Moderating Role of Demographics on the Relationship between Customer Relationship Management and Satisfaction of Commercial Banks’ Account Holders in Kenya

Abstract

Customer relationship management (CRM) in the banking sector is concerned with maintenance and optimization of long lasting valuable relationships with customers. Globally, CRM has been applied in the banking sector to enhance customer satisfaction which increases competitiveness, customer retention, loyalty and profitability. The greatest challenge in the banking industry is maintaining relationships with customers of different age sets, gender and income levels which impact negatively on customer satisfaction and performance. The objective of this study was to establish the moderating effect of demographics (age, gender, income level) on the relationship between CRM and satisfaction of commercial banks account holders in Kenya. The target population was 28,324,334 account holders from commercial banks in Kenya out of which a sample of 400 respondents was used. The study used both descriptive and explanatory research design. Primary data was collected using multi-stage sampling technique. For data analysis, stepwise multiple linear regression was used. This study established a significant and positive moderating relationship explaining; age (R 2 =56.9%), gender (R 2 =62.3%) and income level (54.6%) variation in satisfaction of account holders. This study concluded that age, gender and income have a positive and statistically significant moderating effect on the relationship between CRM and satisfaction of account holders in Kenya. Based on the findings, this study recommends that commercial banks should develop CRM strategies that minimize account holder dissatisfaction and maximize satisfaction with their services based on age, gender and income level. The study further suggests that similar studies be carried out in other service industries to further validate the study proposition.

Demographic Differences and Customer Satisfaction towards Banking Services in Benin City, Nigeria

“…This corroborates with Mishra (2013) findings that there was significant difference on age categories on customer satisfaction. Correspondingly, Mwirigi, et al (2018) from their study realize that age among others is positive and related significantly in moderating CRM and satisfaction in Kenya account owners.…”

“…The outcome shows that gender and occupation have significant differences on customer satisfaction, but insignificant differences were observed on customer satisfaction on the categories of age, house hold income and marital status. Furthermore, Mwirigi, et al (2018) carried out a study between satisfaction of commercial banks' account owners in Kenya and CRM on the moderating role of demographics. From their study they realize that age; gender and income are positive and related significantly in moderating CRM and satisfaction in Kenya account owners.…”

“…Similarly, Okeke and Okpala (2014) observed that demographic attributes in actual reality are prone to changes and these would necessitate for continuous observation and modification of strategies if germane. Mwirigi, Maina and Kimencu (2018) emphasized that it is necessary for banks to incorporate demographic features in their Customer Relationship Management (CRM) practices, policies and strategic plans in view to achieving the anticipated profits, effectiveness and accomplishment. Mishra (2015) stated that satisfaction in service delivery provided by banks to their customers result to progress in the banking sector because of the confidence customer place in banks.…”

“…Henceforth, continuous evaluations of customer satisfaction are important to banks which may be cause by external factors such as demographic trends. Tasks performance understanding does not only act to bring about additional value to staff efficiency but in general contributes to the banking operations (Abdullah, Hussain & Ghani, 2015) Several previous studies related to demographic and customers' satisfaction in banks and OFIs had been conducted by Mishra (2013); Rahman, Islam and Akter (2013); Tiwari (2014); Mwirigi, et al (2018); Mkpojiogu, Hashim, Hussain and Tan (2019); Ariffin, Hamid and Shukri (2020); Dhanya and velmurugan (2021). Nevertheless, not much in this field has been well-thought out in the Nigerian context, as an avenue for providing quality banking services to existing and potential customers.…”

Privacy enhancing technology adoption and its impact on SMEs’ performance

“…Previous studies have examined moderating the relationship between independent characteristics and technology adoption. 115 This study investigates demographic characteristics, namely firm size and industry sector, as moderating factors to define the relationship between technological, environmental, organizational, and managerial readiness, intent to PET adoption, and FP.…”