Influence of Strategic Customer Retention Practices on the Performance of Automotive Firms in Nairobi City County, Kenya

Abstract

Purpose: The main focus of the study was to establish how strategic customer retention practices influences performance of automotive firms in Nairobi City County, Kenya. The study specifically focused on establishing the influence of customer support programs, technological advancements, and strategic communication practices and customer’s motivation programs on performance of automotive firms in Nairobi City County, Kenya. The study was anchored on Expectancy Theory, Diffusion of Innovation Theory, Communication Theory and Customer Service Theory. Methodology: The study employed a descriptive survey research design and targeted 18 franchised automotive firms registered by Kenya Motor Industry Association. The unit of observation comprised of employees in strategic, marketing and IT departments. A total of 80 respondents were involved in the study. Primary data was utilized in the study and was gathered through 5-point Likert scale structured questionnaires. Both descriptive and inferential statistics were adopted in analyzing the collected data. The statistics were generated by help of SPSS software and results presented in form of tables and figures. The study conducted a pilot test before the main study on two randomly selected automotive firms to assess the reliability and validity of questionnaires. Respondents involved in the pilot study was not be included in the main study. Findings: The study established that strategic customer retention practices accounts for 61.8% in variations of performance of automotive firms in Nairobi County. The study further established that strategic customer retention practices comprising of customer support programs, technological advancements, and strategic communication practices and customer’s motivation programs positively and significantly influences performance of the firm. This was depicted by beta values of 0.508, 0.324, 0.216, and 0.196 and significant values of 0.000, 0.000, 0.007, and 0.012. Unique Contribution to theory, Policy and Practice: The study concluded that enhancing the strategic customer retention practices leads to enhanced performance levels of the firms. The study provided recommendations to the management of the automotive firms to enhance aspects of customer support programs, technological advancements, and strategic communication practices and customer’s motivation programs since the practices leads to enhanced performance levels of the firms.