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CUSTOMER RELATIONSHIP MANAGEMENT STRATEGIES AND
CUSTOMER SATISFACTION: CASE OF CHASE BANK (KENYA)
LIMITED-IN RECEIVERSHIP
BY
NOELLA ANGELA MUKAMI
UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA
FALL 2017
CUSTOMER RELATIONSHIP MANAGEMENT STRATEGIES AND
CUSTOMER SATISFACTION: CASE OF CHASE BANK (KENYA)
LIMITED-IN RECEIVERSHIP
BY
NOELLA ANGELA MUKAMI
A Project Report Submitted to the Chandaria School of Business in Partial
Fulfillment of the Requirement for the Degree of Master of Business
Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA
FALL 2017
ii
STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any other
college, institution or university other than the United States International University-Africa
for academic credit.
Signed: ________________________ Date: _________________________
Noella Angela Mukami (ID: 628421)
This research project has been presented for examination with my approval as the appointed
supervisor.
Signed: ________________________ Date: _________________________
Dr. Maina Muchara
Signed: _______________________ Date: _________________________
Dean, Chandaria School of Business
iii
COPYRIGHT
All rights reserved; no part of this work may be reproduced, stored in a retrieval system or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or
otherwise without the express written authorization from the writer.
Noella Angela Mukami © 2017
iv
ABSTRACT
The main objective of the study was to find out the effect of customer relationship management
strategies on customer satisfaction at Chase Bank (Kenya) Limited-In Receivership. The study
had three research questions, what is the effect of focus on key customers on customer
satisfaction at Chase Bank (Kenya) Limited-In Receivership? What is the effect of
organizational efficiency on customer satisfaction at Chase Bank (Kenya) Limited-In
Receivership? What is the effect of customer knowledge management on customer satisfaction
at Chase Bank (Kenya) Limited-In Receivership? The study adopted a survey research design.
The population consisted of 214 employees of Chase Bank (Kenya) Limited-In Receivership
deployed in the bank’s branches in Nairobi City County. Stratified random sampling was used
to draw a sample of 65. Random tables were used to randomly select 50 non-management staff,
11 middle management staff and 4 top management staff from the staff list at the bank to
participate in the study. A questionnaire was used to collect primary data. Regression analysis
was carried out to establish the existence and the strength relationships between customer
relationship management strategies and customer satisfaction. Frequencies and percentages
were used to present the descriptive findings. The data presentation was in form of charts and
tables. The first study objective sought to establish the effect of focus on key customers on
customer satisfaction at Chase Bank (Kenya) Limited-In Receivership. The findings revealed
that focus on key customers positively influence customer satisfaction at Chase Bank (Kenya)
Limited-In Receivership. The study showed that needs assessment, provision of customized
services, ongoing dialogue and employee empowerment are used as key customer focus
strategies for enhancing customer satisfaction at Chase Bank (Kenya) Limited-In
Receivership. The second study objective sought to establish the effect of organizational
efficiency on customer satisfaction at Chase Bank (Kenya) Limited-In Receivership. The
findings revealed that organizational efficiency positively influence customer satisfaction at
Chase Bank (Kenya) Limited-In Receivership. The study identified use of decentralized
organizational structure, employee reward system, clear organizational goals and use of
performance measurement standards as organizational efficiency management strategies for
enhancing customer satisfaction at Chase Bank (Kenya) Limited-In Receivership. The third
study objective sought to establish the effect of customer knowledge management on customer
satisfaction at Chase Bank (Kenya) Limited-In Receivership. The findings revealed that
v
customer knowledge management positively influence customer satisfaction at Chase Bank
(Kenya) Limited-In Receivership. The study identified knowledge creation, knowledge
acquisition, knowledge sharing and knowledge storage as some of the knowledge management
strategies used by Chase Bank (Kenya) Limited-In Receivership to enhance customer
satisfaction. The study makes the following conclusions. First, the more emphasis are laid on
satisfying key customers, the better the performance of the organization. Secondly, high
organizational efficiency positively influence customer satisfaction. Third, an increase in
customer knowledge management leads to a corresponding increase in customer satisfaction.
The study makes the following recommendations. Organizations need to pay more attention to
customer needs assessment, ongoing dialogue with customers and employee empowerment for
effective identification and addressing of customer needs. Secondly, the study recommends
targeted investments in organizational efficiency for enhanced responsiveness, productivity,
effectiveness, and timeliness of service delivery. Third, the study recommends investment in
information communication to enhance customer knowledge creation, acquisition and sharing.
Further use of internet based media is welcome in ensuring real time engagement with the
customers for value creation. Studies focusing on other banks in Kenya and other service
sector firms would be welcome to ensure generalization of the findings. Further, other variables
of customer relationship management could be explored. Moreover, other studies within
different time zones would be welcome.
vi
ACKNOWLEDGEMENT
My appreciation goes to my supervisor, Dr. Maina Muchara for his guidance and support
throughout this work.
vii
DEDICATION
This academic work is dedicated to my loving family for their understanding and support.
viii
TABLE OF CONTENTS
STUDENT’S DECLARATION ............................................................................................. ii
COPYRIGHT ......................................................................................................................... iii
ABSTRACT ............................................................................................................................ iv
DEDICATION....................................................................................................................... vii
LIST OF ABBREVIATIONS ............................................................................................... xi
LIST OF TABLES ................................................................................................................ xii
LIST OF FIGURES ............................................................................................................. xiii
CHAPTER ONE ..................................................................................................................... 1
1.0 INTRODUCTION............................................................................................................. 1
1.1 Background of the Study ................................................................................................. 1
1.2 Statement of the Problem ................................................................................................ 4
1.3 Purpose of the Study ....................................................................................................... 5
1.4 Research Questions ......................................................................................................... 5
1.5 Significance of the Study ................................................................................................ 5
1.6 Scope of the Study ........................................................................................................... 6
1.7 Definition of Terms ......................................................................................................... 6
1.8 Chapter Summary ............................................................................................................ 7
CHAPTER TWO .................................................................................................................... 8
2.0 LITERATURE REVIEW ................................................................................................ 8
2.1 Introduction ..................................................................................................................... 8
2.2 Focus on Key Customers and Customer Satisfaction ..................................................... 8
2.3 Organizational Efficiency and Customer Satisfaction .................................................. 14
2.4 Customer Knowledge Management and Customer Satisfaction ................................... 19
ix
2.5 Chapter Summary .......................................................................................................... 25
CHAPTER THREE .............................................................................................................. 26
3.0 RESEARCH METHODOLOGY .................................................................................. 26
3.1 Introduction ................................................................................................................... 26
3.2 Research Design ............................................................................................................ 26
3.3 Population and Sampling Design .................................................................................. 26
3.4 Data Collection Methods ............................................................................................... 28
3.5 Research Procedure ....................................................................................................... 28
3.6 Data Analysis Method ................................................................................................... 29
3.7 Chapter Summary .......................................................................................................... 29
CHAPTER FOUR ................................................................................................................. 30
4.0 RESULTS AND FINDINGS .......................................................................................... 30
4.1 Introduction ................................................................................................................... 30
4.2 Demographic Characteristics ........................................................................................ 30
4.3 Descriptive Statistics ..................................................................................................... 33
4.4 Inferential Statistics ....................................................................................................... 38
4.5 Chapter Summary .......................................................................................................... 41
CHAPTER FIVE .................................................................................................................. 42
5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS ........................... 42
5.1 Introduction ................................................................................................................... 42
5.2 Summary ....................................................................................................................... 42
5.3 Discussions .................................................................................................................... 43
5.4 Conclusions ................................................................................................................... 51
5.5 Recommendations ......................................................................................................... 53
x
REFERENCES ...................................................................................................................... 54
APPENDICES ....................................................................................................................... 63
Appendix A: Cover Letter ................................................................................................... 63
Appendix B: Questionnaire ................................................................................................. 64
xi
LIST OF ABBREVIATIONS
CBK: Central Bank of Kenya
CRM: Customer Relationship Management
GDP: Gross Domestic Product
IFC: International Finance Corporation
KDIC Kenya Depository Insurance Corporation
SMEs: Small and Medium Enterprises
xii
LIST OF TABLES
Table 3.1: Population Distribution…………………………………………………………..27
Table 3.2: Sample Size Distribution…………………………………………………………28
Table 4.1: Study Response Rate……………………………………………………………..30
Table 4.2: Age Category of Respondents……………………………………………………30
Table 4.3: Highest Education Level………………………………………………………….31
Table 4.4: Position of the Respondents………………………………………………………32
Table 4.5: Experience of Respondents……………………………………………………….32
Table 4.6: Focus on Key Customers…………………………………………………………34
Table 4.7: Organizational Efficiency………………………………………………………...35
Table 4.8: Customer Knowledge Management……………………………………………...37
Table 4.9: Customer Satisfaction…………………………………………………………….38
Table 4.10: Focus on Key Customers and Customer Satisfaction…………………………...39
Table 4.11: Focus on Key Customers and Customer Satisfaction…………………………...40
Table 4.12: Focus on Key Customers and Customer Satisfaction…………………………...40
Table 4.13: CRM Strategies and Customer Satisfaction…………………………………….41
xiii
LIST OF FIGURES
Figure 4.1: Gender of Respondents ........................................................................................ 31
Figure 4.2: Distribution of Respondents according to Branches ............................................ 32
1
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
In today’s business world, free and rapid flow of information has epitomized a paradigm of
fluidity and fragile business relationships. Businesses managers are increasingly facing an
informed and empowered set of customers with diminishing brand loyalty (Nwankwo &
Ajemunigbohun, 2013). This causes a lot of dynamism and presents strategic challenges to
most businesses. In such environments, a clear understanding of the customer needs and their
dynamics is critical in providing solutions that keep customers satisfied and connected to the
organization (Lombard, 2011). An effective customer relationship management has been
shown to enhance customer satisfaction, loyalty and retention. Customer relationship
management enables an organization to provide excellent real-time customer service through
effective use of individual information for better customer engagement and service delivery
(Khedkar 2015). Thus, the success of an enterprise principally depends on the effectiveness of
its customer relationship management (Mehta, Sharma & Mehta, 2010).
Research shows that information from customer relationship management systems directly
influence business performance as this information facilitates the business to focus on the most
important customers of the organization; increase efficiency of the organization; and promote
better customer knowledge management (Soliman, 2011). In this way, customer relationship
management acts a tool for customizing of products and services offerings for individual
customers (Yim, Anderson & Swaminathan, 2004). It is for these reasons that in the current
globally competitive markets, customer relationship management (CRM) is one of the leading
strategies employed by business firms for building customer satisfaction, loyalty and retention
(Nwankwo & Ajemunigbohun, 2013).
There are diverse views on what constitutes the definition of customer relationship
management. Swift (2001) defined customer relationship management as a method of
understanding the customer behavior through intense communication with the customer to
improve the organizational performance by attracting the customer, keeping the customer and
increasing the customer’s loyalty and business profitability. Kotler and Armstrong (2010),
expanded this definition beyond just communication by stating that customer relationship
2
management is concerned with managing detailed information about individual customers and
all customer to maximize customer loyalty. This means that customer relationship management
is a strategic process by which the institution's more profitable customers are chosen, and
interactions between this institution and their customers is determined, in order to achieve the
goal of maximizing the present and future values for the organization and its customers (Kumar
& Reinartz, 2006).
Customer relationship management therefore, consitutes a strategic system, which is
concerned with creating an enhanced shareholder value through the involvement of suitable
alignments with key customers and customer segments (Payne & Frow, 2005). Customer
relationship management in this sense is a set of business activities supported by the alignment
of both technology and processes directed by strategy and designed to enhance firm
performance (Nwankwo & Ajemunigbohun, 2013). Thus, Fagbemi and Olowokudejo (2011)
explain that customer relationship management is based on understanding customer desires
and needs through the integration of customer desires with the organization’s strategy,
technology, people, and enterprise process.
Soliman (2011) summarizes the most important aspects of the concept of Customer
relationship management to cover activities that focus on “ the main customers of the
organization; the efficiency of the organization; and the customer knowledge management,
with the aim of enhancing the effectiveness of the organization decisions related to its customer
" (pp. 167). It is this definition that will form the basis of this study’s indepenedent variables.
The impacts of customer relationship management will be measured by the level of focus on
key customers, organizational efficiency, and customer knowledge management. While the
dependent variable (Customer Satisfaction) will be measured as a composite of the level of
customers satisfaction, customer loyalty and customer retention.
To put these variables into perspective, focus on key customers emphasizes positioning of the
customer as the primary basis for organizing all organizational activities with the aim of
increasing customer satisfaction and loyalty (Gebauer & Kowalkowski, 2012). The strategy is
geared towards understanding the dynamic needs of the customer as well as establishing and
retaining customer relationships for better satisfaction and retention of the customer (Yaacob,
2014). The strategy requires integrating the functions of marketing, business development,
3
customer service and distribution to achieve the highest competence in delivering value to the
customer (Soliman, 2011). The strategy is directed at delivering a distinguished value to the
customer by enhancing responsiveness, productivity, effectiveness, and timeliness. Finally,
customer knowledge management entails systematic and integrated management strategy that
develops, transfers, transmits, stores, and implement knowledge so that it can improve
efficiency and effectiveness of the organization (Dahiya, Gupta & Jain, 2012).
Despite the significance of customer relationship management in enhancing customer
satisfaction and business performance, a study by Garder (2001) reports that 50% of customer
relationship management programs fail to meet customer and business expectations. In the
same breadth, Band, Leaver and Magarie (2008) recorded 47% failure rates of customer
relationship management strategies. Further, Azzam (2014) posits that globally, only 50% of
companies with sales turnover of more than US$ 1 million practice customer relationship
management and only 55% of these companies indicate significant relationship between
customer relationship management programs and business performance. Moreover, 81% of
companies with less than US$ 1 million sales turnover practice customer relationship
management with 75% of these firms recording significant relationship between customer
relationship management and performance (Azzam, 2014). These arguments raise questions as
to the true value of customer relationship management in enhancing customer satisfaction and
business performance and whether circumstantial factors affect the benefits associated with
customer relationship management.
