The Effect of Service Quality on Customer Retention A Case of CBE Tutiti Branch

Customer retention became an important factor with the sudden increase in number of banks<br> worldwide. Customers are seen hopping from one bank to the other, either of the public or<br> private, depending on the kind of services provided by. What will happen in the future as a<br> result of loss of quality service is loss of customers, damage to corporate image, low<br> profitability, and loss of competitive edge. This study was, therefore, designed to assess the<br> effect of service quality on customer retention using the CBE Tutiti branch as a case study.<br> The study aimed at examining service quality of the branch and customers’<br> perception/expectation of service quality at the branch. The study was guided by the following<br> research questions: What is the relationship between tangibility and customer retention in the<br> branch? What is the relationship between reliability and customer retention in the branch?<br> What is the relationship between responsiveness and customer retention in the branch? What<br> is the relationship between assurance and customer retention in the branch? What is the<br> relationship between empathy and customer retention in the branch? A sample size of 378<br> respondents was chosen for the study. The five determinants of the effect of service quality on<br> customer retention i.e., tangibility, reliability, responsiveness, assurance and empathy were<br> the identified independent variables while customer retention is as the identified dependent<br> variable. In order to achieve the objectives, both primary and secondary sources of data were<br> used. Data was obtained through the use of questionnaires. The primary data was collected<br> through administrating questionnaire and was analyzed by using SPSS software (version 2020). Convenient sampling procedure was used to obtain responses from customers of the<br> branch. Correlation and multiple regressions were used to investigate the relationship<br> between dependent and independent variables. Demographic data was analyzed by descriptive<br> statistics while the relationship between service quality and customer retention was analyzed<br> using regression model. There was significant relationship between independent variables<br> (tangibility, reliability, responsiveness, assurance and empathy), and dependent variable<br> (customer retention).