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assess the role of customer care in retention and acquisition of customers in organisations

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CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Customer satisfaction is a business philosophy which tends to the creation of value for customers, anticipating and managing their expectations, and demonstrating ability and responsibility to satisfy their needs, (Dominici and Guzzo, 2010). Qualities of service and customer satisfaction are critical factors for the success of any business (Gronoos, 1990; Parasuraman et al., 1988). As Valdani (2009) points out: enterprises exist because they have a customer to serve. The key to achieve sustainable advantage lies in delivering high quality service that results in satisfied customers (Shemwell et al, 1998).

 

Companies are facing their toughest competition ever. To win customers and encourage them to stay loyal or repurchase the service, most companies have resorted to meeting and satisfying customer needs by not being only reactive but proactive. They are also interested in finding new ways and means to satisfy the customer. Most companies are aiming for good customer relationship which means better service to the customer thereby preventing the customer from being promiscuous. A lot of companies are not just attracting customers, but are working at building long term relationships with customers (both local and foreign customers), suppliers, employees, distributors and the general public. These companies are striving to satisfy the maximized expectations of each stakeholder group. Based on the nature of marketing, it involves voluntary “exchange” relationship where both sides must be willing parties. The parties must be able to communicate which could be through different instruments. Therefore, in today’s highly competitive environment, businesses need better understanding of their customers. This understanding meets different channels of which one is Customer Relationship Management. (CRM) helps companies make sense of customer needs, manage these relationships more intelligently and help predict the future (Dominici and Guzzo, 2010). Sobotie and Oduro-Senya (2009) indicated limited revision of literature on CRM in Ghana. This research is therefore, an attempt to improve and contribute to knowledge in CRM operations in Ghana especially, how CRM impacts on organisational performance in the hospitality industry. The paper describes how CRM helps organisations to achieve better results and how it can be used to effect repurchase behaviour. The paper also describes how the research was conducted using both individual and cooperate clients responses to arrive at conclusions.

 

1.2 Problem Statement

Customer requirements for quality products and service in the tourism industry have become increasingly evident to professionals (Lam and Zhang, 1999; Yen and Su, 2004). Guest relationships are a strategic asset of the organization (Gruen et al., 2000) and customer satisfaction is the starting point to define business objectives. In this context, positive relationships can create customer‟s higher commitment and increase their return rate. Long-term and reciprocally advantageous relationships between customers and the hotel is becoming progressively important because of the highly positive correlation between guests’ overall satisfaction levels and the probability of their return to the same hotel (Choi and Chu, 2001). Hotels are increasing their investments to improve service quality and the perceived value for guests so as to achieve better customer satisfaction and loyalty, thus, resulting in better relationships with each customer (Jones et al., 2007). Relationship quality has a remarkable positive effect on hotel guests‟ behaviour: it creates positive word of mouth (WOM) and increases repeated guest rates (Kim et al., 2001).

Organisations have discovered research studies have shown that retaining current customers is much less expensive than attracting new ones. Companies have come to realize that in order to develop successful long-term relationship with customers, they should focus on the economically valuable customer, while keeping away and eliminating the economical invaluable ones. Proper CRM practices can potentially impact customer satisfaction rating and can potentially lead to increased customer retention, thereby increasing customer loyalty. It is against this background that this study seeks to assess the role of customer care in retention and acquisition of customers in organisations using Golden Tulip Hotel as a case study.

 

1.3 Objectives

The general objective of the study is to assess the role of customer care in retention and acquisition of customers in organisations.

The specific objectives of the study are to:

  1. Determine if CRM has an impact on customer loyalty.
  2. Determine if the practice of effective CRM in organisations leads to a long or short term financial impact.
  3. Find out the extent or degree to which effective CRM leads to customer satisfaction.
  4. Assess if the services provided by the hotel meets the needs and wants of customers.

 

 

 

1.4 Research Questions

The study was guided by the following research questions:

  1. What is the impact of CRM on customer loyalty?
  2. What is the impact of effective CRM practices organizational performance?
  3. To what extent or degree do effective CRM leads to customer satisfaction?
  4. What is the level of satisfactions of customers in the study company?

 

1.5. Scope of the Study

Customer relations has several aspects. This study was limited to customer relationship management and how it affects customer retention and acquisition of new customers. Other areas like customer marketing would not be covered due to time and resource constraints. The study was limited to only one organization in Accra- Golden Tulip Hotel.

 

1.6. Significance of the Study

The significance of this study can be seen in its contribution to discovery of new methods of customer care. The findings of the study would help improve good customer practice. The integrated literature gathered for the study would be useful for customer relations practitioners and business students as this report can serve as a reference material.

 

1.7. Organisation of the Study

Chapter One

Chapter one gives general introduction to the study, comprising of the background to the study, the problem statement, objectives of the study, research questions, significance study and the limitations and delimitations of the study.

 

Chapter Two

This presents a comprehensive review of relevant literature in an attempt to position the study in an appropriate theoretical framework. Thus it discusses findings of related researches to this study.

 

Chapter Three

This chapter presents the methodology employed for data gathering as well as the relevant analytical tools that are employed for analyzing the results gathered during the study.

 

Chapter Four

This section presents the findings from the case study, using descriptive methods of data analyses.

Chapter Five

This chapter gives the summary, discussion, conclusion and recommendations of the study.

 

1.8  The study variables

1.8.1 Independent variables:

1) CRM Concept adoption.

 

1.8.2 Dependent variables:

1) Customer Satisfaction 2) Customer Acquisition 3) Customer retention 4) Customer loss

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