ABSTRACT
A customer is one of the significant assets for any profit-making firm, hence most profit making firms strive to acquire and retain as many customers as possible so as not to experience nose-diving of profits. While few existing researches have shown that product and or quality of service results in acquisition and retention of business customers, some few researchers with little empirical data also recommend that corporate image and customer loyalty affects acquisition and retention of existing customers. In business terms, retention of customers directly affects profitability of firms and acquiring new business customers is one of the most challenging tasks, thus most profit making firms invest a lot in customer retention strategies. This research therefore investigated the influence of customer loyalty programs, corporate image, service and product quality on customer retention in commercial Banks in Kenya. Explanatory survey design was used to explain hypothesized relationships, thus the influence of the independent variables (customer loyalty programs, corporate image, service quality, product quality) on customer retention (dependent variable). The study targeted 142 employees from 17 branches of Bank of Africa in Nairobi, Kenya. From a target population of 142 respondents, a sample size of 105 was calculated as per Taro Yamane’s proportional sampling technique formula; from which stratified sampling technique was applied to select 105 sampled employees of Bank of Africa in Nairobi, Kenya, to participate in the study. From 105 questionnaires that were dispatched to respondents for data collection, 97 respondents returned completely filled questionnaires representing a response rate of 92.45% which is very good for generalizability of research findings to a wider population. Both descriptive and inferential statistics showed that all conceptualized study variables (customer loyalty programs, corporate image, service and product quality) significantly influence customer retention (dependent variable). The study concludes that one, customer loyalty programs being rolled out by many commercial banks can significantly attract and retain loyal customers; two, that commercial bank’s corporate image determines its reputation in the public eyes, thus banks with a positive reputation can really attract and retain a number of bank customers. The study recommends that one, commercial banks should articulately utilize viable customer loyalty programs to engage loyal customers so as to attract and retain a strong customer base; two, commercial banks should carefully guard their public image to avoid huge reputational costs used to redeem and maintain impaired corporate image that consequently affects customer attraction and retention. Lastly, commercial banks should heavily invest in customer service quality to minimize customer switching behavior which has a bearing on customer retention.
