The Relationship Between Customer Retention Strategies and Organizational Performance at Barclays Bank of Kenya Limited

Abstract

According to Ahmad and Buttle (2001), customer retention is the maintenance of continuous trading relationships with customers over the long term. In an increasingly dynamic and information-driven environment, the quest by business leaders and management researchers for performance measures which reflect competitive productivity strategies such as customer retention strategies have been adopted to enhance performance. The Kenyan banking industry is facing many challenges including cut-throat competition among each other and CBK strict regulations especially on minimum cash deposits, the rule dictating maximum interest rates on amounts borrowed, as well as floor rates. Other challenges include serving more educated and discerning customers, technological innovations, globalisation, and encroachment into banking services by mobile phone providers in money transfer and utility bill payment services. Banks therefore have a huge task of employing effective strategies to remain in profitable operations. Looking at the above empirical studies it is clear to note that the researcher did not get a research conducted to find out the relationship between customer retention strategies and performance specially targeting Barclays Bank of Kenya. The study was anchored on Customer Service theory and product life cycle theory. This research adopted a case study design .primary data on customer retention strategies and organizational performance at Barclays Bank of Kenya was obtained through in-depth interviews using interview guide. Content analysis was used to analyze the data collected.The study focused on the senior marketing manager, customer lifecycle manager, customer relations manager, head of customer service and products manager at Barclays Bank Headquarters in Nairobi because they are the one that deal with customers relations matters and therefore deemed conversant with the customers‟ relationships strategies adopted by the bank. Therefore the total population of this study comprised 5 senior managers of Barclays bank in Nairobi.The study established that there was a positive relationship between customer relationship marketing and market share growth explained by customer relationship marketing. The study also concludes that there was positive, moderate relationship between customer communication and market share growth. The study recommends that customer retention strategies should be enhanced in commercial banks in order to increase market share growth. It is also recommended that commercial banks should expand their market share through customer relationship marketing and customer communication. It is also recommended that there should be strong emphasis on the mutual relationship between commercial banks and bank customers as this would minimize customer switch and defections.