In Kenya, the service sector is primarily spearheaded by the financial sub-sector. While the
service sector contributed up to 48% of the gross domestic products (GDP) in Kenya in the
year 2015 (World Bank, 2016), 22% of the Kenyan GDP was attributed to the finance and
business services sectors (International Finance Corporation [IFC], 2016). This represent 46%
of the total contribution by the service sector. An average of 44% and 41% of Kenyan firms
use banks to finance investment and working capital respectively (IFC, 2016).
Chase Bank (Kenya) Limited-In Receivership is a Kenyan locally owned Bank started in
November 1995. The bank’s business philosophy has been pillared on establishing viable and
lasting relationships with its customers. At its inception, the bank adopted a focus strategy to
serve the corporate and high net worth individuals. However, with time, the strategy changed
4
to differentiation with the bank developing products for the corporate and low-end customers.
The bank’s growth was sustained as evidenced by 52 branches across the country. On April 7,
2016, Central Bank of Kenya (CBK) placed Chase Bank (Kenya) Limited under receivership
citing conflict of interest among the bank’s management. The CBK appointed the Kenya
Deposit Insurance Corporation (KDIC) as a receiver for Chase Bank Limited for a period of
twelve months. Despite its current status, the bank still position itself as the best relationship
bank in Kenya.
1.2 Statement of the Problem
Business firms constantly face the demand of providing goods and services that satisfy and
meet their customer needs. Satisfied customers show high level of loyalty and retention, which
in turn have a positive impact on organizational revenue and overall performance (Graeme &
Ensor, 2005). Customer relationship management acts a tool for enhancing customer
satisfaction. Customer relationship management is specifically used to provide a
comprehensive, reliable, and integrated view of customer base so that all processes and
customer interactions help maintain and expand a mutually beneficial relationships through the
process of careful use and managing detailed customer information (Kotler & Keller, 2011).
There are three three key CRM strategies, focus on customers; organizational efficiency; and
customer knowledge management (Soliman, 2011). A study by Mohamad, Othman, Jabar and
Majid (2014) among Malaysian small and medium enterprises indicated that enhanced key
customer focus and relationship marketing leads to better organizational performance.
Similarly, in India, Khedkar (2015) showed a high positive correlation between focus on key
customer requirements and customer satisfaction & loyalty. On the contrary, a study by Amira,
Yousof and Asma (2014) reveals lack of conclusivity on the effect of focus on key customers
on customer satisfaction and loyalty at Ansar bank branches in East Azarbaijan, Iran.
In the United States of America, a study by Mithas, Krishnan and Fornell (2005) established
that the applications of customer knowledge management has a positive effect on customer
satisfaction. Further, a study by Gholami, Asli, Nazari-Shirkouhi and Noruzy (2013) revealed
that knowledge management practices directly influence the organizational performance of
Iranian SMEs. Similarly, a study by Pension, Nyasha, Sheiller andVhuramai (2013) revealed
that knowledge management has positive impact on performance of organizations. However,
5
the study also showed that knowledge management can be negatively affected once a culture
that embraces learning and sharing knowledge is minimized.
From the review, the effect of CRM strategies on customer satisfaction have mainly been
contextualized in the developed countries and in the emerging Asian economies. Further, there
is non-conclusivity on the exact role of specific CRM strategies on customer satisfaction. Due
to contextual variations, there is need for a clear understanding of the effect of CRM strategies
on customer satisfaction in Kenya. To emerge from receivership and strategically grow, Chase
Bank (Kenya) Limited-In Receivership needs strong customer relationships with potential of
stimulating financial growth and sustainable competitive advantage. Hence, the need to explore
the effect of CRM strategies on customer satisfaction at Chase Bank (Kenya) Limited-In
Receivership for strategic decision-making.
1.3 Purpose of the Study
The main objective of this research was to find out the effect of customer relationship
management strategies on customer satisfaction at Chase Bank (Kenya) Limited-In
Receivership.
1.4 Research Questions
1.4.1 What is the effect of focus on key customers on customer satisfaction at Chase Bank
(Kenya) Limited-In Receivership?
1.4.2 What is the effect of organizational efficiency on customer satisfaction at Chase Bank
(Kenya) Limited-In Receivership?
1.4.3 What is the effect of customer knowledge management on customer satisfaction at
Chase Bank (Kenya) Limited-In Receivership?
1.5 Significance of the Study
1.5.1 Management of Chase Bank (Kenya) Limited-In Receivership
The findings provide managers at Chase Bank (Kenya) Limited-In Receivership and other
financial institutions in Kenya with information on the exact role played by customer
relationship management systems in enhancing customer satisfaction through customer
satisfaction, loyalty and retention. The information is particularly important in improving the
systems for better performance.
6
1.5.2 Government Policy Makers
The findings provide policy makers with the necessary information that can be used to offer
the general guidelines on customer relationship management. Of importance is how the
government can use the information to facilitate information communication technology to
support CRM, and better firm performance, which result in increased GDP and taxes.
1.5.3 Researchers
The findings will be of interest to researchers, as they require empirical evidence enrich
literature on the impact of CRM on customer satisfaction. The findings are significant in
grounding and extending the existing theory on CRM.
1.6 Scope of the Study
The study was limited in its concept. The study explored three aspects of customer relationship
management; focus on key customers, organizational efficiency and customer knowledge
management. The dependent variable was measured by the extent of customer satisfaction,
loyalty and retention. Geographically, the study was limited to the 214 Chase Bank (Kenya)
Limited-In Receivership employees deployed in the bank’s branches in Nairobi City County.
Data was collected in the month of July 2017.
1.7 Definition of Terms
1.7.1 Customer Relationship Management
The overall process of carefully using and managing detailed customer information to provide
an enterprise with a comprehensive, reliable, and integrated view of its customer base so that
all processes and customer interactions help maintain and expand mutually beneficial
relationships (Kotler & Keller, 2011).
1.7.2 Customer Satisfaction
The extent to which a product’s or service’s perceived performance in delivering value matches
a buyer’s expectations (Armstrong & Kotler, 2003).
1.7.3 Customer Focus
The process of understanding customer needs then focusing and directing organizational
processes and activities in order to achieve the successful fulfilment of the identified customer
need (Graeme & Ensor, 2005).
7
1.7.4 Organizational Efficiency
The amount of resources used to achieve an organizational goal. That is, the quantity of
resources necessary for producing a given volume of output (Daft & Marcic, 2015).
1.7.5 Knowledge Management
“Any process or practice of creating, acquiring, capturing, sharing and using knowledge,
whenever it resides, to enhance learning and performance in organizations” (Armstrong , 2006,
pg 174).
1.8 Chapter Summary
Chapter One of the study discussed the study concepts and their significance to the context.
The chapter also highlighted the problem statement as well as defined the study objectives,
scope, significance, and key terms. The second chapter explores theories and empirical
evidence on which the study was grounded. Chapter Three discusses the research methodology
while chapter four presents the findings and chapter five gives the study discussions and
recommendations.
8
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter is a review of literature on the concept of customer relationship management. The
review forms the basis for the study. Customer relationship management is the overall process
of carefully using and managing detailed customer information to provide an enterprise with a
comprehensive, reliable, and integrated view of its customer base so that all processes and
customer interactions help maintain and expand mutually beneficial relationships (Zikmund,
McLeod, & Gilbert, 2003; Kotler & Keller, 2011).
In this way, customer relationship management acts a tool for customizing of products and
services offerings for individual customers (Yim, Anderson & Swaminathan, 2004) for
building customer satisfaction, loyalty and retention (Nwankwo & Ajemunigbohun, 2013).
Custoner relationship management (CRM) has three main facets, focus on key customers;
organizational efficiency; and customer knowledge management (Soliman, 2011).
2.2 Focus on Key Customers and Customer Satisfaction
The concept of focus on key customers is based on the customer orientation theory. Customer
orientation theory is traced back to McCarthy’s (1960) market orientation concept whose
primary objective was to ensure that business firms focus all its efforts on satisfying its
customers, at a profit. According to Frambach, Fiss and Ingenbleek (2016), customer
oreintation is at the heart of a market orientation because customer orientation best reflects the
core of the marketing concept. That is, customer orientation underpins the sufficient
understanding of one's target buyers to be able to create superior value for them continuously.
Therefore, by organizing the firms' structure and operations around creating customer value,
business enterprises generate higher levels of satisfaction, loyalty, innovation, and
performance (Gebauer & Kowalkowski, 2012).
Unlike in the traditional product oriented era where companies developed products and pushed
them to the market to increase sales, the customer orientated concept created a shift such that
for a business enterprise to realize sustainable profitability, it works first by seeking to
understand its customer’s existing and potential needs. The company then moves to develop
9
solutions that satisfy these needs (Gebauer & Kowalkowski, 2012). It involves trying to occupy
the customer’s position so as understand the customer’s perceptions and desires. The study
therefore, proposes that customer orientation forms the central component of effective business
strategy and customer satisfaction as customer orientation enables the firm to put the
customer’s interest first. However, this should not be construed that success only lies in
customer focus. There has to be a balance between customer needs and the needs of other
stakeholders in order for the firm to develop a long-term and viable profitability (Kennedy,
Goolsby, & Arnould, 2003).
Assabil and Abdallah (2011) identifies the five main variables that constitute key customer
focus strategy as; dialogue with the customers; customization of products; customer needs
assessment; employee empowerment and implementation of customer needs information.
Customer focus is defined as laying emphasis on understanding what customer want and
anticipating their future requirements (Aggarwal, 2004). This is achieved by planning based
on what customer want rather than the firms goals and listening to the customer rather than
forcing the customer to listen to the firm (Olowokudejo & Adeleke, 2011).
Customers focus strategy emphasizes positioning of the customer as the primary basis for
organizing all organizational activities with the aim of increasing customer satisfaction and
loyalty (Gebauer & Kowalkowski, 2012). The strategy is geared towards understanding the
dynamic needs of the customer as well as establishing and sustaining customer relationships
for better retention of the customer (Yaacob, 2014). However, Jain and Singh (2002) argue
that the firm should not just focus on any other customer, but the key customers who are
identifiable through customer lifetime value analysis (Yim, Anderson, & Swaminathan, 2004).
The main objective of focusing on key customers is to establish a deep customer relationship
through personalized products and services that makes an organization a necessary partner to
its most profitable customers (Vandermerwe, 2004).
2.2.1 Customer Needs Assessment
Customer needs assessment is defined as the process of examining and analysing the existing
customer needs to establish the difference between current and the desired state (Messner,
2009). Firdousi (2014) posit that needs assessment can be as simple as asking customers what
service or product they would like to have, to developing an individualized service for every
10
customer to satisfy their needs. Prasad, Subbaiah, Rao and Sastry (2010) argue that since
quality is judged by how best a product or service satisfy the needs of the customer, customer
needs assessment forms an important process in ensuring that the right customer needs are
identified so as to design products and service that ensure customer satisfaction. Therefore, as
a prerequisite of customer satisfaction, needs assessment is focal in designing products and
services that meet customer expectations and even beyond.
Messner (2009) posits that once a customer need is identified, the organization evaluates it to
determine if the need has enough priority or impact for resources to be allocated to meet that
need. The results then form the basis for designing solutions to bridge the needs gap. Firdousi
(2014) explains that to be effective at addressing customer needs, an organization need to select
appropriate customer needs assessment approaches and tools in order to ascertain the needs
and requirements of the customer. The process should be continuous and as holistic as possible
with customer needs assessment being conducted for all customers to create superior
understanding and design of appropriate services and products in the areas of weaknesses.
Customer needs assessment is thus, a tool utilized to identify what services could be provided
to customers to improve quality of the services offered with focus on the needs.
2.2.2 Customized Services
Service customization is defined as any creation or adjustment of a service to fit the individual
requirements of a customer (Ball, Coelho, & Vilares, 2006). However, this should not be
construed to limit the definition to only a specific individual customer, but can include a group
of customers who share a common need. The primary objective of service customization is to
identify profitable market segments or customers and design products and services to optimally
satisfy their needs (Coelho & Henseler, 2012). Simonson (2005) asserts that the emphasis on
customization is on satisfying as many needs as possible for each individual customer rather
than reaching many customers and only satisfying needs of a limited number of them. In this
way, customization strategy provides solutions to the varied and dynamic customers’ demands.
Proponents of service customization argue that customization plays a pivotal role in customer
relationship management. They argue that service personalization improves customer retention
through service quality, customer satisfaction, customer trust and customer loyalty (Coelho &
11
Henseler, 2012). Empirically, a study by Ostrom and Iacobucci (1995) established an indirect
relationship between service customization and customer retention. The study showed that
service customization contributes to customer satisfaction, which in turn positively influence
customer retention. That is to say, a satisfied customer has a higher rate of coming back for
more and more from the same service provider.
The study argued that customised services are likely to satisfy a customer more than
standardized offers since customization facilitate a near accurate match between customer
needs and the service or products offered (Ostrom & Iacobucci, 1995). Thus, service
customization serves as signal of high quality product or service that meets customer demands.
The findings were further supported by a study by Ball, Coelho and Vilares (2006), which
empahsized positive relationship between personalization and customer satisfaction, customer
loyalty and customer retention.
Secondly, a study by Coelho and Henseler (2012) showed that customization decreases
customer uncertainty and creates customer trust. The study argues that to the customer,
customization shows a sign of compassion and dedication by the firm in addressing their needs.
