The Adoption of Customer Relationship Management System by Commercial Banks in Kenya

Abstract

With the increasing competition in the service industry there is need for every service oriented firm to ensure that they have a competitive advantage over other firms. This revolves around ensuring that customers are retained and not lost to other firms. To be able to attain this objective CRM system was developed. CRM system is the most innovative process to create loyalty by maintaining a long term relationships of trust between customers and organization. It is a broadly recognized, widely-implemented strategy for managing and nurturing a company's interactions with customers and sales prospects. However, the adoption of CRM system in Kenyan bank has been slow despite the advantages associated to the adoption of CRM system. This study therefore aimed at determining the factors that affect the adoption of CRM strategies in Kenyan banks. The specific objectives included identifying the extent of adoption of CRM systems among Kenyan banks; benefits; challenges; and factors affecting the adoption of CRM systems in banks in Kenya. Cross sectional research design was used to carry out the study. Respondents and participants for the study included employees from frontier, emerging and developed banks in Kenya. Purposive sampling method was used to select the participants and the respondents and interviews or questionnaire administered to collect data. The data was then analyzed using SPSS (Statistical Package for Social Scientists) software and MS Excel 2007. From the findings respondents unanimously agreed that the CRM system helped banks to understand their customers' demography and analyzed loan performance with the highest score of 84.8%. Additionally Adoption of CRM was reported to ensure personalized attention is provided by the bank to the customers and enabled the bank to conduct risk analysis and increase customer service effectiveness. Furthermore adoption of CRM was reported to ensure professional behavior of the employees of the bank and developed and improved new products for the customers. On the other hand respondents strongly agreed that chances of CRM failure are possible. Other CRM adoption challenges highly rated included need for further training of IT staff to efficiently operate the CRM systems and that CRM systems require continuous maintenance, information updating and system upgrading. The study recommends that before embarking on CRM, it is necessary to delineate CRM and technology. The researcher also recommends that through CRM systems; the banks should recognize the diversity of experience and needs of different customers and develop the propositions both relevant and practical, but not too complex.