Customer-Bonding Capability: A Revolutionary Management Skill for Improved Performance of SMES in Agribusiness in Rivers State, Nigeria

Abstract

Economic advancement of nations is interlaced with growth and prosperity of businesses. Hence, policy-makers devote resources to orchestrating an enabling environment for businesses, especially SMEs, to thrive. Governments have over the years made deliberate efforts to encourage and promote SMEs, in lieu of their significant contribution to economic development. However, SMEs do not rely solely on government support or incentives to thrive. They also require skills and capabilities that provide sufficient fillip to operational success. This study examined the relevance customer-bonding capability to performance of SMEs in agribusiness. Customer-bonding capability was treated uni-dimensionally; while customer-base enlargement, profitability and portfolio expansion were used to represent SMEs’ performance. The study adopted an explanatory research design, and collected primary data through cross-sectional survey, using a structured questionnaire whose validity and reliability was confirmed through exploratory factor analysis and Cronbach’s Alpha test respectively. The population of the study comprised SMEs in agribusiness in Rivers State. 90 SMEs in agribusinesses in Rivers State were surveyed. After data cleaning, data collected from 77 SMEs were found usable for analyses. Pearson Product Moment Correlation served as test statistic, relying on Statistical Package for Social Sciences (SPSS) version 24.0. The study found that customer-bonding capability has strong, positive and statistically significant relationship with customer-base enlargement and business portfolio expansion; and a moderate positive and statistically significant relationship with profitability of SMEs in agribusiness. The study therefore concluded that customer-bonding capability drives improved performance of SMEs in agribusiness; and recommends that SMEs in agribusinesses in Rivers State that seek improved performance in terms of customer-base enlargement, business portfolio expansion, and profitability should develop or groom capabilities that nurture and expand relationship with customers.

Keywords:Business portfolio expansion, customer-base enlargement, customer-bonding capability, profitability, SMEs’ performance

DOI: 10.7176/EJBM/15-13-01

Publication date:July 31^st 2023