Research On Factors Influencing Customer Satisfaction And Retention In Rwanda Banking Industry

Globally,the aim of organizations’ working in service industry would like to delight the customer;though,this aim is not easy to accomplish.In this era of globalization,where competition is increasing due to advancement in technology,innovation,competitive environment,and customers changing behaviors.All type of organizations including banks are encountering such global challenges and hyper competition.To sustain and continue the smooth operations in to the industry banks are required to develop and improve relationships with their potential and a new customers and stakeholders and to retain them.As like other emerging countries,banks located in Rwanda compete in all aspects of delivering services and secure customers from switching.Through this,banks provide loans to businesses and the government,but ultimately it affects the economy of the country.However,competition between firms is constantly increasing and there has been a dramatic shift in business process delivery.Financial services organizations strive to improve their operations and processes by connecting with customers in order to compete successfully and survive.Therefore,To deeply understand customer behavior;this study aims to explore the factors influencing customer satisfaction and retention.To meet the objective of the study.The author utilized a quantitative research approach.In addition,using a 5-point Likert scale,a self-administered questionnaire was designed using a google form and shared via social applications including Whats App,Email,etc.,among the Bank of Kigali(BK)customers.To run the analysis on 3 months collected data,the author used SPSS and Smart PLS 4 techniques.The primary objective of this research was to evaluate the factors that influence customer satisfaction and retention.Results revealed that commitment,complaint handling,security,service quality,and trust all had a major positive effect on customer satisfaction and retention respectively.Also,these elements accounted for 87.0% and 71.5% of changes in customer satisfaction and retention.Furthermore,security had the strongest effect on customer satisfaction and trust had the most impact on customer retention.The study also sought to investigate the impact of customer satisfaction on customer retention.The outcomes of this study showed that there is a positive correlation between customer satisfaction and retention(β=0.707).The final objective of the study was to explore the mediating role of customer satisfaction.The findings stated that customer satisfaction positively and significantly mediated the relationship between relationship marketing underpinnings(commitment,complaint handling,security,service quality,and trust)and customer retention.This research observed the partial mediation of customer satisfaction.In addition,this research has offered many implications,such as adding value to the existing literature on service industry(especially banking)by empirically connecting a more comprehensive factors to the customer satisfaction and retention.Besides,all of the hypothetical relationships were supported,which reflects the importance of antecedents(i.e.,commitment,complaint handling,security,service quality,and trust)of customer satisfaction and its consequences on customer retention in the banking sector of Rwanda,especially BK.