Influence of Relationship Marketing on Performance of Commercial Banks in Kenya

Abstract

The general objective of this study was to investigate the influence of relationship marketing on performance of commercial banks in Kenya. The study used a descriptive survey design which involves identifying the characteristics of an observed phenomenon or exploring possible correlations among two or more phenomena. The target population of this study was all the 43 banks in Kenya. The respondents (unit of analysis) were all the 43 heads of customer relationship management. Through purposive sampling the study reached 43 respondents in the commercial bank headquarters in Nairobi. The method of data collection was through questionnaires as the main data collection instrument. These was administered through drop and pick method to the respondents. The collected data was sorted according to different categories. Before processing the responses, the completed questionnaires were edited for completeness and consistency. The raw data from questionnaires was checked for completeness, errors, and coded for analysis using Statistical Package for Social Sciences (SPSS). Qualitative data was analyzed by use of content analysis. This study concludes that relationship managers and other staff in related departments understand that marketing as a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction, rather than a dominant focus on sales transactions. The study also concludes that relationship marketing is about winning the customer at every sales encounter and that there are various marketing practices adopted by the commercial banks sampled some of which are; that the management conducts regular polls and surveys of customer database to ensure they understand the currents challenges and needs of our market, that the bank strives to integrate customer feedback as much as possible in order to improve products and services. To a great extent, RM has enhanced customer satisfaction, repeat purchase, more customer referrals, shareholder value, and customer retention, an indication that retention marketing practices adopted had a positive impact towards brand trust, customer satisfaction, repeat purchase, more customer referrals, shareholder value, customer retention and customer loyalty, hence their overall performance. This study recommends that the management should come up with RM programs to ensure that employees are well trained on the extent of importance of RM practices adoption towards the performance of a commercial bank. Commercial banks should also continue adopting more and more and more modern RM practices or related activities for these have a great impact on customer satisfaction, brand trust, customer loyalty, customer Interaction and customer retention.