Thus, facilitate customer trust and confidence in the organization. Sirdeshmukh, Singh, and
Sabol (2002) asserts that customization of services may encourage the customer to believe in
the firm’s goodwill, thus increasing his/her trust.
Empirical evidence further links service customization to customer loyalty. The argument can
be traced to Thibaut and Kelley’s (1959) social exchange theory. The theory argues that
individuals maintain a relationship as long as the attractiveness of alternatives does not exceed
the attractiveness of the current offer. The objective of customization is to create a service or
products of high quality that satisfy the customer beyond the match of alternative offerings.
Moreover, since the customers spend a lot of time and resources in establishing fulfilling
relationships that lead to customized satisfying services with the service providers, this leads
to very high switching costs. Ball, Coelho and Vilares (2006) explain that this is sometimes
entrenched by the complexity and emotional nature of these relationships. Hence, if
customization satisfies the customer, the customer will be more inclined towards retention of
the existing relationship rather than switching to alternatives.
12
2.2.3 Customer Ongoing Dialogue
Ongoing dialogue is defined the continuous exchanges between the organization and its
customers (Kanagal, 2012). The significance of making regular contacts with the
organization’s customers is of ultimate importance in an environment where customer
demands are highly dynamic. The changing demands drives the need for interactivity,
connectivity and ongoing dialogue between an organization and its customers (Vargo & Lusch,
2004).
Merisavo and Raulas (2004) posit that one way to create brand loyalty is by communicating
actively with customers as regular communication brings value to the users of the brand by
providing them with relevant information and by reducing their efforts to search for
information. In this way, by customers appreciating regular communication from the brand,
their loyalty to the brand is enhanced. Moreover, ongoing communications with the customers
may also help reassure consumers that they are using the right brand, thereby helping to remove
cognitive dissonance (Merisavo & Raulas, 2004).
Several studies have empirically shown the significance of ongoing dialogue in enhancing
customer relationship management and customer retention. A study by Merisavo (2008)
showed that being frequently in touch with customers positively enhance customer loyalty and
retention. The study explains that ongoing dialogue strengthen customer loyalty as the
customers feel that they are cared for by the organization. For example, ongoing reminders on
when to repurchase personalized service ease the customers’ efforts in managing their activity
calendars. This signals value creation to the customers.
A study by Jayachandran, Sharma, Kaufman and Raman (2005) demonstrated that being
regularly in touch with customers positively influence an organization’s customer relationship
management. Similarly, a study by Mithas, Krishnan and Fornell (2005) showed that ongoing
dialogue with an organization’s customer is positively significant in improving customer
knowledge and satisfaction. This is further supported by a study by Reinartz and Kumar
(2003), which established a link between the numbers of emails sent to an organization’s
customers to its profitability.
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This demand for ongoing dialogue has been greatly facilitate through technological
innovations, which enable the organization to enhance the frequency and increase of
personalization and interactivity. Email newsletters, as Merisavo and Raulas (2004) suggest
are some of the common technological technique for establishing ongoing dialogue with
customers, because they provide a terrific mechanism for communicating a highly personalized
blend of information, entertainment, and promotions.
2.2.4 Employee Empowerment
Randolph and Kemery (2010) define employee empowerment as “a transfer of power” from
the employer to the employees. Empowerment is not only having the freedom to act, but also
having higher degree of responsibility and accountability (Blanchard, Carlos, & Randolf,
1996). In simpler terms, employees’ empowerment involves putting employees in charge of
what they do by allowing them to take responsibility for their actions under limited direct
supervision and control (Isimoya & Bakarey, 2013). This makes them accountable for their
actions. Ongori and Shunda (2008) Ongori and Shunda (2008) explain the implication of
employee empowerment to mean allowing the employees to do what needs to be done instead
of doing what they are told. This promotes management delegation, individual responsibility,
autonomous decision-making, and feeling of self-efficacy. This in turn drives employee
intrinsic motivation and desire to excel at what they do.
A study by Isimoya and Bakarey (2013) argue that since customer needs are variable, it is
paramount for employees to have some degree of personal contact with the customers to handle
these variations especially in-service provision. However, this relationship can only be fruitful
when the employees are allowed to make decisions affecting their delivery. Ukil (2016)
observes that empowered employees who work with enthusiasm generate higher satisfaction
to the customer. In agreement, a study by Timothy and Abubaker (2013) to explore the impact
of employee empowerement on service quality among Nigerian banks clearly demonstrates a
positive and significant relationship between employee empowerment and service quality.
Research shows an indirect relationship between employee empowerement and customer
retention. According to Ukil (2016), highly satisfied employees demonstrate higher level of
loyalty to the organization, higher level of satisfaction and better performance.
14
That is, quality of service offered by satisfied employees tends to be better. It is this enhanced
product or service quality that helps to retein the customers. Therefore, whether a customer
feels that a service or product meets their expectations is highly influenced by the people who
directly offer the service or the product. Naeem and Saif (2010) posit that the autonomy,
responsibility, innovation and information held and offered by the service providers gives the
customers the much-needed confidence in the service providers and enhances their level of
satisfaction and retention. This means that for an organization to demonstrate focus on
customers, their employees must be empowered with the necessary autonomy and information
that seeks to adequately address the dynamic customer concerns.
2.3 Organizational Efficiency and Customer Satisfaction
The study presupposes that having a strong relationship with the customer provides an
organization with significant information that facilitate better and quicker service delivery to
its customer. This links organizational efficiency to relationship marketing theory. The
relationship marketing theory is built on the social exchange theory and relational contracting
(Hunt, Arnett, & Madhavaram, 2006). According to Kanagal (2012) market transactions can
either be descrete or relational. Descrete transactions are definite with defined beginnings and
definite ends (Hunt, Arnett, & Madhavaram, 2006). Such transactions are predorminately short
term and identity of parties is not relevant. The main focus of descrete market transactions is
on the agreement itself not the individuals involved in the contracting process.
Relational transactions on the other hand are built on previous reference points. With
referencing, relational market exchanges do not exist in isolation but are traced to previous
transactions. The engagements between the parties are thefore long term and continous.
Further, the focus is not limited only to the value of the present agreements but the previous
behaviour of the pa1rties involved and prospects of future transactions. Kanagal (2012) argues
that the frequency with which transactions recur between parties influence trust and the terms
of the transaction. In essence, the relationship marketing theory is hinged on the fact that the
current and the future market exchange agreements between parties are not only influenced by
the value of the transaction but are also significantly influenced by the parties’ existing
information and knowledge about each other.
15
Hence, in a relational transaction, the contractual gaps between parties are reduced, as the
relation becomes stronger and stronger (Hunt, Arnett, & Madhavaram, 2006). The study
therefore, presupposes that establishment of a stronger relationship between a seller and a
buyer, empowers the seller with vital information on how to develop and market products of
value to the customer. Relations enable the business firm to focus on its key customers,
enhance its efficiency, establishes customer satiafaction, loyalty and retention. Efficiency is
defined as the ratio between outputs and inputs. It a measure of the departure of the quantity
or quality of the output from the quantity or quality of the input.
A study Yim, Anderson and Swaminathan, (2004) identified six variables that an organization
should focus on to achieve the highest competence and efficiency in delivering value to the
customer. These were expanded by Soliman (2011) to seven including, assessment of the
employee performance to reward them on basis of their ability to satisfy the needs of the
customer; enhancing employee skills through trainings; accurately designing of the
organizational framework to facilitate dealing with customers; assigning clear goals related to
obtaining and preserving new customers; supply of the necessary experiences and resources
for success in CRM; assigning standards of performance and monitor them in all the stages of
communication with the customer; and specifaction of enough time and necessary resources.
Organizational efficiency strategy for customer retention focuses on ensuring that employees
and organizational design work in convergence to offer customers the best of the experiences.
According to Soliman (2011), the strategy requires integrating the functions of marketing,
business development, customer service and exposition chain so as to achieve the highest
competence and efficiency in delivering value to the customer. The strategy is directed at
delivering a distinguished value to the customer by enhancing responsiveness, productivity,
effectiveness, and timeliness.
2.3.1 Organizational Structure
Organizational structure is defined as the “totality of connections and relationships between all
the factors of production, as well as the totality of connections and relationships within each
factor of production or operations” (Sikavica & Novak, 1999, p 142). That is, it defines the
relationships between factors of production, and the relations within these factors (Nedović &
Božinović, 2013). Tran and Tian (2013) explain that organizational structure constitute the
16
formal system of task and reporting relationships that controls, coordinates, and motivates
employees so that they cooperate to achieve an organization’s goals. This according to
Andrews (2012) include well defined job positions, their relation- ships to each other and
accountabilities for the process and sub-process deliverables. Hence, organizational structure
directs the competence of work, the enthusiasm of employees and coordination among the top
management and subordinates for flow of plans and goals in the organization.
Organizational structure has three broad dimensions. First, is the formalization, which refers
to the degree of prescription, the level of standards and measures of employee behaviour in
accordance with the prescribed rules and procedures (Nedović & Božinović, 2013). A study
by Sivadas and Dwyer (2000) indicate that for organizations with low formalization, job
behaviours are relatively unstructured and members have greater freedom in dealing with the
demands of their relevant tasks. This means that low formalization would offer more flexibility
and autonomy to the front-line employees who provide services to the customers. This
becomes a critical tool for addressing emerging and dynamic customer needs in a timely
manner. It will also encourage innovation for enhanced customer satisfaction and retention.
The second dimension of organizational structure is the concept of centralization. Nedović and
Božinović (2013) refers to the concept as the locus of decision-making authority, which lies in
the higher levels of a hierarchical relationship. Hence, centralization creates a non-
participatory environment that reduces communication, commitment, and involvement from
the employees (Sivadas & Dwyer, 2000). The study argues that a highly centralized structure
slows down the responsiveness of the organization, reduces staff commitment and motivation.
These in turn negatively affect organizational efficiency and delivery of value to the customers.
The third dimension of the organizational structure is the integration. Integration looks at how
the various departments or sections of the organization are inter connected. It is imperative for
employees in different departments to easily and readily access information from different
sections to effectively address customer needs. Chung-Jen and Jing-Wen (2007) argue that
integrative work structure provides opportunities for employees to learn from their colleagues.
This learning framework empowers employees with the necessary information for efficient
customer service. The presumption is that well integrated organizations offer an opportunity
to deliver value that satisfies and retentions the customers.
17
2.3.2 Employee Reward Systems
Employee reward is the compensation which an employee receives from an organization for
his or her service (Jiang & Xiao, 2009). Rewards are used by organizations to strengthen
certain behaviours. The rewards may extrinsic or intrinsic. That is, monetary rewards or those
items which can be converted to currencies as well as soft rewards such as having a comfortable
office; favourable interpersonal relationship inside the organization; having access to decision-
making involvement; the challenge and sense of achievement; and preferable growth
opportunities (Jiang & Xiao, 2009). Reward systems are anchored on the theory of positive
reinforcement. The theory is concerned with the use of stimuli to produce desired behaviours
among employees (Skinner, 1963). That is, the use of incentives to elicit and strengthen the
desired behaviours. Rewards can be either intrinsic such as praise and acknowledgement or
extrinsic such as salary, promotion, freedom in office and job security (Wei & Yazdanifard,
2014).
Sajuyigbe, Olaoye and Adeyemi (2013) posit that well rewarded employees feel that they are
being valued by the organization and are encouraged to work harder and better if they are
aware that their well-being is taken seriously by their employers, and that their career and self-
development are also being honed and taken care of by their organization. This leads to
employee motivation and enhanced positive performance. Hunter, Schmidt and Judiesch
(1990) assert that motivated employees are more productive, more efficient, and more willing
to work towards organizational goals than the employees who are experiencing low levels of
motivation.
This increased efficiency translates into better customer service delivery, which positively
influence customer satisfaction and retention (Njanja, Maina, Kibet, & Njagi, 2013).
Empirically, a study by Ali and Ahmed (2008) sought to establish the effect of reward on
employee satisfaction and performance among staff of Unilever Company. The study
established a positive relationship between rewards and work satisfaction as well as
motivation. Duberg and Mollen (2010) explored the impact of reward systems within the health
and geriatric care sector. The study identified salary, bonuses, and sharing as important aspects
that create enjoyable work place and happy workers who are more efficient.
18
Hence, Njanja, Maina, Kibet, and Njagi (2013) argue that when employees are rewarded, they
get work done. This means that reward systems have the potential of enhancing employee
performance and when employees surpass their target or exceed their standards, customer
satisfaction is enhanced. Therefore, reward systems have an indirect relationship with customer
retention in that, rewards first lead to employee motivation, which leads to enhanced employee
performance, customer satisfaction, and retention.
2.3.3 Organizational Goals
Establishment of organizational goals is a concept linked to management by objectives. Peter
Drucker first fronted the management by objectives concept in 1954. The concept requires all
managers to set specific objectives to be achieved in the future and encourages them to
continually ask what more can be done (Thomson, 2011). Since all organizations exist for a
purpose, Thomson (2011) posits that to achieve that purpose, organizational management sets
goals and objectives that are common to the whole organization. These goals form the basis of
performance evaluation.
Lawlor and Hornyak (2012) assert that employees are motivated when given clear goals and
are provided with feedback about their performance. Effective goals as indicated by Williams
(2012) should be, specific (identify exactly what is being pursued); measurable (having a
number to track progress); attainable (achievability of the goal); realistic (doability from a
business perspective); and time bound (ability to be completed within reasonable amount of
time). The goals therefore steer the organizational activities towards a focused direction. For
effectice customer relationship management, the organization should have well spelt out goals
and how these goals are to be achieved with the available resources. A study by Singh and
Khan (2012) to explore how to increase customer retention and loyalty in B2B World, advices
that while expanding the organization’s customer base it is crucial to work towards clearly
defined goals of customer retention. Further, a review by Lunenburg (2011) show that
individuals who are provided with specific, difficult but attainable goals perform better than
those given easy, nonspecific, or no goals at all. However, the individuals must have sufficient
ability, accept the goals, receive feedback and engage in continuous development. This
superior performance accrues from having clear goals that positively influence customer
satisfaction and retention.
