The impact of relationship marketing on customer retention: A case study of a retail bank in Lagos, Nigeria
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Background of the Study:
Relationship marketing focuses on creating long-term, mutually beneficial engagements between a company and its customers. In the context of retail banking in Lagos, this approach has gained prominence as banks strive to build trust and loyalty among an increasingly competitive customer base. Retail banks have been implementing relationship marketing strategies such as personalized communication, dedicated customer service, and tailored financial products to enhance customer retention. These strategies are designed to move beyond transactional interactions by fostering emotional and relational bonds with customers (Adeola, 2023). Over time, such practices have shown potential in increasing customer satisfaction and reducing churn. As the digital revolution reshapes the financial landscape, retail banks in Lagos are also leveraging online platforms to maintain constant engagement with their clientele. This study examines how relationship marketing practices impact customer retention, analyzing factors such as service quality, customer trust, and loyalty programs. It also considers the effect of digital innovations on relationship-building efforts. Understanding these dynamics is essential for banks aiming to secure long-term profitability and competitive advantage in a fast-evolving market (Ibrahim, 2024). The research further explores how relationship marketing can transform customer experiences from merely functional to deeply relational, ultimately driving sustained retention and increased lifetime value.
Statement of the Problem
Despite significant investments in relationship marketing, many retail banks in Lagos struggle to quantify its effectiveness on customer retention. There is limited empirical evidence detailing how specific relationship initiatives translate into long-term loyalty and reduced attrition. This gap hinders strategic decision-making, as banks are unsure which practices yield the highest returns on investment. Consequently, without a clear understanding of the drivers behind customer retention, banks may misallocate resources, thereby affecting overall performance (Chinwe, 2023).
Objectives of the Study
To assess the impact of relationship marketing on customer retention in a retail bank.
To identify key drivers that enhance customer loyalty.
To propose strategies for optimizing relationship marketing initiatives.
Research Questions
How does relationship marketing influence customer retention in retail banking?
What specific relationship initiatives are most effective in fostering loyalty?
How can retail banks optimize their relationship marketing strategies to enhance retention?
Significance of the Study
This study provides critical insights into how relationship marketing strategies can improve customer retention. The findings will aid retail banks in Lagos to refine their marketing practices, optimize resource allocation, and ultimately foster stronger, long-term customer relationships that drive sustainable profitability (Adeola, 2023).
Scope and Limitations of the Study
This study is limited to a retail bank in Lagos, Nigeria, focusing exclusively on relationship marketing practices. It does not consider other marketing strategies or banks outside Lagos.
Definitions of Terms
Relationship Marketing: Strategies focused on long-term customer engagement and loyalty.
Customer Retention: The ability of a company to keep its customers over time.
Retail Bank: A financial institution that offers services directly to consumers.
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