Abstract
These days, a highly competitive corporate climate may increase the need to improve customer retention and fortify customer connections. The aim of this study is investigating how customer retention strategies affect small and microenterprise performance in three Wollega Zones. An explanatory and descriptive research design was employed. Additionally, a combination of qualitative and quantitative methodologies was used. The study's target population included all SMEs' owners and managers as well as their employees. To choose the study's sample size, the researchers employ both stratified and purposive selection strategies. Data was gathered from 346 participants. Both primary and secondary data were gathered for this investigation. The data was analyzed using the mean, frequency, percentages, and standard deviation. The association between SMEs' performance and customers’ retention strategy was measured and predicted using regression analysis. The study's conclusions demonstrated a relationship between SMEs' performance and their customer retention strategy status, with higher performance being related with better customer retention strategy status. Additionally, it was discovered that the businesses were not employing the right sales marketing tools for the right audiences to raise awareness of their goods and services. Additionally, it comes to the conclusion that the performance of small and micro enterprises was significantly correlated with customer retention strategies.
Keywords
SMEs, Performance, Customer Retention Strategy, Sales Promotion, Service Quality, Customer Relationship Management, Training and Development
1. Introduction
A business in today's competitive environment uses customer retention to fortify itself against encroaching rivals
He contends that rival businesses are constantly trying to draw customers away from other businesses by providing high-quality products. According to Fluss's research, yearly customer attrition rates vary from 7% in sectors like banking and insurance that have strong exit barriers to nearly 40% in the mobile phone sector.
It might be more important than ever to boost customer retention and fortify customer connections in the cutthroat corporate world of today. Only in a genuinely fulfilling business organization do customers stay. Providing what customers want is only one aspect of customer retention. They become devoted brand advocates since it surpasses their expectations. Research by Hamilton-Ibama and Ihunwo indicates that engaged customers generate 1.7 times more revenue than normal customers, while having engaged employees and engaged customers returns a revenue gain of 3.4 times the norm
| [24] | Hamilton-Ibama, E. L., & Ihunwo, E. (2022). Service quality and customer retention in deposit money banks in Port Harcourt, Rivers State, Nigeria. American Journal of Economics and Business Management, 5(2), 27-41. |
[24]
. Therefore, a successful customer retention strategy is critical to achieving maximum profit for any business organization.
1.1. Statement of the Problem
The goal of customer retention strategies in today's modern, cutthroat business environment is to keep customers happy and avoid being overtaken by rivals. According to Ouma et al., customer retention is a common concern across a wide range of businesses and is essential for sustainability or bottom lines in the competitive market of today because it boosts sales and results in significant cost savings. This is due to the fact that acquiring new customers is more expensive than keeping current ones. Loyal customers are more inclined to provide free reviews, while long-term customers may charge higher costs because they are less price sensitive. The effect of competition is lessened in this way. Customer loyalty is getting harder to cultivate in practically every industry, even with all the resources put into it. Gaining a deeper understanding of the fundamental factors influencing customer loyalty is getting harder to cultivate in practically every industry, even with all the resources put into it. Gaining a deeper understanding of the fundamental factors influencing customer loyalty is crucial before terminating a customer. Such appreciation also aids businesses in enhancing their ongoing initiatives to entice other customers to spend more money and stay with them
| [49] | Ouma, B. O.; Ndirangu, A. W.; Munyaka, F. G.; George, G. E.; Mandere, E. N.; Maringa, A. K. &Maswari, E. (2013). Organizational Customers’ Retention Strategies on Customer Satisfaction: Case of Equity Bank Thika Branch, Kenya. Research Journal of Finance and Accounting, 4(10), 8-16. |
[49]
.
Businesses all throughout the world have different strategies for improving customer retention, albeit the strategies differ based on the specific roles that each business plays. This is done in an effort to increase the organizations’ customers' contentment. Since managers can use the energy of every customer to assess customer strength and optimize customer happiness and retention, customer retention strategies have become the most significant phenomenon in an organization
| [29] | Kakuru J. (2000). Financial Dimensions and the Business (1st ed). Cambridge, UK: Cambridge: University Press. |
| [20] | Gengeswari, K., Padmashantini, P., &Sharmeela-Banu, S. A. (2013). Impact of customer retention practices on firm performance. International Journal of Academic Research in Business and Social Sciences, 3(7), 68. |
[29, 20]
.
