Lifetime value and operational performance in the kenyan banking industry
Olonde, Omolo B
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The banking industry in Kenya is very competitive with extensive customer base. Banks are under tremendous pressure to grow in various aspects such as profitability, customer base, asset base and others This study was conducted within the Kenyan commercial banks and investigated value creation and operational performance in relation to the banks‟ profitability. The literature studies included herein are on value creation process and how it influences value perception, customer relationship and profitability, and lifetime value in relation to operational performance. The Regression analysis findings showed that as the implementation of value creation process increases the profitability of the bank reduced, also as banks enhance the strategy of customer lifetime value their profitability reduces. This shows that banks should not be discriminative in their value provision to customers. The study differs with other findings suggesting that banks need to know the value of each customer and treat them based on such values.