EFFECT OF CUSTOMER EXPERIENCE ON CUSTOMER RELATIONS IN BANKS
Introduction
Customer experience management has been identified as an essential component of improving business performance (Kavitha and Haritha, 2018; Lundaeva, 2019). The essence of customer experience management has been attributed to strengthening the bond between businesses and their customers (Cajetan, 2018; Clemes et al., 2019).
The need for customer experience management has become more pronounced in the services sector, where the strength of the service interaction determines the quality of the service (Cajetan, 2018; Zeithaml et al., 1990). Similarly, the banking industry has been at the forefront of improving their customers’ experiences (Gayathry, 2016; Gillani and Awan, 2014).
Customer experience management has been a worldwide phenomenon, particularly in the banking industry. According to Cajetan (2018), the majority of all bank interactions in the United Kingdom were digital in order to provide customers with a banking experience.
Suvarchala and Narasimha (2018) also state that the adoption of modern banking technologies has improved customer experience in India. The same customer experience management trend was evident in African banking services. Since around the year 2010, African retail banks have improved their customer service to exceed customer expectations (Bick et al., 2010).
According to Bick et al. (2010), the move was made to improve customer satisfaction and loyalty. According to Omoregie et al. (2019), retail banks in Ghana, Africa, were taking a holistic approach to customer experience management in order to increase customer loyalty.
Unlike in other countries, the Zimbabwean banking industry has been criticized for failing to meet or exceed customers’ expectations (Dube and Chari, 2019; Murwisi, 2018). Customers became nomadic as a result of long banking lines and the inability to provide withdrawal services, switching from one bank to the next in search of a better customer experience (Murwisi, 2018).
This phenomenon, combined with the ever-increasing competition in the banking industry, resulted in a customer exodus from one institution to the next (Dube and Chari, 2019). The economic meltdown that Zimbabwe has been experiencing since 2017 has also impacted banks’ financial willpower to exceed customers’ expectations (Munatsi and Zhuwau, 2019).
Worryingly, the high rate of customer churn and portfolio purchasing in Zimbabwe’s banking industry was set against a backdrop of poor customer experience management practices.
Between 2014 and 2016, consumer switching behavior increased by an average of 9%. However, by 2017, it had risen to 11%, and by 2018, it had reached an alarming 21%. (Munatsi and Zhuwau, 2019).
The banking industry is no longer the sole provider of financial services, as telecommunications companies and microfinance institutions now provide nearly identical financial services to traditional banks (Lima, 2019). This presents a daunting challenge for banks in terms of retaining customers in order to increase market share through competitiveness.
Through customer experience management practices, this study aimed to bridge the gap between the problems of customer attrition, portfolio purchasing, and churning behavior.
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EFFECT OF CUSTOMER EXPERIENCE ON CUSTOMER RELATIONS IN BANKS
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