Customer Retention Practices A Case of Cal Bank

CHAPTER ONE
INTRODUCTION 1.1 BACKGROUND Over the past few years, the increasing number of banks in the country has been tremendous. Ghanas financial sector is dominated by foreign banks that emerged after the liberalization of the financial market over the last eight years. The Bank of Ghana, formed in 1957, as it provides the regulatory framework within which all banks within the country operate, has licensed a total of twenty-seven banks as at June 2009. (www.bankofghana.com). Ghana has 1.2 million bank account holders out of a population of 23 million (a ratio of 5%) compared to Nigerias 23 million banks accounts holders among a population of 140 (more than 16%). With 27 banks, Ghana is said to be having three more banks than Nigeria (The New Crusading Guide, 2009). So many banks in such a limited territory as Ghana have brought about severe competition in this sector. The dire need for strategic customer acquisition and retention strategies can therefore not be disregarded. The banking industry is highly competitive, with banks not only competing among each other; but also with non-banks and other financial institutions (Hull, 2002). Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of relationship marketing. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in todays ever-increasing competitive banking environment. Clearly, there are compelling arguments for bank management to carefully consider the factors that might increase customer retention rates. Several studies have emphasised the significance of
customer retention in the banking industry (see Dawkins and Reichheld, 1990; Marple and Zimmerman, 1999). However, there has been little effort to investigate factors that might lead to customer retention. Most of the published research has focused on the impact of individual constructs, without attempting to link them in a model to further explore or explain retention. If retention criteria are not well managed, customers might still leave their banks, no matter how hard bankers try to retain them. This paper examines the impact of several retention-relevant constructs that influence consumers decisions to stay with or leave their firms; with specific reference to CAL Bank. These constructs were rated by customers as having strong effects on loyalty to their banks.
1.2 PROBLEM STATEMENT As the cost of acquiring new customers and accounts increases, banks are paying more attention to the number of customers and accounts they are losing. Therefore a firm which refuses to install proper customer retention practices experiences major crises in managing its cost in its endeavour. The true health of any business is therefore closely related to how well it acquires and retains customers. The metrics for these two functions will tell you much more about the long-term outlook of the company than a yearly financial filing. (Benchmark Consulting International, 2009; Vindicia Inc., 2009) According to Bowen and Chen (2001), in the course of retaining customers, having satisfied customers is not enough, there has to be extremely satisfied customers. Satisfaction influences repurchase intentions whereas dissatisfaction has been seen as a primary reason for customer defection or discontinuation of purchase (La Barbera and Mazursky 2000). The consequences of not satisfying customers can be severe; this is because customer satisfaction must lead to customer loyalty and retention. Bansal and Gupta (2001): Building customer loyalty is not a choice any longer with businesses: its the only way of building sustainable competitive advantage. Apart from the high costs and maximum satisfaction inhibiting banks and other firms from retaining customers, we also identified that another key issue; the complicated nature of the whole idea of customer retention. Customer retention practices need in-depth knowledge and understanding of how consumers behave. One needs to understand the attitudes and behaviours of customers. The challenges of keeping customers include determining who should be retained
and how to retain them. Retaining the wrong customer will just lead to piling cost and no increase in the profitability of the firm. Building loyalty with key customers has become a core marketing objective shared by key players in all industries catering to business customers. Customer retention is an important element of strategies in todays increasingly competitive economic environment. Employee performance and professionalism, willingness to solve problems, friendliness, communication skills, and selling skills, among others must be employed. Furthermore, customer defection can also be reduced through adjustments in a banks rates, policies and branch locations (Leeds, 1992).
1.3 OBJECTIVES OF THE STUDY The study seeks to achieve some objectives which are: 1. To make obvious how important it is to retain customers and the benefits attached to it. 2. Identify the procedures by which customer retention practices are performed in CAL Bank. 3. To establish the relationship between customer retention on one hand and the success of CAL Bank and profitability in general on the other hand. 4. Identify some basic things that make customers loyal to CAL Bank. 5. Recommend to enterprises, especially banks, to build up customer retention strategies. The overall study aims at encouraging firms to adopt and institutionalize effective and efficient customer retention practices to their overall success and profitability.
1.4 TEST QUESTIONS Our main goal in conducting this research was to evaluate how customer retention is done and its corresponding business outcomes. The processes which are the focus of our research are customer retention planning processes in CAL Bank. From the literature above we derived the following test questions; Q1. Is customer retention a key factor that has a positive impact directed at the overall success and profitability of CAL Bank? Q2. Do companies that excel at customer retention have a strategy put in place? Q3. Do companies that excel at customer retention have a well-structured process for handling customer complaints? Q4. Do strategically positioned firms, in terms of customer retention, gain competitive advantage with respect to holding its market share and also have the potential to increase its market share?
1.5 SIGNIFICANCE OF THE STUDY In today's competitive business environment, customer retention is becoming more and more of a challenge. Companies can no longer afford to become complacent in their marketing efforts directed at existing customers, particularly with the cost of new customer acquisition increasing. An essential way to hold your ground against the competition is by keeping existing customers happy and continuing to increase sales to this group. Marketing activities directed at your existing customers are essential to keeping in the forefront of their minds. This also allows you to keep them apprised of new product offering and special events. When marketing to existing customers is neglected, typically you will see an "out of sight, out of mind" result. If your customers are then targeted by your competition attempting to acquire their own new customers they feel no sense of loyalty to you or your company. (Stephanie Baldwin, 2007) Moreover, every company, even the best ones, loose customers. To stay at the status quo, or even grow the business you need a steady supply of new customers to replace the old ones. Now, if your business is not good at customer retention, which is the ability to keep customers, your company would be losing a lot of customers. As a result, you would need to replace them with a lot of new customers, before you can continue to grow. According to Erwin (2008); this is bad for business for two reasons: On average, it costs 5 times as much to get a new customers than to keep an existing ones. Customers, who have bought from you before, are much more likely to buy from you again.
Yet there are so many companies that spend millions and millions to get new customers, and next to nothing to keep them.
That every individual sees their bank as a most important service provider is not difficult to understand. Considering the relationship involves the management of their hard-earned money, it is understandable people will be especially critical when deciding upon a bank or deciding to remain with one. Accordingly, banking customer retention is more of a challenge than it would be in different industries. In addition, the current economic downturn is heightening concerns and further threatening customer loyalty.
Customers naturally gain a sense of security placing their money in an institution they believe shares their interests, and the nature of their precious finances means they need to know those interests are being catered for. Understanding that their business is valued plays a role in this, as many consumers view bank products and services primarily as commodities. Promising to safeguard and grow peoples finances is only a portion of what a bank must offer to promote bank customer retention.
Banking industry statistics have made it clear that recruiting new banking customers is a considerably larger cost to the banks as compared to retaining existing ones. On average, any bank will lose 20% of its customer base every year, and yet it is suggested that by retaining as little as five per cent of that base could increase profitability by up to twice their current figure. With this statistic, any doubts regarding the value of banking customer retention should be thoroughly dispelled. (Hubpages Inc., 2010) This perspective carries even more legitimacy when you consider the fact that banks spend a significant bulk of their marketing budget on an acquisition cost per customer. This average expense to bring a customer into their business stable is decidedly higher than the cost a non-
financial services business would be subject to for the same recruiting purpose. Industry experts claim banks struggle with recovering acquisition costs as it is, and a high customer defection rate makes that recovery even more challenging. As mentioned, the current economic slowdown is adding increased severity to these concerns. Insiders concur that the prospects for organic growth in banking, are waning like never before, and in excess of 10 million financial customers are switching institutions each year. The truth is there for all to see banks must adopt strategies for effective bank customer retention. (Hubpages Inc, 2010)
1.6 SCOPE OF THE STUDY Cal Bank Ghana Limited was selected for the study, and this was done based on merit. We have to emphasize the main reason for selecting Cal Bank is because they were recently awarded Chartered Institute of Marketing Ghana (CIMG) best bank of the year. Notably, some of the ground-principles the CIMG bases its awards on encompass excellent customer retention practices.
The researchers will focus on CAL Bank Ghana Limited and the tools they use to communicate with their consumers; paying particular attention to their customer retention practices. Various integrated marketing communication techniques used by CAL Bank to send a clear and consistent message to its customers in the course of acquiring and retaining them will also be accessed.
The main objective of the research is to ascertain the extent to which Cal Bank adopts proper customer retention practices in administering their daily business activities. It also seeks to assess whether their customer acquisition and retention practices can be standardized for other banks. The research study was based on both qualitative and quantitative data that gave us enough information to substantiate our conclusions and recommendations.
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1.7 CHAPTER DISPOSITION The study will be organized into five main chapters or divisions. Chapter one will discuss the background to the study, statement of the problem, the methodology, scope of the study as well as the significance of the study. Chapter two will place much premium on the research literature; what other practitioners have said and written concerning the impact on organisations in terms of customer satisfaction and profit in banks, as a result of the use of proper customer retention practices. Chapter three will expound on the methodology of the study. This section will look at or describe the data collection instruments, limitations, among others. Chapter four will provide a comprehensive discussion of the data analysis and interpretation. Chapter five will conclude the entire study. A summary of the work as well as the conclusion and findings will be discussed. Finally, recommendations may be given.
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CHAPTER TWO
LITERATURE REVIEW 2.1 INTRODUCTION The banking sector in Ghana is one of the most saturated industries. As explained in the background, there are too many banks operating in the confines of such a relatively small economy. The effect of this congestion is intense competition, technological advancement and demand for better service quality in the subsector ultimately because there are many banks appealing to a small number of people or customers. The need to address issues like the various customer retention practices utilized by different industries and the definition of service marketing has led us into a number of literatures on customer retention across many fields of business endeavour. Literature on financial service institutions and their customer retention practices has been made adamant because only a few institutions put into practice these concepts.
2.2 WHO IS A CUSTOMER? A customer can be described as the lifeline of every business. Often used interchangeably with customer, is consumer. Customers, however, are significantly different in various ways from consumers. Consumers refer to the final and ultimate users of a product or service. Consumers can therefore be an individual buying to consume, or a corporate body buying to reproduce or facilitate production. In general terms, a customer is a person or organization that a marketer believes will benefit from the goods and services offered by the marketers organization. As this definition suggests, a customer is not necessarily someone who is currently purchasing from the
