Factors Influencing Customer Retention in Community Banks in Tanzania: A Case of MUCOBA Bank PLC
Abstract
The purpose of this study was to examine factors influencing customer retention in Community Banks in Tanzania, a case of MUCOBA Bank PLC in Mafinga Town in Iringa region. Specifically, the study sought to examine the influence of tangibility and assurances on customer retention. The study used a mixed method (qualitative and quantitative) approach, adopting a cross-sectional research design. The population involved was customers and senior staff of MUCOBA Bank PLC. The convenience sampling technique was used in selecting customers, while purposive sampling was used to select senior staff and a few customers who were heads of group loan beneficiaries. The sample size of 382 comprised 377 customers and five senior staff. The response rate was 88.2%, whereby 337 responses were obtained through questionnaires and in-depth interviews. Quantitative data were analysed by using multiple regression analysis, while qualitative data were analysed using content analysis technique. The findings revealed that tangibility had a significant influence on customer retention with (β = .110, p = .036). Also, assurance was found having a significant relationship with customer retention on customer retention at MUCOBA Bank PLC with (β = .176, p = .002). The study recommends that tangibility and assurance should be used to the maximum to influence customer retention
Downloads
References
Abdul-Qadir, A.B., Abubakar H. S., & Utomi, Q. A.R. (2021): Impact of Service Quality on Customer Retention of Listed Food and Beverages Companies in Kaduna State. Gusau International Journal of Management and Social Sciences, Federal University, Gusau, 4(1): 47-63.
Adam, J., & Kamuzora, F. (2008). Research Methods for Business and Social Studies, Mzumbe book Project, Morogoro Tanzania,
Adebisi. O. S., & Lawal, K.O. (2017). The Impact of Service Quality on Customer Loyalty: A Study of Pharmaceutical Firms, Arabian Journal of Business and Management Review (Nigerian Chapter 4(2)
Ahmed, A. Shaikh, S.S., Naseer, R., & Asadullah, M. (2019). Factors Affecting Customer Retention in the Restaurant Industry: Moderating Role of Restaurant Location Journal of Business Studies (IBT-JBS) 15:pg 95-108
Alhkami, A., A. & Alarussi, A., S. (2016). Service Quality Dimensions and Customer Satisfaction in Telecommunication Companies. Asian Journal of Business and Management, 4(3), pp. 117-128.
Alketbi, S., Alshuridehb, M. & Al Kurdic B., (2020). The Influence of Service Quality on Customers’ Retention and Loyalty in the UAE Hotel Sector with Respect to the Impact of Customer satisfaction, trust, and Commitment: A Qualitative Study. International Journal of Innovation, Creativity and Change. www.ijicc.net Volume 14, Issue 7, 2020
Ashraf, E., &. Venugopalan, K. (2016): Impact of Service Quality Dimensions on Customers’ Satisfaction, Retention and Loyalty: An Empirical Evidence from Commercial Banks in Kerala International Journal of Innovative Research in Engineering & Multidisciplinary Physical Sciences Volume 4, Issue 5, 2016
Bahadur, W., Aziz, S., & Zulfiqar, S. (2018). Effect of employee empathy on customer satisfaction and loyalty during employee–customer interactions: The mediating role of customer affective commitment and perceived service quality, Cogent Business & Management, 5:1
Bryman, A., Bell,. E., & Bjorn, N. (2005). Foretagsekonomiska forskningsmetoder, malmo; liber ekonomi.
Churchill, Jr.G.A, & Surprenant, C. (1982). An Investigation into the Determinants of Customer Satisfaction. Journal of Marketing Research (JMR), 19, 491-504
Daniel,W,S. (2016). Effects Of Service Quality on Customer Retention Among Commercial Banks In Kenya. University of Nairobi. Fida B.A, Ahmed1. U, Al-Balushi. Y &, Singh. D. (2020): Impact of Service Quality on Customer Loyalty and Customer Satisfaction in Islamic Banks in the Sultanate of Oman; SAGE Open 1(1): 1-10
George, D., & Mallery, P. (2003). SPSS for Windows step by step: A simple guide and reference. 11.0 update (4th ed.). Boston, MA: Allyn & Bacon.
