Customer Relationship Management Practices and Organisational Performance of Commercial Banks in Ghana: The Roles of Customer Satisfaction and Customer Loyalty

Abstract

In today’s dynamic global banking environment, Customer Relationship Management (CRM) practices play a critical role in building a competitive advantage in the industry. Globally, CRM has been applied in the banking sector to attract, build, and maintain good customer relationship. The subject of CRM, customer satisfaction, loyalty and organisational performance has become a global issue. With intense competition among commercial banks, this study aimed at establishing the effects of CRM practices on organisational performance in the ban king industry in Ghana, taking into consideration the mediating roles of customer satisfaction and loyalty. This is so because previous studies only looked at the direct influence of CRM practices on performance of firms. The argument of the study was anchored on social exchange theory. Methodologically, the study was guided by the positivists’ philosophy of quantitative approach. The study employed descriptive survey design, with a study population of 2,005,895 bank customers. A sample of 420 was selected using multi-stage sampling techniques. A questionnaire, with a reliability coefficient between 0.845 and 0.861, was the instrument used. The data were analysed using both descriptive and inferential statistical tools. The findings show that CRM practices have positive effect on organisational performance. However, the effects become stronger when customer satisfaction and loyalty mediate the relationship between CRM and organisational performance. Also, demographic variables, such as age, gender and years of banking on the part of customers, have controlling effects on the customers’ perception with regard to CRM practices. The study concludes that whenever customer satisfaction and loyalty mediate the relationship between CRM practices and organisational performance, there will be a significant boost in the performance of commercial banks in Ghana. Based on the findings, the study recommends that the various branch managers in charge of CRM should develop, nurture and maintain an attractive CRM practices as an administrative system to help boost the satisfaction and loyalty of customers respectively.