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marketer. The requirements to become a customer include such issues as having a need for a product, possessing the financial means to buy, and having the authority to make a buying decision. In assessing customers in aspect of retention, customers may fall into one of three customer groups:
Existing Customers Consists of Customers who have purchased or otherwise used an
organizations goods or services, typically within a designated period of time. Such Customers are the most important of the three customer groups. They represent the best market for future sales, especially if they are satisfied with the relationship they presently have with the marketer. Getting these Existing Customers to purchase more is significantly less costly and less time consuming. If managed correctly, they are easy to reach with promotional appeals (an instance is emailing a special discount for new product).
Former Customers This group consists of those who formerly had relations with the
marketing organization typically through a previous purchase. However, the marketer no longer feels the customer is an Existing Customer either because they have not purchased from the marketer within a certain time frame or through other indications (e.g., a Former Customer just purchased a similar product from the marketers competitor). A Former Customer who felt they were not treated well by the marketer will be more difficult to persuade to buy again compared to a Former Customer who liked the marketer but decided to buy from someone else who had a similar product that was priced lower.
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Potential Customers The third category of customers includes those who are yet to
purchase but possess what the marketer believes are the requirements to eventually become Existing Customers. Locating Potential Customers is an on-going process for two reasons. First, Existing Customers may become Former Customers (e.g., decide to buy from a competitor) and, thus, must be replaced by new customers. Second, while we noted above that Existing Customers are the best source for future sales, it is new customers that are needed in order for a business to significantly expand. In order to realize stronger growth a company may seek to sell their products in other countries where Potential Customers may be quite high.
2.3 WHY CUSTOMER RETENTION? The purpose of a business is to create and keep customers. If a business successfully creates and keeps customers in a cost-effective way, it will make a profit while continuing to survive and thrive. If, for any reason, a business fails to attract or sustain a sufficient number of customers, it will experience losses. Too many losses will lead to the demise of the enterprise.
Todays customers are becoming increasingly sophisticated. They have become smarter, more price conscious, more demanding, less forgiving, and they are approached by many more competitors with equal or better offers. The challenge then to companies becomes the challenge of maintaining a long- term relationship with their clients in such a way that customers are retained not based on products alone but on the relationship with the organization. Every company knows it costs more to attract new customers than to retain them and repeated purchase
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from old customers is more profitable. Therefore customer retention has become the Holy Grail in all industries from banking to airlines to wireless and telecommunications. Undoubtedly, companies seeking to expand their profits and sales have to spend considerable time and resources searching for new customers. However, it is not enough to be skilful in attracting new customers; the companies must retain them and increase purchases from these customers. Thus, companies increasingly face the agonizing dilemma of trading- off the management of each service or customer event at minimum cost, with developing a long term relationship or partnering with a hopefully satisfied customer. Building a long term relationship should be balanced carefully with new customer acquisitions; thus striking a fair balance between the two. (Hinson- pp.106- 107) Retaining your customer base is critical to your success. If you do not give your customers some good reasons to stay, your competitors will give them a reason to leave. Customer retention and satisfaction drive profits. It is far less expensive to cultivate your existing customer base and sell more services to them than it is to seek new, single-transaction customers. Most surveys across industries show that keeping one existing customer is five to seven times more profitable than attracting one new one. It is often said that it can cost up to seven times more to acquire one new customer than to retain an existing one. But in the financial industry, the costs reach a whole new level: acquiring one new customer can exceed US$350. As a rule, of these, 20% will be very profitable, 20% will cost money to retain, and the middle 60% will pay for themselves while generating marginal revenue, according to Harvard Business Review (www.hbr.com).
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With statistics like these, a customer engagement and retention plan based on extensive data collection and analysis is imperative for the long-term health of companies in the financial industry.
Financial institutions must find a way to retain profitable customers, turn marginally unprofitable customers profitable, and reduce the marketing budget spent on the most costly customers. However, before firms can address these issues and take action they must closely monitor customer behaviour to develop insights that allow them to target the right customer segment with a relevant, compelling offer at a time when the customer is most open to receiving the message.
2.4 CUSTOMER RELATIONSHIP MANAGEMENT According to Storbacka, K., Strandvik, T. & Grnroos, C. (1994), relationship marketing has to do with establishing, maintaining and enhancing relationship with customers and other parties at a profit so that the objectives of the parties involved are met. This is done by mutual exchange of fulfilment of promises. In other words Glazer explains that, Customer Relationship Management (CRM) attempts to provide a strategic bridge between information technology and marketing strategies aimed at building long-term relationships and profitability. This requires "information-intensive strategies" (Ravi Dhar and Rashi Glazer, 2003).
CRM is a management approach that seeks to create, develop and enhance relationships with carefully targeted customers in order to maximize customer value, corporate profitability and
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shareholder value. CRM is primarily concerned with utilizing information technology to implement relationship marketing strategies (Payne, 1999, pp. 797 - 818). To get a better idea of CRM, Payne separated the common expressions of CRM into Relationship Marketing and Customer Management based on interviews with senior executives. As a result, "Relationship Marketing" was associated by the respondents with high-level strategic thinking about relationships with all key stakeholders. When describing "customer relationship management", managers used phrases describing the development of marketing strategies over the customer lifetime, such as understanding the customer base in total, understanding needs, attitudes, life stage, profitability and lifetime value. By contrast, "customer management" was seen by the majority of respondents as being more concerned with the tactical implementation of CRM, in particular using specific tools such as campaign management or call centre activities. According to Russ Lombardo Peak Sales Consulting (2002), CRM is a centralized database containing customer profiles for understanding customer requirements and satisfying their needs. It is not simply technology nor is it technology for technology sake. It is technology used to profile your customers so that you can better understand their requirements in order to satisfy their needs. Technology is the enabler of your business customer relationship management strategy.
CRM is a strategic approach concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. CRM unites the potential of IT and relationship marketing strategies to deliver profitable, long-term relationships. Importantly, CRM provides enhanced opportunities to use data and information both to understand customers and implement relationship marketing strategies better. This requires a cross-functional integration of people, operations, processes and marketing capabilities
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that is enabled through information, technology and applications". (Payne, A.F.T. and Frow, P., 1999)
Relationship marketing seeks to go beyond transactional to maintaining and enhancing on-going relationships or contacts with clients such as calling to ask how their day had been, whether or not the services rendered to them were up to standard etc. Research has shown that successful continuing relationship is characterized by trust and commitment [Morgan and Hunt (1994); Shemwell et. al., (1994)]. Morgan and Hunt identified five major precursors of bank relationship trust and commitment, relationship termination costs; relationship benefits; shared values; communication and opportunistic behaviours.
2.5 CUSTOMER RETENTION STRATEGIES AND PRACTICES
Customer retention is the act of implementing certain strategies which allows current customers to keep using the brand and potential customers to turn into regular customers. In order to sustain in the tough market competitions, businesses have to follow customer retention strategies right from the time they get a new customer till throughout the period the person uses the product. Customer retention is not just a matter of offering quality products, but also how the company gives proper services and creates a dependable goodwill in the market.
If customer satisfaction is focused on mainly, it inevitably contributes to customers being loyal to the product and brand. The following are some of the best practices that Stephen R. (2011) proposed.
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He begins that good customer retention strategies most importantly include techniques that exceed the expectations of customers, leading to utmost customer satisfaction. First of all, the seller should make it a point to provide the best customer service, be it to any type of customer. In order to generate loyalty in consumers regarding the brand, marketers and salesmen should create good personal relations with consumers.
Moreover, effective business communication would lead to healthy corporate relations. Customers tend to jump to other brands just because they do not receive the after sales service that they expected they would. For making a customer loyal, providing satisfactory after sales service is a must. If it is a technical appliance that is sold, the company should pay attention to customers complaints regarding improper functioning of the product and provide technical support as soon as possible.
Another good customer retention tip is to include contemporary business techniques such as offering memberships and frequent-buyer programs to regular consumers. These programs should offer heavy discount shopping to regular customers making them more loyal towards the product or service. In addition you also have the option of using technology as a method of giving customers what they expect. Companies can set up electronic order systems and email notifications regarding latest product offerings and deals. This would allow consumers to contact the company and carry out purchases conveniently.
The main key for customer retention is improving customer service and satisfaction. (Stephen Rampur, 2011)
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According to Bruce Temkin, a customer experience transformist and managing partner at Temkin Group, a Newton Mass.-based research and consulting firm, customer experience in the financial services means loyalty. Customers who have positive interactions with their financial providers are more likely to purchase additional products, less likely to move business away, and more likely to recommend the institution to their friends and families.
To begin with, he suggested that there is the need to invest in flexibility. Customer needs change, and so do market conditions. Sometimes customer needs will require platforms that allow for easy changes to business rules and process flows. There had to be a continued investment in moving inflexible applications onto business process management platforms. Companies will put more emphasis on business intelligence tools, especially to analyse customer-facing activities.
You also need to put a premium on the usability of the technologies that you pick. This will drive the need for more formal usability testing in all IT projects. Companies will also want to invest more in customer insight tools making the collection, analysis and dissemination of customer insight an on-going process. Obviously, IT issues can cause major customer experience problems, but technology is not often the key driver. There are four key competencies that companies need [in order] to be good at customer experience: purposeful leadership, compelling brand values, employee engagement and customer connectedness. A company with good customer experience competencies can overcome technology shortfalls, while a company with poor competencies can mess up even the finest technology
Banks can totally customize the customer experience for individual segments. But that does not mean you need to design different experiences for every customer or customer group.
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Customer experience should be customized to meet your brand and business strategy. This means that companies need to have a good understanding of their brand values and their target customer segments.
(Genroe, 2010): The creation and implementation of financial institution customer retention strategies, including bank customer retention strategies is one of the core strengths of the Genroe organization. There are a range of strategies that can be implemented and we intend to summarize them based on a customer's position in the customer lifecycle. The lifecycle is shown below along with the value that different types of customers contribute to the business at different parts of the cycle.
