INFLUENCE OF INNOVATION ON CUSTOMERS’ SATISFACTION IN THE ELECTRICITY DISTRIBUTION INDUSTRY OF NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background Of The Study

Transactional processes are increasingly being facilitated by technology in the rapidly evolving twenty-first century. There is a growing trend among clients to depend on technological methods for generating service outcomes, rather than engaging in direct communication with personnel of the service firm. Technology has been embraced by organisations in an effort to augment customer contentment via the delivery of streamlined and user-friendly services. According to Mick and Fournier (2018), businesses that exhibit a resistance towards adopting technological advancements run the risk of becoming obsolete in the near future. Technology and organisational innovations are pivotal elements that have a substantial influence on the performance of an organisation and its ability to achieve a competitive advantage (Trott, 2021). In the past, businesses assessed customer satisfaction using various metrics, including but not limited to customer loyalty, market share growth, attractive books of accounts, and sales volume. Customer satisfaction has traditionally been equated with customer loyalty and repeat purchases. However, businesses have become cognizant of the fact that customer satisfaction cannot be inherently assured through loyalty and reuse. In markets where the cost of transferring is substantial, such as monopoly and duopoly markets, for example, consumers might perceive the organisation as ensnaring them. Under such conditions, customers might demonstrate allegiance to the organisation not as a result of their subjective preference for the services rendered, but rather due to their lack of viable alternatives. Consequently, it is imperative that businesses conduct a more frequent and methodical assessment of consumer satisfaction so that they can identify the factors that influence it and devise strategies to enhance them. Customer satisfaction-based retention and repurchases would result from the enhancement of these service delivery innovations, as opposed to customer entrapment within the organisation (Cacciopo, 2020). 

Similarly, the current market is characterised by a surplus of offerings, increased competition, limited product and service differentiation, and declining sales. As a result, consumers are provided with a wide range of choices regarding the acquisition of high-quality products and services at exceedingly low prices. The customer assumes a position akin to that of a monarch, and the organisation bears the onus of guaranteeing their contentment (Hill et al., 2023). As a result of the aforementioned considerations, businesses have come to understand the importance of integrating qualitative metrics, including customer satisfaction, alongside quantitative metrics, for the purpose of measuring organisational success. Consequently, organisations place the utmost significance on evaluating customer satisfaction, given that it functions as a reliable predictor of customer retention, repurchase propensity, and loyalty (Smith 2019). 

To tackle the aforementioned obstacles, enterprises have adopted technological advancements to improve customer service, consequently attaining a competitive advantage and increasing client satisfaction. The majority of these developments are electronic self-service technologies powered by information technology, which enable customers to procure services without direct employee involvement (Katono 2021). Due to the reduction in differences between the public and private sectors in Nigeria, which is an outcome of privatisation and the need to comply with a civil sector reform agenda that promotes transparency, learning, evaluating, and sanctioning, state-owned enterprises such as Nigeria Power are obligated to embrace a customer-centric approach to establish their legitimacy (Zairi & Marwa, 2019). Nigeria Power has previously faced numerous obstacles as a result of its lack of concern for service quality, which ultimately culminated in consumer discontent. Prolonged delays in the banking corridors, power disruptions, and unanticipated increases in utility fees have consistently defined the situation. Complaints were infrequently attended to and frequently disregarded. 

Conversely, the Nigerian power sector adopted prepaid electricity metering in 2006. Nigeria Power instituted prepaid metering with the objectives of enhancing technological and human resources, elevating service quality, and granting customers the authority to oversee their electricity expenses. There was an expectation that the implementation of prepaid power metres by Power Holding Company of Nigeria (PHCN) would mitigate the numerous challenges that are commonly associated with postpaid metres. The implementation of prepaid metres, which increased customer value and conserved electricity, commenced an extensive process of system improvement for the organization's public service delivery in an effort to address the myriad obstacles it faced. 

1.2 Statement Of The Problem

The importance of consumer contentment to the expansion, functionality, and overall prosperity of an organisation cannot be overstated. In the realm of modern business, the contentment of customers has become a fundamental goal. To maintain their clientele, establishments are allocating substantial resources towards improving customer satisfaction. An organization's financial performance is impacted in multiple ways by a satisfied clientele. These include the generation of positive word-of-mouth that attracts new clients and the encouragement of customer loyalty and repurchase intentions (Zeithaml and Bitner, 2019). Consequently, businesses have come to acknowledge the critical nature of regularly evaluating and integrating innovative service technologies in an effort to increase customer satisfaction. 

