Before knowing about the Behaviour of Relationship Marketing in Nigeria Let’s first Know about Relationship Marketing. Relationship marketing is an effective way to improve customer retention.
What is Relationship Marketing?
The term “relationship marketing” is a fairly new concept that was born out of direct response marketing campaigns. In direct response marketing, companies focus their efforts on sales transactions and customer satisfaction.
The relationship approach places more emphasis on customer satisfaction and retention. This means that a company will have to spend more time building relationships with customers, compared to focusing solely on sales.
The behaviour of Relationship Marketing in Nigeria
According to the researchers, this type of marketing strategy has no effect on retention. The research also revealed that most consumers find insurance contracts too complex to understand. However, this perception has been changing with time.
The study found that the relationship between customers and insurers is increasing, resulting in a higher retention rate. In addition, it is not surprising that most insurance consumers in Nigeria are now looking for ways to improve their customer retention.
The study also found that trust was negatively related to WOM communication. Therefore, the study concluded that trust is essential for the development of an effective relationship marketing programme.
The authors further posited that the success of a relationship marketing programme depends on the degree of trust customers have in the firm. In their study, K. Damtew and V. Pagidimarri(2013) found that 69% of respondents chose their insurance provider based on their trustworthiness and customer service. However, only 38% of respondents chose insurers based on operational efficiency.
Customer Satisfaction Positively
Moreover, the research found a positive correlation between customer satisfaction and relationship marketing components. R-squared analyses showed that the variation in the independent variables explained 67.5% of the variance in the dependent variable.
In conclusion, this relationship-based approach was proven to be effective in earning customer loyalty and positive WOM communication.
These are important indicators to monitor in the context of relationship-based marketing. In addition, WOM communication was linked to trust. In turn, this positively correlated with customer satisfaction and WOM communication.
As a result, it was found that the relationship-based approach leads to positive WOM communication and customer loyalty. The study also reveals that WOM communication can be beneficial for the brand. If these factors are present, the relationship-based approach should be used to improve customer satisfaction.
Nigeria, Struggling for Customer Trust!
In Nigeria, the insurance industry is struggling with a lack of trust in its customers. A recent study shows that customers’ trustworthiness is the most important factor in creating an effective relationship-based marketing strategy.
Additionally, the study says a relationship-based marketing approach increases customer retention. In addition, it is positively correlated with company valuation. Furthermore, the relationship-based approach earns positive WOM and customer loyalty.
Social exchange theory predicts that negative WOM communication negatively correlates with customer trustworthiness even though WOM communication is positive. Insurance relationships are a reflection of these factors.
As a result, the relationships among customers and insurers are mutually beneficial. For the insurance industry to grow and succeed, it needs to invest in the relationship-building model. This study will help insurance companies in Nigeria create better customer experiences.
Relationship marketing strategies In Nigeria!
The study will help life banking firms and central banking regulatory bodies in Nigeria implement relationship marketing strategies. The study will also contribute to the body of literature on relationship marketing in Nigeria. It will help life insurance providers improve their customer retention. It will also help the insurance industry improve its efficiency and effectiveness.
In addition, it will boost the quality of the industry’s literature. And it will help life-saving and disaster prevention. Although the relationship marketing concept is not yet mainstream in Nigeria. It has gained momentum in the past few years. The success of an insurance company depends on its ability to attract and retain customers.
It is important to be able to maintain a relationship with its existing customers. And build a strong one with prospective customers. The study has identified that the majority of the commercial bank customers in Nigeria switch from one bank to another due to service failures.
Struggling for establishing relationships.
Despite the importance of establishing relationships with clients. The Nigerian insurance industry is poorly implementing this strategy in its various forms. The results showed that it was the most efficient way to achieve customer retention. Most banks have not implemented this strategy effectively. But they are attempting to do so.
The study is a first step towards making the concept of relationships more popular in Nigeria. Its success in the financial industry will help the country develop a more vibrant and competitive market.
Know Differences between direct response marketing and relationship-based marketing.
In relationship marketing, businesses invest time and energy into building a relationship with customers. By developing a relationship with customers. Business can increase their profits and develop a more human brand image.
They can also create a better customer experience by creating emotional connections with them. They can sell more if they provide a better experience to their customers. A business that understands its customers’ emotions will be able to create stronger bonds with them.