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Halle Abdullahi Mohamed - Master of Science in Marketing Management, Kenyatta University, Kenya

Dr Jane W. Njuguna (PhD) - School of Business, Kenyatta University, Kenya

Chrispen Maende - School of Business, Kenyatta University, Kenya


SACCOs just like any other financial institutions need to have a noble comprehension of their client’s tastes and preferences so that suitable marketing approaches directed towards relationship construction and customer retention can be established. However, customer retention in Sacco’s has been a challenge due to stiff competition and higher customer expectations. This study therefore aimed at determining the effect of relationship marketing on consumer retention among DT-Saccos in Nairobi City County, Kenya. Specifically, the study focused on assessing effect of service delivery, trust, communication effectiveness and financial products diversification on customer retention by DT Sacco’s in Nairobi City County, Kenya. Customer’s age, education level and financial status was used as the moderating variable. This study was anchored on social exchange theory, servqual model and relationship commitment model. The study adopted descriptive research design and targeted five DT Sacco’s in Embakasi. Random sampling was employed in generating a396 respondents sample size from a total population of 40,342 DT Sacco members obtained from five Sacco’s in Embakasi area which formed the strata. Primary data was gathered using questionnaires which were semi structured in nature. Questionnaires were piloted which ensured questionnaire reliability in data collection. The respondents were DT Sacco members. The five DT-Saccos whose members formed the target population of the study were from; Airports Sacco, Kenpipe Sacco, Wanandege Sacco, Nafaka Sacco and Jamii Sacco. Cronbach alpha was utilized in evaluating reliability. Quantitative data was analyzed by descriptive statistics (standard deviation and mean). Inferential statistics involving regression and correlation analysis was also used to establish the effect of independent variables on dependent variable. At significance level of p<0.05, it was found that service delivery positively and significantly affected customer retention (β = 0.419, p = 0.00001), trust positively and significantly affected customer retention (β = 0.209, p = 0.00001). The study also revealed that communication effectiveness positively and significantly affected customer retention (β = 0.509, p = 0.0001) while financial products diversification positively and significantly affected on customer retention (β = 0.197, p = 0.00001) at a p< 0.05significance level. Customer characteristics (income, education and age) had a significant moderating influence on relationship marketing - customer retention relationship. Basing on the results, the study’s conclusion was that relationship marketing do have a significant effect on customer retention as shown by the F-value of 28.140, which had a p-value of 0.000. Key recommendations from this study is that Saccos should recruit qualified and competent staff who are well informed about the products and services that are on offer and the plans set for the benefit of members. The study further recommends that New changes, products and services done should be effectively communicated and with clarity. All Saccos should aim at improving their financial services and terms of products to the members.

Full Length Research (PDF Format)