Assessment of the SME customer retention strategies at Stanbic bank Uganda ltd.

Abstract

Customer retention is an important component of banking strategy in today’s increasingly competitive environment. The purpose of the study is to assess the SME customer retention strategies at Stanbic Bank Uganda Ltd. The objective of the study includes, to identify the existing SME customer retention strategies at Stanbic Bank Uganda limited (SBU); to recognize challenges and lapses in the SME customer retention strategies at SBU and to propose ways to improve SME customer retention strategies at SBU. The study focused on the customer retention strategies of customer relationship management, service quality, loyalty rewards and switching barriers. A descriptive research design was adopted, where quantitative data was collected with the aid of the structured self-administered questionnaires. The population of the study was 40 SME customers that have bank accounts domiciled at Stanbic bank Metro branch. Simple random sampling was used to select 36 respondent and data was analyzed using SPSS. The study found out that SBU has promotional activities that retain both new and old SME customers and that the bank tries to find out the customer’s needs and challenges in line with the customer relationship management strategy. The study also reveals that SBU offers free online banking services to the SME customers about the loyalty reward customer retention strategy. The study findings however also revealed that with reference to customer relationship strategy, the bank doesn’t work with SME customers while formulating their product or service offering. With regards to the service quality strategy, the study also indicates that the bank does not have accurate customer records and that relationship managers do not timely respond to SME customer queries. The study recommends that marketers for SBU products need to often collect more accurate data and transactional information from SME customers to serve them better to serve purpose to the service quality strategy of customer retention. It also recommends that SBU should involve SME customers while formulating new products and services offering for them to serve value to the customer retention strategy. Keywords: Customer Retention, Loyalty, Service Quality, SMEs Customers