Figure 2.1 The Customer Life Cycle
Source; Genroe organization (2010)
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New The single largest group of customer retention strategies that can be implemented in the new section of the customer lifecycle is customer on-boarding. Customer on-boarding is the process of bedding a customer into your organization and includes ensuring that their personal data is correct, that they understand the products they have purchased and how to quickly contact the organization.
Existing The best bank customer retention strategy for existing customers is to classify each type of customer (silent attrition, ideal and unhappy) and create appropriate initiatives to change their behaviour. For instance customers in silent attrition are those that have reduced or stopped using a product but where the account is still open. Examples for instance are credit card accounts with little or no spending. For these customers you must determine why they are no longer using your product and create initiatives to change their behaviour. Examples of Existing customer management programs include; Product design evolution Payment automation optimization Active customer complaints management High value relationship programs Low value relationship programs Local area marketing
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Exiting Customers that are Exiting are those customers that have started the process of moving their business to another company or are in the process of considering that move. The first step in creating bank customer retention strategies for Exiting customers is to identify which customers are in each camp. For customers in the process of moving their business you will need to understand the product drop cycle, i.e. the order in which customers drop your products before leaving. With this information you can create effective customer retention strategies to target those customers. One of the key programs that can be implemented in this phase is Save Teams.
Exited Generically, strategies that are aimed at recapturing customers that have left the organization are called Win-back strategies. This is the most expensive and lowest ROI place to try to implement your bank customer retention strategies. Mentally customers have already moved to another organization and it takes a large inducement to bring them back. If you do choose execute Win-back strategies then you will need to carefully manage the level of incentive that your staff can offer to customers. For instance you will need rules to tailor the incentive level to each specific customer in order to ensure that the level of inducement is not larger than the future business generated by that customer.
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2.6 CUSTOMER RETENTION AND FINANCIAL SERVICES Financial Services Institutions (FSIs) are once again focusing on retaining their existing customers, but with little success. Given a lack of clear metrics on what attrition is and no enterprise focus on the problem; FSIs are reactively rather than proactively trying to hold onto customers. To achieve success, FSIs should think more strategically about retention by baking it into every step of the customer life cycle: target, acquire, service, and develop. Smarter use of the technology tools available, revisiting processes to improve the customer experience, and ensuring the organizational culture supports retention are all ways to improve attrition rates. (Mary Pilecki, 2007). It is becoming more and more urgent for financial service institutions to retain customers for a number of reasons which include: Financial institutions face broader competition. Retailers like Wal-Mart Stores and Home are actively seeking banking licenses and can offer significant convenience to their customers, given their broad distribution networks and frequent buyer patterns. Service providers are developing savings account products like the MTN Mobile Money, Tigo Cash, Airtel Money by Airtel, and many other similar products. Monocline lenders, mortgage companies as well as life assurance companies are all coming up with products which are similar and even earn more interests than the ones in the banks are applying for thrift charters to expand their offerings.
Mergers and acquisitions cause customers to reassess loyalty. Mergers and acquisitions expand customer bases, but holding onto those new customers can be a significant challenge.
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The product and service changes can often be the catalyst to propel customers out of the inertia they have felt to go and find a new institution. Banks that have been actively acquiring are now recognizing the need to grow wallet share within their new customer base to help retain these customers.
Switching financial providers becomes easier. Banks look to online bill pay and broad customer relationships as ways to keep the customer sticky less likely to leave. But new processes and tools today are facilitating changing institutions. Investment firms obtain one or two signatures from their new clients, and then handle all the asset transfers from the prior company. Banks offer a process to initiate changing a payroll direct deposit directly, rather than having the customer do the work. Even online bill pay has become simpler to set up, with common payees already in a database, requiring the customer to just enter their account number with the vendor.
Most institutions are coming back to building strategies for retention after the tremendous focus on acquisition during the past years. But these strategies are often haphazard, yielding poor results. Even those institutions that are getting proactive about retention are not seeing successes. And this may be attributed to the fact that retention is being addressed as a project, rather than a guiding principle. As a result: There is no common definition or measurement for attrition. Tactics address products, not customers Staff members do not have timely, relevant offers to make. FSIs try to retain everyone, not just profitable customers.
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2.7 CUSTOMER RETENTION AND CUSTOMER SATISFACTION BenchMark Consulting International, Addressing the Challenges of Customer Retention: Given account acquisition costs, it seems prudent for those banks to develop formal customer retention programs. A formal customer retention program needs a vision, a strategy or objective (e.g., how the bank will build customer loyalty), and a tactical plan for success -- in that order. Customer dissatisfaction generally stems from three major sources: fees misunderstood, unexplained, poorly explained, too steep, etc. errors or perceived errors poor service
Customer retention strategies with respect to some functional areas Customer expectations Seek and act on customer feedback. Improve customer satisfaction by resolving errors immediately. Customers generally are more concerned with speedy resolution than the errors themselves.
Organization structure Design an organization to support the customer retention program and communicate the structure and rationale throughout the company. Hire and train employees eager to work with customers. Train employees how to bundle products. Train employees on the economics and importance of account retention. Train employees how to resolve problems effectively and allow them to resolve them at the customer touch point. Train employees to understand the impact of customers and how to turn them into opportunities. Ensure employees
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understand fee structures and how to communicate them effectively. Reward employees for retaining customers.
Processes Engineer processes that touch the customer. For example, shorten the cycle time for new accounts and monitor it closely to ensure a smooth setup. Ask customers what processes matter to them and engineer accordingly. Develop parameter-driven products to allow customization without creating exception processing.
Information Determine what information is needed, then capture it, analyse it, and use the analysed information. How is attrition measured? By number of accounts? By account type? Geographically? How does the closed account portfolio compare to the active account portfolio? How does customer attrition expense compare to account acquisition expense? Can account churn be isolated? Is there any value in losing some customers? Consider predictive modelling so branch bankers can identify customers likely to leave and take action.
Technology Identify technology requirements including integrating reporting or accounting applications with existing architecture and infrastructure. Customers expect that banks have a unified view of them across all channels.
Scorecard Set measurable objectives for each plan element and monitor them. Although metrics will be unique for each element, they will link to support the overall objective, e.g., employee performance. Focusing on a formal customer retention program may prove more
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efficient and effective for increasing revenue and deposits than account acquisition plans. At least focusing on improving service levels will attract and retain customers. Good service or perceived good service appears to be a major differentiator in the marketplace.
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CHAPTER THREE
METHODOLOGY 3.1 INTRODUCTION This chapter basically looks at how the fieldwork was conducted and the various data collection techniques employed to ascertain relevant data for the study. The methodology of this research work and any other research work for that matter is of absolute importance so as to ensure the replicability and generalization of the research results. It is also very essential to ensure the accuracy, reliability and validity of the study. The process of our methodology is therefore conventional, systematic, procedural and unbiased. The process further ensures the gathering of appropriate data and the careful employment of reliable statistical techniques in analysing the data in order to control possible statistical errors. Our methodology therefore is scientific.
3.2 RESEARCH STRATEGY The research study was based on both qualitative and quantitative data that gave us enough information to substantiate our conclusions and recommendations. The research aimed at the top, middle and lower level staffs perception on key areas of customer retention practices in the dayto-day operations of the bank. Rather few customers of CAL Bank were surveyed to answer questions establishing the degree to which the responses of the employees may be corroborated and effective. Furthermore we investigated the various ways and processes CAL Bank handles customer complaints, which we believe plays a very important role in retaining customers. Since the focus of the study was limited to CAL Bank, this approach was used to unearth relevant data
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from the bank in other to deduce issues largely affecting the bank, with regard to customer retention practices. Interviews were used to record some key information in relation to our study. We also used disguised observation as well, to enhance our analysis. A survey was conducted on a limited number of customers of the bank whilst employees of CAL Bank were given questionnaires to fill.
3.3 POPULATION OF THE STUDY This research was conducted using a sampling frame of a list of all employees and all individual and private enterprises of CAL Bank. With about four hundred and fifty (450) employees, CAL Bank has nine branches in Accra, four in the Ashanti Region, and three in the Western Region. With forty three per cent (43%) of total deposits made up of twenty largest depositors (2009: 49%), CAL Bank has over GH 250,305,000.00 in individual and private enterprise deposits. (CAL Bank Annual Report, 2010) Respondents for this study were drawn from a cross-section of both employees and customers of four (4) CAL Bank branches in the Greater Accra Region. Our selection was influenced by ease of accessibility, concentration of the branches of the bank in the capital, and the fact that the head office, located in Accra, was also included in the study. All of these factors and considerations helped us have a representative sample for our study.
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3.4 SAMPLE SIZE For the purpose of this study, a total sample of one hundred (100) customers and employees of CAL Bank Ghana was considered. Out of this figure eighty (80) were employees of the bank and the remaining twenty (20) were customers of the bank. Indebt interviews however, were held with the Marketing Manager and Customer Relationship Managers (CRM) of the Bank for our qualitative analysis of the study. Personal data of respondents such as gender, profession and bank service patronized were collected.
3.5 SAMPLING TECHNIQUES The judgemental sampling technique was used to select fifty (50) employees and eight (8) customers from the Independence Avenue (Head Office) branch of the bank; ten (10) employees and four (4) customers each from the Tema Harbour, Derby Avenue and Ring Road West branches of the bank. Respondents who accepted to be part of the study were considered to maintain a high level of informed consent.
3.6 SOURCES OF DATA Data used for the research was collected from both primary and secondary sources. Primary data was collected using questionnaires, observations, and interviews. The questionnaires were selfadministered to employees of the bank, interviews and personal observations were also used to gather primary data. Secondary data was obtained through online research, research papers and reports, working papers, documents, newsletters and other publications.
