Impact Of Emotional Intelligence On Retention Customers

Introduction

1.1 Background of the Study

Banks were considered as a good subject for this research because as a service its attributes are essentially intangible and the typical bank attributes are almost synonymous with the consequences rather than the physical characteristics. It is the basic job of bank employees to deal with the customers and consumers as well. So it is important for them to deal with them in such a manner so that they can retain customers. There are multiple factors effecting the service industries like globalization, competition, volatile market dynamics and customers’ needs are always evolving at a much faster rate as much as the volatility of the markets. The one most important attribute that separates competitors is the quality of service delivered to the customers by trying to bridge the gap between the customers’ expectations and experience. This has made the banking sector change the approach from transaction based marketing approach to a relationship based approach that has at its core the recognition of lifetime value of the customer. In the current scenario it has been observed that there would be a closure relationship between behavior of employees and service quality providing by the bank thus leading to high degree of customer satisfaction and further will lead to customer retention. In this context banking as one of the important sectors of the service industry requires relationships to be established between banking staff and customers. The success of these relationships will depend on the quality of the service they are providing and the way they use to deal with the customers. One potential indicator of staff’s ability to their customers is their level of emotional intelligence. Individual’s emotional intelligence which is all about managing emotions and is being observed as one of the important emerging determinants for dealing with the customers. Therefore this research study tries to examine the link between the bank employee’s emotional intelligence levels, their service performance and ability to retain the customers.

According to Goleman, the behavior of any service personnel can be interpreted in terms of variables which have a bearing on the dimensions of Emotional Intelligence. He describes the human behavior based on an integrated concept of EI. EI is generally discussed in terms of leadership roles, individual contributions and contribution to team building exercise. Actions or behavior relevant to the performance varies on the type of the industry or organization. If going by the judgment that emerges from the literature review on the antecedents of the employee work performance, it is the context that matters. In 1998 he defined “ Emotional Competence” as a “learned capability based on the emotional intelligence that results in outstanding performance at work and further divided emotional intelligence in to the following 4 competencies:

Self Awareness- to identify and name one’s emotional states and to understand the link between emotion, thought and action.

Self- Regulation-to Manage One’s Emotional States, to control emotion or to shift undesirable emotional states to more adequate ones.

Social Awareness –to read, be sensitive and influence other people’s emotions.

Social Skills – to enter and sustain satisfactory interpersonal relationship.

 

There is a plethora of research suggesting that there is a strong correlation between the ability of customer service providers to develop strong customer relationships with customers which attribute to outcomes such as customer satisfaction, customer retention and customer service quality.

Making customers and getting customers is the objective of the manufacturing firm but, retaining customer is the prime objective of the service industry. Customer retention is the process through which service organization try to reduce the customer defection. Ability of any banking sector to retain customer directly shows the execution of services provided by the bank. For entering in service industry especially in bank one must be thorough with the basic concept of customer retention. Customer retention is not about meeting the customers’ expectation but it is all about what you give and how you give to the customer beyond their expectation. It starts with the first meeting with customer, dealing on issue and continues till he remain customer and after that as well. Customer retention has direct effect on turnover of the financial institutions. This is the reason it is considering as the prime objective of service industry. It starts with customer relationship make them comfort to share their issues politely with the service provider, understand it and then take corrective action to solve their problem. If it maintains smooth relationship, it will aid to retain customer and thus increase the loyal customers. Banking customer retention is more of a challenge than it would be in different industries. In addition the current economic downturn is heightening concerns and threatening customer loyality. Customers naturally gains the sense of security placing their money in institution they believe shares their interests, and the nature of their precious finance means they need to know those interests are being catered to. Banking industry statistics have made it clear that recruiting new banking customers is a considerably larger cost to the banks as compared to retaining those customers.

1.2 Statement of Problem

Managing workers’ emotions correctly appear to be a 21st century challenge to the managers. Although past researcher established a relationship between emotional intelligence and performance in the organization, little evidence is known about how employees translate their emotional intelligence into enhanced work outcomes in the banking industry.

In workplaces where people are constantly afraid and insecure, employees are at risk of “turning numb” to protect themselves. These are clearly seen in the black faces of sub staff the lack of enthusiasm by front line workers, and in the remarkably incentive ways managers and employees treat each other.

The mechanism which allows a person to survive an emotionally painful environment also makes it difficult for them to respond sensitively and empathetically towards others. Some staff in the banking industry seems not to be socially aware of the emotions and concerns of others. They do not know what is socially acceptable from them in society and how they should act in that manner.

At work place, interaction with other people seems to be critical which may require the competency of empathy for better performance. Most banks’ employees are not socially competent employees. They lack the idea of putting themselves in others’ position and then may proceed to certain inappropriate action.

As there are many researches and findings available which shows that there is a significant relationship between the employees’ emotional intelligence and the customer satisfaction, & the relationship between the employees’ emotional intelligence and the service performance. But still there is dearth of studies on effect of EI on customer retention orientation of employees. So the present research has been undertaken to identify the effect of EI and gender customer retention.