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2.3.4 Performance Standards/Measurement
A performance measurement system is a balanced and dynamic system that enables support of
decision-making processes by gathering, elaborating and analysing information (Kurien &
Qureshi, 2011). The concept of using a balanced set of measures means, having different
measures with different perspectives to measure and establish the overall performance of the
organization (Taticchi, Tonelli, & Cagnazzo, 2010). Moreover, situations are not static, which
means the system should be able to continuously monitor not only the internal environment
but also the external context and reviews objectives and priorities.
Henri (2004) posits that performance measurement systems focuses on the process of
quantifying the effectiveness and the efficiency of action with a set of metrics (Henri, 2004).
Since, performance measurement seeks to highlight the difference between actual and desired
output levels, performance measurement systems are used in developing and setting
performance direction for both the organization and the individual employees. Hence,
performance measurement systems act as control systems that produce information necessary
for competitive advantage. Performance measurement acts in two ways. It forms the basis for
activity and organizational planning as well as control. Performance measurement systems
gather performance data, evaluate the data and provide feedback necessary for steering action
and behaviour. Overall, performance measurement plays a key role in the development of
strategic plans and evaluating the achievement of organizational objectives as well as acting
as a signalling and learning device (Henri, 2004). By controlling action and directing
behaviour, performance measurement is expected to focus the actions of employees’ specific
organizational objectives. This promotes better service delivery, customer satisfaction, and
retention. Furthermore, employees would feel more motivated if they achieve measurable
outputs.
2.4 Customer Knowledge Management and Customer Satisfaction
Knowledge based theory, proposes that knowledge management practices such as knowledge
acquisition, knowledge storage, knowledge creation, knowledge sharing and knowledge
implementation play a critical role in achieving high level productivity; financial and human
resource performance; and improved sustainable competitive advantage (Gholami, Asli,
Nazari-Shirkouhi, & Noruzy, 2013).
20
The fundamental argument is that customer knowledge is pivotal in decision-making and
building organizational competencies. Therefore, the use of customer knowledge management
for customer relationship management reduces risk factor in strategic decision-making and
enhances customer satisafaction and overall organizational performance (Madhoushi, Saghari
& Madhoushi, 2011). To establish a good relationship with customers, it is essential for an
organization to adopt measured management of customer knowledge to increase efficiencies
and effectiveness in optimal delivery of goods and services to customers as well as enhance
customer satisfaction.
Knoweldge management according to Gholami, et al. (2013) can be discussed from five point
model. That is, there are five key variables that constitute knowledge management. That is,
knowledge creation, acquisition, sharing, storage, and implementation. The concept of
knowledge management has drawn a number of definitions. Gholami, Asli, Nazari-Shirkouhi
and Noruzy (2013) stated that knowledge management is the process of acquiring, storing,
understanding, sharing and implementing knowledge. In the same breadth, Bhatti and Qureshi
(2007) defined the concept as the process of exploring the tacit and explicit knowledge of
individuals, groups, and organizations for decision-making.
Hence, according to Dahiya, Gupta and Jain (2012) knowledge management entails a
systematic and integrated management strategy that develops, transfers, transmits, stores, and
implement knowledge so that it can improve efficiency and effectiveness of the organization.
These definitions are in line with market orientation theory, which focuses on how an
organization can create value to its customers through acquisition, collection, examination,
distribution, and response to information from customers and competitors (Nejatian, Sentosa,
Piaralal, & Bohari, 2011).
The fundamental argument is that customer knowledge is pivotal in decision-making and
building organizational competencies. Empirically, a study by Madhoushi, Saghari and
Madhoushi (2011) to determine the relationship and the impact of customer knowledge
management on customer relationship management confirmed the influence of customer
knowledge management on customers’ relationship management in Melli Bank branch in
Mazandaran province.
21
Dadashkarimi and Asl (2013) posit that knowledge management is based on the assumption
that organizations have a high volume of data in form of reports, financial information, tangible
information, and confidential information among others. However, the data may not be useful
unless it is organized in such a manner that it provides practical information through
knowledge management processes. Madhoushi, Saghari and Madhoushi (2011) argue that the
use of customer knowledge management for customer relationship management reduces risk
factor in strategic decision-making and enhances customer loyalty since to establish a good
relationship with customers it is essential for an organization to adopt measured management
of customer knowledge to increase efficiencies and effectiveness in optimal delivery of goods
and services to customers as well as enhance customer satisfaction. This means that knowledge
management form a critical part of customer loyalty and retention. This study adopts Gholami,
et al. (2013) five point model to discuss knowledge management practices. That is, knowledge
creation, acquisition, sharing, storage, and implementation.
2.4.1 Knowledge Creation
Gholami, et al. (2013) define knowledge creation as the utilization of internal and external
resources of an organization to generate new knowledge for achieving the organizational goals.
Knowledge creation therefore involves the interactions between tacit and explicit information
in spiral movement that leads to the creation of new knowledge (Srisamran & Ractham, 2014).
This cyclic movement means that the use of the knowledge in actively involved in development
of the new knowledge.
Knowledge creation is particularly important in customer relationship management. The
arguerment is that both the external and intenal environments of the organization possess
critical information that can be brought together, rearrranged or constructed to create unique
knowledge that can be used to better the organization’s decision making. Srisamran and
Ractham (2014) posit that the process facilitates knowledge of customer needs and motivation
for continuous performance improvement. Huiming and Yi (2010) argue that competitive
advantages and growth do not emerge from merely making decisions in the present but from
creating knowledge over periods of time. Grant (2000) gives examples of research and
development; experimental learning and simulations as some of the knowledge creation
mechanism.
22
Huiming and Yi (2010) writes that knowledge creation can develop from the combination of
knowledge held by the firm and its connected actors in a given network and may occur
gradually or radically. The source of information for knowledge creation may be the
preexisting information within or without the organization or as a result of experimentation
that leads to cognitive and/or behavioral change.The knowledge creation therefore may act as
a source of unique heterogenious characteristics of the organization used for achieving
competitive advantage and customer satisfaction, loyalty and retention.
2.4.2 Knowledge Acquisition
According to ALHawari, Talet, Alryalat and Hadi, (2008) customer knowledge acquisition is
defined as the process of pursuing certain knowledge that is necessary for gaining new
customers to the company. However, as indicated by Gholami, et al. (2013) knowledge
acqusition encompass the process of acquiring and learning appropriate knowledge from the
organization’s various internal and external resources, such as experiences, experts, relevant
documents, surveys among others.
The significant difference between knowledge creation and knowledge acquisition is that in
the later, the user does not take an active role in the development of the knowledge but rather
adopt what already exists in the environment. Huiming and Yi (2010) posit that the
relationships that provide knowledge vary in nature, and can be both formal and informal such
as daily activities or structured intentions of data mining and information exploration, among
others. Some sources of knowledge as identified by Grant (2000) include inherited knowledge
possessed by the organization’s founders, on job trainings, attendance of work related
conferences, training programmes, workshops, benchmarking with other organizations,
interaction with other actors, or establishing of strategic alliances.
These may also include research and development activities and various forms of
organizational experimentations. In customer relationship management, Gebert, Geib, Kolbe
and Brenner (2003) assert that customer knowledge must be acquired in order to get to know
customer needs and motivation much better. However, to acquire the right knowledge about
the customer, Talet, (2012) identifies a five stage sequential steps that should be taken in order
to make sure that the knowledge is acquired from the right people at the right time and the right
23
place. The steps include, knowledge identification (determine sources and type of information
required); information gathering (gather and transform knowledge according to the
specifications); knowledge adaptation (code and categorize the knowledge); knowledge
organization (preparation and mapping of knowledge into the specific requirements); and
knowledge storage (keeping and indexing the knowledge).
2.4.3 Knowledge Sharing
Knowledge sharing may be defined as the process through which personal and organizational
knowledge is exchanged between and among individuals, and within and among teams,
organizational units, and organizations (Gholami, et al., 2013; Paulin & Suneson, 2012). Foss,
Husted and Michailova (2010) simply define knowledge sharing as the provision or receipt of
information, know how, and feedback on a product or a procedure. This means that the process
of knowledge sharing is intertwined with other elements of customer knowledge management
such as knowledge creation, acquisition, storage, and implementation. The term knowledge
sharing and information sharing has been used interchangeably in literature. However, Paulin
and Suneson (2012) try to offer clarity by arguing that knowledge can never be shared as it
exists in a context and the receiver interprets it in the light of his or her own background. In
the study, knowledge is viewed as information that offer meaning and is of value to the bearers.
The information exchange in this case can be either focused or unfocused. Moreover, the
process can be formal or informal. Hence, Brčić and Mihelič, (2015) posit that knowledge
sharing is a complex human process that requires dynamic interaction and good relationships
between the giver and the receiver of the information. Therefore, it is important to understand
what drives the knowledge transfer process between customers and the members of an
organization. Research shows that apart from the collective and organizational constructs, the
intra and inter individual factors such as motivation, willingness, communication,
expectations, and collaboration play a critical in igniting knowledge sharing. The significance
of knowledge sharing to customer retention is well illustrated in literature. Many organizations
employ various methods to enhance their information sharing with the customers. In the
current technological era, numerous platforms have emerged where organizations instantly
share product or service information with their customers. These include social media
platforms such as Facebook, WhatsApp, Twitter, blogs among others.
24
2.4.4 Knowledge Storage
According to Gholami, et al. (2013), knowledge storage involves both the soft or hard style
recording and retention of both individual and organizational knowledge in a way so as to be
easily retrieved. This is in line with Karadsheh, Mansour, Alhawari, Azar and El-Bathy (2009)
assertion that knowledge storage systems make use of technical systems that combine
information technology hardware and software as well as human processes to identify the
knowledge in an organization for coding and indexing for ease of later retrieval and use.
Customer relationship management processes typically being a complex process that combines
quantitative customer transactional information and qualitative customer information are
considered knowledge-intensive systems, which require an integrated flow, storage and
management of customer knowledge across all communication channels and all organizational
units to enable the use of knowledge about the customers (Bueren, Schierholz, Kolbe, &
Brenner, 2005).
Therefore, the fundamental role of knowledge storage in customer relationship management is
not only to have a pool of customer data but to have a database that can be used effectively in
enhancing the relationship with the customer. Several media methods such as text, images,
sound can be used to store knowledge. Gebert, Geib, Kolbe and Riempp (2002) advices that,
whichever method is adopted, care should be taken to ensure that the knowledge collection,
storage, and distribution only focus on knowledge that is needed and not waste time and effort
on collecting and storing useless knowledge.
Further, Bueren et al. (2005) note that to enhance efficiency and effectiveness of customer
relationship management in a highly dynamic and interconnected world, data storage systems
should enable dispersed individuals to store and retrieve information from virtually anywhere.
The study therefore argues that when customer knowledge is properly stored and easy to
retrieve, response to customer needs is enhanced, a fact that leads to customer satisfaction,
loyalty and retention.
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2.5 Chapter Summary
This chapter was a presentation of the literature that the study is based on. It reviewed both
empirical and theoretical literature. The context of the review was based on the research
questions. First, studies on the relationship between customer focus and customer satisfaction
was explored. This was followed by a review of studies discussing the relationship between
organizational efficiency/customer knowledge management and customer satisfaction. The
next chapter outline the systematic plan of action on how to carry out the study so as to answer
the research questions.
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CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter discusses the choice and use of research design, population, sampling frame, data
collection, research procedure, and data analysis methods.
3.2 Research Design
The study adopted a survey research design. Survey design involves studying a sub set or
sample of a population to provide a quantitative or numeric description of trends, attitudes, or
opinions for drawing inferences to the population (Creswell, 2014). Levin (2006) posits that
survey design is appropriate when the aim of the study is to describe a population or a subgroup
within the population with respect to certain parameters. That is to say, when the purpose of
the study is to present facts as they exist.
The design was appropriate for this study as it sought to explore the present relationship
between the customer relationship management and customer satisfaction at Chase Bank
(Kenya) Limited-In Receivership. The survey collected descriptive quantitative data to present
facts in their current state without the researcher’s perceptions interfering with the findings.
That is, the researcher’s expectations, experiences, and perceptions were set aside to ensure
objectivity in the conduct of the study and the conclusions drawn (Harwell, 2011).
3.3 Population and Sampling Design
3.3.1 Population
According to Burns and Grove (2003) a population consists of all the elements that meet certain
criteria for inclusion in a study. That is, the elements share some common characteristics of
interest to be evaluated. The population consisted of 214 employees of Chase Bank (Kenya)
Limited-In Receivership deployed in the bank’s branches in Nairobi City County.
27
Table 3.1: Population Distribution
Position Number Percentage (%)
Top Management 13 6%
Middle Level Managers 36 17%
Non-Management 165 77%
Total 214 100%
Source: Chase Bank (Kenya) Limited-In Receivership (2016)
3.3.2 Sampling Design
Sampling design is the means of selecting primary unit for data collection and analysis, which
are appropriate for a specific research question (Lameck, 2013). It involves defining the
sampling frame and choosing the appropriate sampling technique.
3.3.2.1 Sampling Frame
Sampling frames are formal or informal lists of units or cases from which the sample is drawn
(Teddlie & Yu, 2007). The study used the staff list as provided by the human resources
department at Chase Bank (Kenya) Limited-In Receivership to form the sampling frame.