Hussin M, Y. (2021): Investigating the Effect of Trust, Empathy, Satisfaction and Communication on Customer Loyalty: Evidence from Banking Industry in Nekemte Town, Ethiopia. Advances in Applied Sciences. Vol. 6, No. 4, 2021, pp. 70-83. doi: 10.11648/j.aas.20210604.12
Idrees, Z., & Xinping, X. (2017): Impact of Banking Relationship Characteristic on Service Quality Dimensions and Customer Retention. International Journal of Academic Research in Economics and Management Sciences 2017, Vol. 6,
Iddrisu,A.M., Nooni, I.K., Fiankoc, K.S., & Mensah, W. (2015): Assessing The Impact Of Service Quality On Customer Loyalty: A Case Study Of The Cellular Industry Of Ghana. British Journal of Marketing Studies Vol.3, No.6,
Ivanauskienė, N. & Volungėnaitė, J. (2016). Relations between Service Quality and Customer Loyalty: An Empirical Investigation of Retail Chain Stores in Emerging Markets, American International Journal of Social Science Vol.3, No.3.
Kotler, P., & Keller, K. L. (2012). Marketing Management 14e Global edition, Pearson Education Limited Prentice Hall.
Korobov, Y. (2019). Saratov Socio-Economic Institute (branch of Plekhanov Russian Economic University), Department of Banking, Money & Credit, 410003 Saratov, Russia, SHS Web of Conferences 61, 01009 (2019
Lay, E., Alhabsji, T.,& Arifin, Z. (2018). Factors Affecting Customer Retention in the Banking Sector (Study on BRI Customer in East Nusa Tenggara, Indonesia): European Journal of Business and Management www.iiste.org ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol.10, No.12, 2018
Magasi, C. (2016). Customer Relationship Marketing and its Influence on Customer Retention: A Case of Commercial Banking Industry in Tanzania; Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB) An Online International Research Journal (ISSN: 2306-367X) 2016 Vol: 1 Issue: 1
Magigi, W. (2015). Research Proposal Development and Report Writing, Safi Publishers and Trading Co. Ltd.
Mahmood, A., Rana, M.L.T., & Kanwal, S. (2020). Relationship between Service Quality, Customer Loyalty and Customer Satisfaction in Pakistan. The Lahore Journal of Business. Volume 6
Mashenene, R.G., Msendo, A. & Msese, L.R. (2019). The Influence of Customer Retention Strategies on Customer Loyalty In Higher Education In Dodoma, Tanzania. African Journal of Applied Research Vol. 5, No. 1
McAlexander, J.H., Kaldenberg, D.O., & Koeing, H.F. (1994). Service quality measurement: examination of dental practices sheds more light on the relationships between service qualities, satisfaction and purchase intentions in a health care setting. Journal of Health Care Marketing, 14(3), 34-40.
Michelle P. Yu., Grustani H. G. C., & Intano M. S (2017). Factors influencing Customer Retention among Banks, Sci. Int. (Lahore), 29(4),729-732
Mugambi, M. N., & Kagiri, A, W. (2015). Effects of Customer Retention Strategy on Performance of Commercial Banks in Kenya Mutegi Nicholas. International Journal of Science and Research (IJSR), ISSN (Online): 2319-7064
Ndunguru, P.C. (2007). Lectures on Research Methodology for Social Sciences, Mzumbe Morogoro
Ngaliman, M., Eka, J., & Suharto, O. (2019). The Effect of Tangibles, Responsiveness, and Reliability on Customer Satisfaction of Delivery Services; Journal of Economics and Management Studies Volume 6 Issue 5, 86 – 92.
Nzowa, S., Kara, N., & Mbilinyi, B. (2022). Influence of Service Quality on Customer Switching Behaviour in Commercial Banks of Tanzania: Evidence from Selected Commercial Banks in Dar es Salaam. Tanzanian Economic Review, Vol. 12 No. 1
Pakurár, M., Haddad, H., Nagy, J., Popp, J., & Oláh, J. (2019): The Service Quality Dimensions that Affect Customer Satisfaction in the Jordanian Banking Sector, Journal of Sustainability
Parasuraman, A., Zeithaml, V. A., & Berry L. L. (1985). A conceptual model of service quality and its implication. Journal of Marketing, 49, 41–50
Parasuraman, A., Zeithaml, V.A. & Berry, L. L. (1988). SERVQUAL: A multiple- item scale for measuring consumer perceptions of service quality. Journal of retailing, 64 (1), 12-40.
Shrestha, P. (2018) Service Quality and Customer Satisfaction: Evidence of Nepalese Banks, Nepal Journals Online
Zebrga, F., W. & Zaveri, B. (2020). Effect of Service Quality on Customer Loyalty, A Study of Hotels in Ethiopia. International Journal of Management (IJM), Volume 11.
Copyright (c) 2023 Hilda Mng’ong’o
This work is licensed under a Creative Commons Attribution 4.0 International License.