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3.7 QUESTIONNAIRES The questionnaires for the customers were divided into nine sections. Section A centres on frequency and recency of respondents dealings with the bank. Section B covers respondents loyalty to the bank in relation to the physical and tangible outward appearance. Section C asks questions on how accessible the banks facilities are and how that influences loyalty to the bank. The responsiveness of personnel to customers makes up Section D. Section E examines how reliable services of the bank are to customers of the bank. Consistency in service delivery and assurance of services, security and cost factors, and questions on future relationship with the bank are questioned in sections F, G, and H respectively. The section also included questions pertaining to customers intention to continue banking with CAL Bank as well as their preparedness to recommend the bank to others. Participants were instructed to respond to most items using independent variables: question requiring yes, no or neutral as answers. The final section, with respect to the questionnaire for customers, asks for a few personal and other details needed to help us in our study.
The questionnaire for employees was divided into five sections. Section A was on employee regard for customers; Section B assessed measures put in place to retain customers, if any; Section C examines how CAL Bank targets and acquire customers; Section D is on servicing and developing customer relationships; Section E is on how results with respect to attrition and retention are recorded and monitored; the final section collected other information. Ninety-seven point three per cent (97.3%) of the questions were closed ended and participants were instructed to respond to most items using a likert scale: question requiring answers which include and fall between strongly agree to strongly disagree.
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Explanations were given to the respondents where necessary to provide clarification on questions asked. In the process of administering the questionnaires, respondents were made to understand the full implications of the sections to ensure that the most accurate options were selected.
3.8 PERSONAL INTERVIEW In other to get a wider scope of customer retention practices in CAL Bank, structured personal interview was used in this study to solicit data from some key employees in CAL Bank. This was further meant to enable the researchers to solicit relevant data from CAL Bank Ghana Limited which otherwise was not captured in the questionnaire. Before approaching our interview subjects, we had already done a good deal of research so that we can prepare a list of pertinent questions and also allot ourselves plenty of time to arrange the interviews, since we were requesting face-to-face meetings. We also submitted a list of questions to our interview subjects by letter and this is because with this approach, people can respond to your questions at their leisure and you are far more likely to be able to persuade a busy expert to submit to this type of interview.
3.9 OBSERVATION A series of personal two-hour observations were conducted over a period of three working days at the head office and one day at each of the other three branches. This was done to confirm the responses from the questionnaires and also to check consistency over time and across branches. Observation was basically unstructured, disguised and in a very natural setting.
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3.10 PROCEDURE Customers and employees of CAL Bank were contacted in the banking halls to ascertain their interest in the research. Questionnaires with cover notes were administered to employees and customers who expressed willingness to participate in the study to complete. Explanations were provided as and when necessary to enable respondents give the most accurate information. The questionnaires did not require the names and entity of respondents this was meant to ensure the confidentiality required by respondents. Additional questionnaires were given to other bank personnel to fill during their leisure time. These questionnaires were retrieved three days after they had been given out. A seventy to ninety minutes interview was held with the marketing manager whereas a series of informal interviews were held with the customer relationship managers at each branch of the bank included in our study.
3.11 DATA ANALYSES TECHNIQUES Both quantitative and qualitative analysis of data was done. Quantitative methods involves proceeding for the positivist assumption that, if something exists, it exists in some degree and can therefore be numerically measured. Qualitative methods are more of open-ended and require the researcher to elaborate with words convincingly, concerning the motive. The approaches for qualitative analysis of data involved data reduction, coding, tabulation and calculation of summarizing statistics. Microsoft Excel and Statistical Package for Social Studies (SPSS) were used. The scores for all questions were summed up and the average score
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determined. The mean scores were then compared. The next chapter looks at the entire analysis as well as the interpretation of the data collected. A comprehensive examination of the responses we had from our qualitative approaches is done in context of the qualitative analysis of our study.
3.12 LIMITATIONS OF THE METHODOLOGY Some constraints were encountered in the course of the research study, some common ones include; Limited amount of time Limited resources to conduct the research. (money, materials and other resources) Finally, our case study firm did not allow a free data collection from its customers because of their policy concerning their customers. A number of compromises had to be made. These compromises makes it fundamental to exercise due caution in making any generalizations from the findings. These compromises were: a) A small sample size was collected b) The survey focused on CAL Bank branches in Accra only, this means that the results may not apply nationwide. Notwithstanding, the results may serve as a basis for generalizing because the sample represents to a large extent what happens generally as far as CAL Bank and their customer retention practices are concerned in the country.
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CHAPTER 4
ANALYSIS AND INTERPRETATION OF RESEARCH FINDINGS 4.1 INTRODUCTION This section presents data collected from a survey conducted on ninety-four (94) out of hundred (100) employees and customers of CAL Bank. Four (4) questionnaires were lost and could not be retrieved whilst two (2) questionnaires were discarded because of excessive loss of data. This chapter gives detailed analysis of the profile and other customer retention related factors of the respondents. The results from the findings will be used to meet the research objectives and test the stated hypothesis. The quantitative data was analysed using frequency tables and charts. Narratives will be given based on the results of the frequency table and the charts. The qualitative data was analysed at par with the findings of the quantitative analysis.
4.2 PROFILE OF RESPONDENTS This section centres on the profile of the respondents. This was to indicate the number of respondents that fall under the various branches with respect to their level in the organization and department. In all, 100 questionnaires were administered to the employees and customers in all the four branches in the ratio 58 to the Head Office, 14 each to the Tema Harbour Branch, Derby Avenue Branch, and the Ring Road West Branch of the bank.
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Out of the 100 questionnaires proposed: 76 out of 80 were retrieved from employees; 46 out of 50 from the Head Office, 10 out of 10 from the Tema Harbour Branch, 10 out of 10 from the Derby Avenue Branch, and 10 out of 10 from the Ring Road West Branch of the bank. However two of the employee questionnaires, 1 from the Head Office and 1 from the Derby Avenue branches of the bank, were discarded due to excessive loss of data. Figure 4.1 Employees Branch (Profile)
Source: Field Data, 2011
20 out of 20 were retrieved from customers; 8 were distributed to the Head Office, 4 to the Tema Harbour Branch, 4 to the Derby Avenue Branch, and 4 to the Ring Road West Branch. All Questionnaires given to customers to fill were retrieved and incorporated into our analysis.
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Figure 4.2 Customers Branch (Profile)
Out of 74 employees used in the study, 7 of them were top management employees, 49 were employees in the middle management level, and 18, operational level employees.
We also grouped employees into the various departments we came across in the various branches.
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Figure 4.3 Departments and their respective number of employees
From Figure 4.3, out of 74 employees, 25.6% of them are made up of employees from the customer relations and marketing department. This shows that most of our respondents were from the marketing department. The next department with the highest number of respondents is the retail banking department.
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It must however be noted that equal level of organizational members were not attained across branches of the bank, and the number of various levels of employees in branches also differ. The head office however covered all of the departments considered in the study. All the other branches had departments mutually inclusive to the head office. The customers were made up of different account holders. Accounts include current accounts, savings accounts, investment account or any other. To have mutually exclusive responses, someone who had more than one account was made to select other. Two respondents had more than one account and no respondent specified other accounts. They were further grouped into how long they have been with CAL Bank. The average years spent in CAL Bank according to our study was discovered to be 1-3 years. Figure 4.4 Number of years customer has been with CAL Bank.
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The average balance in CAL Bank is also shown in the diagram below. Figure 4.5 Customers average bank balance
4.3 IMPORTANCE OF CUSTOMERS TO THE BUSINESS In line with our first objective, to make obvious how important it is to retain customers and the benefits attached to it, the acknowledgement of customers by employee at various levels were assessed. 4.3.1 Customers deserve to be treated with respect and attended to. This assessment was to find out whether employees of the company know for a fact and acknowledge that customers are essential part of the company. The figure below depicts the response of the employees.
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From the figure 86.5% of employees strongly agreed that customers have feelings and deserve to be treated with respect, dignity and given the most courteous attention; the rest of the employees agreed to this notion.
Figure 4.6 Acknowledgement of customers by employees
Source: Field Data
Another 82.4% of employees saw customers as an essential part of their business and they depend on them. All employees were very much aware of the importance of the customer, and agreed to the notion.
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The perception of employees with regard to the acknowledgement of customers as an essential part of business was therefore highly positive within CAL Bank. Employees were also sure that they offered better services to customers than competitors as they all agreed to this notion. Figure 4.7 Employee perceptions of services in relation to competitors
4.4 PROCEDURES AND STRATEGIES FOR CUSTOMER RETENTION This section fulfils our second objective by outlining certain key steps towards customer retention by CAL Bank. 4.4.1 Employee awareness of the availability of customer retention procedures It was necessary to assess whether CAL Bank had documented procedures and ways of retaining customers.
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Figure 4.8 Awareness of the availability of customer retention procedures
According to the data collected, most employees responded positively to the possibility of there being procedures and organized as well as conscious ways of retaining customers as they agreed to questions assessing the availability of such procedures.
4.4.2 Customer Retention Practices in CAL Bank According to an interview with the marketing manager, he confirmed the fact that CAL Bank has a policy or strategy for customer retention. He stated that CAL Bank has a strategy and not a policy concerning customer retention.
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In elaborating what customer retention strategies are implemented in CAL Bank, he said, they do not have any specific policy on retaining customers. Everybody in the organization is responsible for the` implementations of the strategies which would lead to customer retention. He also went forward to say that the structure of their organization is flat which allow interaction between the people in the organization and thus all people at different levels of the organization. Even those at the lower level such as the gatemen, the cleaners, are trained and made aware of their responsibilities toward customers and to treat them well. This was embedded in the comment that every touch point between the company and its customers is geared to enhance retention. The flat organizational structure in CAL Bank grouped most employees into the middle level of the organization. In other words all employees worked together and reported to similar functional managers or top managers. 4.4.3 Persons responsible for implementation of customer retention The marketing department, hence the marketing manager was in charge of overseeing retention programs. The marketing manager stressed on the fact that no one specifically is responsible for the implementation of customer retention strategies. Everyone is responsible for that responsibility related to retention that falls within his jurisdiction. There is intra-organizational integration to coordinate and enhance the effective integration of these customer retention strategies. 4.4.4 Budget for Customer Retention To add to the whole, customer retention strategies, we believe should be backed by a budget. Asking the question as to how strategies to retain customers are funded and to what extend is
