Strategies Adopted By Commercial Banks for Customer Retention in Laikipia County, Kenya
Catherine, Muriithi W.
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Local studies done on customer retention in Kenya have not focused on strategies adopted to enhance customer retention in commercial banks and none of these studies sought to find out how relevant strategies can be used to enhance customer retention with bias to the commercial banks in Laikipia County. The main objective of this study was to find out the strategies adopted by commercial banks for customer retention in Laikipia County, Kenya. The specific objectives were to examine the strategies used for customer retention, determining the effects of customer defection on customer retention in the banking sector and to establish how customer relationship management influences customer retention in the banking sector. The target population of the study was the customers and staff of three commercial banks in Nyahururu (Cooperative Bank, Kenya Commercial Bank and the Barclays Bank). The customer base of the branches is forty six thousand customers. Random sampling was employed to identify the sample for the customers while purposive sampling was used to establish the sample of the staff. A sample size of 75 customers and 15 staff was obtained. Secondary data was obtained from the websites and other relevant publications and journals while primary data was collected using self-administered structured questionnaires. The study used external validity. Descriptive and inferential statistics was used to analyze the data. The statistical package for social sciences (SPSS) was used for this analysis and information presented by use of bar charts, graphs and pie charts. Study revealed that ease of technology was the strongest contributor to the retention of customers in the banks, while excess time waiting to be served was a significant contributor to defection of customers. The study revealed that customers prefer simple and easy to use technology. It also revealed that banks don't reward customers' for loyalty, the loyalty clubs are weak, and banks don't take initiative to call up customers with inactive or less active accounts while regular communication with loyal customers was weak. The study further revealed that banks are able to handle customers well at entry but this treatment wanes with time, the system of addressing customer issues could be there but customers are either not aware about it or it does not address their issues comprehensively. The study recommends that commercial banks should ensure that they offer quick and efficient services in order to retain customers. They should ensure the technology they use is user friendly and should strengthen customer loyalty plans including calling up customers whose accounts are inactive or less active. In addition, they should ensure they are more open in communicating with loyal customers and should be consistent in the way they handle customer's right from recruitment. Customers' issues should be handled comprehensively while banks' environment should be more open for customers to communicate with management. Banks should also make loyal customers feel special.