Strategies Adopted by Commercial Banks to Enhance Customer Retention in Kenya

Customer retention is increasingly being seen as an important managerial issue, especially in the context of a saturated market or lower growth of the number of new customers. The purpose of the study will be to assess the influence of strategic responses by commercial banks on customer retention in Kenya, the case of Kenya Commercial Bank Kisii branches. The data was coded to enable the responses to be grouped into various categories. Data collected in this study was quantitative. The quantitative data was analysed descriptively using Statistical Package for Social Statistics. The findings were presented by the use of frequency distribution tables. The study sought to establish the strategic responses adopted by commercial banks in Kenya to enhance customer retention. The study deduced that the level of service quality in the bank was high. The study established that technology adoption affected customer retention to a moderate extent. To a moderate extent, the bank had adopted new technologies on time, adoption of new technologies had improved the task completion rate among staff, adoption of information technologies had improved the bank’s agency banking management, adoption of information technology had increased the modes of service delivery in the bank and adoption of information technology had improved the portability of the bank’s services internationally. The study further established that product differentiation had been adopted by the banks to a moderate extent. To a moderate extent, the Banks had well-differentiated financial products from other banks; the bank had a well-differentiated market segment from other banks; The Banks had unique financial products for their customers and financial product differentiation has allowed the bank to position itself better on the market. The study concluded that customer relationship management strategy had affected customer retention. Commercial banks had created a platform to manage interactions; the interaction system with customers had improved customer satisfaction levels; the interaction system with customers had reduced the number of customer complaints; and the interaction system with customers had enabled the banks to learn the expectations and needs of its customers. From the findings, it was evident that customer relationship management had affected customer retention; thus, the study recommends that commercial banks should improve customer satisfaction, interaction with customers and systems to know their needs. Technology adoption, commercial banks should adopt new information technologies which would meet customer needs and improve efficiency in the banking industry in Kenya.