THE EFFECTIVENESS OF CUSTOMER RETENTION STRATEGIES IN THE ZAMBIAN BANKING SECTOR

Abstract

Introduction: This study examines the retention strategies employed by ZANACO Bank and their effectiveness in fostering customer satisfaction and loyalty within the Zambian banking sector. The research aims to identify key drivers of customer retention, evaluate the effectiveness of existing retention strategies, and assess their contribution to the bank's competitive advantage. Methods: The study employs a mixed-methods approach, by employing a structured questionnaire to gather data from a sample size of 201 ZANACO Bank customers through simple random sampling. Analysis of the collected data was conducted using IBM SPSS Statistics version 27, employing descriptive statistics, frequency distributions, pie charts, and one-way ANOVA analysis to examine perceptions of retention strategies, drivers of customer retention, and the effectiveness of specific retention initiatives. Results: The findings reveal mixed perceptions regarding the existence and effectiveness of retention strategies at ZANACO Bank. While customers acknowledge the importance of communication, personalized services, and incentives and rewards, there are notable gaps and areas for improvement identified. Competitive interest rates, customer service quality, and effective product offerings emerged as significant drivers of customer retention. Furthermore, personalized services and incentives and rewards demonstrate significant effectiveness in driving customer loyalty. Recommendations: Based on the study findings, several recommendations are proposed for ZANACO Bank to refine its retention initiatives and foster stronger customer relationships. These include enhancing transparency and communication about retention strategies, tailoring services to individual customer needs, and optimizing incentives and rewards programs. By prioritizing customer satisfaction and loyalty, ZANACO Bank can achieve sustainable growth and success in the competitive Zambian banking sector.