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CAL Bank ready to go to finance this budget in relation to its impact on the company, the marketing manager gave a high level of positive response. Strategies to retain customers are funded from the companys revenues. This is done through organization of mixtures of activities that are aimed at retaining customers and thereby generate revenues which will help to finance budget set for allocation of retention strategies such as, rewarding of the profitable customer, and some special packages for customers. He also stated that the budget stems from the marketing department as part of retention activities. An instance he used in their spending towards customer retention is the cocktail party they held for KNUST grandaunts who were customers of CAL Bank to extend their relationship with them after school. 4.4.5 Rewards based on customer retention These can be grouped into reward for employees for retaining customers and reward for customers who remain loyal to the bank. Reward for employees
Employees were asked whether there are reward programs on various attempts made to retain customers. The figure below shows the responses to their answers.
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Figure 4.9 Employee perceptions on the availability of rewards
Source; Field Data, 2011
From the figure above 13% plus 46% of employees, representing more than fifty percent of respondents were very much aware of the banks strategies in rewarding employees who make efforts to retain customers. Asking the marketing manager what reward programs CAL Bank has put in place for employees who contribute to retain customers, he gave an example of a recent internal promotion that was undertaken for employees who brought in customers to the bank, and have open an account with them within the next three (3) months. Reward for Customers
Customers also affirmed the fact that they are rewarded based on their loyalty to the bank. When asked what reward program CAL Bank put in place for loyal customers, he replied that it is information that he cannot release.
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4.5 FACTORS THAT CONTRIBUTE TO CUSTOMER LOYALTY According to our study we further surveyed a number of customers to investigate factors that contributed to their loyalty with the bank. This is in cognisance of our objective of identifying some basic things that make customers loyal to CAL Bank. This section seeks to group factors into those that are used to infer that customers are still loyal to the firm and factors that customers seek or look for to remain with the bank. We would therefore like to group factors into those that are used to infer and deduce that customer retention exists and those that are used to influence and manipulate customer retention behaviours.
4.5.1 Customer retention deducing factors Here some factors that CAL Bank uses to determine that customers are still loyal to them were assessed. Questions such as how often a customer visits the bank premises, how often they use the ATMs and such facilities, and how often they deal with the bank through phone and internet banking. Other retention inferring factors was how the activities between CAL Bank and its customers have changed over recent times. Recency
Recency in this case refers to latest contacts made by the customer to the bank, in the form of visits, contact with ATMs, and other contact points, within a short period of time.
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From our study customers recency of business activities was investigated. We investigated how often a customer comes into contact with the bank and its facilities. The figure below shows the outcomes we had from our study. Figure 4.10 Monthly visits to the bank
Source; Field Data, 2011 From the figure above most of the customers we spoke to, visit the bank once a month. Others visit the bank for transactions 2-5 times a month. Five per cent of customers were not sure if they visited the bank at least once a month, or their activities differ from month to month. This implies that about 95% of the customers made visits to the bank between 1 to 10 times a months. The manager of CAL Bank made a statement concerning the fact that an account is treated as a dormant account if the customer has not made any contact with the bank for six months. This is irrespective of the account balance of the customer. Other contacts by customers are depicted in the diagram below.
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Figure 4.11 Recency of contact between the customer and the bank
Source; Field Data, 2011 Most customers would prefer the use of ATMs to visiting the banking Hall or using the phone and internet banking. This is shown in the responses as 85% of customer use the ATMs from 2 to more than ten times a month. 75% of customers seldom use the phone and internet banking or use it once a month. This implies that most of the contacts between the customer and the bank is through the ATMs and such structural services put in place by the bank. Activity
Other activities are used to determine whether a customer is still with CAL Bank or not. Such activities include changes in the activities of the customer with the bank. A customer who used
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to visit the bank once every week and begin to suspend visits; such behaviours are seen as signs of attrition. The customer relations unit therefore take action to find out what caused the change in activities. Whether there has been a change in bank or the customer has travelled, the relationship officer assigned to the customer takes steps to address these
4.5.2 Customer retention influencing factors Some factors stumbled upon were noted as customer retention influencing factors. Customers sought certain attributes from the bank in order to remain with them. These same factors can be manipulated by the bank in order to let customers remain with them. Such factors include the following sub topics.
Tangible factors
Customers of CAL Bank were asked if the physical aesthetics of the bank had anything to do with their loyalty with the bank. As many as commented on the spacious banking hall as a factor to retention, also said it does not really matter to them. The result is depicted by the diagram below.
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Figure 4.12 Tangible factors and its effect on customer retention
Source; Field Data, 2011
Availability of professional and neat appearing employees in CAL Bank also does not seem to be a contributor to retention. Accessibility factors
These factors have to do with how close the bank is to the consumer. Customers were asked whether CAL Bank has a lot of branches and that is why they prefer it to other banks. We also assessed whether they had their ATMs at convenient places and are evenly distributed for their access. Respondents were also asked to comment on the technology of CAL Bank and its effect on their loyalty. The result is shown below.
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Figure 4.13 Accessibility factors and its effect on retention
Source; Field Data, 2011 Responsiveness
How responsive employees are to customers were also assessed as a factor contributing to customer retention. Factors such as workers are always available and willing to help was tested. The result is shown below.
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Figure 4.14 Responsiveness related factors
Source: Field Data, 2011 Factors that have to do with how responsive the personnel of CAL Bank are to customers came out to be one very important variable in maintaining customers.
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Reliability of Banking service and technology
Figure 4.15 Reliability related factors
People will bank with CAL Bank not because they are perfect or there are no mistakes in doing things but because their systems are always working and they have good customer care to resolve their issues.
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4.6 SUCCESS AND PROFITABILITY OF CAL BANK, AS A RESULT OF RETENTION. In line with our forth objective, we seek to find out the relationship between customer retention on one hand, and profitability and other successes of CAL Bank on the other hand. We found out in our research that as much as CAL Bank tend to please all customers profitably, they are however conscious of the fact that most of their profits are generated from activities that deals with just 20% or less of their customers. Clear segments of retaining customers are not available in CAL Bank but the Pareto principle is highly acknowledged in serving customers. Each customer in CAL Bank is assigned a customer relationship officer to attend to periodically. Such personal relationships help retain market share and also extract the potential to increase market share in every company. Out of a total of GH 275,543,000.00 of total depositors, 43% adding up to GH 118,483,490.00 was just from the first twenty largest depositors. This reveals the capacity at which CAL Bank retains some key customers for survival. The first twenty to total depositors ratio was 49:51 in 2009. Profits have been increasing consistently with over 20% increase in profits per annum. From the annual statement the profits after tax from 2005 to 2007 were GH4,701,000.00, GH5,204,000.00, GH9,068.00, respectively. Such steady increase in profits can be attributed to a consistent and increasing market share as a result of retention. With three CIMG Awards as the best bank of the year, CAL Bank can be seen as one of the most successful banks in the country.
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4.6.1 The Pareto Principle This principle was propounded by Vilfredo Pareto (1848-1923) when he observed that 20 percent of the people of Italy owned 80 percent of the wealth. This concept of disproportion often holds in many areas; 20% of the time expended produces 80% of the results 80% of your phone calls go to 20% of the names on your list 20% of the streets handle 80% of the traffic It goes on and on. The important thing is to notice any such disproportions, and then possibly act on such observations. As mentioned, according to the annual report of CAL Bank 2010, first twenty largest depositors make up 43% of their total deposit. This figure used to be 49% as at 2009. Such twenty customers make up rather very small portion of the total customers of CAL Bank. Management of CAL Bank are therefore very sensitive to the reactions of customers and that is why they make every effort to control all contact points between the company and its customers. Enforced with low cost and effective leadership, customer retention is a key contributing factor that has led to an increase in profit over 20% each year.
4.7 RECOMMENDATIONS TO ENTERPRISES The final objective is to recommend to enterprises, especially banks the essence and ways of customer retention. This is elaborated in Chapter 5 of our study.
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4.8 ANSWERING TEST QUESTIONS
4.8.1. Question 1; Is customer retention a key factor that has a positive impact directed at the overall success and profitability of CAL Bank
Customer retention is seen in CAL bank as the act of implementing certain strategies which allows current customers to keep banking with them and potential customers to turn into regular consumers. In order to sustain in the tough competitive banking, CAL Bank follows customer retention strategies right from the time they get a new customer till throughout the period the person uses the product. CAL Bank customer retention does not just offer quality services, but also create a dependable goodwill in the market, in doing so they create relationship between them and their customers. This type of relationship is what they call Relationship Marketing.
This approach attempts to transcend the simple purchase-exchange process with a customer to make more meaningful and richer contact by providing a more holistic and personalized purchase, thereby using the experience to create stronger ties.
The practice of relationship marketing has been facilitated by several generations of customer relationship management software that allow tracking and analyzing of each customer's preferences, activities, tastes, likes, dislikes, and complaints.
According to Gordon (1998), the marketing mix approach is too limited to provide a usable framework for assessing and developing customer relationships in many industries and should be replaced by the relationship marketing alternative model where the focus is on customers, relationships and interaction over time, rather than markets and products.
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Relationship marketing involves the application of the marketing philosophy to all parts of the organization. Every employee is said to be a "part-time marketer". The way Regis McKenna (1991) puts it: "Marketing is not a function, it is a way of doing business . . . marketing has to be all pervasive, part of everyone's job description, from the receptionist to the board of directors, as practiced in CAL Bank
According to Buchanan and Gilles, the increased profitability associated with customer retention efforts occurs because of several factors that occur once a relationship has been established with a customer.
The cost of acquisition occurs only at the beginning of a relationship, so the longer the relationship, the lower the amortized cost.
Account maintenance costs decline as a percentage of total costs (or as a percentage of revenue).
Long-term customers tend to be less inclined to switch, and also tend to be fewer prices sensitive. This can result in stable unit sales volume and increases in dollar-sales volume.
Long-term customers may initiate free word of mouth promotions and referrals. Long-term customers are more likely to purchase ancillary products and high margin supplemental products.
Customers that stay with you tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.
Regular customers tend to be less expensive to service because they are familiar with the process, require less "education", and are consistent in their order placement.
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4.8.2. Question 2; Do companies that excel at customer retention have a strategy put in place? CAL Bank has received three CIMG Awards. One of the bases of selection has to do with customer retention. Cal Bank is therefore seen as one of the best banks that practices customer retention. Generally customer retention practices and strategies may take one or more of the following forms. Customer reward program
