ASSESSMENT OF CUSTOMER SERVICE STRATEGIES ON CUSTOMER RETENTION IN LOCAL COMMERCIAL BANKS: A CASE STUDY OF INVESTRUST BANK PLC

The study sought to examine the effect of customer service strategies on customer retention in
a local commercial bank using Investrust Bank PLC as a case study being the only indigenous
bank in Zambia. Primary data was collected from bank customers using a likert type scale
questionnaire adapted from the ServQual dimensions of Service Quality for banks. The sample
size was of 106 respondents of the Industrial Branch of Investrust Bank PLC Data presentation
and discussion were supported with bar graphs , pie charts and tables and simple correlation
analysis using the Microsoft excel and SPSS (21.0) version. The study established that
Investrust Bank Plc do have customer retention strategies and these included “ digital channels
of service delivery to reduce physical banking, ATM network, innovation of new products,
prompt service delivery, efficiency in handling customer complaints. The findings further
revealed that customers were generally satisfied with the bank’s customer service strategies in
terms of the five dimensions of the SERVQUAL model, i.e. Tangibility (r = 0.64), Reliability
(r = 0.61), Empathy (r = 0.68), Responsiveness (r = 0.58) and Assurance (r = 0.52). The
association ranges from moderate positive to strong positive in the areas where employee based
services were offered which are statistically large enough to shows that the bank’s customer
services are within the expectations of their customers. However there were complaints on
tangibles such as frequent downtime of systems, internet banking and ATMs resulting in
dissatisfaction as well as some areas of reliability and responsiveness. The study recommends
that these areas of concern be addressed urgently and also that periodically customer feedback
on desired service quality be sought to provide satisfaction. The bank must also train and
motivate their staff to ensure that service delivery is of excellent quality. Thus Investrust Bank
Plc needs to ensure that their service quality is frequently reviewed by obtaining customer
feedback to identify gap areas and remedy them. This way the bank will match its service
delivery to customer expectations which will enhance customer satisfaction, loyalty and
retention.