The role of individual relationship marketing factors in influencing customer retention among microfinance institutions in Kenya

Abstract

Organizations seeking a competitive advantage are increasingly embracing relationship marketing programs to manage customer relationships more efficiently. However, despite the deployment of such relationship management programs, customer retention continues to be the greatest challenge facing many organizations. This paper argues that relationship marketing factors - trust, commitment, strong bonds, communication, shared values and keeping promises - each plays a unique role in influencing customer retention, however, the nature of the influence of these individual factors on customer retention moreover in a developing market context has not been empirically investigated much. Relying on social exchange theory and relational market behavior theory, this study sought to determine the relationship between these relational factors and customer retention. Data were collected among 492 customers of Kenya's microfinance sector, using a structured self-administered questionnaire. The association between individual relationship marketing factors and customer retention was tested through simple linear regression analysis. Results showed that among the six relational factors, communication and shared values were the most significant. The study makes a theoretical contribution to the relationship marketing knowledge base by providing empirical evidence on the role of individual relationship marketing factors in predicting customer retention. Marketing practitioners should develop relationship management programs that promote communication effectiveness and shared values.

Relationship Marketing Strategies on Customer Retention in the Postal Corporation of Kenya, Nairobi Region

“…Customer retention is a model used by businesses to decrease the frequency of customer shifting and perhaps maintain them for a longer period or forever (Rao & Abegaz, 2017). This is also consented by (Nyongesa , Kibera & Kiraka, 2020;Anne & Nyongesa, 2018). Retention goal is to maintain a robust customer database and stop defections to competitors for substitutes brand or service (Komalasari & Budiman, 2018).…”

“…In developing economies like Kenya, organisations are trying to bring on board new customer as well as keeping them to achieve long term sustainability due to challenges they face of poor management and increase government regulations (Nyongesa, Kibera & Kiraka, 2020). According to Agumba , Kirui and Gudda ( 2017), Kenya mobile network providers are struggling to keep their customers due to tight competition they are experiencing in the market.…”

CSR Communication Matters! An Examination of CSR, Organisational Pride, and Task-Related Pro-Environmental Behaviour Nexus

“…The analysis of the role of employee perceptions is vital for CSR initiatives, and taking a human resource perspective is important. Moreover, the need to examine conditional factors in CSR and pride association is missing from the literature [18]. Much of the past focus was on communicating CSR initiatives to external stakeholders instead of internal ones [19].…”