Relationship Marketing and its Effect on Customer Retention: A Case of Commercial Banks in Nigeria

Abstract

The objective of this study was to examine the effect of relationship marketing on customer retention of commercial banks in Nigeria. In achieving the objective of the study, the study considered five dimensions of relationship marketing which include Trust, Bonding, Empathy, Reciprocity, Responsiveness and their effect on customer retention. The study adopted a cross sectional survey research design and a sample size of 200 was employed for the study. The study used a structured questionnaire as its primary source of data collection and convenience sampling techniques were used in the distribution of the questionnaire to the study's respondents, who were customers of selected commercial banks in Nigeria, including First Bank, Guaranty Trust Bank (GTB), Access Bank, United Bank of Africa (UBA), First City Monument Bank (FCMB), and Zenith Bank. 188 of the 200 questionnaires that were sent were correctly completed, returned, and provided the study's data. Data were analyzed using both descriptive and inferential statistics and multiple regression was used to test the hypotheses. The results showed that all of the independent variables taken into account had a significant and positive effect on the customer retention of commercial banks in Nigeria. It was thus recommended that commercial banks should make sure that all of their employees are actively involved in building friendly relationships with their customers. They should also continuously offer top-notch services to build customer trust and enhance customer communications to better understand customer's needs and take the appropriate action to meet those needs.