THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT

(CRM) ON SMALL AND MEDIUM ENTERPRISES (SMEs)

SUSTAINABILITY IN AWKA SOUTH L.G.A.

CHIEJI CHIDERA GIFT

REG NO: 2018804013

BEING A PROJECT SUBMITTED TO THE DEPARTMENT OF

ENTERPRENEURSHIP STUDIES IN PARTIAL FULFILMENT OF THE
REQUIREMENT FOR THE AWARD OF BACHELOR OF SCIENCE (B.Sc.)
IN ENTERPRENEURSHIP STUDIES.

DEPARTMENT OF ENTREPRENEURIAL STUDIES

FACULTY OF MANAGEMENT SCIENCES
NNAMDI AZIKWE UNIVERSITY, AWKA

MAY, 2023
 DECLARATION

I, CHIEJI CHIDERA GIFT. hereby declare that this work is truly researched by me and that

materials consulted are truly acknowledged. I am therefore liable for any insincerity discovered

in it thereafter.
 CERTIFICATION

I certify that this project entitled “the Effect of Customer Relationship Management (CRM) on

Small and Medium Enterprises (SMEs) sustainability in Awka South L.G.A, Anambra State”,

submitted to the Department of Entrepreneurial studies Nnamdi Azikiwe University, Awka, is an

original work carried out by CHIEJI CHIDERA GIFT, with Registration Number 2018804013.

This project is original and has to best of my knowledge, been submitted in partial fulfilment for

the award of Bachelor of Science (B.Sc) degree in Entrepreneurial studies.

. . . ……………………… …………………
Name Date
(Supervisor)

………………………… ….………………
Prof. Agbionu C.U Date
(Head of Department)

…………………………… …………………..
Prof. Pius V. C Okoye Date
(Dean, Faculty of Management Science)

………………………… …. ……………..
(External Examiner) Date
 DEDICATION

This work is dedicated to God Almighty for the success of this work and to my family, God bless

you.
 ACKNOWLEDGMENT

I am most grateful to God Almighty for taking me through this journey. I have enjoyed

extravagant grace from him and therefore, return all the glory and honor and praise to Him who

sits on the throne, the Lamb of God, Jesus Christ.

I also express immense gratitude to my supervisor …., for her patience, passion, support and

corrections throughout the course of this project, without her this study would not have been a

success. I remain grateful. I also appreciate all the lecturers in the department of Entrepreneurial

studies Nnamdi Azikiwe; my H.O.D Prof. Agbionu C.U, Dr ifeanyi okoli, Dr. Bibian Ndu

Okafor, Dr. Ihediwa, Dr. Clara Anugwu, Dr. Ihedimma, Dr. Amaka Okoye and others, including

non-academic staffs.

To my incredible parents; ………….., words alone cannot express my depth of gratitude and

love. Thanks for your constant support, your words of encouragement, financial support, prayers

and for believing in me and my siblings; …………………, may the peace of the lord always be

with you always. I appreciate the care and support shown to me. Thanks for the sacrifices. I wish

to thank my friends in the department ………………. God bless you all.

 TABLE OF CONTENT

Title page………………………………………………………………….. i

Declaration………………………………………………………………… ii

Certificate………………………………………………………………….. iii

Dedication…………………………………………………………………. iv

Acknowledgments…………………………………………………………. v

Table of Content…………………………………………………………… vi

Abstract……………………………………………………………………. viii

CHAPTER ONE: INTRODUCTION

INTRODUCTION

1.1 Background of the Study……………………………….. 1

1.2 Statement of the Problem…………………………………………. 5

1.3 Objectives of the Study…………………………………………… 10

1.4 Research Questions……………………………………………….. 10

1.5 Research Hypotheses……………………………………………… 11

1.6 Significance of the Study………………………………………….. 11

1.7 Scope of the Study…………………………………………… 13

1.8 Limitations of the Study…………………………………………………. 13

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1. Conceptual Framework…………………………………………………… 14

2.2 Theoretical Framework………………………………………………………... 38

2.3 Empirical Review………………………………………………………………. 40

2.4 Gap in Literature………………………………………………………………. 44

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research Design………………………………………………………………. 46

3.2 Population of the Study………………………………………………………...47

3.3 Sample Size Determination and Sampling Technique………………………..47

3.4 Source of Data Collection……………………………………………………..49

3.5 Research Instrument ………………………………………………..50

3.6 Validity of Research Instrument…………………………………………….50

3.7 Reliability of Research Instrument………………………………………………...51

3.8 Operationalization of research construct……………………………………….52

3.9 Method of Data Analysis ………………………………………………………. 52

CHAPTER FOUR: DATA ANALYSIS, PRESENTATION AND DISCUSSION OF

FINDINGS

4.0 Introduction…………………………………………………………………….53

4.1 Presentation of Data…………………………………………………………….53

4.1.1 Analysis of Questionnaire…………………………………………………….54

4.2 Analysis of Response Rate………………………………………………..58

4.3 Hypothesis Testing……………………………………………………. 75

4.4 Discussions of Findings……………………………………………….. 82

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary …………………………………………………………………….. 85

5.2 Conclusion ………………………………………………………………….. 86

5.3 Recommendation ……………………………………………………………. 87

References…………………………………………………………………… 89

Appendix I…………………………………………………………………….. 94

Appendix II………………………………………………………………………95
 ABSTRACT

The study assessed the Effect of Customer Relationship Management (CRM) on Small and
Medium Enterprises (SMEs) sustainability in Awka South L.G.A, Anambra State. The aims were
to determine the effect of Customer Relationship Management on sustainability of Small and
Medium Enterprises (SMEs) in Awka South LGA, Anambra State. The researcher employed
survey method of research in carrying out the study. Results showed that majority of SMEs that
adopted customer relationship management strategy performed better and had increase in
customer retention in Awka South, Anambra State. It was also found that Customer relationship
management have a great impact to small & medium Enterprise profitability in Awka South,
Anambra State. The study recommends that Government and especially small industries can
improve the SMEs sustainability and performance by consultation, conferences and programs
related to CRM.
 CHAPTER ONE
INTRODUCTION

1.1 Background of Study

Galimi (2000) states that Customer Relationship Management (CRM) is a business strategy

focused on customers to increase customer satisfaction and customer loyalty by providing a more

responsive and customized service to each customer. Customer relationship management (CRM)

is a broad innovation because CRM system initiatives and efforts normally involve the

implementation of customer-focused business strategy, a re-design of business function

processes and also a re-engineering of work processes (Maklan and Knox, 2009). While the

customer is important in current dynamic market, their demands are increasing and changing

every day, therefore, the company is rapidly forced to shift their focus from mass production to

mass customization (Maklan and Knox, 2009). This is to resolve customer concerns or offer the

customer with the right mix of products at the right approach. Basically, acquiring of new

customers is a key consideration of the most companies; however, retaining existing customers is

one of important factors to drive the success of companies. Furthermore, the cost associated with

finding new customers mean that every existing customer could be important and its cost is more

than five or six times of retaining existing customers (Mirchandani and Motwani, 2001).

Customer Relationship Management (CRM) is believed to have the potential to improve the

performance and value of Small and Medium Enterprises (SMEs), but not many Small and

Medium Enterprises (SMEs) adopt Customer Relationship Management(CRM) system due to

various reasons, such as lack of knowledge about Customer Relationship Management(CRM),

lack of resources to acquire the Customer Relationship Management(CRM) system, lack of skills

and expertise to implement it, and so on.

Nowadays, Customer Relationship Management (CRM) is widely accepted within marketing

sales business unit of major firms. In the growing competitive global economy, most firms are

trying to focus on delivering better customer value against the competitors. As a strategy to

optimize lifetime value of customers, Customer Relationship Management (CRM) can help firms

to succeed in the world of e-business. Ata and Toker (2012) assert that firms that have adopted

Customer Relationship Management (CRM) as a corporate strategy are expected to grow at a

faster pace than those firms of the same industry who have not adopted Customer Relationship

Management (CRM). Small and Medium Enterprises (SMEs) are increasingly seeking to

implement Customer Relationship Management(CRM) in order to find a competitive advantage

on which to base business prospects for longevity (Maklan and Knox, 2009). In this competitive

world market, Small and Medium Enterprises(SMEs) play an important role in the national

economies by providing job opportunities, enhancing exports of the country and also supplying

goods to other manufacturing industries (Deros, Yusof and Salleh, 2006). Customer relationship

management (CRM) has as its aim the enhancement of a company’s ability to achieve the

ultimate goal of retaining customers, and also gain a strategic advantage over its competitors

(Maklan and Knox, 2009). It has been found that investment in and implementation of a

Customer Relationship Management (CRM) system results in a positive change in consumer

behavior which in turn leads to increased revenues through increased sales or efficiency savings

(Maklan and Knox, 2009).

Small and medium-sized enterprises (SMEs) play a pivotal role in the national economies of

countries around the world, as they are considered to be an engine for growth in both developed
and developing countries; the benefits of a vibrant SME sector include: the creation of

employment opportunities; the strengthening of industrial linkages; the promotion of flexibility

and innovation; and the generation of export revenues (Lerner, 2002). In Nigeria, there is no one

single definition that distinguishes a purely small-scale enterprise from a medium-scale

enterprise. The Central Bank of Nigeria, defines small-scale enterprises as having an annual

turnover not exceeding (N500, 000) five hundred thousand Naira (CBN, 2003). Section 376(2) of

the companies and Allied matters decree of 1990 defines a small company as one with: an annual

turnover of not more than two million naira (N2,000,000) and net assets value of not more than

one million naira (N1,000,000). Small scale business is described as an owner-owned venture

managed and operated by the owner personally or through the assistance of a few personnel who

are informally engaged (Moses, 2010). This type of business is normally the natural habitat of

entrepreneurs, as it provides the ideal environment for entrepreneurs to test their talents.

In Nigeria, since the 1970’s, there has been an increased interest in the promotion of small

businesses due to the inability of government and mega organizations to employ the nation’s

teeming populace (Maklan and Knox, 2009). This has strengthened individuals’ self-sustaining

and self-reliant perspective to the recognition that dynamic and growing small businesses can

contribute substantially to a wide range of national developmental objectives (Maklan and Knox,

2009). The small business community in Nigeria has assumed universal recognition and

relevance based on its potentials for creating self-employment, balanced development of regional

utilization of available localized resources (Moses, 2010). They play active role in generating

and providing employment opportunities at lower capital cost. The Small and Medium Enterprise

landscape in Nigeria accounts for 90% of businesses; contributes 48% of Gross Domestic

Product (GDP); consists of 43% female led enterprises and over 100,000,000 jobs (Moses,
2010). Small and Medium Enterprises (SMEs) are classified as companies with labour force of

11 to 300 and a turnover of less than 100 million naira (Moses,2010).

However, Small and Medium Enterprises (SMEs) in Nigeria and Anambra State, in particular,

are said to practice less of customer relationship management. Therefore, there is need to

enhance the sustainability of Small and Medium Enterprises (SMEs), since they could contribute

meaningfully to economic development. It is on this basis, that this study focused on

investigating whether Customer Relationship Management (CRM) improves the sustainability of

Small and Medium Enterprises (SMEs) in Awka South L.G.A, Anambra State.

1.2 Statement of the Problems

Small and Medium Enterprises(SMEs) contribute in no small measure to the growth and

development of a country, and is also seen as a tool for entrepreneurial development which in

turn impacts the Gross Domestic Product (GDP) of such country (Moses, 2010). Small and

Medium Enterprises (SMEs) survival depends solely on its customer. Enhancing customer

experience is always a challenge. In order to enhance business performance, SMEs have to

expand their customer base. Growth happens only when customer relationships with the

organization are robust and satisfied. Also, customer satisfaction can only be increased with

effective CRM in an organization. Hence, there is need for all organizations to adopt the concept

of CRM with its practices in surviving and growing in this world of dynamism and competition.

