CHAPTER ONE

INTRODUCTION

In the  story of businesses today, it all depends on how deeply a company  understand it’s customers  how quickly they meet their needs. so maintaining and growing a strong customer relationship is an important aspect which is directly influenced by how the organization serve them and boost their satisfaction.  Customer relationship management plays an essential function in driving customer satisfaction. Satisfied customers are profitable not only because they are likely to make repeat purchases but because they promote the firm through words of mouth. Therefore, customer relationship management improves the firm’s market share by bringing in more customers (Urehman and Jam, 2010). However, proper implementation of customer relationship management is a must for customer satisfaction. For customer relationship management to be implemented successfully, the policies of the firm’s strategy structure ought to be flexible and explicit particularly the pricing policies. These are vital issues that increase customer satisfaction and firms profit (Khaligh et al.2012). Customer relationship management prescribes that to satisfy the customers, it is essential to understand the customers. Customers should be well understood for their tastes, attitudes, and preferences.

CRM stands for customer relationship management. It refers to that processes, strategies, and technologies used by businesses to efficiently manage interactions with customers, leads, and prospects. So it was built as a basic sales force management tool, CRM technology quickly became an effective tool for businesses to understand their customers and improve their experience. This helps businesses like yours build customer loyalty, retain more customers, and ultimately grow revenue. To successfully deliver products or services that targeted customers, while heading to the success of the business.

To choose the right CRM technology for any business is very important, as the efficient functioning of the business processes and employee productivity will depend on the technology adopted. It is also imperative that the solutions chosen by the company can sustain the   business in the long term and continue to support its operations as scale.

 customers will love, a business needs to have a proper strategy and a plan put in place. When a business put customers at the center of their business, strategies can be built and offers which will aim at improving the lives of their customers.

1.1.1 back ground of study

There is about three billion half of the world’s population living on the income of less than two dollars a day. Among these poor communities, one child in five does not live to see his or her fifth birthday (Barr 2005) the world bank in its reports(1990) defines poverty as the inability to obtain a minimal standard of living .According to world bank repots in (2002, the dimension poverty is classified as at least four dimensions .The lack of income, low level of achievement, in education and health and vulnerability to risk and some sort of insecurity and voiceless .to enhance international  development, the united Nations organization announce the  mellimum development goal ,aimed to eradicate  poverty by 2030 .In this regard, micro finance is the form of financial development that has it primary  aim to elevate poverty( Ibid 2005).Government, donor and NGOs around the world responded with plans and promise to work towards realization of this goals.

Today in Cameroon there are over 850 registered MFIs  (statistics as official government figures)  and in the north west region 169 registered under CamCCUL. With all this effort to eradicated poverty, there has been wild competition in financial institution in Cameroon due to multiples numbers of commercial banks and micro finances agencies, cooperatives societies and also tele communication companies like MTN and Orange which also offers financial service. From 1990 to 2009,  financial institution in Cameroon have experienced bank liquidation, acquisition and merge due to the high competition arising from the globalization of the economy and the frequent changing of monetary rules in Cameroon imposed by world bank, the bank of central Africa states [BEAC] the banking commission for the six central Africa states COBAC and the umbrella of micro finance CAMCULL for financial institutions to cooperate with the pressure, they need to have reasonable profit that will ensure their sustainability through the creation of a larger customer and member base. As a result, micro finances section in general and those in Bamenda iii municipality in particular are setting themselves strategies to ensure customer satisfaction and loyalty to raise reasonable profit . ( Mohsan et al 2011]. The micro finance vision is to get membership and to achieve profitability and a high degree of customer’s satisfaction is a necessary condition for achieving the relent objective in the face of competition. This is why micro finances listen to customers’ requirements and complaints to provide them with the quality of products and service that will meet their needs Haridasan and Venkatesh [2011]. Micro finance in Cameroon offering to their customers are similar and satisfaction remains the sole tool that differentiates between one micro finance market share and another, as such measuring customer satisfaction is important( Zoponenidis 2012, Board, 2014).