3.3.2.2 Sampling Technique
Probability sampling technique was used for the study. The study used stratified random
sampling to draw a sample upon which the study was conducted, and then the findings
generalized to the study population. The technique was appropriate for this study because it
offered an opportunity for all sub categories of employees to be proportionately included in
the study. Further, each individual in the population had a chance of participating in the study
since the selection within each stratum was randomized.
3.3.2.3 Sample Size
A sample is a smaller but representative collection of units from a population used to determine
truths about that population (Cooper & Schindler, 2014). A sample was appropriate for this
study because it saved on time and cost. Further, since the sampling was probabilistic, the
sample findings gave results with known accuracy that could be calculated mathematically.
The study drew 30% of the population to constitute the sample size as recommended by
Mugenda and Mugenda (2003) for social research. Random tables were used to randomly
select 4 top management, 11 middle level management staff and 50 non-management staff
from the staff list at the bank to participate in the study.
28
Table 3.2: Sample Size Distribution
Position Number Percentage (%)
Top Management 4 6%
Middle Level Managers 11 17%
Non-Management 50 77%
Total 65 100%
3.4 Data Collection Methods
A questionnaire was used to collect primary data from the respondents for analysis. The use of
questionnaire was preferred because it standardized data collection. Furthermore, gathering
data by use of questionnaires was comparatively faster and less costly. The questionnaire had
five sections. The first part sought to provide the general demographics of the respondents.
The second part sought to highlight the customer focus strategies at Chase Bank (Kenya)
Limited-In Receivership. The third part explored the organizational efficiency strategies at
Chase Bank (Kenya) Limited-In Receivership. The fourth section evaluated the knowledge
management strategies at Chase Bank (Kenya) Limited-In Receivership. The final section
evaluated customer satisfaction index at Chase Bank (Kenya) Limited-In Receivership.
The questionnaire had a 5-point Likert scales with options where respondents chose their level
of agreement to the statements provided. The scale was such that 1 indicated strongly disagree;
2 will indicate disagree; 3 will indicate neutral; 4 will indicate agree; and 5 will indicate
strongly agree. Data from the scale was coded and used to run regression analysis for
establishment of relationships. The questionnaire also had open-ended questions with spaces
where respondents wrote down their responses. This was critical in gaining more insights about
the concepts from the respondents’ perspective.
3.5 Research Procedure
Before the actual study, a pilot study was conducted on 5 respondents from the target
population. The pilot findings was used to establish validity and reliability of the study
instrument. It was also used to identify ambiguity or lack of clarity in the study tool. It also
determined time needed for the study as well as identify potential logistical challenges to be
addressed before the final study.
29
Two approaches were adopted for data collection. First, was the drop and pick approach. In
this strategy, the services of a research assistant was sought. The assistant dropped the hard
copy questionnaires to the respondents in the branches within Nairobi City County. The
respondents were given five days to complete the questionnaires before the research assistant
went back to collect the duly filled questionnaires. For the hard copy questionnaires, duly
signed covering and introductory letters from the university were included. This was to assure
authenticity and enhance response rate.
Soft copy of the questionnaire was also sent via email to staff members who either travelled or
were out of their stations at the time of distributing the hard copies of the questionnaire. The
respondents were also allowed five days. Those who delayed were prompted through a follow
up email. For all the questionnaires, the respondents were assured of confidentiality of the
information shared in writing.
3.6 Data Analysis Method
To establish quantifiable relationship between customer relationship management strategies
and customer satisfaction, regression analysis was conducted on the quantitative data collected.
The date was first coded into numeric and entered into a computer programme for analysis.
The regression sought to show existence of relationship and the strength of such relationships.
Frequencies and percentages were used to present the descriptive findings. The data
presentation was in form of figures and tables.
3.7 Chapter Summary
The chapter outlined the study methodology adopted for this study. It defined and explained
the choice research design, study population, sampling design, data collection tool, research
procedure and data analysis procedure. The following chapter will provide the study findings.
30
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This study explored the effect of customer relationship management strategies on customer
satisfaction at Chase Bank (Kenya) Limited-In Receivership. The findings in this chapter
sought to identify the effects of focus on key customers; organizational efficiency and customer
knowledge management strategies on customer satisfaction at Chase Bank (Kenya) Limited-
In Receivership.
4.2 Demographic Characteristics
4.2.1 Response Rate
The study achieved a total of 71% response rate. Top management represented by the heads of
department had 75% response rate while the middle level managers represented by the
relationship managers had 73% response rate with non-management recording 70% response
rate.
Table 4.1: Study Response Rate Position Sample Reponses Response Rate
Top Management (Head of Department) 4 3 75%
Middle Level Managers (Relationship Manager) 11 8 73%
Non-Management 50 35 70%
Total 65 46 71%
4.2.2 Age Category of the Respondents
The findings in Table 4.2 shows that the study population was fairly young. Majority were in
their youthful years (67.4%). majority of the respondents were aged 26-35 years (52.25).
Table 4.2: Age Category of Respondents Frequency Percent
Valid
20-25 years 7 15.2
26-35 years 24 52.2
36-45 years 15 32.6
Total 46 100.0
31
4.2.3 Gender of the Respondents
The study showed that majority of the respondents were female (70%) as in Figure 4.1.
Figure 4.1: Gender of Respondents
4.2.4 Highest Education Level of the of the Respondents
The study revealed that Chase Bank (Kenya) Limited in receivership has a well trained staff.
Table 4.3 shows that 54% of the staff had a bachelor’s degree as their highest academic
qualification with 37% were having master’s degree qualification. Only 4.3% had diploma and
certificate qualifications as the highest academic qualifications respectively.
Table 4.3: Highest Education Level
Frequency Percent
Valid
Certificate 2 4.3
Diploma 2 4.3
Bachelor’s degree 25 54.3
Master’s degree 17 37.0
Total 46 100.0
4.2.5 Position of the Respondents
The study showed that Forty eight percent of the respondents were relationship officers while
17.4% were customer care representatives, 17.4% were relationship managers (middle level
managers), 10.9% were portfolio officers and 6.5% were heads of departments (top
management) as shown Table 4.4.
Male30%
Female70%
32
Table 4.4: Position of the Respondents Frequency Percent
Valid
Relationship Officer 22 47.8
Head of Department 3 6.5
Portfolio Officer 5 10.9
Relationship manager 8 17.4
Customer care representative 8 17.4
Total 46 100.0
4.2.6 Experience of the Respondents
The study in Table 4.6 revealed that 76.1% of the respondents had been with the organization
for less than 5 years while 17.4% had worked with the organization for between 6 and 10 years.
Only 6.5% of the respondents had worked with the organization for between 11 to 15 years.
This corroborates the fact that majority of the respondents were fairly young as indicated in
Table 4.3
Table 4.5: Experience of Respondents Frequency Percent
Valid
Less than 5 years 35 76.1
6-10 years 8 17.4
11-15 years 3 6.5
Total 46 100.0
4.2.7 Distribution of Respondents According to Branches
The findings show that 33% of the respondents were drawn from the headquarters, 24% from
Delta, 19% from Upper hill, 13% from Riverside and 11% from Westlands branches.
Figure 4.2: Distribution of Respondents according to Branches
Delta24%
HeadQuarters33%
Riverside13%
Upperhill19%
Westlands11%
33
4.3 Descriptive Statistics
4.3.1 Focus on Key Customers
The first study objective was to determine the effect of focus on key customers on customer
satisfaction at Chase Bank (Kenya) Limited in receivership. Focus on key customers was
measured through a scale which explored the extent of customer needs assessment, provision
of customized services, presence of ongoing dialogue and employee empowerment. The rating
was a five-point Likert Scale. Table 4.6 shows that majority were in agreement (89.1%) that
focus on key customer as a strategy influences customer satisfaction at Chase Bank (Kenya)
Limited in receivership. The focus is demonstrated by the fact that majority of the respondents
were highly educated and could use their skills to focus on key customers as shown in Table
4.3 (91% had at least bachelor degree qualification). This supports skills for needs assessment,
service customization, ongoing dialogue and better service delivery. Table 4.6 reveals that
majority (71.8%) of the respondents agreed that at Chase Bank (Kenya) Limited in
receivership, customer needs assessment is conducted. Majority of the respondents indicated
that the organization makes effort to find out what key customer needs are, prioritize key
customers’ wants and carry out customer satisfaction assessments.
Secondly Table 4.6 shows that at majority (89.1%) agreed that at Chase Bank (Kenya) Limited
in receivership, key customers are offered customized services. In that, the organization
provides customized services and products to our key customers, modify services to meet
customer needs and key customer receive personalized services. Thirdly, Table 4.6 shows that
majority (82.2%) agreed that there is an ongoing dialogue between Chase Bank (Kenya)
Limited in receivership and its customers. That is, there are regular contact with customers on
customization of offerings, clients are periodically called to remind them of on their
personalized services, and that periodically emails and newsletters are sent clients to inform
them of new services and new products.
Fourth, Table 4.6 reveal that majority (71.8) agreed that employees are Chase Bank (Kenya)
Limited in receivership are empowered to better serve key customers. That is, employees are
empowered to treat customers with great care, there are efforts to enhance the skills of the
employees, and that staff are competent in handling customer concerns.
34
Table 4.6: Focus on Key Customers PERCENTAGES (%)
Items
SD
(1)
D (
2)
N (
3)
A (
4)
SA
(5)
Needs Assessment
Efforts to know customer needs are in place 4.3 0.0 0.0 39.1 56.5
System of prioritizing our key customers’ needs in place 4.3 13 6.5 45.7 30.4
Continuously customer satisfaction assessments 4.3 0.0 17.4 43.5 34.8
Summated (Needs Assessment) 4.3 0.0 13.0 47.0 24.8
Customized Services
My organization provides customized services and products
to our key customers.
4.3 0.0 6.5 30.4 58.7
When my organization finds that customers need modified
service, the departments involved do so.
4.3 0.0 6.5 39.1 40.0
Our key customers always receive personalized services 4.3 0.0 13.0 67.4 15.2
Summated (Customized Services) 4.3 0.0 6.5 54.3 34.8
Ongoing Dialogue
Through regular contacts with our customers, we work with
individual key customer to customize our offerings.
4.3 0.0 6.5 67.4 21.7
We periodically call our clients to reminder them on their
personalized services
4.3 0.0 19.6 45.7 30.4
We periodically send email and newsletter to our clients to
inform them of our services and new products
4.3 0.0 26.1 34.8 34.8
Summated (Ongoing Dialogue) 4.3 0.0 13.0 60.9 21.3
Employee Empowerment
All people in my organization treat customers with great care 4.3 0.0 19.6 34.8 41.3
There are efforts to enhance the skills of the employees 4.3 0.0 23.9 30.4 41.3
Our staff are competent in handling customer concerns 4.3 6.5 23.9 30.4 34.8
Summated (Employee Empowerment) 4.3 0.0 23.9 37.0 34.8
Summated (Focus On Key Customers) 4.3 0.0 6.5 54.3 34.8
4.3.2 Organizational Efficiency
The second study objective was to determine the effect of organizational efficiency on
customer satisfaction at Chase Bank (Kenya) Limited in receivership. Organizational
efficiency was measured by the extent of flexibility and effectiveness of organizational
structure, adequacy and appropriateness of employee reward systems, clarity of organizational
goals and presence of performance measurement and standards. High level of efficiency was
partly influenced by the fact that most employees were well trained and used their skills in
enhancing efficiency. Table 4.7 shows that majority were in agreement (63%) that the
organizational structure is flexible and effective. That is, front line staff are empowered to
35
make decisions, adjust procedures and readily access information from other departments to
meet customer needs. Table 4.7 further shows that majority (84.8%) agreed that the employee
reward system at Chase Bank (Kenya) Limited in receivership is adequate and appropriate.
Employees get adequate compensation, have comfortable working environments and have
favourable growth opportunities.
Thirdly, Table 4.7 reveals that majority (76.1%) agreed that goals at Chase Bank (Kenya)
Limited in receivership are clear. The firm has clear business goals and allocate time a resource
to actualization of the goals as well as research and development. Fourth, Table 4.7 shows that
majority (76.1%) agreed that there is effective performance measurement systems in place.
The firm has set performance standards which are regularly measured and used for employees’
skills development.
Table 4.7: Organizational Efficiency PERCENTAGES (%)
Items
SD
(1)
D (
2)
N (
3)
A (
4)
SA
(5)
Organizational Structure
I make decisions concerning customer service delivery 0.0 19.6 30.4 43.5 6.5
I am allowed to adjust work procedures 0.0 26.1 28.3 34.8 10.9
I can easily and readily access information 0.0 0.0 26.1 45.7 28.3
Summated (Organizational Structure) 0.0 19.6 19.6 50.0 10.9
Employee Reward System
I am adequately paid for the services I offer to our customers 0.0 6.5 39.1 54.3 0.0
We have a comfortable working environment 0.0 6.5 8.7 58.7 26.1
My organization offers favourable growth opportunity 0.0 6.5 21.7 50.0 21.7
Summated (Employee Reward System) 0.0 6.5 8.7 78.3 6.5
Organizational Goals
My organization has established clear business goals 0.0 6.5 26.1 23.9 43.5
My organization commits time and resources to CRM 0.0 6.5 4.3 52.2 37.0
My organization allocate sufficient resources for R&D 6.5 6.5 23.9 39.1 23.9
Summated (Organizational Goals) 0.0 6.5 17.4 39.1 37.0
Performance Measurement & Standards
Customer-centric performance standards at touch points. 0.0 6.5 41.3 39.1 13.0
Employee output expectations are clearly communicated 0.0 6.5 17.4 65.2 10.9
Performance measures used for employee skill development 0.0 6.5 13.0 60.9 19.6
Summated (Performance Measurement & Standards) 0.0 0.0 23.9 56.5 19.6
Summated (Organizational Efficiency) 0.0 6.5 30.4 58.7 4.3
36
4.3.3 Customer Knowledge Management
The third study objective sought to determine the effect of customer knowledge management
on customer satisfaction at Chase Bank (Kenya) Limited in receivership. Customer knowledge
management was measured by the extent of knowledge creation, knowledge acquisition,
knowledge sharing and knowledge storage. Table 4.8 shows that majority were in agreement
(67.4%) that there is customer knowledge management at Chase Bank (Kenya) Limited in
receivership. Table 4.8 shows that majority (63%) agreed that there knowledge creation at
Chase Bank (Kenya) Limited in receivership. That is, the bank periodically reviews customer
information, has a well-functioning research and development and that there is top
management support in continuous learning. However the study showed that majority
disagreed that everybody in my organization collects customer views.