Relationship marketing is solely concerned with building relationships at each and every possible

point of interaction between the firms and the customers. This implies mutual benefit for the

firms and the customers. Overall relationship marketing focuses on developing sound knowledge
about customers’ requirements and preferences (Lo, 2012). Also, customers are the nucleus of an

organization. With the information gathered from customers on issues of needs, requirements

and preferences, an organization can then devise strategies and philosophies to effectively utilize

the information for satisfying customers. Since consumers are the end, then satisfaction must be

achieved through relationship marketing. Crosby and Stephens (1987) opined that relationship

marketing alone is a tool for competitive advantage, as it brings about a high level of satisfaction.

However, some scholars condemned the issue of relationship marketing to achieving satisfaction

when there is no product quality (Kanyan et al., 2015).

Customers’ needs, tastes, preferences are changing day by day, therefore there is a need for

organizations to change their ways, methods, techniques in line with that of their customers’

needs (Maklan and Knox, 2009). Customer knowledge is an inclusive process that considers

identification, transmission and usage of accurate data and experience in SMEs (Moses, 2010).

To build a steady and profitable relationship with customers, organizations must identify their

customer’s respective needs and preferences and try to satisfy them (Moses, 2010). With

increasing market competition, Small and Medium Enterprises (SMEs) that consider customer

knowledge stand to outsmart other enterprises, which simply means competitive advantage.

However, the inability to use customers’ knowledge in the right way can lead to less efficiency

of the business, increase business risk and loss of opportunities that are supposed to be fully

exploited (Maklan and Knox, 2009). However, some researchers argued that getting information

from customers makes consumers lack privacy despite the popular saying that Customers are

kings (Maklan and Knox, 2009).

Hence, Small and Medium Enterprises (SMEs) in Awka South L.G.A are yet to ascertain if

acquiring knowledge from customers really result in competitive advantage for their businesses.
Businesses continually devise innovative ways to acquire, increase and retain customers because

the cost of losing customers is high. Retained customers represent an opportunity to increase

profitability, as one existing customer is capable of bringing ten (10) potential customers to the

business. The longer a customer stays with a seller/producer, the higher the likelihood that such

customers will place a greater amount of business with either the seller or producer, even to the

extent of single sourcing. Hence, the rate at which an organization relates with its customer will

be bring about customer loyalty and retention which in turn will leads to increased profit for such

organization. However, some SMEs focus too much on retention that they forget to acquire or

devise ways of bringing in new, potential customers.

Furthermore, the extent of practice of Customer Relationship Management in small and medium

enterprises in Awka South L.G.A is yet to be ascertained. Secondly there is another problem of

ascertaining if customer relationship management impacts small and medium enterprises

sustainability. It is these gaps in literature that this study sets out to fill.

1.3 Objectives of the Study

The main objective of this study is to examine the effect of Customer Relationship Management

(CRM) on Small and Medium Enterprises (SMEs) sustainability in Awka South L.G.A.

The specific objectives are:

i. To determine the effect of Customer Relationship Management on sustainability of Small

and Medium Enterprises (SMEs) in Awka South LGA.

ii. To establish the effect of Customer Relationship Management on the profitability of

Small and Medium Enterprises (SMEs) in Awka South LGA.

iii. To ascertain the effect of Customer Relationship Management on customer satisfaction of

Small and Medium Enterprises (SMEs) in Awka South LGA.

1.4 Research Questions

i. To what extent does Customer Relationship Management (CRM) affect sustainability of

Small and Medium Enterprises (SMEs) in Awka South LGA?

ii. To what extent does Customer Relationship Management (CRM) affect the profitability of

Small and Medium Enterprises (SMEs) in Awka South LGA?

iii. To what extent does Customer Relationship Management (CRM) affect customer

satisfaction of Small and Medium Enterprises (SMEs) in Awka South LGA?

1.5 Research Hypothesis

For the purpose of this study, the following hypotheses were put forward and tested:

H01: Customer Relationship Management (CRM) does not affect sustainability of Small and

Medium Enterprises (SMEs) in Awka South LGA.

H02: Customer Relationship Management (CRM) has no effect on the profitability of Small and

Medium Enterprises (SMEs) in Awka South L.G.A.

H03: Customer Relationship Management (CRM) does not affect customer satisfaction of Small

and Medium Enterprises (SMEs) in Awka South LGA.

1.6 Significance of the study

This study will contribute significantly in the following ways:

  Small and Medium Enterprises (SMEs): Small and Medium Enterprises (SMEs) will be

able to gain insights into how Customer Relationship Management (CRM) can be

encouraged, so as to bring about survival, growth and sustainability.

 Prospective researchers: This study will provide a basis on which further research can be

conducted.

 Government: Government will benefit from this work, through obtaining the information

needed to create necessary conditions that will enable Small and Medium Enterprises

(SMEs) thrive in the country through Customer Relationship Management (CRM).

 Policy makers: This research study will educate the policy makers on the importance of

Customer Relationship Management (CRM), as a strategic tool for decision making.

1.7 Scope of the Study

This study focused on the effect of Customer Relationship Management (CRM) on the

sustainability of Small and Medium Enterprises (SMEs) in Awka South L.G.A, Anambra State,

with variable limited to relationship marketing, customer retention, knowledge from customers

and customer satisfaction. The reason for the selection of these SMEs is because it is still in

operation after several years of establishment.

1.8 Limitations of the study

The researcher encountered some difficulties in the course of this research ranging from; the

inability of the respondents to share some personal information and some miniature of the

situation concerning the organization. Some of those who may be ready to give out this

information may be unwilling until they are influenced so as to get the information.
Administering questionnaires, finding adequate variables and sampling techniques to be used

tends to be part of the limitation of this study due to little research work that have been done to

the research topic.

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Conceptual Framework

2.1.1 Relationship Marketing

Relationship marketing was introduced in the service marketing by Leonard Berry in 1983. In

addition, a good application of relationship marketing requires the presence of a good internal

marketing (Álvarez et al., 2011). The objective of relationship marketing is to increase the

customer's commitment to the organization through the process of offering better value on a

continuous basis at a reduced cost. This can be achieved partly within the organization and partly

through partnerships with suppliers and even competitors. The measure of success is the growth

of the share of the customer’s business and its profitability (Parvatiyar and Sheth, 2002). Wu and

Lu (2012) found that relationship marketing has a positive influence on the four aspects of

organizational performance in services namely financial, customer, internal process, and learning

and growth. Relationship marketing is chiefly concerned with building relationships at each and

every possible point of interaction between firms and the customers. Overall relationship

marketing focuses on identifying factors affecting customer relationship with firms and works

towards those factors in order to retain clients.

The overall objective of relationship marketing is to facilitate and maintain long-term customer

relationships, which leads to changed focal points and modifications of the marketing

management process. The familiar superior objectives of all strategies are enduring unique

relationships with customers, which cannot be imitated by competitors and therefore provide

sustainable competitive advantages.

2.1.2 Customer Knowledge

Customer knowledge refers to understanding your consumers, their needs, wants and aims.

Customer knowledge is widely accepted as a dynamic combination of experience, values,

contextual information, and expert insight which are needed, created and observed during the

transaction and exchange between customers and the organization, and that provides a

framework for evaluating and incorporating new experiences and information (Roy and

Stavropoulos, 2007).

Previous studies identified three types of customer knowledge. First, knowledge about customer

represents the knowledge type that organization attains to know its target customers better (Wu

et al., 2013). Organizations require this knowledge to identify their customers' requirements; so

as to address them in a personalized way (Williams, 2014). Second, knowledge for customer

refers to knowledge type provided by organization to its target customers (Parirokh et al., 2009).

It could flow from the organization to its customers – regarding its products, markets and

suppliers – with the aim of supporting them (Salomann et al., 2005; Williams, 2014). And last

but not least, knowledge from customer is the knowledge type that resides within customers'

minds and that organization attains to support its products (Wu et al., 2013). This type of

knowledge generated and captured through customer interactions with the organization

(Williams, 2014).
2.1.3 Customer Retention

Blattberg et al. (2001) state that customer retention is taking place when a customer keeps on

buying the same market offering over a long period of time. For products with short purchase

cycles, they define customer retention as occurring when ‘the customer continues to purchase the

product or service over a specified period’. For products with long purchase cycles, they define

customer retention as taking place when the customer indicates the intention to purchase the

product or service at the next purchase occasion. Payne (2000) defines customer retention rate as

‘the percentage of customers at the beginning of the period who still remain customers at the end

of the period’. To measure customer retention, therefore, a number of factors need to be taken

into account. These includes: the customer retention rate by market segment in terms of the

different services or products offered, and share earned of the customer’s wallet (Payne, 2000)

Customer retention has become the main agenda for the firms who emphasize on maintaining a

productive relationship with customers, besides functioning as a key instrument to generate

financial gains (Kumar et al., 2007). Past literatures indicate that customer’s price insensitivity is

the key stimulus for satisfying firm’s customers (Trasorras et al., 2009). The retained customer

would not mind paying slightly higher prices and look forward for discounts as compared to the

new customers (Ang and Buttle, 2006). This is because retained customers believe that slightly

higher prices indicate higher quality besides indicating firm’s above average customer service

( Honts and Hanson, 2011). These customers normally shop all year round even after discount

periods at their preferred shops and find it worthwhile to do so due to the value for money

component (Ang and Buttle, 2006). Subsequently, customers who stay with a firm for a longer

tenure are considered as retained customers (Ang and Buttle, 2006).

2.1.4 Business Dynamics

Sterman (2000) defines business dynamics as the application of system dynamics to business.

Business dynamics presents strategies for improving the accuracy, timeliness, coverage and

integration of data that are used in constructing aggregate economic statistics as well as in micro

level analysis, ranging from job creation and destruction, and firm entry and exit to innovation

and productivity (National Research Council 2007). According to Stuart (2005), business success

depends on a company’s ability to perform relative to the competition on the product, service and

total cost priorities that customers value the most. Business dynamics helps a firm gain and

maintain competitive advantage by becoming the value leader in the industry. Business dynamics

will help an organization to gain competitive advantage in performance, customer retention, sales

and service: (Stuart 2005)

2.1.5 Innovation and Quality

Innovation is often viewed as the application of better solutions that meet new requirements,

unarticulated needs, or existing market needs (Maryville 1992). This is accomplished through

more-effective products, processes, services, technologies, or business models that are readily

available to markets, governments and society. The term “innovation” can be defined as the

original and more effective and, as a consequence, new that “breaks into” the market or society

(Frankelius 2009). Innovation by businesses is achieved in many ways with much attention now

given to formal research and development (RandD) for “break through innovations”. RandD help

spur on patents and other scientific innovations that leads to productive growth in such areas as

industry, medicine, engineering, and government (Mark et al. 2008). Edison et al. (2013) define

innovation as production or adoption, assimilation, and exploitation of a value- added novelty in

economic and social spheres; renewal and enlargement of products or services, and markets;

development of new methods of production; and establishment of new management systems. It

is both a process and an outcome. In addition, entrepreneurs continuously look for better ways to

satisfy their customers with improved quality, durability, service, and price which come to

fruition in innovation with advanced technologies and organizational strategies (Heyne et al.

2010). Engelberger(1982) asserts that innovation requires only three things:

i. A recognized need

ii. Competent people with relevant technology

iii. Financial support

American Society for Quality (2008) defines quality as the meeting the requirements and

expectations in service or product that were committed to and pursuit of optimal solutions

contributing to the confirmed successes, fulfilling accountabilities. According to Drucker (1985),

quality in a product or service is not what the supplier puts in; it is what the customers get out

and is willing to pay for. Quality of a product or service refers to the perception of the degree to

which the product or service meets the customer’s expectations.