CAL Bank has reward program. The details of such information however, were not made available. Rewards program may include allowing the customer to use a particular service or a special credit card, etc.
Back-End Rebate Program
This is similar to a reward program but differs in that the customer accrues a rebate that is only applied at the end of a given period. The back-end rebate program forces customers to come to you when they have received a competitive bid. Why? Well, once they start buying within your rebate program, they will not want to lose the credit they have accrued so, they will call to see if you can match the competitive offer.
Being Proactive in Sales & Customer Service
The sales profession is littered with companies that allow their sales teams to approach sales as singular transactions. This emphasizes on maximizing the gross profit on each and every sale is simply no way to grow repeat business. Avoid the temptation of trying to maximize the gross
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profit on every sale. Instead, focus on the long-term relationship by being proactive in sales & customer service. Take the time to embed your sales & customer service team into your customers business. It will instill a sense of partnership and grow your companys sales.
The interview conducted with the marketing manager of Cal Bank, he make mention of the fact that they do not have one strategy but they have various strategies that they implement together.
4.8.3. Question 3; Do companies that excel at customer retention have a well-structured process for handling customer complaints? CAL Bank being the best in practicing customer retention on the basis on the information provided above has a well structure for handling customer complaints. One of the questions from our interview with the marketing manager was as follow: Does your company have a documented process for handling customer complaints: He said that they do not have a documented process for handling customer complaints but they have procedures. In addition he mentioned that they have a complaint card which is accessible to everyone at the banking hall as well as a complaint section on their website. For the website, part of the complaints goes to the Human Resource department and the other fraction goes to the Client Service department. Questions had also been asked to the customers on whether they get feedback from complaint or not. Their response was positive. Handling Customer complaint are one of the most effective ways to retain customers because grieving customers are able to express their disappointments, views on their services, and make any suggestions if possible. This process allows CAL Bank therefore to take immediate actions directed toward the complaints of its customers aiming at satisfying them as much as they can.
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This leads to retention of customers in the bank by them being loyal or attach to the company because they are glad.
4.8.4 Question 4; Do strategically positioned firms, in terms of customer retention, gain competitive advantage with respect to holding its market share and also have the potential to increase its market share? The sole purpose of a business Peter Drucker (1973) once famously claimed was to create a customer. However, keeping the customer has become regarded as equally, if not more important, since Dawkins and Reichheld (1990) reported that a 5% increase in customer retention generated an increase in customer net present value of between 25% and 95% across a wide range of business environments. Every individual sees their bank as a very important service provider. Considering the relationship involves the management of their hard-earned money, it is understandable people will be especially critical when deciding upon a bank or deciding to remain with one. Accordingly, banking customer retention is more of a challenge than it would be in different industries. Customers naturally gain a sense of security placing their money in an institution they believe shares their interests, and the nature of their precious finances means they need to know those interests are being catered for. Understanding that their business is valued plays a role in this, as many consumers view bank products and services primarily as commodities. Promising to safeguard and grow peoples finances is only a portion of what a bank must offer to promote bank customer retention.
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Banking industry statistics have made it clear that recruiting new banking customers is a considerably larger cost to the banks as compared to retaining existing ones. On average, any bank will lose 20% of its customer base every year, and yet it is suggested that by retaining as little as five percent of that base could increase profitability by up to twice their current figure.
If Banks in general, precisely Cal Bank, is able to retain its customers, he will be able to maintain its market share because customers will be loyal and it will be difficult for them to switch to another bank due to rich relationships. The potential that more customers will be retained is highly true considering the fact that those that have been retained will use words of mouth to publish the good image of the bank. Furthermore customers that stay with you tend to be satisfied with the relationship and are less likely to switch to competitors, making it difficult for competitors to enter the market or gain market share.
4.9 OBSERVATION In our visit at CAL Banking hall premises, a close look was taking place toward some of the factors that push their customers to be retained. The following points represent our perceptions on the basis of what has been viewed.
The physical appearance of the banking hall is visually appealing and neat Cal bank hall is very spacious, accommodating, well furnished. Adequate tellers help reduce waiting time of customers. Customers seats were many and that enhanced customers convenience and comfort.
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The banking hall ensured high level of security. Gadgets enhancing the effectiveness of banking services in relation to technology and many others factors were present.
Employees conducted themselves well towards the customer. The Skills and knowledge of the employees could also be measured regarding how they were able to assist customers and their actions in the workplace.
CAL Bank personnel were never too busy to respond to customers request and complaints.
CAL Bank personnel delivered prompt service to customers so they do not waste time when they arrive and do business in the bank.
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CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 INTRODUCTION This chapter gives a summary of the findings, conclusions and also recommendations that will help in the improvement of customer retention practices in Ghanaian businesses especially with respect to the banking sector. 5.2 SUMMARY OF FINDINGS
Below is a summary of findings from the research study. They are categorized into the various data collection instruments.
5.2.1 Questionnaires Two questionnaires were administered to customers and employees. Out of these, various outcomes were derived. Employee Questionnaire
This revealed that employees of CAL Bank regarded customers as very important to business. The researchers uncovered the existence of measures employed by CAL Bank to retain customers. We also sought staff perspective on targeting, acquiring and retaining customers. Customer relationship servicing and development were found to be excellent in the case study firm.
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Ways and procedures of measuring results were not strongly known across the firm. Customer Questionnaire
Various factors used to determine customer retention such as recency and activities of customers were revealed. Manipulating factors such as physical aesthetics, accessibility and reliability were assessed. Other factors such as consistency, security and future relationships were assessed. Customers were more interested in accessibility and reliability of services than physical aesthetics and professional appearances of staff to let them remain with the bank.
5.2.2 Interview The interview revealed that CAL Bank has a strategy for retaining customers. The strategy used to retain customers such as rewarding of the employees and customers for retention were found to be present in CAL Bank. No unit or department specifically however, was in charge of customer retention in CAL Bank as it remains the responsibility of every employee from the gardener to the top manager to service the customer. A budget was not set up separately for retention, but it formed part of the budget of the marketing department. CAL Bank is ready to go an extra mile to finance the budget to retain customers. Customers activities were monitored to detect attrition. Finally a documented process for handling customer complaints was not available but procedures for handling complaints were admitted. And the Pareto Rule was used to monitor and service customers in CAL Bank even though every customer was cherished.
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5.2.3 Observation A disguised, unstructured, natural observation was carried out to identify any retention factors that could be realized from the behaviours of employees and customers in the banking hall. The banking halls seem large enough to accommodate quite a large number of customers. Queues are reduced and employees seem to find their way around without assistance when they enter the banking hall.
5.3 CONCLUSIONS Businesses are becoming aware of the need to keep proper and excellent relationship between them and their customers. However, most businesses fail to retain loyal customers. Many companies do not have the requisite skills and knowledge to practice customer retention. The necessary skills and technical know- how ranges from a well laid down strategy, and an organizational culture geared towards retention of customers. It is important also that companies investigate customer retention deducing factors and customer retention influencing factors. This is to enable the business apply a scientific approach to customer retention. A company which does not retain customers may lose market share or have a declining market share and also may be incurring huge costs in acquiring new customers such that their profitability would be at stake
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5.4 RECOMMENDATIONS From the various observations made, and the conclusions drawn, the following recommendations can be made to aid the improvement of customer retention practices in business enterprises, especially in the banking industry.
1.
Training seminars should be organized by the government, marketing agencies, and other marketing oriented organizations to train employees and CEOs of organizations on how to retain customers and educate them on the benefits derived from it. They should be educated to monitor and keep as many as possible, customers that come their way.
2. Enterprises should be able to separate customers into various levels of profitability. This can be done by segmenting and targeting with a special marketing program, segments that are most profitable. Key customer segments may be seen as those customers who make repeat purchases, spread good word of mouth, and act in diverse ways that benefit the company.
3. Customer complaints must be taken into consideration in retaining customers. This is to help them evaluate their service performance and also take action that will benefit the customer as well as to the overall profitability of the company.
4. Business should have an organizational structure that facilitates the implementation of customer retention strategies. The organizational culture of businesses also plays an important role in the success of this implementation.
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5. There is the need for enterprises especially banks to employ a department, a group or a person in charge of customer retention. A budget should be set to finance retention activities; a well laid down strategy with targets to be achieved employed to deal with retention and attrition.
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BIBLIOGRAPHY
1. Baldwin, S. Importance of Customer Retention. Retrieved 2007 from www.eazinarticles.com 2. Bansal. S, and Gupta. G,.(2001). Building Customer Loyalty: Business-to-Business Commerce 3. Best Practices: Customer Retention. (2009) Vindicia Incorporated 4. Boateng, M. (2009, October 14). Ghana Has Too Many Banks. The New Crusading Guide, pp. 3 5. Bowen, J. T. & Chen, S. L. (May 2001). The Relationship Between Customer Loyalty and Customer Satisfaction. International Journal of Contemporary Hospitality Management, pp. 213-217. 6. CAL Bank Annual Report, 2010 7. CustomerRetention. (2010). Bank Customer Retention More Important Now Than Ever. Hubpage Incorporated 8. Dawkins, P. and Reichheld, F. (1990). Customer Retention Management: A Reflection of Theory And Practice. 9. Gordon, I. (1998), Relationship Marketing, John Wiley, Etobicoke. 10. Hinson, R. (2004). Services Marketing.pp.106- 107) 11. La Barbera, P. A. and Mazursky, D. (2000). A Longitudinal Assessment of Consumer Satisfaction. 12. Leeds, B. (1992). 'Mystery Shopping' Offers Clues to Quality Service. Bank Marketing, 24(11), November, pp. 24-27. 13. Lombardo, R. (2002). Customer Retention: A Key To Business Success. Retrieved from www.PeakSalesConsulting.com
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14. Marple, M and Zimmerman, M. (1999). A Customer Retention Strategy. Mortgage Banking, 59(11), August, pp. 45-50. 15. McKenna, R. (1991). Relationship Marketing 16. [Morgan and Hunt (1994); Shemwell et. al., (1994)] as cited in Hinson, (2004) 17. Payne, A.F.T. and Frow, P. (1999), Developing a segmented service strategy: improving 18. measurement in relationship marketing, Journal of Marketing Management, Vol. 15 No. 8, pp. 797-818. 19. Pilecki M. (2007). Customer Retention Is a Process, Not An Event. Forrester Research Incorporated. 20. Rampur, S. Customer Retention Strategies. Retrieved January 12, 2011, from www.buzzle.com 21. Ramshaw, A. (2010). Bank Customer Retention. Genroe Incoporated. 22. Ravi Dhar and Rashi Glazer, Hedging Customers, Harvard Business Review, 81. May 2003, 8692. 23. Storbacka, K., Strandvik, T. & Grnroos, C. Sept 1994, Managing Customer Relationships for Profit: The Dynamics of Relationship Quality, International Journal 24. Wiggers, A. and Yaeger, C. (2009). Addressing The Challenges Of Customer Retentin. Benchmark Consulting International.