An extensive body of research has been devoted to examining the relationship between technological advancements and consumer satisfaction with the ultimate goal of gaining a comprehensive understanding of the notion. However, the vast majority of research that has been undertaken has been descriptive and of a general nature; instead of dividing the population based on characteristics such as socioeconomic status, age, gender, income, and education level, the participants have been consolidated into a single homogenous group. Based on the findings of Ndung'u's (2022) study regarding customer satisfaction and the quality of internet banking services at Access bank, a higher percentage of clients conveyed contentment rather than discontentment regarding the technological progress instituted by the bank. Nevertheless, the study failed to investigate the possibility of a correlation between customer satisfaction and income level. In a study examining the influence of modern technology on customer satisfaction in the banking industry, Omondi (2020) discovered that consistent application of technology increases customer satisfaction. Furthermore, his investigation indicated that it would be prudent for financial institutions to offer consumer training programmes to furnish them with the essential technological expertise. However, intellectual capacity was not accounted for in the investigation as a factor influencing satisfaction. 

Forooz et al. (2018) assert that customer orientation and innovation management are universally recognised as pivotal components in enhancing business performance and customer satisfaction. Research has shown that companies that adopt technological systems to enhance the efficiency and effectiveness of the purchase transaction process are more likely to achieve repeat business and cultivate consumer loyalty (Anderson & Swaminathan 2021). Moreover, the current body of research neglects to consider the influence of diverse consumer orientations and social dispensations on the level of customer satisfaction. 

An examination of the effectiveness of electricity prepaid metering in Nigeria has unveiled that a considerable number of customers have already complained about the following: the limited accessibility of locations where tokens can be purchased, the extended processing time for transferring funds via mobile phone, the lengthy digits or codes, and the inconsistent unit rates for identical amounts (Nyambega, 2021). Moreover, an extensive array of complaints has been recorded from electricity consumers in Nigeria concerning the prepaid metres. Several of the grievances revolved around the insufficient provision of consumption breakdowns by pre-paid instruments, which contributed to the perception that the technology was unaffordably costly. With the intention of addressing the subsequent inquiries, the research examined various technological advancements implemented by a Nigerian electricity distribution company, in consideration of the aforementioned discoveries. Is there an obvious correlation between technological innovation and customer satisfaction in the Nigerian electricity distribution company?

1.3 Objectives Of The Study

Generally, this study seek to an analysis of the influence of innovation on customers’ satisfaction in the electricity distribution industry of Nigeria. The study will specifically;

Determine whether there is a significant relationship between innovation and customers satisfaction.

Determine the various innovation technique adopted among DISCOs to enhances customers satisfaction.

Ascertain the attributes of innovation which promotes customers satisfaction in Nigeria's Electricity Distribution Companies.

1.4 Research Question

The study will be guided by the following questions;

Is there a significant relationship between innovation and customers satisfaction?

What are the various innovation technique adopted among DISCOs to enhances customers satisfaction?

What are the attributes of innovation which promotes customers satisfaction in Nigeria's Electricity Distribution Companies?

1.5 Research Hypothesis

Ho: There is no significant relationship between innovation and customers satisfaction

Ha: There is a significant relationship between innovation and customers satisfaction.

1.6 Significance Of The Study 

The findings of this research will also assist the managers of Nigeria electricity distribution company to understand how the customers perceive the innovations introduced in order to improve their service and identify areas of further improvements. Other organizations will be able to use the research findings to develop and implement customer satisfaction programs that will ensure attainment of organization’s objectives. The findings of the research will be critical in formulation and implementation of employees’ performance appraisal and reward programs to ensure they ultimately re-enforce culture that supports customer satisfaction as a means of improving productivity. 

Further, this research has provided an important insight on the role of technological innovations in improving service delivery in the public service as well as providing vital input on ways of ensuring the public companies and civil service align themselves with the vision 2030 and more so justify their existence.

1.7 Scope Of Study

This study is structured to focus on an analysis of the influence of innovation on customers’ satisfaction in the electricity distribution industry of Nigeria. Hence, the study will be delimited to electricity distribution company, Enugu state.

1.8 Limitations of the study

The researcher encountered minor obstacles when conducting the study, as with any human endeavor. The significant constraint was the scarcity of literature on the subject due to the nature of the discourse, so the researcher incurred more financial expenses and spent more time sourcing for relevant materials, literature, or information and in the data collection process, which is why the researcher resorted to a limited choice of sample size. Furthermore, the researcher did this investigation alongside other academic activities. Furthermore, the sample size was limited because only a few respondents were chosen to answer the research instrument, therefore the results cannot be generalized to other secondary schools outside the state. Despite the constraints encountered during the research, all elements were minimized in order to provide the best results and make the research effective.

1.9 Definition Of Terms

Customer satisfaction: defined as a measure of how organization’s total products perform in relation to a set of customer requirements.

Innovation: Is the introduction of a new or improved product, process, or service into the marketplace. As a process of turning opportunity into new ideas and putting these into widely used practice.