2.1.6 Definition of Customer Relationship Management

The term of CRM defines by Sin et al. (2005) is a comprehensive strategy and process that

enables an organization to identify, acquire, retain and nurture profitable customers. The

comprehensive approach of CRM is to maximize the relationship with all customers. Beside the

technological advances, CRM also covers the activities of acquisition management and regain

management at the initiation stage, maintenance stage and termination management with the

purpose to maximize the value of relationship portfolio (Chen and Popovich, 2003). Moreover,

factors such as efficiency, competitive advantage, customer support, inventory control and

accessibility have become drivers to CRM. It is clear that CRM is not just a technology, but is a
new way of doing business. Reynolds (2002) suggests that the comprehensive definition of CRM

might be the business strategy, process, culture and technology that enable organization to

optimize revenue and increase value through understanding and satisfying the individual

customer’s needs.

CRM has evolved from the advances in information technology and organizational changes in

customer centric process. Managing a successful CRM implementation requires an integrated

and balanced approach to technology, process and people (Chen and Popovich, 2003). Coltman

(2007) suggests that the concept must be viewed as more than a tool but part of a deeply

embedded strategic disposition that enables business to outperform their rivals in competitive

advantage. Based on this discussion, this research defines CRM as a core comprehensive firm

strategy to provide information through the use of information technology tools to establish long

term relationship with customers. It is impossible for organizations to possess all the required

sources to stay competitive without having a close relationship with the customers. Therefore, it

is vital for organizations to deploy CRM resources in order to build strong CRM capabilities

subsequently improving firm performance.

CRM is the business strategy focused on the customer that increases the loyalty and satisfaction

of customer by presenting him the personalized services and some know it as a managerial

approach which includes identifying, attracting, developing and maintaining the successful

relationship with customer in order to increase profitability. Research showed that 5% increase in

preserving the customer will lead to 95% increase in the value for organization (Greenberg,

2002). CRM is a strategic necessity for all organizations because its effective implementation

increases the satisfaction of customer, loyalty and attraction and more sale and buy (Wu et al.,

2007). General process of developing and maintaining the profitable communication with
 customer is by delivery or presenting a higher value to customer and achieving his satisfaction

(Kotler, 2004).

CRM focus on managing the relationship between a business and its current and prospective

customer base, as a key to success. To be effective, a CRM strategy must encompasses and

integrate all customer-facing activities. It should ensure that no matter where, when, or how a

customer interacts with the company, the contact is personalized, consistent, and demonstrates

that the company knows and values that customer. Business benefits include (Andrade, 2003):

i. Gathering and integrating information on customers.

ii. Nurturing and maintaining company’s customer base.

iii. Developing a closer relationship with customers.

iv. Increasing customer satisfaction

v. Declining customer acquisition costs.

vi. Ensuring sustainable competitive advantage.

vii. Maximizing profitability due to increased sales.

viii. Increasing customer loyalty as a result of more personal and efficient service.

ix. Enabling micro-segmentation of markets according to customers’ needs and wants.

x. Collaborating with customers for joint value-creation.

xi. Acquiring well-accepted outcomes of data-mining activities.

xii. Supporting effective sales efforts through better management of the sales process.

2.1.7 Development of CRM

Origin of the term CRM can be traced back to the 90’s of the 20th century when the concept of

marketing changed from transactional to relational (Dohnal, 2002). Since the beginning, many

definitions have appeared with different meaning and sometimes even the meaning of the
acronym CRM varied from Customer relationship management to Customer relationship

marketing (Buttle, 2009). It is hard to verify who the first to define CRM was. According to

Lehtinen (2007), CRM came into being together with development of marketing which gradually

became more personal until it transformed into direct customer marketing, also known as one-to-

one marketing, which aims at individual customers. Therefore, CRM implementation requires

companies to change their views of marketing. Transactional (classical) marketing is becoming a

thing of the past and the new trend is relational marketing, defined by Dohnal (2002) as a process

of identifying, establishing, maintaining, improving, and if necessary timely termination of

economic relations with customers and other concerned subjects for the mutual benefit of all

involved parties, which is achieved by mutual fulfilling of obligations and values. The outdated

insight that product brings money to the company is slowly being changed into a new one that

money is brought by the customer. Marketing mix of 4P’s has been crucial in the past century:

product, price, place and promotion. The main goal of employees has thus been to sell a product,

literally to force it to the market, whatever its requirements have been. Nowadays, however,

manufacturers and retailers focus on what the customer wants. They carry out research and

design their products accordingly that customers buy them because it can solve their problems or

can bring tangible benefits. In this context, Chlebovský (2005) writes even about crisis of

marketing mix and sees the future in CRM. We can even note a transition to 4C’s: customer cost,

customer solution, convenience and communication (Kotler and Keller, 2007).

Relationship management is a key skill that marketing professionals need. One of the first

definitions of CRM by Kotler and Armstrong (2004) specifies customer relationship

management as a special software programs and analytical techniques that serve for integration

and utilization of vast amount of data about individual customers stored in databases. Customer
relationship management consists of sophisticated software and analytical tools which sort

customer’s information from all sources, conduct thorough analysis, and use these outcomes for

strengthening the relationship with the customer. From this initial decade of CRM evolution,

authors understand CRM as a process of continuous gathering, processing and following

utilization of customer data that works on the basis of database technology and is done by a

software programs. This activity enables the company to understand needs, wishes and purchase

habits of its customers. Some of this data might be used to foresee future opportunities. This

understanding is agreed on by other authors reviewing this issue (Starzyczná and Pellešová,

2005). Lehtinen (2007) even mention that the goal of customer relationship management is not to

be close to a customer but to live with him. He further elaborates on the issue of customer with

the thought that the intention of CRM is to establish long-term relations with customers, not

pursuing maximization of short-term income, but recognizing strategic customers.

Authors see this thought of focusing on key customers as very important. Newer definitions

understand CRM as a broader term, e.g. Peelen (2005)states that CRM is to be regarded as a

business strategy that is aimed towards developing long-term, mutually profitable, individual

customer-supplier relationships and is placed on an IT infrastructure to be developed, one that

enables well-defined and controlled processes, and places capable personnel in a position to

function optimally. Many authors agree to CRM being an important business strategy, e.g. Buttle

(2009) wrote that CRM is the core business strategy that integrates internal processes and

functions, and external networks, to create and deliver value to targeted customers at a profit. It

is grounded on high quality customer-related data and enabled by information technology. Some

authors disagree with CRM being a new way of marketing, e.g. Tomek and Vávrová (2012)

conclude that for successful CRM a company does not need anything else than every employee
having customer as their primary target. Other researchers conclude as well that CRM should be

mainly perceived as a philosophy of a company and not just a computer programme. According

to Starzyczná and Pellešová (2007), the bases for CRM are two things: customers, who are

unique to each company, and company culture. A view on CRM development according to

Veber (2009) can be summarized into the following phases of CRM utilization:

i. Pre-pre-CRM stage: business initiative is up to the customer, companies respect basic

technical and warranty requirements

ii. Pre-CRM stage: sales department is the leading department in a company, marketing

department is only following, profit is main motivator and that creates pressure on the

costs

iii. Basis for CRM: traditional marketing focused on product and marketing mix

iv. 1st CRM stage: reactive approach to the customer, evaluation of his satisfaction

v. 2nd CRM stage: pro-active approach to the customer creates win-win relationship, CRM

software is becoming important and company focuses on customers values

Matušínská (2009) states that the next “evolutionary” form of CRM could be VCRM (Value

Customer Relationship Management) which is basically CRM based on values or VKCRM

(Value Key Customer Relationship Management) which is CRM that prioritizes communication

with key customers. According to Matušínská (2009), these systems will mainly prioritize the

swiftness of processing questions (speed), detailed knowledge of the customer (access to data),

immediate solution of problems (one-and-done), personalization (customized contacts), no

waiting for assistance (direct help), functioning 24 hours a day, 7 days in a week (all time),

complex ways of sales (multi-channel-strategy), direct contact with a customer (one-to-one),

single contact person (one-touch-point) and other.

As has been mentioned, CRM is present in the marketing theory for two decades, but only in the

last decade its perception made a huge shift from narrowly specialized utilization and focus on

technical aspect to mass utilization in all areas of company management and the focus on

philosophy, one that truly places customer in the center of company’s activities.

2.1.8 Parts of CRM

The complete description of how CRM functions in a company would be too complex, that is

why authors only describe basic division into parts and their characterization. Buttle (2009) calls

this “types “of CRM, but other authors incline to a view by Dohnal (2002) that describes this as

three parts of CRM application architecture: analytical, operative and collaborative. In order for

any action in CRM to be successful, it requires consistent data about customers which will be

accessible to every employee of a company. That is also highly demanding on a technology

providing CRM in a company.

2.1.8.1 Analytical CRM

The purpose of analytical CRM is customer data analysis, its evaluation, modeling and

prediction of customer behavior. (Dohnal, 2002) In real life situation the analytical CRM can for

example gather all the data about customers inquiring a specific product by using data mining

(tool for data gathering), what services they purchased right away and what services they

purchased eventually. It can find patterns in their behavior and propose next steps during up-

selling or cross-selling. It can evaluate efficiency of a marketing campaign, propose prices or

even develop and propose new products. This way analytical CRM serves as some sort of help

during decision making, e.g. manuals for employees working in services concerned with how to

react to certain customer’s behavior.

2.1.8.2 Operative CRM

Operative CRM mainly supports the actual contact with customers conducted by front office

workers and general automation of business processes including sales of products, services and

marketing. All communication with the customer is tracked and stored in the database, and if

necessary it is effectively provided to users (workers).(Dohnal, 2002) The advantage of this

approach being the possibility to communicate with various employees using various channels

but creating the feeling that customer is being taken care of by just one person. It can also

minimize the time that the worker has to spend typing the information and administrating (the

data is shared). This allows the company to increase the efficiency of their employees work and

they are then able to serve more customers.

2.1.8.3 Collaborative CRM

Collaborative CRM enables all companies along the distribution channel, as well as all

departments in a company, to work together and share information about customers.

Dohnal(2002). Buttle (2009) even speaks about partner relationship management (PRM). But

sometimes we might see a rivalry between departments that undermines efforts of CRM to share

relevant data throughout the whole company (e.g. information from help line can help the

marketing department choose a point on which it will focus during the next campaign). The goal

of collaborative CRM then is maximum sharing of relevant information acquired by all

departments with the focus on increasing the quality of services provided to customers. The

ultimate outcome of this process should be an increase in customer’s utility and his loyalty

2.1.9 Benefits of Customer Relationship Management

Swift (2001) mentions that companies can gain many benefits from CRM. He states that the

benefits are commonly found in one of these areas: -

 i. Reduced costs of customer acquisition

The cost for recruiting customers will decrease since there are savings to be made on

marketing, mailing, contact, follow-up, fulfillment, services, and so on.

ii. No need to recruit many customers

The need to recruit many new customers is reduced to maintain the sales volume and

profitability because of customer retention.

iii. Reduced costs of sales

As the relationship with the customers becomes long-term there is a reduction in cost of

sales. This will be because the business becomes more familiar with the tastes and

preferences of the customers. Thus the business has to spend less on sales, advertising

and marketing activities.

iv. Higher customer profitability

As the relationship with the customer develops and grows older it results into increased

profits for the business. This is because of the probability of increased purchases, reduced

transaction cost, up-selling, cross-selling and referrals.

v. Increases customer retention and loyalty

The customer retention increases since customers stay longer, buy more and buy more

frequently. The customer does also more often take initiatives, which increase the

bounding relationship, and as a result the customer loyalty increases as well.

vi. Assessing customer profitability

By implementing CRM, the business is in a position to assess which of its customers are

profitable and which are not. This is essential because ones it is decided which customers

are profitable, then the business can focus in the retention of these customers.
2.1.10 Technology Based CRM

Dutu and Halmajan (2011) are of the opinion that CRM strategy will end in failure if the

information technology is not used properly, thus the suitable use of technology in marketing is

one of the greatest opportunities in organization, because of the fact that it is important to get the

right information from the right people at the right time , so that the right decisions can be made

and /or the services can be rendered (Dev and Olsen, 2000 ).In support with that view, Kasim

and Minai (2009) find out that CRM technology dimension is firmly related to organization

performance, because organizations need to use information technology for improving their

performance .In this regard, new technologies are considered as the core drivers for change

(Minghetti, 2003). Furthermore, several studies, made about the impact of information

technology on organization performance report similar findings about the positive role of

information technology in CRM strategy. In other words, these studies revealed that many

customer-centric strategies cannot achieve their goals, without the help of information

technology (Yeh et al., 2010).

