DECLARATION

We do hereby declare that this work is the result of our own research and has not been presented by anyone for any academic reward in this or any other university. All references used in the work have been fully acknowledged. We bear sole responsibility for any shortcomings.

.................... BROBBEY COLLINS AGYAPONG (10242448) .. ASARE PRISCILLA ASANTEWAAH (10250832) DOLIVEIRA CHARLIE PEGUY (10256927)

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CERTIFICATION
I hereby certify that this long essay was supervised in accordance with procedures led down by the university.

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MR. MAHAMA BRAIMAH (SUPERVISOR)

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DEDICATION
This work is dedicated to our respective families and all loved ones. We very much appreciate their love, support, encouragement and prayers throughout our years of education.

ACKNOWLEDGEMENT
First of all, we thank the Almighty God for bringing us this far. We are also indebted to our supervisor, Mr. Mahama Braimah for his timeless dedication during the supervision of this work. Special appreciation goes to Mr. Kofi Siabi, the Marketing Manager of CAL Bank for his time, contribution, and support especially during the data collection phase of the work.

ABSTRACT
This study has been conducted to investigate customer retention practices, with CAL Bank as the case study firm. The dire need to retain customers because of the increasingly competitive markets coupled with the flexibility in switching service providers has led to a change from satisfying and delivering quality services to building long term relationships and retaining the customer. There is also an increasing need for customer retention practices by firms because of the high cost of attracting new customers than retaining existing customers. The study seeks to achieve some major objectives which include; clarifying the importance of customer retention, establishing how customers are retained, and linking customer retention to profitability and prosperity of the firm. The methodology further ensures the gathering of appropriate data and the careful employment of reliable statistical techniques in analysing the data in order to control possible statistical errors; our methodology therefore is scientific. Both qualitative and quantitative research techniques are employed in the study. We made use of the judgmental sampling technique in selecting elements in our sample. Interviews were conducted and observation was also done to gain more insight into the study. It was found that Cal Bank has a number of strategies put in place for retaining its customers; and also their customers are quite satisfied with their service and express the desire to continue dealing with the bank. Further investigation revealed that the bank was extra conscious in retaining more profitable customers than less profitable ones. Accessibility and reliability impacted more on customers decision to stay with the Bank than physical aesthetics and professional appearances of staff. It is recommended that enterprises should build an organizational structure and culture around retention; employees should be trained on the importance of customer retention and how to contribute to retain customers; finally, a well laid down strategy for customer retention should be incorporated into enterprises.

LIST OF FIGURES
Figure 2.1 Figure 4.1 Figure 4.2 Figure 4.3 Figure 4.4 Figure 4.5 Figure 4.6 Figure 4.7 Figure 4.8 Figure 4.9 Figure 4.10 Figure 4.11 Figure 4.12 Figure 4.13 Figure 4.14 Figure 4.15 The Customer Life Cycle Employee Branch (Profile) Customers Branch (Profile) Departments and their respective number of employees Number of years customer has been with CAL Bank. Customers average bank balance Acknowledgement of customers by employees Employee perceptions of services in relation to competitors Awareness of the availability of customer retention procedures Employee perceptions on the availability of rewards Monthly visits to the bank Recency of contact between the customer and the bank Tangible factors and its effect on customer retention Accessibility factors and its effect on retention Responsiveness related factors Reliability related factors

TABLE OF CONTENTS
Declaration Dedication Certification Acknowledgements Abstract List of figures Table of contents i ii iii iv v vi

vii

CHAPTER ONE: INTRODUCTION 1.1 1.2 1.3 1.4 1.5 1.6 1.7 Background 1 3 5 6 7 10 11

Problem statement

Objectives of the study Test questions -

Significance of the study Scope of the study Chapter disposition -

CHAPTER TWO: LITERATURE REVIEW 2.1 2.2 2.3 2.4 2.5 2.6 Introduction Who is a customer? 12 12 14 16 18 24

Why customer retention?

Customer relationship management -

Customer retention strategies and practices Customer retention and financial services -

2.7

Customer retention and customer satisfaction

26

CHAPTER THREE: METHODOLOGY 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8
3.9

Introduction Research strategy

29 29 30 31 31 31 32 33
33

Population of the study Sample size -

Sampling techniques Sources of Data Questionnaires Personal interview

Observation

3.10 3.11 3.12

Procedure

34 34 35

Data analyses techniques

Limitations of the methodology

CHAPTER 4: ANALYSIS AND INTERPRETATION OF RESEARCH FINDINGS 4.1 4.2 4.3 4.3.1 4.4 4.4.1 4.4.2 4.4.3 4.4.4 Introduction Profile of respondents 36 36 41 41 43 43 44 45 45

Importance of customers to the business

Customers deserve to be treated with respect and attended to. Procedures and strategies for customer retention -

Employee awareness of the availability of customer retention procedures Customer Retention Practices in CAL Bank -

Persons responsible for implementation of customer retention Budget for Customer Retention -

4.4.5 4.5 4.5.1 4.5.2 4.6 4.6.1 4.7 4.8 4.8.1 4.8.2 4.8.3 4.8.4 4.9

Rewards based on customer retention Factors that contribute to customer loyalty Customer retention deducing factors Customer retention influencing factors

46 48 48 51 56 57 57 58 58 60 61 62 63

Success and profitability of CAL bank, as a result of retention. The Pareto principle -

Recommendations to enterprises Answering test questions Question 1; Question 2; Question 3; Question 4; Observation -

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS 5.1 5.2 5.2.1 5.2.2 5.2.3 5.3 5.4 Introduction 65 65 65 66 67 67 68 70 72

Summary of findings Questionnaires Interview Observation Conclusion -

Recommendations -

BIBLIOGRAPHY WEBOGRAPHY

APPENDICES A1. A2. A3. Customers Questionnaire Employee Questionnaire Interview Outline 73 79 85