 For micro financial institutions to fulfil their primary objective of profit maximization, micro finance ought to have a large pool of reliable customers who can stay with the institution for the near future. To maintain these customer relationship management is the bond that keeps them together to improve business relationships with customers better, specifically focusing on their satisfaction.  Customer relationship management plays an essential function in driving customer satisfaction. Satisfied customers are profitable  not only because they are likely to make repeat purchases but because they promote the firm through words of mouth. Therefore, customer relationship management improves the firm’s market share by bringing in more customers (Urehman and Jam, 2010). However, proper implementation of customer relationship management is a must for customer satisfaction. For customer relationship management to be implemented successfully, the policies of the firm’s strategy structure ought to be flexible and explicit particularly the pricing policies. These are vital issues that increase customer satisfaction and firms profit (Khaligh et al.2012). Customer relationship management prescribes that to satisfy the customers, it is essential to understand the customers. Customers should be well understood for their tastes, attitudes, and preferences .

This helps the firm in identifying their target customers and coin out measures to provide them with the quality of services they desire thereby leading to satisfaction. That is why this study tries to assess the impact of customer relationship management on customer’s satisfaction in the micro finance sector of Cameroon.

1.2 Statement of the Problem

Financial institutions offer similar services to their customers, and this always lead to tight competition to acquire and retain customers. As such, financial institutions are faced with the tax of providing goods and services that meet their customer’s needs, because satisfied customers exhibit high level of loyalty and retention thereby increasing the customer base of the financial institution which have a positive impact on their revenue (Kotler and Keller,2011). However, in Bamenda iii municipality , microfinances   use to support developmental initiatives now due to the loss of customers they cannot fund such endeavors and also with the presence of all the pandemics and socio political crisis that the society is faced with, has slow the interactions of microfinances and  customer . In the microfinance sector of Cameroon, there is a constant formation of long queues at the union halls of the respective institutions resulting to delay in crediting and debiting of accounts and the rendering of bank statements. This has gradually developed a feeling of discontentment am and others which if care is not taken might switch to telecommunication companies like MTN that renders fast mobile money account services. Moreover, the initiation of accounts in microfinance limited cash and with a minimum account rates. This might cause prospective customers through referrals (negative words of mouth recommendation) to switch to other agencies which can permit current account holders to take loans with no collaterals.

Further, the process of granting loans in micro finances is too procedural, slow and expensive. It requires a series of documents like the collateral security asset document, surety, certificate of residence and nationality all of which requires money to be done. The loan if granted, the charges that accrue to it are worth a problem to customers with an interest rate twice that of savings account . Furthermore, in microfinances sometimes unavailability cash leads to the shutdown of activities in the institution thereby failing customers’ transactions for the day. To keep these customers in tact with their institutions  and prevent them from defecting to rival competitors, customer relationship management comes into play as the sole marketing tactic and strategy. As such, this research moves to assess the impact of customer relationship management on customer satisfaction in the micro finance sector of Cameroon

1.3 Research Questions

1.3.1 Main research question

Does customer relationship management dimensions’ impact customer satisfaction in microfinances ?

1.3.2 Specific research questions

1. What is the effect of the customer relationship management dimension “customer acquisition”

on customer satisfaction ?

2. What is the influence of the customer relationship management dimension “customer

retention” on customer satisfaction ?

3. What is the effect of customer value increase on customer satisfaction in microfinance?

1.4 Objectives of the Study

The objectives of this study are divided into main and specific objectives.

1.4.1 Main Objective

To determine the impact of customer relationship management dimensions on customer

satisfaction in micro finance institution.

1.4.2 Specific Objectives

1. To assess the effect of customer acquisition on customer satisfaction in microfinance .
2. To determine the influence of customer retention on customer satisfaction in microfinances
3. To study the effect of customer value increase on customer satisfaction.