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WEBOGRAPHY
1. www.bankofghana.com 2. www.calbank.net 3. (www.hbr.com). Harvard Business Review
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APPENDICES
A1. CUSTOMERS QUESTIONNAIRE
UNIVERSITY OF GHANA BUSINESS SCHOOL BSC ADMINISTRATION (MARKETING OPTION)
CUSTOMER RETENTION PRACTICES: A STUDY OF CAL BANK (THE CUSTOMERS PERSPECTIVE) Dear Respondent, We are final year students of the University of Ghana Business School, and as part of our academic requirements we are undertaking a research into customer retention practices. This survey is designed to gather information about both customer expectations and customer perception of factors that relate to customer retention in CAL Bank. The result will provide valuable insights about the strengths and weaknesses of CAL Bank with regard to service delivery and customer relationship management, and possibly identify service delivery gaps that could be addressed. Any information provided is strictly confidential and for academic purposes only. Thank you very much for your cooperation. (Please Tick the appropriate answer) Section A. This section asks questions on how often you deal with the bank.
Q1. How often do you visit the bank premises in a month? [ ] Once a month [ ] 2-5 times a month [ ] 6-10 times a month [ ] more than 10 times a month [ ] on irregular bases
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Q2. How often do you visit CAL Banks ATMs? [ ] Once a month [ ] 2-5 times a month [ ] 6-10 times a month [ ] more than 10 times a month [ ] on irregular bases Q3. How regularly do you patronise their services through internet and phone banking? [ ] Once a month [ ] 2-5 times a month [ ] 6-10 times a month [ ] more than 10 times a month [ ] on irregular basis
Section B.
Tangible (physical) factors that influences your loyalty to the bank
Q4. Do you bank with CAL Bank because the physical appearance of the banking hall is visually appealing? [ ] Yes [ ] Neutral [ ] No
Q5. Employees in CAL Bank are professional and neat appearing and that is why you bank with CAL Bank [ ] Yes [ ] Neutral [ ] No
Q6. The banking hall of CAL Bank is spacious, well furnished and accommodating that is why you like CAL Bank. [ ] Yes [ ] Neutral [ ] No
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Section C.
Accessibility of Bank facilities and it effects your loyalty
Q7. CAL Bank has a lot of branches that is why I prefer it to other banks [ ] Yes [ ] Neutral [ ] No
Q8. The ATMs of the bank are located at convenient places and are evenly distributed for you to access. [ ] Yes [ ] Neutral [ ] No
Q9. I bank with Cal Bank because they have up-to-date technology to facilitate accessibility. [ ] Yes [ ] Neutral [ ] No
Section D.
Responsiveness of personnel to customers needs
Q10. CAL Bank personnel are never too busy to respond to customers request and complaints that is why you bank with them [ ] Yes [ ] Neutral [ ] No
Q11. CAL Bank personnel deliver prompt service to customers so you do not waste time when you come to the bank [ ] Yes [ ] Neutral [ ] No
Q12. Do you receive feedback from the banking personnel when you file a complaint? [ ] Yes [ ] Neutral [ ] No
Q13. CAL Bank staff is polite and willing to help you customers. [ ] Yes [ ] Neutral [ ] No
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Section E.
Reliability of banking service and technology
Q14. Systems (ATMs, Network) put in place by the bank are always working and it contributes to why I prefer CAL Bank to the others [ ] Yes [ ] Neutral [ ] No
Q15. CAL Bank has some customer care telephone lines which I call when you need them [ ] Yes [ ] Neutral [ ] No
Q16. The ways of doing things in CAL Bank does not allow mistakes. [ ] Yes [ ] Neutral [ ] No
Section F.
Consistency in service delivery and assurance of services
Q17. You are always treated in a good manner in CAL Bank [ ] Yes [ ] Neutral [ ] No
Q18. Employees have the customers interest at heart and make you feel part of the company. [ ] Yes [ ] Neutral [ ] No
Q19. Banking personnel provide caring and individualized attention to you [ ] Yes [ ] Neutral [ ] No
Section G.
Security and cost factors that affect your loyalty to CAL Bank
Q20. Do you think your money is safe in CAL Bank? [ ] Yes [ ] Neutral [ ] No
Q21. Are your service charges (bank ATM and other charges) expensive. [ ] Yes [ ] Neutral [ ] No
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Section H.
Future relationship with CAL Bank
Q22. Will you continue to transact business with the bank if you had options to remain or leave? [ ] Yes [ ] Neutral [ ] No
Q23. Will you recommend the bank to your friends and family? [ ] Yes [ ] Neutral [ ] No
Section I. Q24. Gender
Other Information [ ] Male [ ] Student [ ] Female [ ] Self Employed [ ] Government Worker
Q25. Occupation
[ ] Private Sector Worker Q26. Services patronized [ ] Current Account Holder [ ] Savings Account Holder
[ ] other (please specify)............... [ ] Investment Account [ ] other.............................
[ ] Corporate Current Account Holder
Q27. Monthly average bank balance (GH.00) [ ] 0 1000 [ ] 1000 5000 [ ] 5000 - 10,000 [ ] above 10,000
Q28. How long have you banked with CAL Bank [ ] 1-3 years [ ] 4-6 years [ ] 7 years and above
Q29. Do you have accounts on other banks? [ ] Yes [ ] No
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Q30. How many other bank accounts do you have? [ ] one [ ] two [ ] three [ ] four [ ] five [ ] 6 and above
Q31. Arranging all your banks in other of importance, where does CAL Bank fall. [ ] 1st [ ] 2nd [ ] 3rd [ ] 4th [ ] 5th [ ] last
Thank you very much for your patience and cooperation.
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A2. EMPLOYEE QUESTIONNAIRE
UNIVERSITY OF GHANA BUSINESS SCHOOL BSC ADMINISTRATION (MARKETING OPTION)
CUSTOMER RETENTION PRACTICES: A STUDY OF CAL BANK (STAFF PERSPECTIVE) Dear Respondent, We are final year students of the University of Ghana Business School, and as part of our academic requirements we are undertaking a research into customer retention practices. This questionnaire is designed to gather information about employee perception of customer retention practices as well as practical ways in which it is executed. The study will provide insight into how best CAL Bank practices customer retention. Any information provided is strictly confidential and for academic purposes only.
(Please state your level of agreement) Sections A. Regard of customers Q1. Customers have feelings and deserve to be treated with respect, dignity and given the most courteous attention. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q2. Our customers are an essential part of our business and we depend on them. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q3. It is our responsibility to satisfy our customers needs. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree
[ ] strongly disagree
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Q4. We offer better and attractive services of superior value to its customers than our competitors. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q5. Customers of CAL Bank respond favourably to new product development and services provided by the bank. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Section B. Measures employed to retain customers Q6. We communicate to customers on a regular basis to assure them that they are been cherished. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q7. CAL Bank employees are always willing to provide assistance to customers. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q8. CAL Bank offers to review the accounts of its customers as part of growing relationships. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q9. CAL Bank has an organizational culture centred on customer retention. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q10. Employees are empowered to do what is right for the customer for them to be retained. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
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Q11. CAL Bank employees are trained and coached to follow up on alerts of customers at risk of attrition. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q12. CAL Bank has an organizational culture dedicated to helping and retaining existing customers. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q13. CAL Bank seeks to create, develop, maintain and enhance relationships with its customers in order to maximize customer value. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q14. CAL Bank delivers on its promises to its customers. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Section C. Targeting and acquiring the customers Q15. Cal Bank has a clear picture of what the key customer segments are and how it can help meet customer needs. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q16. CAL Bank bundle products and offers to meet the individual goals of these segments. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q17. CAL Bank has identified sub segments within the segment and defined value propositions for them. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
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Q18. CAL Bank has formalized on-boarding programs for new customers that include regular communication during the first year. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q19. We are able price products based on individual customer relationships. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Section D. Servicing and developing customer relationships Q20. We have a common process collaboratively across Line of Businesses (LOBs) and channels (e.g., account opening, change of address, etc.) to simplify the customer and employee experience. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q21. CAL Bank has proactive retention programs to identify and approach customers likely to attrite. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q22. Management champion a customer-centric sales and service culture across CAL Bank. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q23. CAL Bank has a formalized sales training and coaching program for improved employee performance in terms of retaining customers. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q24. Sales and service representatives are trained to recognize retention threats. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
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Q25. There are incentive compensation program in place that rewards for saving customers. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q26. CAL Bank has loyalty programs established for products (e.g., credit card rewards). [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Section E. Measuring results Q27. There is a clear definition of attrition (losing of customers) for your company. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q28. You track and report on attrition on a regular basis. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q29. Management review retention results on a regular basis. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree
Q30. You can identify controllable versus uncontrollable attrition. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree
Q31. Product managers are compensated for retention as well as acquisition. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
Q32. Employees of CAL Bank know how to measure the profitability of individual customers as a result of retention. [ ] strongly agree [ ] agree [ ] somehow agree [ ] disagree [ ] strongly disagree
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Section F. Other Information Please Tick (if other, please specify) Q33. Gender [ ] Male [ ] Female
Q34. How long have you worked in CAL Bank [ ] 0-3 years [ ] 4-7 years [ ] 8 years and above
Q35. Please state the department you are in........................................................ Q36. Which level of the organization is you currently employed? [ ] management level or top level [ ] functional or middle level [ ] operational level or lowest level
Thank you for your patience and cooperation.
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A3. INTERVIEW GUIDE
Interview Details
Date: Interviewee Name*: Interviewee Title: Interviewee Phone No*: Purpose of interview:
Time:
Address and Loc.:
This interview instrument seeks to examine the various efforts made by CAL
Bank to retain its customers.
Questions to Ask Interviewer
Question 1: Do you have any policy or strategy for customer retention? [ ] Yes [ ] No
Question 2: What are some of the strategies put in place to retain customers? Who is responsible for the implementation of these strategies? Notes:
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Question 3: How are the strategies to retain customers funded and to what extend is CAL Bank ready to go to finance this budget in relation to its impact on the company? Notes:
Question 4: Could you discuss with us any formal models (e.g. propensity to switch models) to identify customers who might take some or all of their business elsewhere in the future? Notes:
Question 5: What reward program has CAL Bank put in place for employees who contribute to retain customers? Notes:
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Question 6: To what extent do you let customers feel they key contributors to the growth and survival of your company? Notes:
Question 7: What reward program has CAL Bank put in place for loyal customers? Notes:
Question 8: Does your company have a documented process for handling customer complaints? Notes:
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Question 9: Do you target a particular segment of your customers in retaining customers? [ ] Yes [ ] No
Question 10: If yes, explain the criteria you use to segment your customers. If no, explain why you retain all customers taking into consideration there may be profitable and non-profitable customers? Notes:
Question 11: Could you elaborate on the relationship between customer retention on one hand and your profitability and other successes on the other hand?
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Customer Retention Practices A Case of Cal Bank