Consequently, CRM based technology enables organizations to plan and implement successful

marketing actions for retaining customers and making them more profitable, because of the

customer database and other information storing systems (Roberts, Liu, and Hazard, 2005).

Additionally, Chang, Park, and Chaiy (2010) confirm that CRM technology improves marketing

capabilities by providing valuable information about customers, which, in turn, will help both

managers and employees to achieve specific marketing goals much more effectively. Moreover,

they also recommend investigating separately the mediating impact of marketing planning

capabilities and the implementation of marketing capabilities on the relationship between CRM

and organizations performance.

2.1.11 CRM Organization

First and foremost, to enhance service employees to conduct customer oriented behaviors,

organizations have to develop an appropriate working environment for service in work, for

instance, providing staff with the modern tools, and technology, customer-satisfaction tracking

and complaints management systems, inspirational leadership, and appropriate rewards systems.

As a result of the previous supportive working conditions, organizations can ensure the required

customer –oriented behaviors of their employees (Mechinda and Patterson, 2011)

CRM cannot be successful even if the organizations enjoy the most advanced technology and

adapt a customer -oriented approach, unless the project is completely integrated by them (Sin et

al., 2005) Further, as a confirmation for this point Ku (2010) stress that CRM success does not

only require technological quality or systems, but it also requires an effective service concept as

well as suitable operation procedures. Thus, the success of CRM implementation relies on the

active involvement of the employees in the organization itself (Tamilarasan, 2011). Therefore,

we can say that CRM organization has to be an essential means through which firms effect

fundamental changes in the way they organize their actual business processes for employees and

customers (Sin et al 2005; Yim et al.,2005). Inevitably, all the organization resources (such as

marketing capabilities, policies, culture, and organization structure) have to be integrated in

order to implement CRM successfully and, in turn, to improve organizations performance.

Previous studies also declare the positive impact of CRM organization on customer retention

(Yim et al., 2005), financial and marketing performance (Akrouch et al., 2011; Sin et al., 2005).

Moreover, Richards and Jones (2008) argue that CRM organization may influence future

marketing decisions, such as brand differentiation, price, communication, and distribution. It

goes without saying that Knowledge about customers plays a vital role in CRM, taking into our
consideration the fact that the main purpose behind collecting data about customers is to get a

clear image about them from different perspectives (Sin et al., 2005). Therefore, organizations

can authenticate such data to be able to establish and develop beneficial relationship with their

customers (Zahay and Griffin, 2004)

2.1.12 Customer

Customers are the best asset of an organization and regarding modern competitive world;

customer orientation in organizations has certain importance and leads managers to understand

the importance of CRM in organization (Greenberg, 2002). Organization strategy focuses on the

manner of attracting customers and maintaining and developing communication with existing

customers. In other words, effectiveness of CRM is based on the analysis of customer

segmentation, that in order to developing effective attraction strategies, it needs comprehensive

understanding of needs, behavior and profiles of different groups of customers (Mosad, 2006).

Customer satisfaction is generally described as meeting the expectations of individual. Customer

satisfaction is the feeling or attitude of a customer to a product or service after its use.

2.1.13 Small and Medium Enterprises

Small and Medium Enterprises Equity Investment Scheme(SMIEIS, 2006) claimed that SMEs

are those enterprises that has a total capital employed not below one million five hundred

thousand but not exceeding two hundred million including working capital but excluding cost of

land, with an employee strength of not below ten and not above three hundred. SMEDAN (2005)

defines SMEs based on the following criteria: small scale enterprises are businesses with ten to

forty-nine people with an annual turnover of five to forty-nine million Naira, while a medium

scale enterprises that have fifty to one hundred and ninety-nine employees with a year turnover

of fifty to four hundred and ninety-nine million Naira. In Nigeria, SMEs cover economic
activities within all sectors. It is clear from the various definitions, showing that there is no single

concept that constitutes SMEs; the definitions vary across industries and the globe. SMEs are

heterogeneous group, and SMEs owners may or may not be poor. Some are dynamic, growth-

oriented, and innovative while others are not; they prefer to remain small and also to continue as

usual. In some countries, SMEs owners and workers are (or are perceived to be) dominated by a

member of particular ethnic groups (Hallberg, 2000)

2.2 Theoretical Framework

This research work is hinged mainly on a theory which is the Porter’s Theory of Competitive

Edge.

2.2.1 Porter’s Theory of Competitive Edge

This theory was propounded by Michael Porter in 1985 which suggests that being competitive

means promoting unique strengths and capabilities, and defending them against imitation by

other firms. Competitive advantage is achieved by deliberately selecting a distinctive set of

activities to deliver a unique mix of customer value, either through implementing a value-

creating strategy not simultaneously being employed by current or prospective competitors or

through superior execution of the same strategy as used by the competitors (Sahaf, Qureshi and

Khan, 2011).Porter (1985) states that competitive advantage is the basis of an organization;

above average performance in the long run, without which an organization will decline and

eventually fail. In fact, for long run sustenance and superior performance, the organizations have

to sustain competitive advantage. Hence, CRM strategy is to create a competitive advantage by

better understanding, keeping and delivering value to existing customers and as well to creating

and delivering new customers.

This theory is relevant to CRM as it is seen as a strategic instrument to attract, develop and build

relationships with carefully targeted customers in order to maximize customer value and enhance

company performance to benefit from sustainable competitive advantage. Relationship with the

customers can provide firms not only a source of competitive advantage that may not only be

difficult for competitors to match but also sustain competitive advantage. Therefore, only such

firms that are capable of creating and sustaining relationship with their customers have a much

greater chance of achieving success in the market in future.

However, the Porter’s Theory of Sustainable Competitive Advantage is relevant to this study as

sustainability can only be enhanced through CRM in form cost leadership or differentiation

strategy.

2.3 Empirical Framework

There is so much work done on customer relationship management and SMEs, but there is

paucity of empirical study on the effect of customer relationship management on the

sustainability of selected SMEs especially in Awka Metropolis.

Nwankwo and Ajemunigbohun (2013) found empirically a direct positive and significant

relationship existing between CRM and customer retention in Nigerian insurance company. They

made use of the cross-sectional survey design and it was conducted in Lagos Metropolis from

October 2012 to February 2013. The study employed stratified random sampling technique and

thus, gathered data through the use of structured questionnaire. The sample population consisted

of 58 respondents made up of marketing managers and underwriting managers drawn from 35

insurance companies which were randomly selected from the directory of member companies.

The statistical instruments employed for this study were Simple linear regression and
Kolmogorov-Smirnov test. Two hypotheses were tested in this study and the study found that

CRM positively influences customer retention in the Nigeria’s Insurance Industry, and thus helps

create values for insuring populace in Nigeria.

Hassan and Parves (2013) critically review and compare the current trends of CRM in Tesco and

Sainsbury retail stores where they found that CRM is a determinant of profitability and business

growth. They also used loyalty card scheme as a key prominent feature of CRM, the effect of

CRM on Malaysian hostel industry performance (Mohammed, Rashid and Tahir, 2014) even

though their studies focus on internal environment (RBV model), but they found a significant

and satisfactory result showing positive and direct relationship between CRM technology and

organizational performance of Malaysian hotel industry and found that marketing capabilities

(planning and implementation) fully mediates the association. Performance in freight forward

service was found to be directly positive to CRM (Shang and Lu 2012). Zaman, Javaid,

Arshidand Bibi(2012) discover that satisfied internal customer also increase organizational

performance via internal marketing. The mediating role of customer satisfaction has positive

effect on loyalty service which is subjected to quality service (Musahab, Mohamad and Ramaya,

2010).

Kirmaci (2012) investigated the relationship between banks CRM in Turkey and customer

loyalty where he found the ability of banks to retain their current customers and gain new

customers depend on CRM. Ampoful (2012) found CRM to accommodate customer loyalty and

retention of customers leading to increased sales, profit and reduce cost of acquiring customer.

Sarlak & Fard (2009) conducted a descriptive survey in order to study about how customer

relationship management can increase customer satisfaction. The study was conducted on
agriculture banks in QOM Providence. As per the result it was concluded that customer

relationship management has a positive relationship with the customer satisfaction.

Hussain, Hussain and Shahid (2009) also gave their study which explored and analyzed the

strategic implementation of CRM in selected banks of Pakistan, identify the benefits, the

problems, as well as the success and failure factor and develop a better understanding of CRM

impact on banking competitiveness. As a result, it was found that all the banks have

implemented CRM, but it is Citibank which is more customer-centric as compared to other

banks. Also, Krasnikov, Jayachandran& Kumar (2009) examined the impact of CRM

implementation on two metrics of firm performance operational (cost) efficiency and the ability

of firms to generate profits (profit efficiency) using a large sample of U. S. commercial banks.

The researchers concluded that CRM implementation is associated with a decline in cost

efficiency but an increase in profit efficiency. The results show that CRM implementation

enhances the profit efficiency of firms, regard less of its impact on cost efficiency as over time,

firms learn how to use CRM effectively to manage their customer data and develop one-to-one

relationships.

Phan and Vogel (2014) studied a model for consumer buying arrangements and credit behavior.

They initiated their survey ten years ago and have been collecting data ever since. The authors

sought to examine the effects of unfair pricing on customer relationships followed by the effect

on customer relationships of changing costs or restrictions. They proposed several hypotheses

and used online analytical processing (OLAP) for data analysis. They ascertained that unfair

pricing will lead to a poor relationship. Also, an appropriate business intelligence system and

CRM system will enhance the level of satisfaction and the relationship. Increasing costs do not
annoy customers as the customers are paying with their credit cards and in this study the

company adapts the products and services based on each customer.

King and Burgess (2015) studied a novel method by developing a conceptual framework for

CRM and changing that simulation model. The authors clearly discuss the successes and failures

of CRM systems. They mention that customers complain about the failure of over 50 % of CRM

projects and express their lack of trust in the systems. Hence, they created a model as CRM

outcomes (operational and development) and divided this into two segments. In the next stage,

they discussed the tangible and intangible benefits of CRM. They used a CLD mapping

technique for simulation. Results show the difference between the work quality of an

experienced CRM user and that of a new CRM user, indicating that for an experienced user, the

diagram has an increasing trend. Finally, departmental support given to the users shows a similar

increasing trend.

Richards and Jones (2016) studied a conceptual model in which they provide customer

relationship management’s value drivers followed by generating equity for value, brand and

relationship which will ultimately lead to customer equity. The rationale for this model is that

they believe there is no outcome in terms of benefit to the company.

Line and Runyan (2012) also reviewed hospitality marketing research published within the same

top hospitality journals from 2008 to 2010, to identify the trends and gaps in the literature. They

found that CRM is one of the most popular topics inhospitality marketing research and there is

an opportunity for hospitality researchers to contribute to the development of theory in the field.

Wang et al., (2004) proposed an integrative framework for customer value and CRM

performance based on identification of the key dimensions of customer value. They explored the
decomposed effects of the customer value on CRM performance in terms of relationship quality

and customer behaviors. The authors have proposed a structural equation model using the partial

least square method supported by an empirical investigation of customers in China.

