The Adoption of Customer Relationship Management System by Commercial Banks in Nigeria and Its Effects on Customer Retention

Abstract

With the increasing competition in the service industry, there is need for every service oriented firm to ensure that they have a competitive advantage over other firms. This revolves around ensuring that customers are retained and not lost to other firms. To be able to attain this objective CRM system was developed. CRM system is the most innovative process to create loyalty by maintaining a long term relationships of trust between customers and organizations. It is a broadly recognised, widely-implemented strategy for managing and nurturing a company's interactions with customers and sales prospects. However, the adoption of CRM system in Nigerian banks has been slow despite the advantages associated to the adoption of CRM system. This study therefore aimed at determining the factors that affect the adoption of CRM strategies in Nigerian banks. The specific objectives included identifying the extent of adoption of CRM systems among Nigerian banks; benefits; challenges; and factors affecting the adoption of CRM systems in banks in Nigeria. Cross sectional research design was used to carry out the study. Respondents and participants for the study included employees from commercial banks in Nigeria. Purposive sampling method was used to select the participants and the respondents and interviews or questionnaires administered to collect data. The data was then analysed using SPSS version 20 and MS Excel 2007. From the findings, respondents unanimously agreed that the CRM system helped banks to understand their customers' demography and analyzed loan performance with the highest score of 84.8%. Additionally, adoption of CRM was reported to ensure personalized attention is provided by the banks to the customers and enabled the banks to conduct risk analysis and increase customer service effectiveness. The study found out that the adoption of CRM ensures the professional behaviour of the employees of the bank and developed and improved new products for the customers. However, respondents strongly agreed that chances of CRM failure are possible. Other CRM adoption challenges highly rated included need for further training of IT staff to efficiently operate the CRM systems. The study recommended that CRM systems require continuous maintenance, information updating and system upgrading.