LEVERAGING RELATIONSHIP MARKETING STRATEGIES FOR BETTER PERFORMANCE: EVIDENCE FROM COMMERCIAL BANKS IN NAIROBI CITY COUNTY, KENYA
LEVERAGING RELATIONSHIP MARKETING STRATEGIES FOR BETTER PERFORMANCE: EVIDENCE FROM COMMERCIAL BANKS IN NAIROBI CITY COUNTY, KENYA
Laureen Mercy Auma - Masters Student, School of Business, Economics and Tourism, Kenyatta University, Kenya
Dr. Anne Muchemi (PhD) - Senior Lecturer, Department of Business Administration, Kenyatta University, Kenya
ABSTRACT
Kenyan commercial banks have experienced deterioration in key performance indicators including Return on Investment (ROI) and customer retention rates. This study examined the effect of relationship marketing strategies on the performance of commercial banks in Nairobi City County, Kenya. The specific objectives were to determine the effect of loyalty programs, corporate social responsibility (CSR) initiatives, personalization strategies, and customer service excellence on bank performance. To provide a comprehensive theoretical foundation, the study was anchored on Relationship Marketing Theory, Social Exchange Theory, and the Balanced Scorecard Model. A descriptive and explanatory research design was adopted. The target sample comprised 156 senior staff of all 39 commercial banks based in Nairobi City County. Through stratified simple random sampling, 116 respondents were sampled. Data for the study was collected using structured online surveys and supplemented with secondary data from industry reports. It was found that there was a significant positive correlation between the four RM strategies and bank performance. Among the four strategies, the highest degree of correlation was witnessed in personalization (r = 0.609, p < 0.01) which came out to be the sole predictor of bank performance in the multiple regression model (β = 0.527, p = 0.005). The remaining strategies included corporate social responsibility (CSR) practices (r = 0.562, p < 0.01), customer service excellence (r = 0.463, p < 0.01), and customer loyalty programs (r = 0.326, p < 0.01). All together, the four strategies explained 37.7% of the variance in bank performance (R² = 0.377, F = 16.788, p < 0.001). The study concludes that personalization is the most impactful driver, while the other strategies function effectively as complementary components of a holistic RM framework.
