Customer Interaction and Innovation Performance at Commercial Banks in Kenya

Abstract

In the present day business environment, customers expect firms to increasingly customize their products and services to meet their demands that keep on changing on the day-to-day basis. At the same time, firms need to produce superior products and understand the markets as a whole, but the ability of firms to orient themselves to interact successfully with their individual customers will differentiate them in the future. Advances in technology have resulted in increasing opportunities for interactions between firms and customers, between customers, and between firms. The research objective was to establish the customer interaction practices employed by Banks in Kenya and also determine relationship between innovation and a firms' financial performance. The research design adopted was descriptive research design. Data was collected using a questionnaire which consisted of both open and closed ended questions. The data collected was analyzed using descriptive statistics and also an inferential analysis involving a regression was performed. The study found out that customer involvement in the product development is important in the service industry in establishing a relationship that will be beneficial to the customer and the bank. A bankcustomer interaction can be accomplished by adopting different modes of interaction and the method chosen by a bank should be one that will lead to more customers being incorporated in the process and at the same time result in greater benefit in a firm's product development. In addition, a bank interaction facilitates customer connection and collaboration with each other through sharing of information which help create businesses among themselves. The findings from the research conclude that firms must adopt customer-based performance metrics and institute employee rewards and incentives based on these metrics, instead of using aggregate-level measures, such as sales and market share growth, to evaluate marketing performance.