CHAPTER ONE

                                                             INTRODUCTION

1.1 Background of Study

“The banking landscape in Cameroon is becoming increasingly crowded, with new entrants such as fintech companies, mobile money operators like Orange, and community-based financial institutions like credit unions.

This proliferation of financial services providers has been driven by advances in technology, deregulation, and regional integration. Between 1990 and 2020, the Cameroonian banking sector witnessed significant consolidation, with some banks undergoing mergers, acquisitions, or liquidation due to intense competition, regulatory pressures, and economic uncertainty. To remain viable, banks must focus on building a loyal customer base, which is critical for generating sustainable profits. In this context, banks in Cameroon, particularly those in the Buea municipality, are developing strategies to enhance customer experience and loyalty. By doing so, they aim to differentiate themselves in a crowded market, where product offerings are increasingly homogeneous. As banks strive to achieve their profitability goals, they recognize that customer satisfaction is a key differentiator, setting them apart from competitors and driving long-term growth (Kotler, 2012; Nguyen, 2015).

For financial institutions to achieve their primary goal of maximizing shareholder value, they must cultivate a loyal customer base that will drive long-term growth and profitability. To foster this loyalty, effective customer relationship management (CRM) is crucial, as it enables banks to build strong relationships with their customers, understand their needs, and deliver personalized services that meet their expectations. By doing so, banks can increase customer satisfaction, retention, and advocacy, ultimately driving business growth and competitiveness (Kumar, 2018). However, successful CRM implementation requires a flexible and customer-centric business strategy, including adaptable pricing policies that respond to changing customer needs and preferences (Trainor, 2012). To deliver exceptional customer experiences, banks must also develop a deep understanding of their customers’ behaviors, preferences, and decision-making factors. This customer insights-driven approach enables banks to tailor their services, improve customer satisfaction, and ultimately drive loyalty and retention (Verhoef, 2003). This study aims to investigate the impact of CRM on customer satisfaction in the Cameroonian banking sector. Moreover, in today’s highly competitive banking landscape, customers are a bank’s most valuable asset. To remain competitive, banks must prioritize customer satisfaction, building long-term relationships that drive loyalty, retention, and advocacy. Effective CRM is essential to achieving this goal, as it enables banks to deliver personalized, customer-centric services that meet the evolving needs and expectations of their customers (Levesque, 2017).”

To foster long-term relationships with customers, banks must adopt effective customer relationship management (CRM) strategies. This enables them to combat increasing competition in the global market and maintain a loyal customer base (Levesque, 2017). Customer satisfaction is a crucial aspect of marketing activities, driving long-term success and sustainability for organizations (Peppers & Rogers, 2011;

Hansenmark & Abinsson, 2014). Globally, businesses prioritize customer satisfaction to enhance products and services, increase loyalty, and stay competitive (Turkyilmaz & Ozkan, 2007). Satisfied customers drive retention, loyalty, competitive advantage, market share, and profits, ultimately leading to improved organizational performance (Carter,

2010; Voss & Voss, 2011). Conversely, customer dissatisfaction results in switching, complaints, and reduced profitability, market share, and competitiveness (Munari & Manrai,

2013). To retain customers in a highly competitive market, companies focus on maintaining and expanding their customer base using customer acquisition marketing strategies (Krishnamoorthy & Srivasan, 2013). Organizations recognize the importance of creating and maintaining long-lasting relationships with existing customers, providing customized services through customer lifetime value (Ampofu, 2012). In the banking sector, institutions face intense competition as they shift from product-focused practices to customer-centered strategies that prioritize customer satisfaction (Godson, 2009). To maintain lifetime relationships with customers, commercial banks adopt CRM practices such as value-based CRM strategies, customer acquisition, retention, and complaint handling (Sin, Tse & Yim, 2012). These CRM practices enhance service delivery and customer satisfaction, driving business growth and competitiveness (Chan & Ahmad, 2013). In today’s dynamic financial environment, CRM and customer satisfaction have become essential differentiating factors for banks (Sadek & Tantawi, 2009).

1.2 STATEMENT OF THE PROBLEM

In the Cameroonian banking sector, commercial banks like Société Générale Cameroun (SGC) and Ecobank in the Buea Municipality face intense competition, prompting them to provide customer-centric services that meet their clients’ evolving needs. However, these banks are plagued by issues such as:

*   Congested banking halls, resulting in delayed account transactions and statement rendering.

*   Steep account initiation fees, deterring prospective customers who may opt for more affordable alternatives like cooperative credit unions.

*   Cumbersome and costly loan application processes, involving numerous documents and high interest rates.

*   Frequent ATM breakdowns and internet outages, hindering customers’ ability to access their accounts.

*   Language barriers, as SGC’s French-language menus create difficulties for customers in the Buea municipality.

If left unaddressed, these challenges may drive customers to seek alternative services from competitors like MTN, cooperative societies, and insurance companies, ultimately affecting the banks’ revenue and market share.

1.3 Objectives of the Study

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

Main Objective

To determine the impact of customer relationship management dimensions on customer satisfaction in SGC and Ecobank.

Specific Objectives

1. To assess the effect of customer acquisition on customer satisfaction in SGC and Ecobank in the banking sector of Cameroon.
2. To determine the influence of customer retention on customer satisfaction in SGC and Ecobank.
3. To study the effect of customer value increase on customer satisfaction in SGC and Ecobank.

1.4 Research Questions

Main research question

Does customer relationship management dimensions impact customer satisfaction in SGC and Ecobank?

Specific research questions

1. What is the effect of the customer acquisition on customer satisfaction in SGC and Ecobank?
2. What is the influence of the customer relationship retention on customer satisfaction in SGC and Ecobank?
3. What is the effect of customer value increase on customer satisfaction in SGC and Ecobank?

4.5 Hypothesis to be tested

This study can be approach with the following hypothesis in the null form.

Main hypothesis

HO: There is no impact of customer relationship management dimensions on customer satisfaction in SGC and Ecobank.

Specific hypothesis

HI:  There is no effect of the customer relationship management dimension “customer acquisition” on customer satisfaction in SGC and Ecobank.

H2:  Customer retention base customer relationship management strategy has no influence on customer satisfaction in SGC and Ecobank.

H3:  Customer value increase as a dimension of customer relationship management has no effect on customer satisfaction in SGC and Ecobank.