1.3 Objectives of the Study

The general objective of this study is to ascertain the Impact Of Emotional Intelligence On Retention Customers (a Study Of Access Bank Plc). The specific objectives are to:

Investigate the impact of self-control on Retention of Customers in Nigeria Banking Industry

Find out the impact of self-awareness On Retention of Customers in Nigeria Banking Industry.

Examine the impact of social competency On retention of customers in Nigeria banking industry.

Ascertain the extent to which managing emotion affect employee performance in Nigeria banking industry.

 

1.4 Research Questions

This study is guided by the following research questions:

What is the impact of self-control on retention of customers in the Nigerian banking industry?

Does self-awareness have any impact on retention of customers in the Nigerian banking industry?

What is the impact of social competencies on retention of customers in the Nigerian banking industry?

To what extent does managing emotion of leaders’ affect employee’s performance in the Nigerian banking industry?

 

1.5 Research Hypotheses

H01: There is no relationship between self-control and retention of customers in the Nigerian Banking Industry.

H02: There is no relationship between self-awareness and retention of customers in the Nigerian Banking Industry.

H03: There is no relationship between social competencies and retention of customers in the Nigerian Banking Industry.

H04: Managing emotion of leaders do not positively affect employees performance in the Nigerian Banking Industry.

1.6 Significance of the Study

This study examines the impact of emotional intelligence on retention of customers in the Nigerian banking industry. The study will have great impact on the management of banks and also show the relevance of emotional intelligence on the performance of banks’ employees.

This study on emotional intelligence in the banking industry helps to identify some of the problems of their customers which are attributable to lack of emotional intelligence in the industry.

The study provide ways in which bank employees assist their customers since the study will help the banks managers to train their staff on how to attend to customers.

Other business organizations in the country will also benefit from this study because it will help them to realize that emotional intelligence is a kind of tool and asset in the organization, which enables the employees to work in harmony and the organizational productivity will increase as well.

1.7 Scope of the Study

This study covers the impact of emotional intelligence on retention of customers in the Nigerian banking industry. It covers only staff and management of Access bank PLC. The Branch in Asaba was chosen because the researcher can easily get information needed for his research since the researcher resides in Asaba and can have access to the staff of the banks.

The study is limited to Asaba in Oshimili South Local Government Area of Delta State due to the fact that many indigenous and non-indigenous people live there and also for the fact that Asaba is the state capital. Other areas were not explored.

The population for this study is limited to employees and managers of the selected banks. The adopted indicators of emotional intelligence are limited to self-control; self-awareness; social competence and managing emotion. It was presumed that the indicators would make for easy measurement of emotional intelligence of employees and managers of the selected banks. And this study covers a period of one year (2015/2016)

1.8 Limitations of the Study

In carrying out the study, the researcher was faced with some constraints. Many employees of banks in Asaba use to dislike activities that appear to be probing them. They seem to have special liking for secrecy, thereby tend to avoid researchers. They considered giving information as secret. As such, they refuse to give out meaningful information that would aid the researcher.

Most customers of the bank are illiterate and therefore cannot be useful for the research since they are afraid that if they give out right information, it will be used against them. This made the researcher to segregate them out of research samples due to the difficulty of obtaining relevant data from them.

Some people (respondents) made it difficult for researchers to obtain research information. The researcher was denied access to some confidential data that were considered to be relevant to the study.

The research is mainly for academic purpose. Other academic workload hindered the research from covering a wide range since the research was carried out along side with this academic workload.

Finally, there were no much work done by researchers in the areas of study. The researcher therefore found it difficult to get much materials for the literature review.

1.9 Definition of Terms

For better understanding of some of the terms used in this study, the researcher gave the definitions of some terms as they connote to the study.

Emotion:

The part of a persons’ character that concerns feelings.

Intelligence:

The ability to learn, understand and think in a logical way about things, the ability to do this well.

Emotional Intelligence:

This refers to the abilities concerning recognition and regulation of emotions in self and others.

Employees:

These are people who are paid by UBA to work in the bank.

Performance:

This is the result or impact of activities of individuals over a given period of time.

Self-awareness:

This is having a deep understanding of one’s own emotion as well as strengths, weaknesses, value and motives. It recognizes the importance of one’s own feelings and how it affects one’s performance.

Social awareness:

It is mainly about empathy, having understanding and sensitivity to the feelings, thoughts and situations of others. It means that one should know what is socially acceptable from him/her in society and how he/she should act in that manner.

Self-Management:

This represents how well we control or redirect our internal states impulses and resources.

Managing Emotion:

This refers to managing other people emotions.

1.10 Organizations of the Study

The chapter one consist of the introductory part of the study which includes the study background, the statement of the research problem, the study objective and scope of the study.

The second chapter is a critical review of other literatures relevant to the study and its objectives including the theoretical framework for the study. While the third chapter is methods of data collection, sampling and data analysis used in conducting the study. The fourth chapter centres around the research findings including an analysis of how it relates to previous findings. The fifth chapter consists of the summary of findings, conclusion and recommendations base on the study objectives.