Customer Retention Practices in Micro and Small Food Agro-Processing Enterprises in Tanzania

Abstract

Customer retention practices are crucial for survival and success especially for micro and small enterprise which have limited resources to engage in continuous marketing activities for attracting new customers. This study was set to investigate the customer retention practices in micro and small food agro-processing firms. The study draws from the Customer Bonding theory examining customer retention practices from market perspective as applied in micro and small food agro-processing firms. The study employed quantitative research approach and a cross- sectional survey design. Data were collected from 302 owner-managers of food agro-processing firms in Dar es Salaam, Morogoro and Arusha. Descriptive analysis was done on the responses of customer retention practices employed by the firms. The paper demonstrates that, food agro-processing MSEs employ customer retention practices. It was established that, they do customer needs assessment, analyze competitors’ activities and behaviours and they coordinate internal functions to increase customer value. Likewise, the study established that, employees of these firms portray positive behaviours towards customers and that there are commendable relationships between the firm and the suppliers of raw materials for food processing. The findings add to the existing body of literature on highly demanded knowledge on market focused customer retention practices which are mostly needed in firms operating in competitive business environment like food agro-processing. In addition, customer retention practices are highly recommended in MSEs due to their limited resources to continually recruit new customers. Notably, the investigated customer retention practices can be tested in other firms and sub-sectors with the focus of enhancing customer bonds with the business.