Analysis of customer churn in Ugandan commercial banks: a case study of Stanbic Bank

Abstract

The main purpose of this study was to analyze customer churn in Ugandan Commercial Banks with particular attention to Stanbic Uganda Holdings Limited as the case study. The study was guided by a number of related objectives which included the following; to establish the level of customer churn in Stanbic Bank; to investigate the factors that cause customer churn in Stanbic Bank and; to develop strategies that can help minimize customer churn in Stanbic Bank. The study adopted a descriptive research design using a quantitative methodology. The population focus of the study was 139 respondents drawn from Stanbic Bank customers with active accounts and a few segment heads. Using the random sampling technique, customers were selected for use in the study and using purposive sampling, segment heads were selected. Data was collected using a questionnaire that was both personally administered by paper and others distributed online by the researcher for ease of data collection and for purposes of explaining contents of the questionnaire to customers. Data collected was edited and coded in SPSS for analysis using descriptive statistics such as means, modes, minimums, maximums and frequency distributions. Analyzed data was presented using tables and figures. Interviews were conducted with a few selected staff. Annual reports were also analyzed to gather secondary data. Key findings of this study revealed that most of Stanbic customers perceived customer service quality levels to be good. Majority of customers expressed that they enjoyed a good relationship with the bank; the bank was reliable, staff friendly and helpful. The study also revealed that customers experienced information gaps as to the knowledge they had regards different bank products and services. The knowledge gap by customers is a key recommendation for the bank to look into so that customers do not switch to other alternatives in search of services they would have received from the same provider. It was also recommended that commercial banks continue to innovate, provide superior customer service and experience as a way of managing churn. Furthermore, banks are encouraged to utilize churn prediction models and techniques as a way of tracking customer behavior and preferences.