Strategic Responses Adopted By Commercial Banks In Kenya To Enhance Customer Retention
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.
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