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CHAPTER ONE

Existing Customers Consists of Customers who have purchased or otherwise used an

2.5 CUSTOMER RETENTION STRATEGIES AND PRACTICES

Figure 2.1 The Customer Life Cycle

Source; Genroe organization (2010)

Source: Field Data, 2011

Figure 4.2 Customers Branch (Profile)

Source: Field Data, 2011

Figure 4.3 Departments and their respective number of employees

Source: Field Data, 2011

Source: Field Data, 2011

Source: Field Data, 2011

Figure 4.6 Acknowledgement of customers by employees

Source: Field Data

Source: Field Data, 2011

Figure 4.8 Awareness of the availability of customer retention procedures

Source: Field Data, 2011

Figure 4.9 Employee perceptions on the availability of rewards

Source; Field Data, 2011

Figure 4.12 Tangible factors and its effect on customer retention

Source; Field Data, 2011

Figure 4.13 Accessibility factors and its effect on retention

Source; Field Data, 2011 Responsiveness

Figure 4.14 Responsiveness related factors

Reliability of Banking service and technology

Figure 4.15 Reliability related factors

Source: Field Data, 2011

4.8 ANSWERING TEST QUESTIONS

Back-End Rebate Program

Being Proactive in Sales & Customer Service

UNIVERSITY OF GHANA BUSINESS SCHOOL BSC ADMINISTRATION (MARKETING OPTION)

Tangible (physical) factors that influences your loyalty to the bank

Accessibility of Bank facilities and it effects your loyalty

Responsiveness of personnel to customers needs

Reliability of banking service and technology

Consistency in service delivery and assurance of services

Future relationship with CAL Bank

Section I. Q24. Gender

Other Information [ ] Male [ ] Student [ ] Female [ ] Self Employed [ ] Government Worker

[ ] other (please specify)............... [ ] Investment Account [ ] other.............................

[ ] Corporate Current Account Holder

Q29. Do you have accounts on other banks? [ ] Yes [ ] No

Thank you very much for your patience and cooperation.

A2. EMPLOYEE QUESTIONNAIRE

UNIVERSITY OF GHANA BUSINESS SCHOOL BSC ADMINISTRATION (MARKETING OPTION)

Thank you for your patience and cooperation.

A3. INTERVIEW GUIDE

Address and Loc.:

Bank to retain its customers.

Questions to Ask Interviewer

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