The importance of customer retention strategies has been highlighted in a number of studies
| [12] | Dawkins, J. & Lewis, S. (2003). CSR in stakeholder expectations: And their implication for company strategy. Journal of Business Ethics, 44(2), 185-193. |
| [20] | Gengeswari, K., Padmashantini, P., &Sharmeela-Banu, S. A. (2013). Impact of customer retention practices on firm performance. International Journal of Academic Research in Business and Social Sciences, 3(7), 68. |
| [18] | Fisher, A. (2001). Winning the battle for customers. Journal of Financial Services Marketing, 6(2), 77-83. |
[12, 20, 18]
. According to their research, the primary tactics that improve customer retention include price strategies, relationship marketing, and customer relationship management. Researchers have underlined that maintaining and growing the current clientele is just as crucial as bringing in new ones. Customer satisfaction is the company's relationship capital. The purchasing company would pay for the supplied customer base, the quantity and value of customers doing business with the new company, in addition to the plant, equipment, and brand name if the business were sold. All things considered, the business must comprehend its customers whenever it acquires new ones. Time, effort, money, and resources are all involved in these
| [40] | Mandal, P. C. (2016). Dimensions affecting customer satisfaction in retail banking: A literature review. International Journal of Applied Research, 2(1), 302-306. |
[40]
.
A lot of research has been done on customer retention and how it affects performance, but not many have looked at how MSE performance is affected. Due to a lack of business emphasis on the issue and unclear analytics on what attrition is, MSEs are attempting to retain consumers reactively rather than proactively. The situation's uniqueness and the variety of your clientele must be taken into account for a customer retention plan to be effective. This is due to the fact that the creation and administration of successful customer retention strategies depend heavily on a critical awareness of what works and what doesn't
| [31] | Kanyiri, F. K. (2009). Factors That Inhibit Innovation in Financial Intermediaries for SMEs in Kenya: A Case Study of the Perspectives of Entrepreneurial Members of SACCOs in Nairobi City. Unpublished MA Thesis. Nairobi: USIU. |
[31]
.
In a world that is extremely competitive, customer retention is becoming recognized as a crucial management strategy. Maintaining long-term, mutually beneficial connections with customers is the goal of customer retention. For the majority of businesses, this is the foundation of relationship marketing. Maintaining the relationship that has been built between the company and its customers is the focus of customer retention. According to Pareto's rule, sometimes known as the 80-20 rule, the company's 20% of consumers account for 80% of its sales and profits. Therefore, it is crucial that the business satisfy its most lucrative clients and concentrate on keeping them as customers.
In order to improve their performance in terms of market share, profitability, and other metrics, SMEs must implement customer retention strategies in a market that is expanding and becoming more competitive. This is especially crucial as the industry is maturing to the point where SMEs provide almost similar goods throughout the product lifecycle. As SMEs compete for market share, offering identical items runs the risk of creating a downward spiral of ongoing price reductions. Retaining as many customers as possible is one strategic goal that SMEs should adopt to be competitive
| [43] | Mendzela, J. (2003). Leadership and management how central banks can measure efficiency and deliver effective reform. Central Banking, 13(3), 59-66. |
[43]
.
Gaining a sustained competitive edge in the market requires careful attention to customer retention in particular. The ability of the business to implement efficient customer relationship management to attain customer satisfaction in order to keep current customers and attract new ones is one of the main concerns in Ethiopia's highly competitive MSE sector today. In the three Wollega Zones alone, that is accurate. Since it boosts revenue and results in considerable cost savings, customer retention is a prevalent worry across many businesses and a critical issue for sustainability or bottom lines in today's competitive market. This is due to the fact that acquiring new customers is more expensive than keeping current ones. Loyal customers are more inclined to provide free reviews, while long-term customers may charge higher costs because they are less price sensitive. The effect of competition is lessened in this way.