Secondly Table 4.8 shows that majority agreed (63%) there is knowledge acquisition at Chase
Bank (Kenya) Limited in receivership. The bank actively seeks to get information about its
customers, continuously conduct market surveys and has a data warehouse as a key component
of information technology department. Third, Table 4.8 indicates presence of knowledge
sharing. Majority (67.4) agreed that there is knowledge sharing with key customers and within
the organization. That is, the bank provides channels to enable ongoing two-way
communication between key customers and the bank, there is reliable customer database in the
organization, and that staff members can easily and readily access customer information from
the bank’s database.
37
Table 4.8: Customer Knowledge Management PERCENTAGES (%)
Items
SD
(1)
D (
2)
N (
3)
A (
4)
SA
(5)
Knowledge Creation
The bank reviews customer information periodically 0.0 6.5 6.5 65.1 21.7
The bank has well-functioning R&D department 0.0 6.5 6.5 63.0 23.9
The top management supports continuous learning 0.0 6.5 17.4 39.1 37.0
Everybody in my organization collects customer views 6.5 34.8 21.7 10.9 26.1
Summated (Knowledge Creation) 0.0 6.5 30.4 47.8 15.2
Knowledge Acquisition
The bank actively seeks to get information about its customers 6.5 0.0 34.8 32.6 26.1
My organization continuously conduct market surveys 13.0 13.0 17.4 26.1 30.4
Data warehousing is a key component of our IT department 0.0 0.0 37.0 37.0 26.1
Summated (Knowledge Acquisition) 0.0 13.0 23.9 41.3 21.7
Knowledge Sharing
Provision of ongoing two-way communication with customers 0.0 0.0 19.6 41.3 39.1
My organization provide e-information to its customer 0.0 6.5 19.6 32.6 41.3
My organization publishes periodical newsletters and brochures 0.0 0.0 37.0 30.4 32.6
Summated (Knowledge Sharing) 0.0 0.0 32.6 34.8 32.6
Knowledge Storage
Period upgrade customer database for effective CRM 6.5 0.0 19.6 54.3 19.6
We have reliable customer database in my organization 0.0 26.1 13.0 19.6 41.3
Employee ease of access to customer information 13.0 6.5 17.4 21.7 41.3
Summated (Knowledge Sharing) 0.0 19.6 19.6 26.1 34.8
Summated (Customer Knowledge Management) 0.0 6.5 26.1 39.1 28.3
4.3.4 Customer Satisfaction
Table 4.9 shows that majority (67.4%) agreed that customers of Chase Bank (Kenya) Limited
in receivership exhibit high level of customer satisfaction. The customers are always happy
with the front line staff, the banks professional services are highly rated by the customers,
customer feedback indicate satisfaction with staff knowledge and professionalism, and that
customers are happy with the banks response time. Further, Table 4.9 reveals that majority
(67.4%) agreed that customers of Chase Bank (Kenya) Limited in receivership exhibit high
level of customer loyalty. In that, Chase Bank customers normally recommend to their friends
and relatives to buy the banks products and services, there is growth in customer loyalty in the
past year and that customer feedback always indicate that customers see value in the bank’s
services.
38
Still Table 4.9 shows that majority (63.1%) agreed that the bank do retain its customers. That
is the bank’s client’s stay for a long time, have high repurchase rate, and have good relationship
with the bank. In summary, 67.4% of the respondents ranked the bank’s performance in terms
of customer satisfaction favourably.
Table 4.9: Customer Satisfaction PERCENTAGES (%)
Items
SD
(1)
D (
2)
N (
3)
A (
4)
SA
(5)
Customer Satisfaction
Our customers are always happy with the front-line staff services 0.0 0.0 13.0 54.3 32.6
Our professional standards of conduct are highly rated 0.0 0.0 26.1 39.1 34.8
Customer feedback indicate satisfaction with managers level of
knowledge and professionalism
0.0 0.0 17.4 39.1 43.5
Our customers are happy with our response time 0.0 6.5 26.1 28.3 39.1
Summated (Customer Satisfaction) 0.0 0.0 32.6 34.8 32.6
Customer Loyalty
Our customers normally recommend to their friends and
relatives to buy our products and services
0.0 0.0 32.6 32.6 34.8
Our clients’ loyalty has grown over the past year 6.5 19.6 10.9 37.0 26.1
Customer feedback always indicate that customers see value in
our services
0.0 0.0 32.6 32.6 34.8
Summated (Customer Loyalty) 0.0 0.0 32.6 45.7 21.7
Customer Retention
Our clients stay with us for a long time 0.0 13.0 23.9 50.0 13.0
Our customers have a high repurchase rate 0.0 0.0 50.0 30.4 19.6
We have a good relationship with our clients 0.0 0.0 21.7 34.8 43.5
Summated (Customer Retention) 0.0 0.0 37.0 43.5 19.6
Summated (Customer Satisfaction) 0.0 0.0 32.6 50.0 17.4
4.4 Inferential Statistics
4.4.1 Effect of Focus on Key Customers on Customer Satisfaction at Chase Bank (Kenya)
Limited in Receivership
The first study objective sought to determine the effect of focus on key customers on customer
satisfaction at Chase Bank (Kenya) Limited in receivership. The model summary in Table 4.10
shows that the R squared is 0.101. This meant that, when all factors are kept constant, 10.1%
variability in the customer satisfaction can be explained by the strategy of focusing on key
customers. The F-statistic is, F (1, 44) = 4.928, p=0.0320. Since the p value is less than 0.05,
39
the influence of focus on key customer statistically significantly influence customer
satisfaction. The relationship is such that a unit increase in focus on key customers has a
corresponding increase of 0.240 in customer satisfaction. This supports the descriptive finding
which showed that majority were in agreement (89.1%) that focus on key customer strategy
which influences customer satisfaction at Chase Bank (Kenya) Limited in receivership.
Table 4.10: Focus on Key Customers and Customer Satisfaction Goodness of Fit Test
Statistics
P-value
R-Squared 0.101
F-Statistic (1,44) 4.928 0.032
Dependent Variable=Customer Satisfaction Linear Regression Results
Coefficient t-statistics P-value
Constant 2.974** 2.220 0.0000
Focus on Key Customers 0.240** 6.489 0.0320
Key: **Significant at 5 percent
4.4.2 Effect of Organizational Efficiency on Customer Satisfaction at Chase Bank
(Kenya) Limited in Receivership
The second study objective sought to determine the effect of organizational efficiency on
customer satisfaction at Chase Bank (Kenya) Limited in receivership. The model summary in
Table 4.11 shows that the R squared is 0.615. This meant that, when all factors are kept
constant, 61.5% variability in the customer satisfaction can be explained by organizational
efficiency. The F-statistic is, F (1, 44) = 70.256, p=0.000. Since the p value is less than 0.05,
the influence of organizational efficiency is statistically significantly influencing customer
satisfaction.
The relationship is such that a unit increase in organizational efficiency has a corresponding
increase of 0.776 in customer satisfaction. This supports the descriptive findings which showed
that high flexibility and effectiveness of organizational structure, adequacy and
appropriateness of employee reward systems, clarity of organizational goals and presence of
performance measurement and standards which influences customer satisfaction at the bank.
High level of efficiency was partly influenced by the fact that most employees were well
trained and used their skills in enhancing efficiency.
40
Table 4.11: Focus on Key Customers and Customer Satisfaction Goodness of Fit Test
Statistics
P-value
R-Squared 0.615
F-Statistic (1,44) 70.256 0.000
Dependent Variable= Customer Satisfaction Linear Regression Results
Coefficient t-statistics P-value
Constant 1.171** 8.382 0.001
Organizational Efficiency 0.776** 3.447 0.000
Key: **Significant at 5 percent
4.4.3 Effect of Customer Knowledge Management on Customer Satisfaction at Chase
Bank (Kenya) Limited in Receivership
The third study objective sought to determine the effect of customer knowledge management
on customer satisfaction at Chase Bank (Kenya) Limited in receivership. The model summary
in Table 4.12 shows that the R squared is 0.767. This meant that, when all factors are kept
constant, 76.7% variability in customer satisfaction can be explained by customer knowledge
management. The F-statistic is, F (1, 44) = 145.129, p=0.000. Since the p value is less than
0.05, the influence of customer knowledge management is statistically significantly
influencing customer satisfaction. The relationship is such that a unit increase in organizational
efficiency has a corresponding increase of 0.657 in customer satisfaction. This is in line with
the descriptive findings which showed that majority of the respondents were in agreement
(67.4%) that there is customer knowledge management which influences customer satisfaction
at Chase Bank (Kenya) Limited in receivership.
Table 4.12: Focus on Key Customers and Customer Satisfaction Goodness of Fit Test
Statistics
P-value
R-Squared 0.767
F-Statistic (1,44) 145.129 0.000
Dependent Variable=Customer Satisfaction Linear Regression Results
Coefficient t-statistics P-value
Constant 1.413** 6.496 0.000
Customer Knowledge Management 0.657** 12.051 0.000
Key: **Significant at 5 percent
41
4.4.4 Effect of Customer Relationship Management Strategies on Customer Satisfaction
at Chase Bank (Kenya) Limited in Receivership
The main study objective was to determine the effect of customer relationship management
strategies on customer satisfaction at Chase Bank (Kenya) Limited in receivership. The overall
customer relationship management strategy was measured as a composite of focus on key
customers, organizational efficiency and customer knowledge management. The model
summary in Table 4.13 shows that the R squared is 0.806. This meant that, when all factors
are kept constant, 80.6% variability in the customer satisfaction can be explained by customer
relationship management strategies. The F-statistic is, F (3, 42) = 58.250, p=0.000. Since the
p value is less than 0.05, the influence of customer relationship management strategies is
statistically significantly influencing customer satisfaction. This supports the descriptive
findings which established an influence of customer relationship management on customer
satisfaction at the bank.
Table 4.13: CRM Strategies and Customer Satisfaction Goodness of Fit Test
Statistics
P-value
R-Squared 0.806
F-Statistic (1,44) 58.250 0.000
Dependent Variable=Customer Satisfaction Linear Regression Results
Coefficient t-statistics P-value
Constant 1.216** 4.162 0.000
Focus on Key Customers -0.067 -1.149 0.257
Organizational Efficiency 0.261** 2.500 0.016
Customer knowledge management 0.537** 6.268 0.000
Key: **Significant at 5 percent
4.5 Chapter Summary
The chapter established a positive statistically significant relationship between customer
relationship management strategies and customer satisfaction at Chase Bank (Kenya) Limited
in receivership. Chapter five compares the findings to prior studies to establish points of
convergence or divergence of the findings with existing literature.
42
CHAPTER FIVE
5.0 DISCUSSIONS, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
The chapter presents study summary, discussions, conclusions and recommendations. The
discussions compares the findings in chapter four to previous findings so as to draw
conclusions on the effect of customer relationship management on customer satisfaction at
Chase Bank (Kenya) Limited in receivership.
5.2 Summary
The main objective of the study was to find out the effect of customer relationship management
strategies on customer satisfaction at Chase Bank (Kenya) Limited-In Receivership. The study
had three research questions, what is the effect of focus on key customers on customer
satisfaction at Chase Bank (Kenya) Limited-In Receivership? What is the effect of
organizational efficiency on customer satisfaction at Chase Bank (Kenya) Limited-In
Receivership? What is the effect of customer knowledge management on customer satisfaction
at Chase Bank (Kenya) Limited-In Receivership?
The study adopted a survey research design. The population consisted of 214 employees of
Chase Bank (Kenya) Limited-In Receivership deployed in the bank’s branches in Nairobi City
County. Stratified random sampling was be used to draw a sample of 30%. Random tables
were used to randomly select 50 non-management staff, 11 middle management staff and 4 top
management staff from the staff list at the bank to participate in the study. A questionnaire was
used to collect primary data. Regression analysis was carried out to establish the existence and
the strength relationships between customer relationship management strategies (focus on
customers, organizational efficiency, and knowledge management) and customer satisfaction.
Frequencies and percentages were used to present the descriptive findings. The data
presentation was in form of charts and tables.
The study established a positive statistically significant relationship between customer
relationship management strategies and customer satisfaction at Chase Bank (Kenya) Limited
in receivership. Such that when all factors are kept constant, 80.6% variability in customer
satisfaction can be explained by customer relationship management strategies. To answer the
43
first research question, the study showed that when all factors are kept constant, 10.1%
variability in customer satisfaction can be explained by the strategy of focusing on key
customers. The relationship is such that a unit increase in focus on key customers has a
corresponding increase of 0.240 in customer satisfaction. To answer the second research
question, the study revealed that when all factors are kept constant, 61.5% variability in
customer satisfaction can be explained by organizational efficiency. Such that a unit increase
in organizational efficiency has a corresponding increase of 0.776 in customer satisfaction.
Third, the study revealed that when all factors are kept constant, 76.7% variability in customer
satisfaction can be explained by customer knowledge management and unit increase in
organizational efficiency has a corresponding increase of 0.657 in customer satisfaction.
Fourth, the study showed that when all factors are kept constant, 76.7% variability in customer
satisfaction can be explained by customer knowledge management with a unit increase in
organizational efficiency having a corresponding increase of 0.657 in customer satisfaction.