Mohammad & Rashid (2012) in their study is of the opinion that CRM has a growing popularity

and is becoming one of the hottest academic and practical topics in the business field. They

provide a value conceptual model that explains the theoretical linkage existing between CRM

dimensions and hotel performance. Their study also explains the mediation role of marketing

capabilities in this relationship.

Vella & Caruana (2012) stated in their findings that perceived usefulness and perceived ease of

use as key elements that are critical in encouraging service providers‟ intention to use CRM

systems. They concluded that higher the perceived ease of use the greater the perceived

usefulness and the higher the intention to use CRM. Moreover, they find that perceived

usefulness act as a partial mediator between perceived ease of use and intention to use CRM.

According to Awasthi & Sangle (2012) the review of literature on adoption of CRM technology,

including the CRM in multichannel environment and provide a comprehensive view of insights

gained in this area. They have included articles under four themes based on the channel CRM,

multichannel CRM, eCRM, mCRM.

According to Elkordy (2014), “Customer relationship management is considered key to

organizations' success in today's competitive environment. However, empirical evidence shows

mixed support to the impact of CRM initiatives on performance. Using the resource-based view

RBV of the firm, CRM is hypothesized as a distinctive capability that can lead to superior
business performance. The study proposes four dimensions of CRM capability: CRM

technology, CRM processes, customer orientation, and CRM organization.

2.4 Gap in Literature

A number of studies have been done relating to Customer Relationship Management on SMEs

performance, but little or no studies have been done on Customer Relationship Management on

Small and Medium Enterprises Sustainability in Awka South. To ensure success of Customer

Relationship Management strategy, it is important to consider the implementation and

understand the effectiveness of CRM in order for an organization to perform effectively and

efficiently.

Previous researchers have recorded the importance of Customer Relationship Management in an

effort to improve the performance of Small and Medium Enterprises. However, there still lacks

in depth understanding of which strategy is ideal for Customer Management Relationship. To fill

the gaps, the study aimed at determining the effects of Customer Relationship management on

Small and Medium Enterprises sustainability in Akwa South LGA.

 CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Research Design

The survey research method was adopted for the purpose of this research. This is appropriate

because it includes studying sample chosen from the population to discover the relatives’

incidence, distribution etc., through designed questionnaires, personal interview and observation.

The survey research design for this study focused on self-design and collection of data from the

respondents.

However, in this research, the collection of data was done through the administration of

questionnaires to the respondent.

3.2 Population of the Study

The population of this study consist one hundred and seventy-five (175) workers including the

managers and employees of six (6) randomly selected SMEs in Awka South. The lists of the

SMEs are:
 i. Kjut Logical Concepts, located at 10, Ogbunu Street, Awka South, Anambra (43

employees)

ii. Super Graphics Designer Venture, located at 263, Zip Avenue, Awka South, Awka (15

employees)

iii. Ozalla Plastics Enterprises Ltd, located at Plot 253, Awka Industrial Estate, Awka (59

employees)

iv. Planet Security Guards, located at 133, Arthur Eze Avenue, Opposite UNIZIK Junction

Flyover, Awka (19 employees)

v. Pnet Infotech Systems, located at Suite 40, Patifin Plaza, Enugu-Onitsha Expressway,

Awka (22 employees)

vi. Joydims Investment Ltd, located at 246 Arooma Junction, Awka South, Awka (17

employees)

3.3 Sample Size Determination and Sampling Techniques

The sample size of the target group that participated in this study was calculated using Yaro

Yamane, (1967) formula due to its simplicity which is expressed as:

N
n=
1+ N ¿ ¿

Where N = population

n = sample size

e2 = level of significance (0.05)

n= 175

1 + 175 (0.05)2
 n = 175/1+0.4375

n = 175/1.4375

n = 122 respondents

The sample size for this study were selected using stratified sampling technique where

population is separated into different strata and a sample was taken from each stratum. However,

to know the sample size of each case study, Bowley’s Proportional Allocation Scheme was

adopted. The scheme takes the following form:

n! = nh

Where; n! is the stratified sample size

h is the general sample size
n is the stratified population of the study
N is the total population of the study
n! = 43 * 122 = 30 respondents

175

n! = 15 * 122 = 11 respondents

175

n! = 59 * 122 = 41 respondents

175

n! = 19 * 122 = 13 respondents

175

n! = 22 * 122 = 15 respondents

175

n! = 17 * 122 = 12 respondents
 175

Table 3.4.1 Sample Size Determination

Name of Case Study Population of the Study Sample Size

Kjut Logical Koncepts 43 30

Super Graphics Designer Venture 15 11

Ozalla Plastics Enterprises Ltd 59 41

Planet Security Guards 19 13

Pnet Infotech Systems 22 15

Joydims Investment Ltd 17 12

Total 175 122

Source: Field Survey, 2023

For this study, the researcher will make use of both simple random sampling method; this is

because it ensures a random selection process without biases and stratified random sampling

because of the case study.

3.4 Source of Data Collection

For the purpose of this study, primary source of data was used.

Primary sources: For this research, primary data were generated by administering

questionnaires.

3.5 Research Instrument:

The main research instrument for this study is questionnaire. A questionnaire is a form which is

designed, consisting of a set of questions sent to people (respondent) for completion, to gather

information for analysis and conform to relevant research questions and to test relevant

hypothesis. A five-point Likert scale was used. The questionnaire was divided into four sections,

which is section A-D. Section A was designed to measure the respondent’s bio data, section B

was designed to measure the relationship between relationship marketing and business dynamics,

section C was designed to measure the relationship between customer knowledge and innovation

and quality while section D was also designed to measure the relationship between customer

retention and customer relations.

3.6 Validity of Research Instrument

Asika (1991) stated that validity can be defined as the extent to which a measuring instrument

measure what it is designed to measure. A number of concepts are in a discussion of validity. At

least four types of validity have been identified. These include; the predictive validity which is

the ability of an instrument to predict some future events; the concurrent validity which is

usually measured by the calculation of a correlation coefficient between the distribution of test

scores and some concurrently existing criterion measure; the content validity which is essentially

determined by the process through which the items are selected; the construct validity whereby a

researcher devises an instrument in terms of how much the results obtained fit the theoretical

formulations that constitute its development; and the free face validity which is concerned with

the extent to which the researcher believes the instrument is appropriate.

For this research, Face validity was used because it's a simple first step to measuring the overall

validity of a test or technique. It's a relatively intuitive, quick, and easy way to start checking

whether a new measure seems useful at first glance. The research instruments used in this study
were subjected to face validity. All variables were duly considered and the questionnaire was

constructively reviewed, scrutinized and criticized by the supervisors and other research experts

who were requested to check and appraise its language, clarity and assess the appropriateness of

the questionnaire items for collecting the required information from respondents. Areas of

criticism were corrected accordingly.

3.7 Reliability of Research Instrument

Reliability is the extent to which a test is consistent. It measures what it is supposed to measure

consistently. Reliability test is used to measure the degree at which results are consistent. The

Cronbach’s alpha test was used in this work. Cronbach's alpha is a measure of internal

consistency, that is, how closely related a set of items are as a group. It is considered to be a

measure of scale reliability. A “high” value for alpha does not imply that the measure is

unidimensional.

The Cronbach’s alpha test is adopted in this work, because it helped to ascertain whether the

items are reliable in measuring the same dimension.

3.8 Operationalization of research constructs

Examining the effectiveness of Customer Relationship Management (CRM) on Small and

Medium Enterprises (SMEs) sustainability, the topic has the following constructs: Dependent

variables are Sustainability of SMEs, profitability of SMEs and Customer satisfaction of SMEs,

while the independent variable is Customer relationship management.

The above is mathematically expressed as Y=f(X)

Where:
X= Independent Variable

Y= Dependent Variable

X= Customer Relationship Management (CRM)

Y= Sustainability of Small and Medium Enterprises (SMEs), Customer Satisfaction of SMEs &

Profitability of SMEs

Therefore, from this equation, sustainability of Small and Medium Enterprises (SMEs),

Customer Satisfaction of SMEs & profitability would depend on Customer Relationship

Management (CRM).

3.9 Method of Data Analysis

Frequency tables and one sample T test were used to present and analyze the data obtained from

the respondents. Regression analysis was used to test the research hypotheses and the

relationship between the variables, while independent sample Test was used to test the

hypothesis with the aid of statistical package for social sciences (SPSS) 20.

Decision Rule

In testing hypotheses, the calculated value of the test statistic will be compared with the table

value. The decision will be, if the calculated value is greater than table value reject Ho; accept if

otherwise.
 CHAPTER FOUR

DATA ANALYSIS, PRESENTATION AND DISCUSSION OF FINDINGS

4.0 Introduction

This chapter focused on the analytical aspect of the research work. The general

report of activities conducted on the primary data collected from the sample

population was made for proper presentation and analysis of responses generated

from the administered questionnaire. The presentation of data was done first

followed by the analysis of response rate and lastly testing of hypotheses.

Linear Regression Analysis was used to test the research hypotheses and analyze

the dependent and independent variables.

4.1 Presentation of Data

A sample size of 122 was derived from workers including managers and
employees of 6 randomly selected SMEs in Akwa South of Anambra State,

Nigeria, which represents the total number of questionnaires and respondents.

4.1.1 Analysis of Questionnaire

A total number of 122 well-structured questionnaires were distributed among the

respondents, out of which one hundred and two (102) were appropriately filled and

returned. Given this, it implies that approximately 85% of the administered

questionnaires were retrieved. The tabular presentation of the questionnaire

analysis is given below:

Table 4.1.1 Analysis of Questionnaire

Questionnaires Respondents Percentage(%)

Returned 102 93.58

Not returned 7 6.42

Total
distributed 109 100.0
Source: Field Survey, 2023

4.1.2 Analysis of Gender of Respondents

Table 4.1.2 Gender of Respondents

Frequency Percent
Male 63 61.8
Valid Female 39 38.2
Total 102 100.0
Source: Field Survey, 2023
From the above table, 63 were males while 39 of the respondents were females,

representing 61.8% and 38.2% respectively. This means that the research study has

most of its respondents being males.

4.1.3 Analysis of Age Group of Respondents

Table 4.1.3 Age Group of Respondents

Frequency Percent
16-20 18 17.6
21-30 31 30.4
Valid 31-40 33 32.4
41 and above 20 19.6
Total 102 100.0
Source: Field Survey, 2023

From the above table, 18 (17.6%) fall between 16 – 20 years, 31 (30.4%) were
between 21 – 30 years, 33 (32.4%) were between 31 – 40 years, 20 (19.6%) were
above 40 years of age. This means that the research study has most of its
respondents between the age of 31 - 40.
4.1.4 Analysis of Marital Status of Respondents
Table 4.1.4 Marital Status of Respondents
Frequency Percent
Single 37 36.3
Married 50 49.0
Valid
Others 15 14.7
Total 102 100.0
Source: Field Survey, 2023

From the above table, 37 (36.3%) were single, 50 (49.0%) were married and

15 (14.7%) fall under others. This means that the research study has most of its
respondents being married.

4.1.5 Analysis of Employment Status of Respondents

Frequency Percent
Temporary 44 43.1
Permanent 37 36.3
Valid
Casual 21 20.6
Total 102 100.0
Source: Field Survey, 2023

From the above table, 44 (43.1%) were temporary employees, 37 (36.3%) were

permanent employees and 21 (20.6%) were just casual employees. This means that

the research study has most of its respondents being temporary employees.

4.1.6 Analysis of Business Experience of Respondents

Table 4.1.6 Business Experience of Respondents

Frequency Percent
6 month to 1
43 42.2
year
2 to 3 years 33 32.4
Valid
3 to 5 years 26 25.5
Total 102 100.0
Source: Field Survey, 2023

From the above table, 43 (42.2%) were experienced between 6 months and 1 year,

33 (32.4%) were experienced between 2 to 3 years and 26 (25.5%) were

experienced between 3 to 5 years. This means that the research study has most of

its respondents being experienced in business between 6 months to 1 year.

