Influence of Relationship Marketing Practices on the Performance of Commercial Banks In Kenya

Abstract

Banking as a service industry recently has experienced a tremendous growth as it relates to profits, ongoing deposits and revenues. This trend has had a significant influence in competition in the industry. Even so, Equity Bank has successfully tried to brave the cut throat competition even to stand out as one of the most successful Kenyan businesses. At the wake of this competition, relationship marketing has come in handy helping organizations establish durable and unending associations with their customers. Anchored in its marketing and expansion tact, it has been well-known to employ relationship marketing as it ably pursues to gain but also preserve their customers segment by aiding top not customer services, and to this end making it one of one of the pillars to gaining a competitive advantage since it results to markets access, facilitates repeat purchase, establishes exit barriers hence locking in customers and the overarching effect in that it benefits all parties in the business relationship. This paper has analyzed the relationship marketing practices that are being employed by Equity Bank in a bid to gain a competitive advantage in this growing banking industry. To realize this, the author formulated a conceptual framework. The variables therein were used to formulate both objectives and the research questions. The study employed the use of structured questionnaires; the target respondents were boundary spanners and in this case, staffs in departments that deal with customers directly. The study used descriptive design for data analysis because it sought to do a statistical analysis of relationship between variables. The analysis of the data was done through the Statistical package of Social Sciences (SPSS) and findings penned thereafter. The findings revealed that 88% of the respondents ascribed to the view that communication, been an aspect of marketing translated to a relative influence on the outcome of the bank’s performance. This means that financial performance of the bank is positively correlated to the marketing communication mix strategies employed by the bank. The findings also revealed that least 76% of the total respondents were held the view that they differentiated their offing of services to particularly suit the needs of their clientele for the long haul. It also emerged that the bank had a deliberate approach for service quality as a relationship marketing practice. This was illustrated by the fact that 70% of the respondents who agreed that the bank they worked for invested the resources of the bank in initiatives that would enhance service quality and deliver utmost quality to clientele. The study findings also went further to reveal that personalization as a relationship marketing practice was employed by the bank. Further 85% of the respondents were of the opinion that they personalize relationships with their clientele. Lastly, according to the findings, 80% of the respondents opined that the bank they worked for uses customer service to enhance service delivery.The respondents suggested that these practices have had a progressive impact in the bank’s performance. Some indicators of performance that they indicated were: increased market share, retaining current customers, customer loyalty, improving image, increased profits and attracting customers.