect of customer relationship management on organisational resilience of deposit money banks in Nigeria. International Journal of Economics, Business and Management Studies, 6(2), 272–284.

Itai, M. M., & Onamusi, A. B. P. (2020). Customer relationship management and customer loyalty: An empirical study of selected Deposit Money Banks in Lagos State, Nigeria. IAR Journal of Business Management, 1(4).

Izogo, E. E. (2017). Determinants of relationship quality and customer loyalty in retail banking: Evidence from Nigeria. African Journal of Economic and Management Studies, 8(2), 186–204.

Odor, H. O., Bakwuye, C. O., & Dokai-Okonkwo, C. N. (2025). Customer relationship management (CRM) strategies and customer retention in deposit money banks (DMBs) in Nigeria. Uniben Journal of Marketing.