Strategic Responses Adopted by Commercial Banks in Kenya to Enhance Customer Retention
Abstract
Strategic responses can be seen as the matching of the activities of an organization to the
environment in which it operates. A strategic response affects the long term direction of
the organization and requires large amounts of resources. Customer retention is an
important aspect of any organization because of its continued effect on the financial
performance of organizations. The study sought to determine strategic responses adopted
by commercial banks in Kenya to enhance customer retention. To achieve this, the study
was guided by the following objectives, first to determine the strategies adopted by
commercial banks to enhance customer retention in Kenya and secondly to assess the
effectiveness of the strategies adopted in enhancing customer retention. The study used
cross-sectional survey design to enhance a systematic description that was accurate, valid
and reliable as possible regarding the strategic responses adopted to enhance customer
retention by commercial banks in Kenya. The population of the study was 44 which
comprised of 43 commercial bank and one Mortgage Company. The study used both
primary and secondary data; primary data was collected using a questionnaire. Secondary
data was collected from published magazines an annual reports from both the banks and
the regulator-CBK. The data was analyzed using descriptive statistics. The study
conducted multiple regression analysis and correlation analysis to establish the extent to
which the strategies adopted influence customer retention among commercial banks in
Kenya. The study established that banks had adopted strategic responses to enhance
customer retention, some of the strategies adopted were; relationship management,
technology adoption, service quality, service recovery and product differentiation.
Technology adoption had improved task completion rate among staff. Relationship
management strategy had affected customer retention creating a platform to manage
interactions; the interaction system with customers had improved customer satisfaction
levels. The study recommends that commercial banks should adopt new information
technologies which would meet the customer needs and improve efficiency in the
banking industry in Kenya and that commercial banks should put up mechanisms to solve
customer dissatisfaction issues, customer feedback, customer complaints and gets back to
the client affected by poor service.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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