Abstract

This study was aimed at assessing the effect of customer relationship management (CRM) on customer retention in Rural investment credit SA (RIC) Mutengene branch. The main objective of the study was to determine the effects of customer relationship management on customer retention other objectives was to find out the effect of Customer orientation on customers retention of RIC SA Mutengene, to examine the effect of technology-based customer relationship management on customers retention of RIC SA Mutengene, to analyze the influence of knowledge management on the customers retention of RIC SA Mutengene.

This study employed an explanatory and descriptive survey research design. The population size used for this study was made up of 15 staff of RIC SA Mutengene. The study employed primary source data collection which involved structured questionnaires. Statistical Package for the Social Sciences (SPSS version 21.0) was used to analyze the collected data from the field.

Hypothesis testing was carried out, where the analysis of variance (ANOVA) was used to test the significance of the overall model at 0.05% level of significance. Testing for the first hypothesis a correlation test was done with r = 0.980, and p-value of 0.000 (p<0.01), showing there is a very strong linear positive relationship between the dependent and the independent variables.

More so, this study found that RIC SA Mutengene possesses a computer system efficiently to handle customer’s information. The study concluded that RIC SA Mutengene offers personalized products and services for key customers RIC SA Mutengene competitive advantage is based on understanding customer needs. Furthermore, the study recommended that Microfinance institutions in Mutengene should enhance the process of customer orientation so as to perfect the customer relationship management process so as to increase customer retention.

CHAPTER ONE

GENERAL INTRODUCTION

1.1 Background to the study           

In the past, people only produced what they could eat or drink. Most of them just produced what could be sufficient for their families regardless if there was any extra to sell and use profits. But as time went on, people began to see the need to improve on their welfare and after the industrial revolution, competition began to set in, and businesses began to see the need to remain in the market. Today, we discover that marketing as a whole is everywhere, that is formally or informally. Almost everyone is engaging in a vast of activities which could be referred to as marketing.

As a result of development and technology, many companies have emerged producing similar products or substitutes and as a result competition has become the talk of the day since each of these companies strives to get a bigger share of the market.

Because of the emergence of competitors and pursuit of high market share, businesses apply various marketing techniques and strategies in other to fight competitors, gain market share, satisfy customer needs and wants and still make profit. As the saying goes in marketing “the customer is king”.  This is because the business only exists because of the customer. A producer identifies the needs and wants of the customers and come up with products to satisfy them so to gain market share and stay on top, businesses focus on customers personally as a strategy to gain and keep them.

Customer relationship has been the key element of business since time immemorial. Right from the stages of barter exchange to today’s modern business which relies heavily on technology, the customer relationship is what determines a successful business transaction for services and/or commodities sold (bluflames lab.com). For today’s modern sales organization, CRM is a foundation tool to sell and retain customers. Most products and services that are in the market today face high competition and selling is more difficult than ever. Sellers need to chase after buyers to keep their business alive so, keeping this in mind, keeping a track of customers will determine a closed sale or a lost opportunity. According to the CMO’s 2018 Highlights and insights reports, buyers feel that customer service is the crucial factor that impacts their purchasing decision, so neglecting your customer and ignoring their journey could sink your brand in a blink of an eye.

A recent LinkedIn survey revealed that 77% of top salespeople rely on sales intelligence tools. Hence customer relationship management is a serious subject of consideration and any sales-dependent company without a decent CRM platform to support its sales team is entering the battle arena unarmed. Understanding customer relationship management aids the business to find and retain loyal customers which is very crucial to the ongoing success of any business. Knowing this, it is very essential for RIC Mutengene to understand the concept of customer relationship management and the effect it has on customer retention this will help the institution avoid cost of getting ne customers and hence increase profit.

1.2 Problem Statement

Customer Relationship Management plays a significant role in getting and keeping customers of the business. As time goes on, customers are becoming more sensitive and pay keen attention to how they are being treated by businesses they patronize. Customers like the feeling of being valued and being treated like kings this will influence their decision to purchase and stay loyal to a particular business.

Over the years, the customer has been the center of every business operation as without the customer the business cannot exist. A customer leaving the business is detrimental to the business as it will cost more in getting a new customer. It is essential for every business to have a clear understanding of customer relationship management and its impact on customer retention. Keeping close contact with customers creates a good perception of the business in their minds. This is because everyone loves the feeling of being loved and valued and also it helps the business know them better so as to serve them better.  This research aims to find out the effect of customer relationship on customer retention in the case of Rural Investment Credit Mutengene (RIC).

1.3 Research Questions

Because of high competition globalization and improvement in technology‚ customer expectations are increasing continuously. So, it is a challenge for RIC mutengene to provide them with adequate customer relationship by identifying their needs‚ taking continuous feedback ‚ Hence‚ the following research questions.

1.3.1 Main Research Question

What are the effects of customer relationship management on customer retention?

1.3.2 Specific Research Questions

1. What is the relationship between Customer orientation on customers retention of RIC SA Mutengene?
2. What is the effect of technology-based customer relationship management on customers retention of RIC SA Mutengene?
3. What is the effect of knowledge management on customers retention of RIC SA Mutengene?

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