Customer Retention Strategies Used by Barclays Bank of Kenya Limited in Its International Operations

Abstract

Banks need strategies to acquire customers and then understand their needs and behaviours before they can meet with their needs in order to retain them. Customer acquisition, as well as customer retention are noted to be the main issues facing the industry today as a result of restructuring of the retail banking industry which has been characterized by retail internationalization, new discoveries of technology, fierce and ever increasing competition, economic uncertainties (economic recession) and deregulation and regulations. The objective of this study was to determine the customer retention strategies used by Barclays Bank of Kenya in its international operations. This study was conducted through a case research design. Primary data sources were used in this study where data was obtained through interactive interviews. The nature of data collected was qualitative and was therefore analyzed using content analysis technique. Through content analysis, responses from different respondents were compared and summarized according to the objectives of the study. The study found out that service quality at Barclays bank is high, because the bank consistently delivers higher quality service than its competitors. The key to managing customer satisfaction in Barclays is the measurement systems and the effective interpretation on the feedback that the customers give to the bank. The factors that affect customer satisfaction in Barclays bank were found to be; customers individual attention, the behavior of employees instilling confidence in customers, physical facilities with the bank should be appealing, no charges should be cut on outstation cheques, error free, online banking facilities among others. The study concludes that Barclays bank recognizes that quality service is a key to retaining their customers. They have therefore put in place stringent measures to enhance quality of Service within the Local and International Market. The study also concludes that Barclays bank handle different customer complaints and the service failures such as excessive/hidden fees were the most common complaints the bank handles, unfavorable bank policies (e.g. granting loans) among others. To counter this bank has high service recovery strategies such as not arguing with complaining customers, received the best score, acting fast in resolving customer problems. Barclays Bank achieves effective product strategy by identifying the target customers, differentiates them into groups, interacts with each customer group, and provides customized products and solutions in a cost-effective manner. Other strategies employed by the bank to achieve good customer retention are Promotion mix, which includes advertising, publicity, sales promotion, word-of–mouth promotion, personal selling and telemarketing. Interest rates on loans, innovation and technological use, base rates and the age of the banks, minimizing attrition, reviewing, attrition numbers, unfunded accounts, and review of key processes / procedures to make them more effective and introduction of loyalty /reward program for existing customers. The study recommends that to enhance quality of service within the local and international market the bank should formulate and implement measures to ensure that the bank meets the needs and expectations of customers. The study also recommends that Barclays bank should look at products and pricing based upon a total customer view and respond to the value that customers bring to the bank across the spectrum of rates, fees, features and services to improve product mix strategy to enhance customer retention.