Antecedents of Customer Retention of Ghana Commercial Bank within Agona Swedru Municipality

Abstract

The sole purpose of a business Drucker (1973) once famously claimed was “to create a customer”. However, keeping the customer has become or regarded as equally, if not more important. Reichheld (1996) emphasised that a 5 per cent increase in customer retention generated an increase in customer net present value of between 25 per cent and 95 per cent across a wide range of business environments. Customer attraction and retention is becoming an important element of any banking strategy in today’s increasingly competitive environment (Verhoef, 2003). The study investigated the determinants of customer retention in Ghana Commercial Bank within Agona Swedru Municipality. The main variables of concern were service quality, customer satisfaction, customer trust, commitment and switching barrier. The correlational design was used for the research. Simple random sampling and self administered questionnaire were utilised to obtain data from 480 customers of the bank. Mean and Step-wise regression techniques were used to examine the level of retention and contribution of these factors to customer retention. It was concluded that; switching barrier, customer commitment and customer trust were the three variables in the conceptual framework of the study that emerged as the most significant factors contributing to customer retention. The study has documented that switching barrier is the most significant factor in retaining customers. The above conclusions indicate a need for certain strategies to be applied by organisations so that customer retention would continue to be high. It suggested that management of Ghana Commercial Bank, and other banks should pay more attention to customer retention by increasing customer satisfaction through the provision of accurate and timely information on products and services to its customers. There is also the need to pay more attention to service quality through the continuous provision of fast, reliable and error-free transaction to customers