Effect of Innovation and Technology as a Strategy on Customer Retention at the Equity Bank Kenya Limited

Abstract

Innovation and technology strategy in today’s organizations is paramount to the successful and profitable services delivery in those organizations and enhancement of customer retention. The aim of this study was to establish the effect of innovation and technology strategy on customer retention at Equity bank Kenya Limited. The study was based on the disruptive innovation theory, resource-based theory and diffusion of innovation theory. The research design was a case study which used primary data. The research instrument used to collect the data was an interview guide. The data obtained from the respondents was analyzed qualitatively by the use of content analysis. The study found that Equity Bank of Kenya Limited customers are well informed about the terms of services and products and the level of quality they expect to get from the bank. Innovation and technology strategy contributed to customer retention at the bank. Technology innovations had eased the delivery of service to the customers. In addition, the adoption of technology such as Equitel, mobile banking, internet banking and agency banking had helped the bank customers access the banks services irrespective of where they were located. The study also established product innovation helped the bank introduce new products to target new customers and give more options to the existing customers. Equity bank has been able to achieve customer retention through developing products that meets the customer’s needs. The study revealed the following products contributed to customer’s retention; vijana business loans, ordinary equity accounts, Fanikisha range products for women and Hunger Safety Net Programme. The study lastly established that marketing and process innovation had significantly contributed to the retention of customers at Equity bank. Process innovation streamlined the processes and procedures within the bank thus creating efficiency on loan applications, loan processing and accounts opening. Through process innovation the bank was able to remove procedures that were not relevant and thus able to serve the customer within a short period. Marketing innovation contributed to the bank reaching customers and non-customers all over the country. Through marketing innovations, the bank has been able to increase its customers number and build a strong brand and presence locally and internationally.