Customer Retention: Key towards Sustaining Competitiveness in Commercial Banking in South Africa

Abstract

Customer retention is an important component of banking strategy in today's increasingly competitive environment. Worldwide, banks are struggling to sustain their competitiveness, which hinders their traditional income streams. The foremost challenges banks are currently facing are cost containment and customer retention. Therefore, a relentless focus on customer retention is required to sustain their competitiveness. This article sought to explore factors, which bank customers consider in their decision to leave their current bank for a competitor. Semi-structured interviews were conducted to identify the factors, which prompt customers to switch banks. A thematic analysis of data identified four themes concerning retention. The empirical findings suggest that customers sought an experience that made them feel special and valued. The results also show that essentially, banks that pay special attention to their customers will succeed in retaining their customers.