5.3 Discussions
5.3.1 Effect of Focus on Key Customers on Customer Satisfaction
The first study objective sought to determine the effect of focus on key customer on customer
satisfaction at Chase Bank (Kenya) Limited in receivership. The study showed a statistically
significant positive relationship between focus on key customers and customer satisfaction.
That is, the more emphasis are laid on key customers, the more the customers will be. This
supports argument by Yaacob (2014) that customers focus strategy is geared towards
understanding the dynamic needs of the customer as well as satisfying and establishing a long
term relationship for better retention of the customer. The findings further supports arguments
by Gebauer and Kowalkowski (2012) that focus on key customers underpins the sufficient
understanding of one's target buyers to be able to create superior value for them continuously.
Therefore, by organizing the firms' structure and operations around creating customer value,
business enterprises generate higher levels of satisfaction, loyalty, innovation, and
performance. The argurment is that with proper focus on key customers, the organization steers
itself towards developing solutions that satisfy customer specific needs (Gebauer &
Kowalkowski, 2012).
44
The study identified customer needs assessments, provision of customized services, ongoing
dialogue with the customers and employee empowerment as some of the strategies adopted
by Chase Bank (Kenya) Limited in receivership to ensure focus on key customers for customer
sataisfaction. This clearly supports Assabil and Abdallah (2011) five point classification of
factors that defines focus on key customers as; dialogue with the customers; customization of
products; customer needs assessment; employee empowerment and implementation of
customer needs information. The epitome of focus on key customers is therefore to emphasise
laying of effort in understanding what key customers want and anticipating their future
requirements for development of products and services that satisfy the customer (Aggarwal,
2004). That is, Customers focus strategy emphasizes positioning of the customer as the primary
basis for organizing all organizational activities with the aim of increasing customer
satisfaction and loyalty (Gebauer & Kowalkowski, 2012).
First, the study showed that customer needs assessment at the bank is achieved since the bank
makes effort to find out what key customer needs are, prioritize key customers’ wants and
carry out customer satisfaction assessments to ensure development of effective system geared
towards customer satisfaction. This supports arguments by Prasad, Subbaiah, Rao and Sastry
(2010) that since quality is judged by how best a product or service satisfy the needs of the
customer, customer needs assessment forms an important process in ensuring that the right
customer needs are identified so as to design products and service that ensure customer
satisfaction. The findings are further in line with Messner (2009) assertion that once a customer
need is identified, the organization evaluates it to determine if the need has enough priority or
impact for resources to be allocated to meet that need. The results then form the basis for
designing solutions to bridge the needs gap. This proses is expected to be continuous and as
holistic as possible with customer needs assessment being conducted for all customers to create
superior understanding and design of appropriate services and products in the areas of
weaknesses (Firdousi, 2014).
Secondly, the study showed that key customers are offered customised services at Chase Bank
(Kenya) Limited in receivership to ensure high level of satisfaction. The bank provides
customized services and products to key customers, modify services to meet customer needs
and offer key customer personalized services to enhance customer satisfaction level. The
45
objective of this is to improve customer satisfaction, customer trust and customer loyalty
(Coelho & Henseler, 2012). These findings are in line with a study by Ball, Coelho and Vilares
(2006), which empahsized positive relationship between personalization services and customer
satisfaction, customer loyalty and customer retention. The findings are also in line with
Simonson (2005) assertion that the emphasis on customization is on satisfying as many needs
as possible for each individual customer rather than reaching many customers and only
satisfying needs of a limited number of them. In this way, customization strategy provides
solutions to the varied and dynamic customers’ demands. Coelho and Henseler ( 2012) posit
that the primary objective of service customization is to identify profitable market segments or
customers and design products and services to optimally satisfy their needs.
Thirdly, the study established that there is an ongoing dialogue with the bank’s customers. That
is, there are regular contact with customers on customization of offerings, clients are
periodically called to remind them of on their personalized services, and that periodically
emails and newsletters are sent to clients to inform them of new services and new products.
The objective of which is to learn customer needs for better service delivery and customer
satisfaction. The findings support Merisavo and Raulas (2004) assertion that one way to create
brand loyalty is by communicating actively with customers as regular communication brings
value to the users of the brand by providing them with relevant information and by reducing
their efforts to search for information. In this way, by customers appreciating regular
communication from the brand, their loyalty to the brand is enhanced. Moreover, ongoing
communications with the customers may also help reassure consumers that they are using the
right brand, thereby helping to remove cognitive dissonance (Merisavo & Raulas, 2004).
The findings also support earlier findings by Merisavo (2008) which showed that being
frequently in touch with customers positively enhance customer loyalty and retention. The
study showed that ongoing dialogue strengthen customer loyalty as the customers feel that they
are cared for by the organization. Moreover the findings are also in line with a study by
Jayachandran, Sharma, Kaufman and Raman (2005) which demonstrated that being regularly
in touch with customers positively influence an organization’s customer relationship
management. Similarly, the findings support assertion by Mithas, Krishnan and Fornell (2005)
that ongoing dialogue with an organization’s customer is positively significant in improving
46
customer knowledge and satisfaction. This is further supported by a study by Reinartz and
Kumar (2003), which established a link between the numbers of emails sent to an
organization’s customers to its profitability. Fourth, the study revealed that staff members at
Chase Bank (Kenya) Limited in receivership are empowered to better serve key customers so
as to enhance level of customer satisfaction. That is, employees are empowered to treat
customers with great care, there are efforts to enhance the skills of the employees, and that
staff are competent in handling customer concerns.
This is in line with a study by Timothy and Abubaker (2013) which showed a direct positive
and significant relationship between employee empowerment and service quality and an
indirect positive relationship between employee empowerment and customer retention. As
explained by Ongori and Shunda (2008), the implication of employee empowerment mean to
allow employees to do what needs to be done instead of doing what they are told. This promotes
management delegation, individual responsibility, autonomous decision-making, and feeling
of self-efficacy. This in turn drives employee intrinsic motivation and desire to excel at what
they do for better customer satisfaction
The findings also supports argument by Isimoya and Bakarey (2013) that since customer needs
are variable, it is paramount for employees to have some degree of personal contact with the
customers to handle these variations especially in-service provision. However, this relationship
can only be fruitful when the employees are allowed to make decisions affecting their delivery.
Ukil (2016) further observes that empowered employees who work with enthusiasm generate
higher satisfaction to the customer. In agreement, a study by Timothy and Abubaker (2013) to
explore the impact of employee empowerement on service quality among Nigerian banks
clearly demonstrates a positive and significant relationship between employee empowerment
and service quality. The findings also echo assertion by Naeem and Saif (2010) that the
autonomy, responsibility, innovation and information held and offered by the front line service
providers gives the customers the much-needed confidence in the service providers and
enhances their level of satisfaction and retention. This means that for an organization to
demonstrate focus on customers, their employees must be empowered with the necessary
autonomy and information that seeks to adequately address the dynamic customer concerns.
47
5.3.2 Effect of Organizational Efficiency on Customer Satisfaction
The second study objective sought to explore the effect of organizational efficiency on
customer satisfaction at Chase Bank (Kenya) Limited in receivership. The study revealed a
statistically significant positive relationship between organizational efficiency and customer
satisfaction. That is, the higher the organizational efficiency index, the higher the customer
satisfaction index. This supports arguments by Soliman (2011) that organizational efficiency
strategy is directed at enhancing organizational performance by delivering a distinguished
value to the customer through enhanced responsiveness, productivity, effectiveness, and
timeliness. The argument is that, organizational efficiency strategy for customer retention
focuses on ensuring that employees and organizational design work in convergence to offer
customers the best of the experiences for maximum satisfaction.
The study identified flexible organizational structure, adequate and appropriate employee
reward systems, clear performance goals and effective performance measurement systems as
the main strategies for achieving organizational efficiency and customer satisfaction. First, the
study showed that the bank has achieved flexible and effective organizational structure by
empowering front line staff in making decisions and adjusting procedures to accommodate
situational demands by the customers. There is also ready access to information across
departments to meet customer needs.
The findings supports assertion by Sivadas and Dwyer (2000) that for organizations with low
formalization, job behaviours are relatively unstructured and members have greater freedom
in dealing with the demands of their relevant tasks. This means that low formalization would
offer more flexibility and autonomy to the front-line employees who provide services to the
customers. This becomes a critical tool for addressing emerging and dynamic customer needs
in a timely manner. It will also encourage innovation for enhanced customer satisfaction and
retention.
The findings are also in line with Chung-Jen and Jing-Wen’s (2007) argument that integrative
work structure provides opportunities for employees to learn from their colleagues. This
learning framework empowers employees with the necessary information for efficient
customer service. Moreover, according to Andrews (2012) well defined job positions, their
48
relationships to each other and accountabilities for the process and sub-process directs the
competence of work, the enthusiasm of employees and coordination among the top
management and subordinates for flow of plans and goals in the organization (Tran & Tian,
2013). Secondly, the study showed that the bank has ensured adequate and appropriate
employee rewards by offering adequate compensation for work done, providing comfortable
working environments and by offering favourable employee growth opportunities. This in turn
create an atmosphere to better customer service and customer satisfaction.
This supports arguments by Sajuyigbe, Olaoye and Adeyemi (2013) that well rewarded
employees feel that they are being valued by the organization and are encouraged to work
harder and better if they are aware that their well-being is taken seriously by their employers,
and that their career and self-development are also being honed and taken care of by their
organization. This leads to employee motivation and enhanced positive performance. Hunter,
Schmidt and Judiesch (1990) assert that motivated employees are more productive, more
efficient, and more willing to work towards organizational goals than the employees who are
experiencing low levels of motivation. This increased efficiency translates into better customer
service delivery, which positively influence customer satisfaction and retention (Njanja,
Maina, Kibet, & Njagi, 2013).
Thirdly, the study showed that the bank has clear performance goals. That the bank has clear
business goals and allocate time and resources to actualization of the goals. The firm is also
actively involved in research and development. This is in line with Lawlor and Hornyak (2012)
assertion that employees are motivated when given clear goals and are provided with feedback
about their performance. The goals therefore steer the organizational activities towards a
focused direction. This is supported by a study by Lunenburg (2011) which show that
individuals who are provided with specific, difficult but attainable goals perform better than
those given easy, nonspecific, or no goals at all. However, the individuals must have sufficient
ability, accept the goals, receive feedback and engage in continuous development. This
superior performance accrues from having clear goals that positively influence customer
satisfaction and retention.
49
A study by Singh and Khan (2012) further explains the relationship between organizational
goals and customer satiafaction by indicating that while expanding the organization’s customer
base it is crucial to work towards clearly defined goals of customer retention. In this way,
individuals who are provided with specific, difficult but attainable goals perform better than
those given easy, nonspecific, or no goals at all (Lunenburg, 2011). This superior performance
accrues from having clear goals that positively influence customer satisfaction and retention.
Fourth, the study showed that the bank has an effective performance measurement systems in
place to ensure enhanced employee performance for better customer satisfaction. The findings
support argument by Henri (2004) that performance measurement systems focus on the process
of quantifying the effectiveness and the efficiency of action with a set of metrics. Hence, since,
performance measurement seeks to highlight the difference between actual and desired output
levels, performance measurement systems are used in developing and setting performance
direction for both the organization and the individual employees. Thus, performance
measurement systems act as control systems that produce information necessary for offering
quality services that satisfy customers.
The study showed that the bank has set performance standards which are regularly measured
and used for employees’ skills development. By developing and controlling employee action
and directing their behaviour, performance measurement is expected to focus the actions of
employees’ specific organizational objectives. This promotes better service delivery, customer
satisfaction, and retention. Furthermore, employees would feel more motivated if they achieve
measurable outputs. In a nut shell, performance measurement influence customer satisfaction
in two ways. It forms the basis for activity and organizational planning as well as control.
Performance measurement systems gather performance data, evaluate the data and provide
feedback necessary for steering action and behaviour. Overall, performance measurement
plays a key role in the development of strategic plans and evaluating the achievement of
organizational objectives as well as acting as a signalling and learning device (Henri, 2004).
50
5.3.3 Effect of Customer Knowledge Management on Customer Satisfaction
The third study objective sought to investigate the effect of customer knowledge management
on customer satisfaction at Chase Bank (Kenya) Limited in receivership. The study revealed a
statistically significant positive relationship between customer knowledge management
customer satisfactions. That is, an increase in customer knowledge management leads to a
corresponding increase in customer satisfaction. The fundamental argument is that customer
knowledge is pivotal in decision-making and building organizational competencies. Therefore,
the use of customer knowledge management for customer relationship management reduces
risk factor in strategic decision-making and enhances customer sataisfaction ans loyalty
(Madhoushi, Saghari & Madhoushi, 2011).
Hence, to establish a good relationship with customers, it is essential for an organization to
adopt measured management of customer knowledge to increase efficiencies and effectiveness
in optimal delivery of goods and services to customers as well as enhance customer
satisfaction. Findings by Madhoushi, Saghari and Madhoushi (2011) also indicated that the use
of customer knowledge management for customer relationship management reduces risk factor
in strategic decision-making and enhances customer satisafaction overall organizational
performance
The study has identified knowledge creation, knowledge acquisition and knowledge sharing as
some of the strategies adopted by Chase Bank (Kenya) Limited in receivership in achieving an
effective customer knowledge management and customer satisfaction. First the study showed
that the bank has a system for knowledge creation. That is, the bank periodically reviews
customer information, has a well-functioning research and development and has top
management support for continuous learning. The findings supports arguments that knowledge
creation is particularly important in customer relationship management. The arguerment is that
both the external and intenal environments of the organization possess critical information that
can be brought together, rearrranged or constructed to create unique knowledge that can be
used to better the organization’s decision making. The process facilitates knowledge of
customer needs and motivation for continuous performance improvement (Srisamran &
Ractham, 2014).
