Abstract:
Customer retention, as a concept, has grown in acceptance by players in the services
sectors. Extensive research studies have been conducted on strategies employed in
customer retention. However, there is insufficient research on what links organizational
performance of firms and customer retention strategies. The research objectives were
to establish how strategies employed in customer retention influenced commercial
banks’ organizational performance of in Thika Town of Kiambu County. In the
literature review, the researcher reviewed three theories in the theoretical framework to
demonstrate the connection between customer retention strategies and organizational
performance of commercial banks. Among the concepts were the Loyalty Effect, Social
Exchange, and Customer Bonding. The study's population consisted of 227 employees
from Thika's 22 commercial banks, and it was conducted using a descriptive research
method. The study used purposeful sampling, which included branch management,
supervisors, and other customer-facing staff from the 121 target institutions at the time.
A questionnaire with both open-ended and closed-ended questions was used as the
study tool. Version 21 of the Statistical Package for Social Sciences was used to analyze
the data. To determine the direction and connection of variables, the researcher used
correlation and regression analysis. Based on the objectives, the findings were recorded
using frequencies, charts, and tables. Commercial banks used a variety of distribution
channels for their services, including mobile banking, POS Terminals, Agency banking,
and Automatic Teller Machines, according to the survey. According to the findings, the
success of Commercial Banks in Thika town was aided by the development of loyalty
and rewards programs, a strong corporate image, and the supply of high-quality
services. As a result, banks must continue to innovate in distribution and implement
high-quality service methods. Banks can also continue to improve their performance by
investing in loyalty and rewards programs and enhancing their corporate image.
