Impact of complaint handling procedure on customer retention: Evidence from Steward Bank Zimbabwe

Abstract

The main purpose of this study was to investigate the impact of an effective complaint handling system on customer retention. The components of customer complaint handling that were investigated in the study are policies and procedures, written responses, investigation process, communication channels, and corrective action. The researcher adopted the explanatory approach with the aim to explain the relationship between customer complaint handling and customer retention at Steward Bank, Zimbabwe. This research targeted all Steward bank eight (8) branches in Zimbabwe employees and customers. The eight branches are Eastgate, Joina City, 101 Kwame Nkrumah, Avondale, Bulawayo, Gweru, Mutare, and Masvingo. The sample size was 400, and 243 questionnaires were collected from customers and employees of Steward Bank, Zimbabwe. In order to statistically test the effectiveness of complaint handling to customer retention data analysis was done using the Statistical Package for Social Sciences software (SPSS) for processing of data. The study concluded that the components which are critical in customer complaint handling in order to retain customers attainment are corrective action followed by investigation, clear channels of communication, policies and procedures and lastly written responses. These components have a significant positive influence on customer retention. The following regression model was formulated. Customer Retention= 1.559+ 0.785(Corrective action) + 0.526(Investigation) + 0.322 (Clear channels of communication) + 0.205 (Policies and procedures) + 0.130 (Written responses).