Customer Relationship Management, Service Quality and Firm Performance of Selected Stanbic Bank (U) Branches in Ganda

ABSTRACT The study investigated the relationship between Customer Relationship Management (CRM), service quality and firm performance in selected Stanbic bank Uganda branches. The study adopted a correlation study design using mainly a quantitative approach on a sample of staff and management of the bank and its customers. The data was collected using a questionnaire and was analyzed using frequencies, percentages, correlation, regression analyses. The study found out that CRM had a significant relationship with service quality in Stanbic Bank and CRM was a significant predictor of the variance in service quality as it predicted 66.5% of the variance in service quality in the bank while Service quality had a significant relationship with performance of Stanbic Bank and was a significant predictor of performance of the bank as it predicted 26.6% of the variance in the performance of the bank. Customer Relationship Management had a significant relationship with performance of Stanbic Bank and was a significant predictor of bank performance at it predicted 6l.1% of the variance in the performance of the bank. The study recommends that the management, shareholders and other relevant stakeholders should ensure that: Commercial banks develop and articulate CRM strategy development, value creation, multi-channel integration, performance assessment and information management to achieve effective service quality indicators of customers perceived service reliability, responsiveness, assurance, empathy and tangibles; Commercial banks develop and articulate effective service quality attributes of reliability, responsiveness, assurance, empathy and tangibility for enhanced performance indicators of customer Live Time Value, market share, sales growth, brand equity, and employee retention; and that commercial banks develop and articulate CRM for enhanced indicators of customer Live Time Value, market share, sales growth, brand equity, and employee retention. Other studies need to be carried out to identif~y such factors other than those under this study that predicted the variance in service quality and bank performance.

TABLE OF CONTENTS

Chapter Page

One THE PROBLEM AND ITS SCOPE 1

Background of the Study 1

Statement of the Problem 5

Purpose of the Study 5

Research Objectives 6

Research Questions 6

Hypothesis 6

Scope 7

Geographical Scope 7

Theoretical Scope 7

Significance of the Study 7

Scheme of the study 8

Operational Definitions of Key Terms 9

Two REVIEW OF RELATED LITERATURE 10

Introduction 10

The Origins and Definitions of the CRM 10

Strategy Development Process 13

Business Strategy 14

Customer Strategy 14

Value Creation Process 15

The value customer Receives 15

The value the organization Receives and lifetime value 16

Multi-channel Integration Process 17

Channel Options 17

Information Management Process 18

Data warehouse Technology 19

Analytical Tools 20

Impact of the Internet 20

vi’

Front office and back office applications 21

Performance assessment Process 21

Share holders Result 22

Performance Monitoring 22

Service Quality 22

Firm Performance 24

CRM and Service Quality 25

Service Quality and firm Performance 27

CRM and Firm Performance 28

Conclusion 33

Three METHODOLOGIES 34

Research Design 34

Research population 34

Sample size and Sampling Techniques 35

Research Instruments 36

Validity and Reliability of the Instrument 36

Data Gathering Procedure 37

Data Analysis 38

Ethical Considerations 38

Limitations of the Study 39

Four PRESENTATION, ANALYSIS AND INTERPRETATION

OF DATA 40

Introduction 40

Response Rate 40

Background Information about the Respondents used

In the study 40

Distribution of the profile of the staff and management

Of SBUL respondents used in the study 41

Distribution of the profile of the customers of SBUL

respondents used in the study 43

Presentation of the study findings in relation to

the study objectives 45

VIII

The relationship between CRM and Service Quality at

SBUL 46

Service quahty 50

Regression results between CRM and service quality 55

The relationship between Service Quality and Firm

Performance at the (SBUL) 58

The relationship between Service Quality and Firm

Performance at the (SBUL) 62

Regression results between service quality and

Performance of (SBUL) 63

The relationship between CRM and Firm Performance

At the (SBUL) 65

Regression results between CRM and performance

Of(SBUL) 65

Five FINDINGS, CONCLUSIONS, RECOMMENDATIONS 70

Findings 70

Introduction 70

Summary of findings 70

CRM and Service Quality 70

Service Quality and Firm Performance at the (SBUL) 71

CRM and Firm Performance at the (SBUL) 72

Condusion 73

Recommendations 74

Recommendations for further studies 74

Further Areas of the study 75

References 76

Appendices: 82

Appendix I- Transmittal Letter 82

Appendix Il-Informed Consent 83

Appendix III- Research Instruments 84

(A) Questionnaire for Customers 84

(B) Questionnaire for Staff and Management 87