Effect of Customer Relationship Management on Performance of Commercial Banks in Kenya

Abstract

Customer Relationship Management (CRM) is a strategy that enables a bank to analyze customer profiles, detect their needs and potential profitability areas and establish the necessary actions to achieve customer satisfaction, competitive advantage and thus the. CRM looks at ways to treat clients as individuals with specific needs so as to attain a position where the organization can influence clients’ choices positively toward their product and service offerings. It is a combination of organizational strategy, information systems, and technology that is focused on providing better customer service. The study sought to determine effect of customer relationship management on the performance of Tier 1 banks in Kenya as the main players in the country’s banking sector controlling the market share, customer base and asset base as well as employee numbers. The study adopted a descriptive survey design. A sample of 96 purposively selected respondents from the branches of the six Tier 1 banks in Nairobi was picked. Nairobi banks were targeted because all banks in Kenya have their headquarters and their main branches here. The study results showed that a positive relationship exists between adopted marketing strategies and customer service at the studied company. In particular, people strategies were found to have the greatest influence on customer relationship management.