4.1.7 Analysis of Level of Education of Respondents

Table 4.1.7 Level of Education of Respondents

Frequency Percent
SSCE 49 48.0
NCE/ND 16 15.7
Valid HND 28 27.5
Degree 9 8.8
Total 102 100.0
Source: Field Survey, 2023

From the above table, 49 (48%) were SSCE holders, 16 (15.7%) were NCE/ND

holders, 28 (27.5%) were HND holders and 9 (8.8%) were Degree holders. This

means that the research study has most of its respondents as SSCE holders.

4.2 ANALYSIS OF RESPONSE RATE

4.2.1 Analysis of Customer Relationship Management on Customer

Satisfaction

4.2.1.1 CRM is to maximize the relationship with all customers

Table 4.2.1.1 CRM is to maximize the relationship with all

customers
Frequency Percent
 Strongly
1 1.0
Disagree
Disagree 2 2.0
Undecided 1 1.0
Valid Agree 48 47.1

Strongly Agree 50 49.0

Total 102 100.0

Source: Field Survey, 2023

Table 4.2.1.1 classifies the opinion of respondents on whether CRM is to maximize

the relationship with all customers. It shows that 1 (1%) strongly disagreed, 2 (2%)

disagree, 1 (1%) were undecided, 48 (47%) agree and 50 (49%) of the respondents

strongly agree. This implies majority of the respondents strongly agreed.

1.2.1.2 Factors such as efficiency, competitive advantage, customer

support, inventory control and accessibility have become drivers
to CRM
Table 4.2.1.2 Factors such as efficiency, competitive advantage,
customer support, inventory control and accessibility have become
drivers to CRM
Frequency Percent
Disagree 4 3.9
Undecided 16 15.7
Valid Agree 44 43.1
Strongly Agree 38 37.3
Total 102 100.0
Source: Field Survey, 2023
Table 4.2.1.2 classifies the opinion of respondents on whether Factors such as
efficiency, competitive advantage, customer support, inventory control and
accessibility have become drivers to CRM. It shows that 4 (3.9%) disagreed, 16
(15.7%) were undecided, 44 (43.1%) agree and 38 (37.3%) of the respondents
strongly agree. This implies majority of the respondents agreed.

4.2.1.3 It is clear that CRM is not just a technology, but is a new way of doing
business
Table 4.2.1.3 It is clear that CRM is not just a technology, but is a new
way of doing business
Frequency Percent
Strongly Disagree 1 1.0
Disagree 4 3.9
Undecided 9 8.8
Valid
Agree 53 52.0
Strongly Agree 35 34.3
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.1.3 classifies the opinion of respondents on whether It is clear that CRM

is not just a technology, but is a new way of doing business. It shows that 1 (1%)

strongly disagreed, 4 (3.9%) disagreed, 9 (8.8%) were undecided, 53 (52%) agree

and 35 (34.3%) of the respondents strongly agree. This implies majority of the

respondents agreed.

4.2.1.4 CRM has evolved from the advances in information technology

and organizational changes in customer centric process

Table 4.2.1.4 CRM has evolved from the advances in information

technology and organizational changes in customer centric process
Frequency Percent
Strongly Disagree 2 2.0
Disagree 9 8.8
Undecided 9 8.8
Valid
Agree 48 47.1
Strongly Agree 34 33.3
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.1.4 classifies the opinion of respondents on whether CRM has evolved

from the advances in information technology and organizational changes in

customer centric process. It shows that 2 (2%) strongly disagreed, 9 (8.8%)

disagreed, 9 (8.8%) were undecided, 48 (47.1%) agree and 34 (33.3%) of the

respondents strongly agree. This implies majority of the respondents agreed.

4.2.1.5 CRM is the business strategy focused on the customer that increases

the loyalty and satisfaction of customer

Table 4.2.1.5 CRM is the business strategy focused on the customer that
increases the loyalty and satisfaction of customer
Frequency Percent
Valid Strongly Disagree 2 2.0
Disagree 7 6.9
Undecided 12 11.8
 Agree 48 47.1
Strongly Agree 33 32.4
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.1.5 classifies the opinion of respondents on whether CRM is the business

strategy focused on the customer that increases the loyalty and satisfaction of

customer. It shows that 2 (2%) strongly disagreed, 7 (6.9%) disagreed, 12 (11.8%)

were undecided, 48 (47.1%) agree and 33 (32.4%) of the respondents strongly

agree. This implies majority of the respondents agreed.

4.2.1.6 CRM is a strategic necessity for all organizations because its effective
implementation increases the satisfaction of customer, loyalty and attraction
and more sale and buy
Table 4.2.1.6 CRM is a strategic necessity for all organizations because
its effective implementation increases the satisfaction of customer,
loyalty and attraction and more sale and buy
Frequency Percent
Strongly Disagree 11 10.8
Disagree 15 14.7
Undecided 18 17.6
Valid
Agree 27 26.5
Strongly Agree 31 30.4
Total 102 100.0
Source: Field Survey, 2023
Table 4.2.1.6 classifies the opinion of respondents on whether CRM is a strategic
necessity for all organizations because its effective implementation increases the
satisfaction of customer, loyalty and attraction and more sale and buy. It shows that
11 (10.8%) strongly disagreed, 15 (14.7%) disagreed, 18 (17.6%) were undecided,
27 (26.5%) agree and 31 (30.4%) of the respondents strongly agree. This implies
majority of the respondents strongly agreed.

4.2.1.7 CRM focus on managing the relationship between a business and its
current and prospective customer base, as a key to success
Table 4.2.1.7 CRM focus on managing the relationship between a
business and its current and prospective customer base, as a key to
success
Frequency Percent
Strongly Disagree 1 1.0
Disagree 2 2.0
Undecided 7 6.9
Valid
Agree 46 45.1
Strongly Agree 46 45.1
Total 102 100.0
Source: Field Survey, 2023
Table 4.2.1.7 classifies the opinion of respondents on whether CRM focus on

managing the relationship between a business and its current and prospective

customer base, as a key to success. It shows that 1 (1%) strongly disagreed, 2 (2%)

disagreed, 7 (6.9%) were undecided, 46 (45.1%) agree and 46 (45.1%) of the

respondents strongly agree. This implies majority of the respondents both agreed

and strongly agreed.

4.2.1.8 To be effective, a CRM strategy must encompass and integrate all

customer-facing activities
Table 4.2.1.8 To be effective, a CRM strategy must encompass and
integrate all customer-facing activities
Frequency Percent
Strongly Disagree 16 15.7
Disagree 17 16.7
Undecided 19 18.6
Valid
Agree 26 25.5
Strongly Agree 24 23.5
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.1.8 classifies the opinion of respondents on whether To be effective, a

CRM strategy must encompass and integrate all customer-facing activities. It

shows that 16 (15.7%) strongly disagreed, 17 (16.7%) disagreed, 19 (18.6%) were

undecided, 26 (25.5%) agree and 24 (23.5%) of the respondents strongly agree.

This implies majority of the respondents agreed.

4.2.2 Analysis of Customer Relationship Management on Profitability

4.2.2.1 As the relationship with the customer develops and grows older it
results into increased profits for the business
Table 4.2.2.1 As the relationship with the customer develops and
grows older it results into increased profits for the business
Frequency Percent
Valid Disagree 2 2.0
Undecided 6 5.9
Agree 33 32.4
Strongly 61 59.8
Agree
 Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.1 classifies the opinion of respondents on whether As the relationship

with the customer develops and grows older it results into increased profits for the
business. It shows that 2 (2%) disagreed, 6 (5.9%) were undecided, 33 (32.4%)
agree and 61 (59.8%) of the respondents strongly agree. This implies majority of
the respondents strongly agreed.

4.2.2.2 The cost for recruiting customers will decrease since there are
savings to be made on marketing, mailing, contact, follow-up, fulfillment,
services, and so on
Table 4.2.2.2 The cost for recruiting customers will decrease since
there are savings to be made on marketing, mailing, contact,
follow-up, fulfillment, services, and so on
Frequency Percent

Strongly Disagree 1 1.0

Disagree 4 3.9
Undecided 13 12.7
Valid
Agree 45 44.1
Strongly Agree 39 38.2
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.2 classifies the opinion of respondents on whether The cost for

recruiting customers will decrease since there are savings to be made on marketing,

mailing, contact, follow-up, fulfillment, services, and so on. It shows that 1 (1%)
strongly agreed, 4 (3.9%) disagreed, 13 (12.7%) were undecided, 45 (44.1%) agree

and 39 (38.2%) of the respondents strongly agree. This implies majority of the

respondents agreed.

4.2.2.3 As the relationship with the customers becomes long-term there is

a reduction in cost of sales

Table 4.2.2.3 As the relationship with the customers becomes long-

term there is a reduction in cost of sales
Frequency Percent
Undecided 14 13.7
Agree 39 38.2
Valid Strongly
49 48.0
Agree
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.3 classifies the opinion of respondents on whether As the relationship

with the customers becomes long-term there is a reduction in cost of sales. It shows

that 14 (13.7%) were undecided, 39 (38.2%) agree and 49 (48%) of the

respondents strongly agree. This implies majority of the respondents strongly

agreed.

4.2.2.4 An effective distribution of goods and services ensures customer

satisfaction and retention
Table 4.2.2.4 An effective distribution of goods and services ensures
customer satisfaction and retention
Frequency Percent
 Disagree 3 2.9
Undecided 10 9.8

Valid Agree 62 60.8

Strongly
27 26.5
Agree
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.4 classifies the opinion of respondents on whether an effective

distribution of goods and services ensures customer satisfaction and retention. It

shows that 3 (2.9%) disagree, 10 (9.8%) were undecided, 62 (60.8%) agree and 27

(26.5%) of the respondents strongly agree. This implies majority of the

respondents strongly agreed.

4.2.2.5 The customer retention increases since customers stay longer, buy
more and buy more frequently
Table 4.2.2.5 The customer retention increases since customers stay
longer, buy more and buy more frequently
Frequency Percent
Disagree 1 1.0
Undecided 25 24.5

Valid Agree 29 28.4

Strongly
47 46.1
Agree
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.5 classifies the opinion of respondents on whether The customer

retention increases since customers stay longer, buy more and buy more frequently.
It shows that 1 (1%) disagree, 25 (24.5%) were undecided, 29 (28.4%) agree and

47 (46.1%) of the respondents strongly agree. This implies majority of the

respondents strongly agreed.

4.2.2.6 By implementing CRM, the business in a position to assess which

of its customers are profitable and which are not

Table 4.2.2.6 By implementing CRM, the business in a position to assess

which of its customers are profitable and which are not
Frequency Percent
Undecided 3 2.9
Agree 44 43.1
Valid Strongly
55 53.9
Agree
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.6 classifies the opinion of respondents on whether By implementing

CRM, the business in a position to assess which of its customers are profitable and

which are not. It shows that 3 (2.9%) were undecided, 44 (43.1%) agree and 55

(53.9%) of the respondents strongly agree. This implies majority of the

respondents strongly agreed.

4.2.2.7 CRM based technology enables organizations to plan and

implement successful marketing actions for retaining customers and making
them more profitable, because of the customer database and other
information storing systems
Table 4.2.2.7 CRM based technology enables organizations to plan and
implement successful marketing actions for retaining customers and
making them more profitable, because of the customer database and other
information storing systems
Frequency Percent
Undecided 10 9.8
Agree 44 43.1
Valid Strongly
48 47.1
Agree
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.7 classifies the opinion of respondents on whether CRM based

technology enables organizations to plan and implement successful marketing
actions for retaining customers and making them more profitable, because of the
customer database and other information storing systems. It shows that 10 (9.8%)
were undecided, 44 (43.1%) agree and 48 (47.1%) of the respondents strongly
agree. This implies majority of the respondents strongly agreed.

