The Effect of Customer Service Quality on Customer Retention: A Case Study of Fidelity Bank, Benue State
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Background of the Study
Customer service quality is a critical driver of customer retention in the highly competitive retail banking environment. Fidelity Bank in Benue State has invested considerably in enhancing service quality through personalized interactions, efficient complaint resolution, and continuous staff training (Adebayo, 2023). The bank’s commitment to superior customer service is evident in its integrated use of advanced Customer Relationship Management (CRM) systems, which facilitate timely and effective communication with customers. These measures are intended not only to meet immediate customer needs but also to foster long-term loyalty by building trust and satisfaction (Balogun, 2024).
In today’s digital age, the quality of customer service is influenced by multiple factors including responsiveness, reliability, and the overall customer experience. Fidelity Bank’s proactive approach—combining both digital channels and traditional face-to-face service—aims to create a seamless banking experience that can adapt to diverse customer preferences. However, despite these efforts, challenges such as service delays, inconsistent experiences across different channels, and occasional miscommunications continue to affect customer retention (Okafor, 2025). This study investigates the relationship between customer service quality and customer retention at Fidelity Bank, seeking to understand how improvements in service delivery can translate into higher retention rates and sustained customer loyalty.
Statement of the Problem
Despite Fidelity Bank’s efforts to deliver high-quality customer service, inconsistencies in service delivery have led to customer dissatisfaction and attrition in Benue State. Customers have reported experiencing delays, communication gaps, and varying levels of service quality across branches, which contribute to a decline in overall retention (Adebayo, 2023). In a competitive banking environment, even minor lapses in service quality can prompt customers to seek alternatives, thereby undermining the bank’s customer retention strategies.
Furthermore, the rapid evolution of customer expectations driven by digital innovation poses an additional challenge. Without continuous improvement and adaptation, the bank risks falling behind competitors who offer more consistent and personalized service experiences. This study seeks to identify the critical shortcomings in Fidelity Bank’s customer service practices and to assess their impact on customer retention. The findings will help in formulating strategies that enhance service quality, ultimately leading to improved customer satisfaction and loyalty.
Objectives of the Study
- To assess the impact of customer service quality on customer retention at Fidelity Bank.
- To identify key service quality factors that influence customer retention.
- To propose recommendations for improving service quality to enhance customer retention.
Research Questions
- How does customer service quality affect retention at Fidelity Bank?
- What are the primary factors that drive high-quality customer service in retail banking?
- What strategies can be implemented to improve customer retention through better service quality?
Research Hypotheses
- Superior customer service quality positively influences customer retention.
- Inconsistent service delivery is negatively associated with customer retention.
- Enhanced staff training and efficient CRM usage improve customer retention.
Scope and Limitations of the Study
This study focuses on Fidelity Bank’s customer service practices in Benue State. Limitations include potential respondent bias, external market influences, and challenges in quantifying service quality across various channels.
Definitions of Terms
- Customer Service Quality: The standard of support and assistance provided to customers.
- Customer Retention: The ability of a bank to keep its existing customers over time.
- CRM Systems: Technologies used to manage and improve customer relationships.
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