In the past, they have made an effort to draw in both new customers and current customers of other businesses. Additionally, it necessitated extensive advertising and price-based incentives. Customers now have access to a wide range of services and goods, and if any of them don't satisfy their demands, they can select businesses that provide them with quick, high-quality goods and services. Therefore, instead of adding clients who need greater expenditure, businesses try to employ their own techniques to keep their current clientele. New and unique tools and concepts are needed to accomplish this goal
| [69] | Winer, R. S. (2001). A framework for customer relationship management, California management review, 43(4), 89-105. |
[69]
. Maintaining positive customer interactions also requires taking into account organizational, human, and technical resources
| [32] | Keramati, A., Mehrabi, H., & Mojir, N. (2010). A process-oriented perspective on customer relationship management and organizational performance: An empirical investigation. Industrial Marketing Management, 39(7), 1170-1185. https://doi.org/10.1016/j.indmarman.2010.02.001 |
[32]
.
There hasn't been much empirical study done on the concepts of customer retention. The majority of research has looked on the factors that lead to customer retention. Other research focuses on creating metrics for loyalty, value, and customer satisfaction without explicitly examining other potentially significant dimensions. Three Wollega Zones' MSEs are known to be providing customer service. However, these days, the primary issues facing these businesses are how to keep their customers over the long haul. There are various approaches to keeping customers. The impact of these strategies is misunderstood. Each of these strategies has an impact on an organization's sales, profit, and market share. In addition to a company's goods and services, its ability to draw in and keep new customers is closely tied to how well it treats its current clientele and builds a reputation in the industry. Although they are not successfully implemented in the three Wollega Zones of MSEs, pricing strategy, customer relationship management, sales promotion, employee training, and service quality all have an impact on an organization's performance. In light of this, the current study examined how the performance of micro and small enterprises in three Wollega Zones (Nakemte, Gimbi, and Shambu) was affected by customer retention strategies.
1.2. General Objectives
The general objective of the study was to investigate the effects of customer retention strategy on performance of MSEs of three Wollega Zones: In case of selected towns (Nekemte, Shambo and Gimbi).
1.3. Significance of the Study
It is anticipated that this study will aid in determining the primary tactic that improved MSE performance in Oromia regional state. The main purpose of the study was to give readers a little contribution of how the performance of MSEs in three Wollega Zones is affected by customer retention strategies. This sector benefited from the findings, which helped them understand where they are now and what they will be doing in the future. The research helped the organization do its job well, learn from its own shortcomings, and take advantage of its chances by modernizing and restructuring its customer retention strategy with the goal of delivering high-quality, efficient services that satisfy customers. Additionally, the study will be used as a reference by other researchers who wished to conduct research on relevant subjects.
1.4. Scope of the Study
The focus of this study is on evaluating how customer retention strategies affect performance in relation to competitive advantage in terms of market share, profit, and sales volume. Only four methods of customer retention strategy quality of service, sales promotion, employee training, and customer relationship management have been studied, along with their impact on organizational performance. This study does not include other components or metrics that support customer retention strategies. Because there are numerous MSEs available in these cities that can describe the zone, the study is limited to the administration of the three Wollega Zones, namely Nekemte, Gimbi, and Shambu are these cities. Additionally, the study's participants were purposively selected and restricted to MSE owners, managers, and staff.
2. Related Literature Review
2.1. Theoretical Review
A set of actions for enhancing the transaction process that is founded on the customer's favourable positioning and the ensuing readiness for repeat purchases is known as customer retention. When business retention is high, customer retention techniques work best. A mere 5% improvement in customer retention can boost your business's profitability to nearly 85%. Customer retention strateies are advantageous since they lower the expense of keeping consumers for a long time while simultaneously increasing revenue from devoted clients. According to Reichheld and Kenny, the two options can be distinguished from the perspective of the consumer in terms of customer satisfaction, loyalty, and constraints
| [55] | Reichheld, F. F. & Kenny, D. W. (1990). The hidden advantages of customer retention. Journal of Retail Banking, 12(4), 19-24. |
[55]
.
