A Micro Economic Analysis of Customer Retention Indicators

This research explored the customer retention indicators at Standard Chartered Bank in the Dar Es Salaam region. The key indicator under investigation was customer satisfaction based on three customer service aspects, that is, interpersonal communication, service performance and complaint handling.

The research problem that instigated this research was that of many companies not taking into account these indicators and instead focusing attention on result oriented indicators such as profitability and productivity. In order to research this, questionnaires were distributed to management members and deposit account holding external customers. Data was then compiled and analyzed using computer software.

The results gave an indication that improvements in levels of satisfaction with the customer service mentioned above were likely to increase customer retention. This was supported by extraneous findings that indicated that customers were taking notice of other banks and that they are doing so as a means of filling the gap that existed between their expectations of the bank and what they were actually getting. As a result it was suggested that a number of elements should be rectified including employee satisfaction, service quality standard monitoring, and leadership involvement as these have are key drivers of customer satisfaction and customer retention.