51
Secondly, the study showed that there is a system of knowledge acquisition at Chase Bank
(Kenya) Limited in receivership. In that the bank actively seeks to get information about its
customers, continuously conduct market surveys and has a data warehouse as a key component
of information technology department. This supports assertion by Gebert, Geib, Kolbe and
Brenner (2003) that in customer relationship management, customer knowledge must be
acquired in order to get to know customer needs and motivation much better.
Third, the study revealed presence of knowledge sharing at the bank. That is, the bank provides
channels to enable ongoing two-way communication between key customers and the bank,
there is reliable customer database in the organization, and that staff members can easily and
readily access customer information from the bank’s database. Hence, Brčić and Mihelič,
(2015) assert that knowledge sharing is critical in providing solutions to customer needs and
enhancing organizational mperformance. Paulin and Suneson (2012) show that apart from the
collective and organizational constructs, the intra and inter individual factors such as
motivation, willingness, communication, expectations, and collaboration play a critical in
igniting knowledge sharing for better customer service.
The findings emphasize what many organizations employ to enhance their information sharing
with the customers. In the current technological era, numerous platforms have emerged where
organizations instantly share product or service information with their customers. These
include social media platforms such as Facebook, WhatsApp, Twitter, blogs among others.
The study will explore the extent to which knowledge sharing as a concept has been used to
enhance customer satisfaction, loyalty and retention
5.4 Conclusions
5.4.1 1 Effect of Focus on Key Customers on Customer Satisfaction
The first study objective sought to determine the effect of focus on key customer on customer
satisfaction at Chase Bank (Kenya) Limited in receivership. The study showed a statistically
significant positive relationship between focus on key customers and customer satisfaction.
That is, the more emphasis are laid on satisfying key customers, the better the performance of
the organization. This is linked to the fact that satisfied customers have a high repurchase rate
and also act as goodwill ambassadors to the organization’s products and services. The study
52
showed also showed that to operationalize the strategy of focusing on key customers, at Chase
Bank (Kenya) Limited in receivership, customer needs assessment are routinely conducted;
key customers are offered customized services; there is an ongoing dialogue between the bank
and its customers; and employees are empowered to better serve key customers. All these are
focused on addressing the key customers’ needs and wants for customer satisfaction and
retention.
5.4.2 Effect of Organizational Efficiency on Customer Satisfaction
The second study objective sought to explore the effect of organizational efficiency on
customer satisfaction at Chase Bank (Kenya) Limited in receivership. The study revealed a
statistically significant positive relationship between organizational efficiency and customer
satisfaction. That is, the higher the organizational efficiency index, the better the customer
satisfaction. To enhance organizational efficiency, the study showed that Chase Bank (Kenya)
Limited in receivership has established a flexible and effective organizational structure;
adequate and appropriate employee reward system; clear performance goals; and an effective
performance measurement systems that has set performance standards which are regularly
measured and used for employees’ skills development.
5.4.3 Effect of Customer Knowledge Management on Customer Satisfaction
The third study objective sought to investigate the effect of customer knowledge management
on customer satisfaction at Chase Bank (Kenya) Limited in receivership. The study revealed a
statistically significant positive relationship between customer knowledge management
organizational efficiency. That is an increase in customer knowledge management leads to a
corresponding increase in customer satisfaction. The study established that at Chase Bank
(Kenya) Limited in receivership, there is customer knowledge management system at the bank;
the bank is active in knowledge creation through period reviews of customer information,
research and development and top support for continuous learning. The study also showed that
there are systems for knowledge acquisition and knowledge sharing. That is, the bank provides
channels to enable ongoing two-way communication between key customers and the bank,
there is reliable customer database in the organization, and that staff members can easily and
readily access customer information from the bank’s database.
53
5.5 Recommendations
5.5.1 Recommendations for Improvement
5.5.1.1 Focus on Key Customers
The study has identified focus on key customers as a critical strategy for enhancing customer
satisfaction in the service sector. The study recommends paying more attention to customer
needs assessment, ongoing dialogue with customers, employee empowerment so as to be able
to effectively identify and address customer needs. This would lead to enhanced customer
satisfaction.
5.5.1.2 Organizational Efficiency
The study has demonstrated the significance of organizational efficiency on enhancing
customer satisfaction. The study thus, recommends targeted investments in organizational
efficiency for enhanced responsiveness, productivity, effectiveness, and timeliness of service
delivery.
5.5.1.3 Customer Knowledge Management
The study has shown the importance of customer knowledge management in enhancing
performance. Investment in information communication technology would be critical in
enhancing customer knowledge creation, acquisition and sharing. Further use of internet based
media is well come in ensuring real time engagement with the customers for value creation.
5.5.2 Recommendations for Further Studies
The study was limited Chase Bank (Kenya) Limited in receivership. Studies focusing in other
banks in Kenya and other service sector firms would be welcome to ensure generalization of
the findings. Further, the variables were limited to focus on key customers organizational
efficiency and customer knowledge management. Other variables of customer relationship
management could be explored. Moreover, the study was cross-sectional and was conducted
in the month of July 2017, other studies within different time zones would be welcome.
54
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APPENDICES
Appendix A: Cover Letter
P.O. Box 14634, 00800
NAIROBI
Date: ………………………….
Dear Respondent,
RESEARCH QUESTIONNAIRE
I am a graduate student at United States International University-Africa pursuing degree of
Master of Business Administration (MBA). I am conducting a research on the relationship
between customer relationship management strategies and Customer Satisfaction. I am using
Chase Bank (Kenya) Limited-In Receivership as a case study.
The findings will provide marketing managers at Chase Bank (Kenya) Limited-In Receivership
and other financial institutions in Kenya with information on the exact role of customer
relationship management systems in enhancing customer satisfaction, loyalty and retention.
The information will particularly be important in improving the systems for better
performance.
This is an academic research and confidentiality is strictly emphasized, your name will not
appear anywhere in the report. Kindly spare 15 minutes to complete the questionnaire attached.
Thank you.
Yours sincerely,
Noella Angela Mukami
64
Appendix B: Questionnaire
The purpose of this questionnaire is to identify the relationship between customer relationship
management strategies and firm performance. Kindly, respond by either selecting the response
among choices given that best represents your views or by filling the spaces provided.
PART I: GENERAL INFORMATION
1. Kindly indicate your age category
20- 25 years [ ] 46-55 years [ ]
25-35 years [ ] above 56 years [ ]
36-45 years [ ]
2. Indicate your gender
Male [ ] Female [ ] Other [ ]
3. What is your highest academic qualification?
Certificate [ ] Diploma [ ] Higher national Diploma [ ] Bachelors [ ]
Masters [ ] PhD [ ] Other Specify………………………………………
4. What is your position at the Bank?
Relationship officer [ ] Head of Department [ ]
Portfolio Officer [ ] Relationship Manager [ ]
Customer Care Representative [ ] Other (Specify)……………………..
5. How many years have you worked at Chase Bank (Kenya) Limited-In Receivership?
0-5 years [ ] 6-10 years [ ] 11-15 years [ ] Over 15 years [ ]
6. Indicate your branch
……………………………………………………………………………………….
65
PART II: FOCUSING ON KEY CUSTOMERS
Please indicate the extent of your agreement or disagreement to the following statements by
use of either ‘x’ or √ in the provided boxes.
Items
Str
on
gly
Dis
agre
e
Dis
agre
e
Neu
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Needs Assessment 1 2 3 4 5
My organization makes an effort to find out what our key customer
needs are
[ ] [ ] [ ] [ ] [ ]
My organization has a system of prioritizing our key customers’ needs [ ] [ ] [ ] [ ] [ ]
My organization continuously carry out customer satisfaction
assessments
[ ] [ ] [ ] [ ] [ ]
Customized Services
My organization provides customized services and products to our key
customers.
[ ] [ ] [ ] [ ] [ ]
When my organization finds that customers need modified service, the
departments involved make coordinated efforts to do so.
[ ] [ ] [ ] [ ] [ ]
Our key customers always receive personalized services [ ] [ ] [ ] [ ] [ ]
Ongoing Dialogue
Through regular contacts with our customers, we work with individual
key customer to customize our offerings.
[ ] [ ] [ ] [ ] [ ]
We periodically call our clients to reminder them on their personalized
services
[ ] [ ] [ ] [ ] [ ]
We periodically send email and newsletter to our clients to inform them
of our services and new products
[ ] [ ] [ ] [ ] [ ]
Employee Empowerment
All people in my organization treat customers with great care [ ] [ ] [ ] [ ] [ ]
In my organization, there are efforts to enhance the skills of the
employees
[ ] [ ] [ ] [ ] [ ]
Our staff are competent in handling customer concerns [ ] [ ] [ ] [ ] [ ]
How else does your organization ensure focus on customers?
…………………………………………………………………………………………………
…………………………………………………………………………………………………
66
PART III: ORGANIZATIONAL EFFICIENCY
Please indicate the extent of your agreement or disagreement to the following statements by
use of either ‘x’ or √ in the provided boxes.
Items
Str
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Dis
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Dis
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e
Neu
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Agre
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Str
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Organizational Structure 1 2 3 4 5
I make decisions concerning customer service delivery [ ] [ ] [ ] [ ] [ ]
I am allowed to adjust work procedures depending on circumstance [ ] [ ] [ ] [ ] [ ]
I can easily and readily access information from departments in my
organization to effectively address customer needs
[ ] [ ] [ ] [ ] [ ]
Employee Reward System
I am adequately paid for the services I offer to our customers [ ] [ ] [ ] [ ] [ ]
We have a comfortable working environment at my work place [ ] [ ] [ ] [ ] [ ]
My organization offers favorable growth opportunity for staff [ ] [ ] [ ] [ ] [ ]
Organizational Goals
My organization has established clear business goals related to
customer acquisition, development, retention, and reactivation.
[ ] [ ] [ ] [ ] [ ]
My organization commits time and resources to meet customer
relationships management goals.
[ ] [ ] [ ] [ ] [ ]
My organization allocate sufficient resources for research and
development
[ ] [ ] [ ] [ ] [ ]
Performance Measurement & Standards
Customer-centric performance standards are established and
monitored at all customer touch points.
[ ] [ ] [ ] [ ] [ ]
In my organization, measures for actual employee output against
expectations are clearly communicated to employees for improvement
[ ] [ ] [ ] [ ] [ ]
Performance measures are used in my organization for employee skill
development
[ ] [ ] [ ] [ ] [ ]
Which other ways do your organization use to ensure efficiency of service delivery?
…………………………………………………………………………………………………
…………………………………………………………………………………………………
67
PART IV: CUSTOMER KNOWLEDGE MANAGEMENT
Please indicate the extent of your agreement or disagreement to the following statements by
use of either ‘x’ or √ in the provided boxes.
Items
Str
on
gly
Dis
agre
e
Dis
agre
e
Neu
tral
Agre
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Str
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gly
Agre
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Knowledge Creation 1 2 3 4 5
The bank reviews customer information periodically [ ] [ ] [ ] [ ] [ ]
The bank has well-functioning R&D department [ ] [ ] [ ] [ ] [ ]
The top management at my workplace is actively interested and
supports continuous learning
[ ] [ ] [ ] [ ] [ ]
Everybody in my organization is involved in collecting customer
views
[ ] [ ] [ ] [ ] [ ]
Knowledge Acquisition
The bank actively seeks to get information about its customers [ ] [ ] [ ] [ ] [ ]
My organization continuously conduct market surveys [ ] [ ] [ ] [ ] [ ]
Data warehousing is a key component of our IT department [ ] [ ] [ ] [ ] [ ]
Knowledge Sharing
My organization provides channels to enable ongoing two-way
communication between our key customers and us
[ ] [ ] [ ] [ ] [ ]
My organization provide e-information to its customer [ ] [ ] [ ] [ ] [ ]
My organization publishes periodical newsletters and brochures [ ] [ ] [ ] [ ] [ ]
Knowledge Storage
My organization periodically upgrade customer database for effective
customer relationship management.
[ ] [ ] [ ] [ ] [ ]
We have reliable customer database in my organization [ ] [ ] [ ] [ ] [ ]
I can easily and readily access customer information from our database [ ] [ ] [ ] [ ] [ ]
What are some of the challenges that face knowledge management in your organization?
…………………………………………………………………………………………………
………………………………………………………………………………………………….
68
PART V: CUSTOMER SATISFACTION
Please indicate the extent of your agreement or disagreement to the following statements by
use of either ‘x’ or √ in the provided boxes.
Items
Str
on
gly
Dis
agre
e
Dis
agre
e
Neu
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Agre
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Str
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gly
Agre
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Customer Satisfaction 1 2 3 4 5
Our customers are always happy with the front-line staff services [ ] [ ] [ ] [ ] [ ]
Our professional standards of conduct are highly rated by our clients [ ] [ ] [ ] [ ] [ ]
Customer feedback indicate satisfaction with our managers level of
knowledge and professionalism
[ ] [ ] [ ] [ ] [ ]
Our customers are happy with our response time [ ] [ ] [ ] [ ] [ ]
Customer Loyalty
Our customers normally recommend to their friends and relatives to
buy our products and services
[ ] [ ] [ ] [ ] [ ]
Our clients’ loyalty has grown over the past year [ ] [ ] [ ] [ ] [ ]
Customer feedback always indicate that customers see value in our
services
[ ] [ ] [ ] [ ] [ ]
Customer Retention
Our clients stay with us for a long time [ ] [ ] [ ] [ ] [ ]
Our customers have a high repurchase rate [ ] [ ] [ ] [ ] [ ]
We have a good relationship with our clients [ ] [ ] [ ] [ ] [ ]
THANK YOU
