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EFFECTS OF COMPETITIVE STRATEGIES ON CUSTOMER RETENTION IN THE BANKING INDUSTRY IN NIGERIA: A CASE OF FIRST BANK LIMITED
Abstract: Customer retention is essential for the success of service firms like bank. Th e quality of service has become an aspect of customer retention. Banks are facing a hyper-competitive market place, competitors are just a click away and consumers expect superior customer experience. Trust and satisfaction play different mediating roles i n the relationships between service attributes, customer retention, and cross buying. The study was guided by a general objective of determining the effects of competitive strategies that the banking sector mainly First bank -of Nigeria, West End branch employ to retain their customers. The specific objective was to establish the effects of mobile banking technology on customer retention at First bank of Nigeria,to establish the effects of advertising that influence customer retention at First Bank of Nigeria,to establish the effects of turnaround time on customer service and to establish the effects of costing of products on customer retention at First Bank of Nigeria. The Relationship Marketing theory richly guided this study in understanding the long term value of customer relationships and satisfactions. Other theories such as the disruption theory of innovation helped understand the technology variable, the push pull strategy anchors the promotion mix strategy while customer service theory helped understand the customer service variable towards retaining customers in First bank. This study was conducted through a census case study of First Bank of Nigeria West End branch whose population was 32 employees through the administration of questionnaires aimed at collecting quantitative data. Modes of advertising used were online, mainstream, social media, billboards, print media, offers and incentives. The most preferred was online at 84.6% followed by print media and mainstream at an equal measure of 42.3%. The model used to describe the relationship between the dependent and the independent variable was of good fit with a p-value of 0.002 and a Fisher’s test value of 5.831. Results further found that 65.3% of the four independent variables affected the customer retention. Advertising strategy had the highest coefficient of relationship to the customer retention at 0.71 followed by mobile banking technology at 0.377. Costing of products came third and turnaround time on customer service fourth with coefficients of 0.329 and 0.278 respectively. The study recommended that First Bank should enforce the banking agencies across the country as well as coming up with policies that are not multi-nationally founded but those that fit the Nigerian market.
Keyword: Customer retention, Customer service