Relationship Marketing and Customer Retention in the Ghanaian Banking Industry

Abstract

The Ghanaian banking industry has experienced a heightened level of competition in recent times due to the recent banking sector clean-up by the Bank of Ghana (BOG) which has resulted in a number of mergers, acquisitions and bank closures. As a result of this development, banks in Ghana have adopted relationship marketing (RM) as a strategy to attract new customers and for customer retention purposes. This research seeks to investigate the impact of relationship marketing (RM) on customer retention in the Ghanaian banking industry. It also examined the impact of relationship marketing (RM) on customer satisfaction as well as the impact of customer satisfaction on customer retention in the Ghanaian banking industry. A survey of customers from twenty banks was conducted using a questionnaire. The results revealed that relationship marketing account for a significant variation in the extent of customer retention in the Ghanaian banking industry. The study further revealed that customer satisfaction also accounts for the level of customer retention in the Ghanaian banking sector. The study also discovered that banks in Ghana are able to retain their customers even without employing non-financial benefits, which is considered as very essential in the implementation of RM practices. This indicates that banks in Ghana which employ non-financial benefits in addition to financial benefits could have a competitive urge over other competitors in the Ghanaian banking industry. As a consequence, there is a call on Ghanaian banks to implement effective relationship marketing strategies in order to ensure the retention of their customers. Furthermore, banks should employ strategies that will ensure that their customers are satisfied in order to guarantee higher level of retention of their customers

Keywords: Relationship Marketing, Customer Retention, Banking, Ghana.

DOI: 10.7176/EJBM/12-29-01

Publication date:October 31^st 2020