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Determinants of Customer Retention in Kenyan Commercial Banks: A Case of KCB Bank Kenya Limited

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dc.contributor.author Chuani, Patricia W.
dc.date.accessioned 2017-11-02T15:03:08Z
dc.date.available 2017-11-02T15:03:08Z
dc.date.issued 2017
dc.identifier.uri http://erepo.usiu.ac.ke/11732/3411
dc.description A Research Project Report Submitted to the Chandaria School of Business in Partial Fulfillment of the Requirement for the Degree of Masters of Business Administration (MBA) en_US
dc.description.abstract The purpose of the study was to investigate various factors that determined customer retention rates at KCB Bank Kenya Limited (KCB). To achieve this, the study sought to analyze the effect of service quality levels on customer retention, to investigate the effect of service or product delivery channels on customer retention and finally examined the effect of service cost on customer retention rates at KCB. The study adopted a descriptive research design using a quantitative methodology using KCB as the case of the study. The population of the study was drawn from KCB customers with accounts that had been both active in May and June 2017. Using a stratified random sampling technique, customers were selected for use in the study. Data was collected using a questionnaire that was personally administered by the researcher for ease of data collection and for purposes of explaining contents of the questionnaire to customers. Data collected was edited and coded in SmartPLS 2.0 and SPSS vs. 23 for analysis using descriptive statistics such as means, modes, minimums, maximums and frequency distributions. Analyzed data was presented using tables and figures. Key findings of this study revealed that most of KCB customers perceived customer service quality levels to be good. Consequently this enhanced the bank’s customer retention rates. It was also viewed that the bank boasted of customer responsive products and services. The use of technology in service delivery was also popular amongst customers. A large majority of customers expressed that they enjoyed a good relationship with the bank; the bank was reliable, staff friendly and helpful. The relationship between the bank and customers was also key in improving customer retention rates. Distribution channels had a positive relationship with customer retention rates. The availability of multiple product distribution channels improved customer retention rates. The study revealed that staff at branches were friendly, the use and accessibility of technologies such as mobile phones, ATMs and the internet further increased retention. Others factors that enhanced retention include faster customer service delivery at branches as well as neat branches, customer friendly and knowledgeable employees. The cost of services is also a major significant factor influencing customer retention at KCB. Customers perceived charges at KCB to be average and fair. The findings show that overall customers incurred average costs in accessing banking services and products at KCB. Nevertheless, customers also significantly opined that the queues at KCB are very long which leads to them wasting a lot of time, and that KCB charges to access services via platforms such mobile phone are too high. The findings on retention revealed that a majority of customers are likely to say positive things about KCB to other people and recommend KCB to someone who seeks their advice. This study concluded that there exists a positive relationship between the levels of customer service and customer retention rates. The higher the customer service quality levels the higher the retention rate for KCB customers. The study concluded that use of technology in delivery of banking products and services enhances customer retention rates. The technologies in use include use of mobile telephony, internet banking, automated teller machines (ATM) and Point of Sale (POS) machines. While technology use in service delivery is key, the use of branches still remains vital for customer service delivery. This study recommended that KCB should continually improve its customer service levels. This can be done through training of employees to be fast, knowledgeable and friendly to customers. In addition, the study recommended that KCB continually invests in modern, new and innovative platforms to deliver banking products and services; multichannel delivery of services and products to enhance customer retention rates. This study recommended that substantial customer awareness and education campaigns be launched on the use of Mtaani agents. Finally, KCB should put in place strategies to reduce long queues in branches, initiatives which have already commenced by implementing queuing systems. en_US
dc.language.iso en en_US
dc.publisher United States International University - Africa en_US
dc.subject Customer Retention en_US
dc.subject Kenyan Commercial Banks en_US
dc.subject KCB Bank Kenya Limited en_US
dc.title Determinants of Customer Retention in Kenyan Commercial Banks: A Case of KCB Bank Kenya Limited en_US
dc.type Thesis en_US


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