4.2.2.8 CRM is a determinant of profitability and business growth

Table 4.2.2.8 CRM is a determinant of profitability and business growth
Frequency Percent
Strongly Disagree 2 2.0
Disagree 8 7.8
Undecided 12 11.8
Valid
Agree 48 47.1
Strongly Agree 32 31.4
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.2.8 classifies the opinion of respondents on whether CRM is a

determinant of profitability and business growth. It shows that 2 (2%) strongly

disagreed, 8 (7.8%) disagreed, 12 (11.8%) were undecided, 48 (47.1%) agree and

32 (31.4%) of the respondents strongly agree. This implies majority of the

respondents agreed.

4.2.3 Analysis of Customer Relationship Management on sustainability

4.2.3.1 Customers are the best asset of an organization and regarding

modern competitive world which introduces CRM for competitive advantage

Table 4.2.3.1 Customers are the best asset of an organization and regarding
modern competitive world which introduces CRM for competitive
advantage
Frequency Percent
Strongly
8 7.8
Disagree
Disagree 15 14.7

Valid Undecided 15 14.7

Agree 39 38.2
Strongly Agree 25 24.5
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.1 classifies the opinion of respondents on whether Customers are the

best asset of an organization and regarding modern competitive world which

introduces CRM for competitive advantage. It shows that 8 (7.8%) strongly agreed,

15 (14.7%) disagreed, 15 (14.7%) were undecided, 39 (38.2%) agree and 25

(24.5%) of the respondents strongly agree. This implies majority of the

respondents agreed.

4.2.3.2 Nowadays, Customer Relationship Management (CRM) is widely

accepted within marketing sales business unit of major firms

Table 4.2.3.2 Nowadays, Customer Relationship Management (CRM) is

widely accepted within marketing sales business unit of major firms
Frequency Percent
Strongly Disagree 6 5.9
Disagree 20 19.6
Undecided 8 7.8
Valid
Agree 46 45.1
Strongly Agree 22 21.6
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.2 classifies the opinion of respondents on whether Nowadays,

Customer Relationship Management (CRM) is widely accepted within marketing

sales business unit of major firms. It shows that 6 (5.9%) strongly agreed, 20

(19.6%) disagreed, 8 (7.8%) were undecided, 46 (45.1%) agree and 22 (21.6%) of

the respondents strongly agree. This implies majority of the respondents agreed.

4.2.3.3 Medium Enterprises (SMEs) are increasingly seeking to

implement CRM in order to find a competitive advantage on which to base
business prospects for longevity
Table 4.2.3.3 Medium Enterprises (SMEs) are increasingly seeking to
implement CRM in order to find a competitive advantage on which to base
business prospects for longevity
 Frequency Percent
Strongly Disagree 1 1.0
Disagree 6 5.9
Undecided 17 16.7
Valid
Agree 54 52.9
Strongly Agree 24 23.5
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.3 classifies the opinion of respondents on whether Medium Enterprises

(SMEs) are increasingly seeking to implement CRM in order to find a competitive
advantage on which to base business prospects for longevity. It shows that 1 (1%)
strongly agreed, 6 (5.9%) disagreed, 17 (16.7%) were undecided, 54 (52.9%) agree
and 24 (23.5%) of the respondents strongly agree. This implies majority of the
respondents agreed.

4.2.3.4 Relationship marketing alone is a tool for competitive advantage

as it brings about a high level of satisfaction
Table 4.2.3.4 Relationship marketing alone is a tool for competitive
advantage as it brings about a high level of satisfaction
Frequency Percent
Strongly
4 3.9
Disagree
Disagree 7 6.9
Undecided 18 17.6
Valid
Agree 43 42.2
Strongly Agree 30 29.4
Total 102 100.0
Source: Field Survey, 2023
Table 4.2.3.4 classifies the opinion of respondents on whether Relationship
marketing alone is a tool for competitive advantage as it brings about a high level

of satisfaction. It shows that 4 (3.9%) strongly agreed, 7 (6.9%) disagreed, 18

(17.6%) were undecided, 43 (42.4%) agree and 30 (29.4%) of the respondents

strongly agree. This implies majority of the respondents agreed.

4.2.3.5 A strong customer base helps to know the level of competitive

advantage poses by a firm

Table 4.2.3.5 A strong customer base helps to know the level of competitive
advantage poses by a firm
Frequency Percent
Strongly
6 5.9
Disagree
Disagree 13 12.7

Valid Undecided 16 15.7

Agree 40 39.2
Strongly Agree 27 26.5
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.5 classifies the opinion of respondents on whether a strong customer

base helps to know the level of competitive advantage poses by a firm. It shows

that 6 (5.9%) strongly agreed, 13 (12.7%) disagreed, 16 (15.7%) were undecided,

40 (39.2%) agree and 27 (26.5%) of the respondents strongly agree. This implies

majority of the respondents agreed.

4.2.3.6 Factors such as efficiency, competitive advantage, customer
support, inventory control and accessibility have become drivers to CRM
Table 4.2.3.6 Factors such as efficiency, competitive advantage, customer
support, inventory control and accessibility have become drivers to CRM
Frequency Percent
Strongly Disagree 2 2.0
Disagree 5 4.9
Undecided 12 11.8
Valid
Agree 40 39.2
Strongly Agree 43 42.2
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.6 classifies the opinion of respondents on whether Factors such as

efficiency, competitive advantage, customer support, inventory control and
accessibility have become drivers to CRM. It shows that 2 (2%) strongly agreed, 5
(4.9%) disagreed, 12 (11.8%) were undecided, 40 (39.2%) agree and 43 (42.3%) of
the respondents strongly agree. This implies majority of the respondents strongly
agreed.

4.2.3.7 With increasing market competition, Small and Medium

Enterprises (SMEs) that considers customer knowledge stands to outsmart
other enterprises
Table 4.2.3.7 With increasing market competition, Small and Medium
Enterprises (SMEs) that considers customer knowledge stands to outsmart
other enterprises
Frequency Percent
Valid Strongly Disagree 1 1.0
Disagree 3 2.9
Undecided 14 13.7
 Agree 44 43.1
Strongly Agree 40 39.2
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.7 classifies the opinion of respondents on whether With increasing

market competition, Small and Medium Enterprises (SMEs) that considers

customer knowledge stands to outsmart other enterprises. It shows that 1 (1%)

strongly agreed, 3 (2.9%) disagreed, 14 (13.7%) were undecided, 44 (43.1%) agree

and 40 (39.2%) of the respondents strongly agree. This implies majority of the

respondents agreed.

4.2.3.8 The familiar superior objectives of all strategies are enduring

unique relationships with customers, which cannot be imitated by competitors

and therefore provide sustainable competitive advantages.

Table 4.2.3.8 The familiar superior objectives of all strategies are enduring
unique relationships with customers, which cannot be imitated by
competitors and therefore provide sustainable competitive advantages.
Frequency Percent
Strongly
2 2.0
Disagree
Disagree 9 8.8

Valid Undecided 8 7.8

Agree 57 55.9
Strongly Agree 26 25.5
Total 102 100.0
Source: Field Survey, 2023

Table 4.2.3.8 classifies the opinion of respondents on whether The familiar

superior objectives of all strategies are enduring unique relationships with

customers, which cannot be imitated by competitors and therefore provide

sustainable competitive advantages. It shows that 2 (2%) strongly agreed, 9 (8.8%)

disagreed, 8 (7.8%) were undecided, 57 (55.9%) agree and 26 (25.5%) of the

respondents strongly agree. This implies majority of the respondents agreed.

4.3 HYPOTHESIS TESTING

Linear Regression analysis was used to test the research hypotheses and analyze

the dependent and independent variables.

Hypothesis 1: Customer Relationship Management (CRM) does not affect

sustainability of Small and Medium Enterprises (SMEs) in Awka South LGA.

Table 4.3.1 Model Summary of Customer Relationship Management (CRM) and

Sustainability of SMEs
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .583a .340 .333 .60858
a. Predictors: (Constant), Customer Relationship Management

Table 4.3.2 ANOVAa of Customer Relationship Management (CRM) and

Sustainability of SMEs
Model Sum of Df Mean Square F Sig.
Squares
1 Regression 19.048 1 19.048 51.430 .000b
Residual 37.038 100 .370
 Total 56.086 101
a. Dependent Variable: Sustainability of SMEs
b. Predictors: (Constant), Customer Relationship Management

Interpretation of Results

The result from the model summary table revealed that the extent to which the

variance, Sustainability of SMEs decision can be explained by Customer

Relationship Management is 34.0% (R Square = 0.340). The ANOVA table shows

the Fcal 51.430 at 0.000 significant level. The table shows that Customer

Relationship Management (CRM) affect sustainability of Small and Medium

Enterprises (SMEs) in Awka South LGA.

Table 4.3.3 Coefficientsa of Customer Relationship Management (CRM) and

Sustainability of SMEs
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Beta
Error
(Constant) .606 .445 1.361 .177
Computerized
1
Accounting .757 .106 .583 7.171 .000
System
a. Dependent Variable: Sustainability of SMEs

The coefficient table above shows that the simple model that expresses how

Customer Relationship Management (CRM) affect sustainability of Small and

Medium Enterprises (SMEs) in Awka South LGA. The model is shown

mathematically as follows:

Y=a+bX where y is Sustainability of SMEs and x is Customer Relationship

Management, a is a constant factor and b is the value of coefficient. From this

table therefore, Sustainability of SMEs = 0.606 + 0.757 Customer Relationship

Management. Therefore, a unit increase in Customer Relationship Management

will lead to 0.757 increase in Sustainability of SMEs.

Decision

The above result implies that Customer Relationship Management (CRM) affect

sustainability of Small and Medium Enterprises (SMEs) in Awka South LGA. i.e.

since our P value (0.000) is less than 0.05. Thus, the decision would be to reject

null hypothesis (Ho) and accept alternative hypothesis (H 1), i.e. Customer

Relationship Management (CRM) affect sustainability of Small and Medium

Enterprises (SMEs) in Awka South LGA.

Hypothesis Two: Customer Relationship Management (CRM) has no effect on the

profitability of Small and Medium Enterprises (SMEs) in Awka South L.G.A.

Table 4.3.4 Model Summary of Customer Relationship Management

and Profitability of SMEs
Model R R Square Adjusted R Std. Error of the Estimate
Square
a
1 .524 .274 .267 .38547
a. Predictors: (Constant), Customer Relationship Management
Table 4.3.5 ANOVAa of Customer Relationship Management and
Profitability of SMEs
Model Sum of Df Mean Square F Sig.
Squares
Regression 5.619 1 5.619 37.816 .000b
1 Residual 14.859 100 .149
Total 20.478 101
a. Dependent Variable: Profitability of SMEs
b. Predictors: (Constant), Customer Relationship Management

Interpretation of Results

The result from the model summary table revealed that the extent to which the

variance, Profitability of SMEs can be explained by Customer Relationship

Management is 27.4% (R Square = 0.274). The ANOVA table shows the Fcal

37.816 at 0.000 significant level. The table shows that Customer Relationship

Management (CRM) has effect on the profitability of Small and Medium

Enterprises (SMEs) in Awka South L.G.A.

Table 4.3.6 Coefficientsa of Customer Relationship Management and

Profitability of SMEs
Model Unstandardized Coefficients Standardized T Sig.
Coefficients
B Std. Error Beta
(Constant) 1.913 .384 4.978 .000
Customer
1
Relationship .550 .089 .524 6.149 .000
Management
a. Dependent Variable: Profitability of SMEs

The coefficient table above shows that the simple model that expresses how

Customer Relationship Management (CRM) has effect on the profitability of Small

and Medium Enterprises (SMEs) in Awka South L.G.A. The model is shown

mathematically as follows:

Y=a+bX where y is Profitability of SMEs and x is Customer Relationship

Management, a is a constant factor and b is the value of coefficient. From this

table therefore, Profitability of SMEs = 1.913 + 0.550 Customer Relationship

Management. Therefore, a unit increase in Customer Relationship Management

will lead to 0.550 increase in Profitability of SMEs.

