An investigation of customer relationship management innovations on loyalty in banking: a case study of Sterling Bank
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Background of the Study
Customer relationship management (CRM) innovations have transformed how banks engage with their clientele, ultimately influencing customer loyalty. Sterling Bank has adopted a range of CRM technologies—including AI-driven analytics, personalized communication platforms, and automated feedback systems—to enhance customer interactions and build lasting relationships (Afolabi, 2023). These innovations allow the bank to segment its customer base, tailor products and services to individual needs, and proactively address issues before they escalate, thereby fostering increased loyalty and trust (Ibrahim, 2023). The integration of digital CRM tools has streamlined the process of tracking customer behavior and preferences, enabling more effective and timely interventions. Recent developments in CRM technology have further enabled Sterling Bank to leverage big data and predictive analytics to anticipate customer needs and design targeted retention strategies (Chinwe, 2024). Despite these advancements, challenges persist in ensuring that technological innovations translate into improved customer loyalty. Issues such as inconsistent service delivery across channels, integration challenges with legacy systems, and gaps in employee training may undermine the potential benefits of CRM innovations. This study seeks to investigate the impact of CRM innovations on customer loyalty at Sterling Bank by analyzing customer retention rates, satisfaction surveys, and qualitative feedback from both customers and staff. The aim is to identify key drivers of loyalty and determine the effectiveness of current CRM practices, thereby offering recommendations for further enhancements that can solidify long-term customer relationships.
Statement of the Problem
Although Sterling Bank has invested significantly in CRM innovations, the expected improvements in customer loyalty have not been uniformly realized. Discrepancies in service quality across different channels and regions have led to uneven customer experiences, which in turn impact loyalty (Afolabi, 2023). Furthermore, the integration of advanced CRM systems with traditional customer service processes has encountered challenges, resulting in delays and inconsistencies in personalized service delivery (Ibrahim, 2023). These operational shortcomings, coupled with insufficient staff training on new CRM tools, have hindered the bank’s ability to fully leverage technological advancements to boost customer retention (Chinwe, 2024). Moreover, there is a lack of a comprehensive framework to measure the direct impact of CRM innovations on customer loyalty, making it difficult for management to identify areas needing improvement. This study aims to address these challenges by evaluating the relationship between CRM innovations and customer loyalty, and by identifying the operational bottlenecks that limit the efficacy of current systems. The ultimate goal is to provide actionable insights that enable Sterling Bank to refine its CRM practices and enhance customer loyalty in a competitive banking environment.
Objectives of the Study:
1. To assess the impact of CRM innovations on customer loyalty at Sterling Bank.
2. To identify operational challenges affecting CRM effectiveness.
3. To recommend strategies for enhancing customer retention through improved CRM practices.
Research Questions:
1. How do CRM innovations influence customer loyalty at Sterling Bank?
2. What operational challenges hinder effective CRM implementation?
3. What improvements can strengthen customer retention through CRM?
Research Hypotheses:
1. Advanced CRM innovations are positively correlated with increased customer loyalty.
2. Operational integration challenges negatively affect CRM outcomes.
3. Enhanced employee training on CRM tools leads to higher customer retention.
Scope and Limitations of the Study:
This study focuses on Sterling Bank’s CRM systems and their effect on customer loyalty, using customer surveys and internal performance data. Limitations include self-reporting biases and variability in service quality across branches.
Definitions of Terms:
• CRM Innovations: Technological advancements in managing customer relationships.
• Customer Loyalty: The tendency of customers to remain with a bank over time.
• Personalization: Tailoring services to individual customer needs.
• Retention: The ability to keep existing customers.
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