Relationship marketing and customer retention lessons for South African banks

Abstract

21Banking industries are very competitive, and banks are facing service delivery challenges. Relationship marketing is a strategy for building and maintaining relationships with clients, and customer retention is important for banks as it refers to the maintaining of profitable banking clients. Therefore, this article addresses the need for further understanding of relationship marketing and customer retention of banks, and related lessons that can be learned from banks in Canada and the United Kingdom (UK). A self-developed, structured questionnaire was distributed via convenience snowball sampling to banking clients in South Africa, Canada and the UK. The findings revealed that six banking service delivery variables influence banks’ relationship marketing and customer retention. Fee structures and the ethical behaviour of banks are regarded as the most important focus areas for banks. Canada was identified
as  The country with the most highly regarded banks in terms of relationship marketing, customer retention, empowerment of bank
employees and personalisation of banking services. UK banks were
highlighted as superior in setting fee structures, communication strategies and ethical behaviour. Therefore, strategies implemented by Canadian and UK banks relating to the variables were adapted to fit South African banks as well as institutions in other developing countries. The implementation of the recommendations of the  Article may lead to improved client relationships and increased customer retention rates, which will be beneficial to banks, their clients and the countries in which they operate. The study also resulted in the development of a conceptual model that could be used in future relationship marketing research.