Decision

The above result implies that Customer Relationship Management (CRM) has

effect on the profitability of Small and Medium Enterprises (SMEs) in Awka South

L.G.A. i.e. since our P value (0.000) is less than 0.05. Thus, the decision would be

to reject null hypothesis (Ho) and accept alternative hypothesis (H 1), i.e. Customer

Relationship Management (CRM) has effect on the profitability of Small and

Medium Enterprises (SMEs) in Awka South L.G.A.

Hypothesis Three: Customer Relationship Management (CRM) does not affect

customer satisfaction of Small and Medium Enterprises (SMEs) in Awka South

LGA.

Table 4.3.7 Model Summary of Customer Relationship Management and

Customer Satisfaction

Model R R Square Adjusted R Square Std. Error of the

Estimate

1 .013a .000 -.010 .61564

a. Predictors: (Constant), Customer Relationship Management

Table 4.3.8 ANOVAa of Customer Relationship Management and Customer

Satisfaction
Model Sum of df Mean Square F Sig.
Squares
Regression .007 1 .007 .017 .895b
1 Residual 37.901 100 .379
Total 37.907 101
a. Dependent Variable: Customer Satisfaction
b. Predictors: (Constant), Customer Relationship Management

Interpretation of Results

The result from the model summary table revealed that the extent to which the

variance, Customer Satisfaction can be explained by Customer Relationship

Management is 0.0% (R Square = 0.000). The ANOVA table shows the Fcal 0.017
at 0.895 significant level. The table shows that Customer Relationship

Management (CRM) does not affect customer satisfaction of Small and Medium

Enterprises (SMEs) in Awka South LGA.

Table 4.3.9 Coefficientsa of Customer Relationship Management and Customer

Satisfaction
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
(Constant) 4.024 .318 12.647 .000
Customer
1 Relationship
-.011 .084 -.013 -.132 .895
Managemen
t
a. Dependent Variable: Customer Satisfaction

The coefficient table above shows that the simple model that expresses how

Customer Relationship Management (CRM) does not affect customer satisfaction

of Small and Medium Enterprises (SMEs) in Awka South LGA . The model is

shown mathematically as follows:

Y=a+bX where y is Customer Satisfaction and x is Customer Relationship

Management, a is a constant factor and b is the value of coefficient. From this

table therefore, Customer Satisfaction = 4.024 - 0.011 Customer Relationship

Management. Therefore, a unit increase in Customer Relationship Management

will lead to 0.011 decrease in Customer Satisfaction.

Decision
The above result implies that Customer Relationship Management (CRM) does not

affect customer satisfaction of Small and Medium Enterprises (SMEs) in Awka

South LGA. i.e. since our P value (0.895) is greater than 0.05. Thus, the decision

would be to reject alternative hypothesis (H 1) and accept null hypothesis (Ho), i.e.

Customer Relationship Management (CRM) does not affect customer satisfaction

of Small and Medium Enterprises (SMEs) in Awka South LGA.

4.4 Discussion of Findings

The findings reveal the effect of Customer Relationship Management (CRM) on

Small and Medium Enterprises (SMEs) sustainability in Awka South L.G.A. The

best theory that fits in the research finding is the Porter’s Theory of Competitive

Edge. Michael Porter (1985) stated that being competitive means promoting unique

strengths and capabilities, and defending them against imitation by other firms.

Competitive advantage is achieved by deliberately selecting a distinctive set of

activities to deliver a unique mix of customer value, either through implementing a

value-creating strategy not simultaneously being employed by current or

prospective competitors or through superior execution of the same strategy as used

by the competitors. Porter (1985) states that competitive advantage is the basis of

an organization; above average performance in the long run, without which an

organization will decline and eventually fail. Hence, CRM strategy is to create a

competitive advantage by better understanding, keeping and delivering value to

existing customers and as well to creating and delivering new customers.

Applying this Porter’s theory of Competitive Edge to this study, it was seen as a

strategic instrument to attract, develop and build relationships with carefully

targeted customers in order to maximize customer value and enhance company

performance to benefit from sustainable competitive advantage.

From the data analyzed, the questionnaire was backed up by past findings. These

include:

i. Nwankwo and Ajemunigbohun (2013) found empirically a direct positive

and significant relationship existing between CRM and customer retention in

Nigerian insurance company. They made use of the cross-sectional survey

design and it was conducted in Lagos Metropolis from October 2012 to

February 2013. This is in line with the result of this research study as shown

in Table 4.3.1 to 4.3.3 that Customer Relationship Management (CRM)

affect sustainability of Small and Medium Enterprises (SMEs) in Awka

South LGA.

ii. Hassan and Parves (2013) critically review and compare the current trends

of CRM in Tesco and Sainsbury retail stores where they found that CRM is a

determinant of profitability and business growth. This is in agreement with

the result of this research study as shown in Table 4.3.4 to 4.3.6 that

Customer Relationship Management (CRM) has effect on the profitability of

 Small and Medium Enterprises (SMEs) in Awka South L.G.A

iii. Table 4.3.7 to 4.3.9 showed that Customer Relationship Management

(CRM) does not affect customer satisfaction of Small and Medium

Enterprises (SMEs) in Awka South LGA.

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary of the Study

Customer relationship management (CRM) is a broad innovation because CRM

system initiatives and efforts normally involve the implementation of customer-

focused business strategy, a re-design of business function processes and also a re-
engineering of work processes (Maklan and Knox, 2009). While the customer is

important in current dynamic market, their demands are increasing and changing

every day, therefore, the company is rapidly forced to shift their focus from mass

production to mass customization. This is to resolve customer concerns or offer the

customer with the right mix of products at the right approach. Basically, acquiring

of new customers is a key consideration of the most companies; however, retaining

existing customers is one of important factors to drive the success of companies.

Chapter one of this report covered the background to the study, the rationale behind

the work, and the research problems to be properly evaluated. Chapter two covered

reviews of other researchers, chapter three covered the methods of collecting and

analyzing data, and chapter four consisted of the implementation and evaluation of

the data.

From the statistical result, it was found that there is a significant relationship

between Customer Relationship Management and sustainability of SMEs, with a

confidence level of 99%. Two of three hypotheses tested were in support of this

relationship.

5.2 Conclusion

Customer Relationship Management strategy is a major driving force and source of

strength for inexhaustible healthy sustainability of SMEs; their core competencies

also have been entirely reflected through Customer relationship. SMEs must
therefore recognize the need to enhance the Customer relationship management,

continue to study and develop new customer relationship strategy/technology, and

always maintain a strong technical customer relationship ability, and only in this

way can stand out in the fierce competition in the market and remain invincible.

This study focused on Customer relationship management and the sustainability of

SMEs and made mention of some dimensions that facilitate performance of SMEs

in Awka South, Anambra State.

5.3 Recommendation

Following the findings and conclusion, the study made the following

recommendations:

i. Government and especially small industries can improve the SMEs

sustainability by consultation, conferences and programs related to CRM..

ii. Managers of SMEs can increase the abilities of their employees in the

information system such that their employees become familiar with

common information systems and acquire necessary skills for improving

the sustainability and performance of these industries.

iii. SMEs should enhance their recognition of environment and customers in

order to improve their performance. For example, through customer

segmentation and identifying interests and tastes and predicting needs.

iv. Entrepreneurs need to intensify more effort on all customer relationship

 innovation dimensions.

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APPENDIX 1

Department Of Entrepreneurial Studies

Faculty of Management Sciences,
Nnamdi Azikiwe University,
Awka,
April, 2023
Dear Sir/Madam,

REQUEST FOR RESPONSE OF QUESTIONNAIRE

I am a researcher from the above-named Institution. I am carrying out a study on

The Customer Relationship Management (CRM) on Small and Medium Enterprises

(SMEs) sustainability in Awka South L.G.A, Anambra State. This is part of

fulfillment of the requirements for the award of B.Sc in Enterpreneurship.

I will be grateful if you would complete the attached Questionnaire. Every

information you give will be highly confidential.

Thanks,
Yours Faithfully.,

________________
Chieji Chidera Gift

APPENDIX II
QUESTIONNAIRE
Instructions: Please tick ( )as appropriate in the boxes provided to indicate your
answers,views and opinions

SECTION A: DEMOGRAPHIC DATA

1. What is your Gender? Male ( ) Female ( )

2. Age: 16-20 ( ) 21-30 ( ) 31-40 ( ) 41 and above( )
 3. What is your Marital Status? Single ( ) Married ( ) Others( )
4. Employment Status: Permanent ( ) Temporary ( ) Casual ( )
5. Business Experience: 6month - 1year ( ) between 2 - 3years ( ) 3years - 5years ( )
5years and above( )
6. What is your Level of Education? SSCE ( )NCE/ND ( ) HND ( ) Degree ( )
M.Sc/MBA/M.A ( ) Others, please specify ( )

SECTION B - D

For each of the statement below, kindly indicate your level of agreement or disagreement by
ticking the appropriate column.

KEY: SA= STRONGLY AGREE

A=AGREE
U= UNDECIDED
D= DISAGREE

SD = STRONGLY DISAGREE

S/N ITEMS SA A U D SD

B. CUSTOMER RELATIONSHIP MANAGEMENT ON

CUSTOMER SATISFACTION

B1 CRM is to maximize the relationship with all customers

B2 Factors such as efficiency, competitive advantage, customer

support, inventory control and accessibility have become drivers
to CRM

B3 It is clear that CRM is not just a technology, but is a new way of

doing business
B4 CRM has evolved from the advances in information technology
and organizational changes in customer centric process

B5 CRM is the business strategy focused on the customer that

increases the loyalty and satisfaction of customer

B6 CRM is a strategic necessity for all organizations because its

effective implementation increases the satisfaction of customer,
loyalty and attraction and more sale and buy

B7 CRM focus on managing the relationship between a business

and its current and prospective customer base, as a key to
success

B8 To be effective, a CRM strategy must encompass and integrate

all customer-facing activities

C. CUSTOMER RELATIONSHIP MANAGEMENT ON

PROFITABILITY

C1 As the relationship with the customer develops and grows older

it results into increased profits for the business

C2 The cost for recruiting customers will decrease since there are
savings to be made on marketing, mailing, contact, follow-up,
fulfillment, services, and so on

C3 As the relationship with the customers becomes long-term there

is a reduction in cost of sales

C4 An effective distribution of goods and services ensures customer

satisfaction and retention

C5 The customer retention increases since customers stay longer,

buy more and buy more frequently

C6 By implementing CRM, the business in a position to assess

which of its customers are profitable and which are not
C7 CRM based technology enables organizations to plan and
implement successful marketing actions for retaining customers
and making them more profitable, because of the customer
database and other information storing systems

C8 CRM is a determinant of profitability and business growth

D. CUSTOMER RELATIONSHIP MANAGEMENT ON

SUSTAINABILITY

D1 Customers are the best asset of an organization and regarding

modern competitive world which introduces CRM for
competitive advantage

D2 Nowadays, Customer Relationship Management (CRM) is

widely accepted within marketing sales business unit of major
firms

D3 Medium Enterprises (SMEs) are increasingly seeking to

implement CRM in order to find a competitive advantage on
which to base business prospects for longevity

D4 Relationship marketing alone is a tool for competitive advantage

as it brings about a high level of satisfaction

D5 A strong customer base helps to know the level of competitive

advantage poses by a firm

D6 Factors such as efficiency, competitive advantage, customer

support, inventory control and accessibility have become drivers
to CRM

D7 With increasing market competition, Small and Medium

Enterprises (SMEs) that considers customer knowledge stands to
outsmart other enterprises
D8 The familiar superior objectives of all strategies are enduring
unique relationships with customers, which cannot be imitated
by competitors and therefore provide sustainable competitive
advantages.