Determinants of Customer Retention in Commercial Banks in Tanzania
Msoka Caroline M, Msoka Elizabeth M

This study examined determinants of customer retention in commercial banks in Tanzania. Four specific objectives were developed related to latent variables: customer service, quality of the products provided by banks, pricing of bank products as well as services and customer satisfaction. The variables’ relationships were established through explanatory studies under positivism paradigm. The study adopted convenience sampling technique to select a sample of 200 bank customers. Primary data were collected using questionnaires and all 200 bank customers responded positively. The Chi-square and multiple regression analyses were used to test the hypotheses. Each latent variable was found to be effective in determining customers’ retention. The study discovered that academics need to incorporate quality of products provided by the banks together with pricing of banks products in customer retention models. For Bank of Tanzania, there is a need to expand monitoring and include quality of the products provided by banks to determine the sustainability of banking industry. Moreover, for the banks, there is an opportunity to customize their services as well as increase revenue and at the same time improve service quality by employing more Customer Relationship Managers to serve customers better and enhance their retention.

Full Text: PDF