Social customer relationship management, service quality and customer retention in the banking industry in Uganda; a case of UBA bank branches in Kampala district

Abstract

The study examined the effect of social customer relationship management and service quality dimensions on customer retention among commercial banks in Kampala district, A case study of UBA Uganda limited. Social customer relationship management and service quality in a dynamic and competitive business environment is crucial for commercial banks to achieve customer retention. However, today many banks are facing challenges in attracting and retaining customers. Therefore, the purpose of this study was to assess the effect of social customer relationship management and service quality on customer retention among commercial banks in Kampala district. The study employed a causal research design, descriptive research design and a cross-sectional research approach with a quantitative study approach which involved collecting of numerical data from 68 respondents from a sample of 73 staff at UBA Kampala branches using a survey questionnaire. This study was premised on the uses and gratifications theory (UGT), an approach that helps to understand how and why people actively seek specific media to satisfy their needs. The study showed a significant positive relationship between Social Customer Relationship management and Customer retention. The study also showed a significant a positive relationship between Service quality and Customer retention and finally the study showed that service quality has a positive significant moderating effect on the relationship between social customer relationship management and customer retention. The study, therefore, recommended that commercial banks can use social interactions, social media tools, and customer engagement to create commercial relationships, which will strengthen their relationship with their customers and lead to customer loyalty, which will be the foundation for the commercial bank's economic sustainability. In terms of service quality, the study recommended that commercial banks could use service quality dimensions such as dependability, empathy, assurance, and responsiveness to achieve customer retention. Furthermore, the study proposed that training and empowerment in technology can be included as parameters in boosting service quality, which affect the level of success and, thus, contribute to the adoption of Social Customer Relationship Management as strategies and great service quality. The study will provide the necessary knowledge and a better understanding of the role of social customer relationship management and service quality on customer retention.