ASSESSING THE EFFECT OF CUSTOMER RETENTION [A CASE STUDY OF STANBIC BANK KUMASI]

Department: BUSINESS STUDIES

Request on WhatsApp

Instant Download

Code No: 482594

₦5,000.00

ABSTRACT


Customer retention has become important with the proliferation of banks. Customers of late are seen hopping from one bank to the other depending on the kind of services offered. The problems envisaged as a result of loss of customers service are damage to corporate image, low profitability, and loss of competitive edge, etc. This study was therefore designed to assess the effects of customer retention using Stanbic bank Kumasi as a case study. The study aimed at examining customer retention strategies of the  branch and customers’ perception of quality at the branch. 

A sample size of 201 respondents was chosen for the study. Data was obtained through the use of questioning and interview session. Data presentation and discussion were supported with line graphs and tables. The study revealed that Stanbic Bank Kumasi has established customer retention strategies as evidenced by the response rate. As the study found, these strategies included ‘Timely service delivery’, ‘Effective handling of complaints’, ‘customer acknowledgement’, and ‘reliable technology such as ATM service. 
On the average, most customers were satisfied with the bank’s strategies and general banking system. Results pointed to a reliability of service delivery at the branch although there were complaints of long waiting time sometimes. The study generally found that the bank is responsive to the customer’s needs and that customer assurance is embedded in the bank’s service delivery. The study recommended the need for the bank to know the demands of the customers in relation to the service they provide .Again, the bank should focus on the reliability issues that may be overcome by training the employees.
 

CHAPTER 1


GENERAL INTRODUCTION AND CONTENT

1.0 Introduction

This chapter presents a background to the study which is an assessmentof the effects of customer service strategies on customer retention in the banking industry using Stanbic Bank Kumasi as a case study.Objectives of the study as well as the statement of problem are clearly stated in this chapter. The chapter further describes the scope of the study, methodology used as well as a justification and organisation of the study.


1.1 Background to the study

Corporations who understand the importance of, and do not underestimate customer service and satisfaction have a strong starting point in gaining competitive advantage and have major profits to collect (Bazan, 1998).There is a strong relationship between customer satisfaction and loyalty (Horstmann, 1998). Customer satisfaction influences loyalty; the higher the level of customer satisfaction, the higher the level of loyalty. Customer satisfaction is the feeling a customer experiences when the customers’ expectations are met (Chaston, 1993) whilst loyalty is shown when a customer repeatedly turn to the same provider to get a service.


A business can in no point function without its customers and the financial losses and loss in reputation can be devastating for it when losing customers. When assessing the financial value of a life-long customer one can gain an insight in why every customer matter. The value varies heavily from industry to industry, often between several
 
thousands to hundreds of thousands of dollars. The cost of gaining a new customer is five times higher than keeping an existing one (Walsh et al 2009).


Customer satisfaction is not an element that businesses can put only semi-focus on. These instead demand an objective of complete focus on satisfying the customers from all employees and in every single step of operation in the business. However, in order to communicate this objective to the employees, the extent of the consequences from failure must be fully understood. (Bazan, 1998)


Financial institutions have realized the strategic importance of customer value and seemed to be continuously seeking innovative ways to enhance customer relationships through its various service strategies. As the offers of many financial services are very similar and slightly differentiable, loyal customers have a huge value, since they are likely to spend and buy more, spread positive word-of-mouth, resist competitors’ offers, wait for a product to become available and recommend the service provider to other potential customers.


Financial services in Ghana have experienced several changes over the last decades with a growing attention to customer needs. The role in the development of every economy by the financial sector cannot be overlooked. Banks as a matter of fact play an important role in boosting the performance of businesses in the economy. Banks are the principal supplier of credit in Ghana.In spite of their role, banks could not have done all these without customers.
 
This makes necessary the need to for a bank to be customer oriented in its everyday activities and relations with its customers so as to be able to retain them. The question however is to what extent has Stanbic Bank, Kumasi ensured a satisfied customer? What has been the effectiveness of their customer satisfaction strategies in term of customer perception? How has this affected customer retention? This study examines these issues as an attempt to contribute to effective customer satisfaction and retention in the banking industry of Ghana.


1.2 Statement of the Problem

Over the last decade, banks have undergone many changes as mergers and acquisitions, and regulatory changes shape the industry into one that provides more than just the traditional deposit and loan products. As banks continue to provide an increasing number of financial services and products, they face the challenge of integrating these disparate systems into a coherent, efficient infrastructure, while delivering the highest level of customer service and convenience without exposing their customers to the bank's internal system integration problems.


While there is existing research about customer service in the banking industry around the world, there are no clear conclusions as to the most important customer service dimensions and strategies for satisfying bank customers in order to retain them. As a result of the proliferation of banks, customers of late are seen hopping from one bank to the other depending on the kind of services offered. The current mobility crisis has been due to poor service which eventually put customers off. The problems envisaged as a
 
result of poor customer service are damage to corporate image, low profitability, lost of customers (both existing and potential), loss of competitive edge, high cost in attracting customers, bad mouthing and legal implications. A bank therefore has to see to the effect of its customer service strategies on customer satisfaction. It is as a contribution in this regard that this study examines the effect of customer service strategies on customer satisfaction and performance.

Departments