Customer relationship management and customer retention: evidence from a bank in Ghana

Abstract

This study investigates the relationship between customer retention and customer relationship management CRM constructs represented by five dimensions namely bonding, empathy, reciprocity, trust and responsiveness using data from five branches of a bank in Ghana. Structured questionnaires were used in collecting data from 282 respondents who were customers of these branches. The results indicate the existence of a positive relationship between customer retention and four of the dimensions of customer relationship construct namely bonding, reciprocity, trust and responsiveness. Empathy was removed from the analysis owing to its low reliability value. The results also provide new insights into CRM and customer retention in the banking sector of Ghana. The study also indicates a strong relationship between reciprocity and bonding as well as responsiveness and trust. It is, therefore, important for banks to develop strategies to reciprocate and to be responsive to increase the switching costs of their customers.