Sales Promotion and Customer’s Retention in Selected Foods and Beverages Companies in Lagos State Nigeria

Abstract

Organisations’ customers are the greatest asset they have to remain sustained and to retain these customers, effective sales promotion is required to push company’s products and services to various customers at satisfaction with view of making profit. However, some organisations especially those in consumable goods pay little attention to customers’ satisfaction by not imbibing effective sales promotion leading to poor sales performance and customers’ turnover. This study examines the effect of sales promotion on customer retention of selected food and beverages companies in Lagos, Nigeria. Survey research design was adopted for this study. The population of the study comprised of customers of Foods and Beverages (FandB) Companies estimated at 4,209,483 from the selected five local governments in Lagos State, Nigeria. Sample size of 1019 was derived via Krejcie and Morgan method and through simple random sampling technique. Data were elucidated from the respondents via research instrument. The Cronbach’s Alpha reliability co-efficient as well as the Kaiser-Meyer-Oklin (KMO) was established for both reliability and validity of the research instrument. Both descriptive and inferential statistics were adopted for analysis and the hypothesis was tested with simple linear regression. Result indicated that sales promotion had positive effect on customer retention of selected Foods and Beverages Companies in Lagos State Nigeria (R2=.367; t = 22.595; P<0.05). The study concludes that sales promotion has significant effect on customer retention and recommended that adequate promotional budget incentives should be considered by the F&B companies’ anagement to encourage effective sales promotion especially at special periods to boost sales and enhance customer retention. Quality food processing and safety measures should be enforced by the government through regulating agencies like National Foods and Drug Administration Council (NAFDAC), the Standards Organization of Nigeria (SON), and the Ministry of Health.