According to Edet et al., customer retention is the term used to describe a customer's claimed continuation of a business connection with the company. The actions your sales team takes to lower customer attrition are part of customer retention. The company's initial interaction with the customers marks the beginning of successful customer retention, which lasts the duration of the relationship
| [14] | Edet, N.; Etim, U. &Etesin, U. (2013). Effective customer service: A tool for client retention among stock broking firms in Nigeria. African Journal of Business Management, 5(20), 7987-7991. https://doi.org/10.5897/AJBM09.234 |
[14]
. Since retaining an existing customer is far less expensive than gaining a new one, most businesses place a high value on customer retention
| [25] | Henry, O. & Jennifer, C.N. (2011). Training and development practices in an organization: an intervention to enhance organizational effectiveness. |
[25]
. Gaining a thorough understanding of the theories that underpin this area of services marketing literature can help you better understand the efficacy of customer retention methods. These include Self-determination Theory (SDT)
| [13] | Deci, E. L. & Ryan, R. M. (1985). The general causality orientations scale: Self-determination in personality. Journal of research in personality, 19(2), 109-134. |
[13]
and Expectation Confirmation Theory (ECT)
| [26] | Hossain, M.A., & Quaddus, M. (2011). Expectation–confirmation theory in information system research: A review and analysis. Information systems theory: Explaining and predicting our digital society, Vol. 1, 441-469. https://doi.org/10.1007/978-1-4419-6108-2_21 |
[26]
.
2.1.1. Self-Determination Theory (SDT)
The first theoretical basis of this study is self-determination theory. Self-determination theory is being Self-determination theory serves as the study's primary theoretical foundation. Motivation is increasingly being studied using self-determination theory. Intrinsic motivation, extrinsic motivation, and motivation are the three categories of behavioral regulation that SDT distinguishes between, each with a different level of self-determined motivation
| [13] | Deci, E. L. & Ryan, R. M. (1985). The general causality orientations scale: Self-determination in personality. Journal of research in personality, 19(2), 109-134. |
[13]
. The highest degree of self-determined motivation is known as intrinsic motivation, and it describes circumstances in which people actively partake in rewarding activities. When people participate in an activity because they place a higher value on the results (prizes, recognition, etc.) than the action itself, this is known as extrinsic motivation. Finally, a lack of motivation is shown in people's unwillingness to participate in a particular behaviour. The sorts of motivation derived from the fulfillment of the basic human needs of competence, autonomy, and relatedness can be influenced by social variables. Different forms of motivation can forecast behavioral consequences; the most positive outcomes are predicted by intrinsic motivation, whereas the most negative ones are predicted by motivation
.
2.1.2. Product Life Cycle Theory
The product life cycle serves as the study's second theoretical foundation. A key element of the manufacturing industry's customer retention strategy is the product life cycle. Vernon concentrated on the product, not the proportions of its components, rather than the nation and manufacturing technique
| [65] | Vernon, R. (2013). Storm over the Multinationals. Harvard University Press. |
[65]
. The MSEs can compare, advice, and use dynamically thanks to their understanding of the product life cycle. Therefore, it is necessary to comprehend the main phases that a product is going through in order to ascertain its current state
. As a result, top practices incorporate customer advocacy into daily service, target the right consumers with the correct value proposition, build relationships to boost stickiness, and start positive partnerships through acquisitions. By enabling an analysis of how new product innovation can contribute to better business performance, the theory will inform the study.
2.1.3. Customer Retention Strategies
According to Waithaka, customer retention strategies are those that concentrate on a company's current customers in order to maintain their loyalty over time
| [66] | Waithaka, L. W. (2014). Influence of customer retention strategies on performance of insurance companies in Nairobi, Kenya. Unpublished Msc Marketing Project, University of Nairobi. |
[66]
. Gulati, asserts that keeping your current customer is the simplest strategy for expanding your company
| [22] | Gulati, R. (2010). Reorganize for resilience: Putting customers at the center of your business. Harvard Business Press. |
[22]
. Because of this, Gengeswari et al., contend that keeping existing customers increases profitability by lowering the expense of acquiring new ones
| [20] | Gengeswari, K., Padmashantini, P., &Sharmeela-Banu, S. A. (2013). Impact of customer retention practices on firm performance. International Journal of Academic Research in Business and Social Sciences, 3(7), 68. |
[20]
. According to Sharmeela et al., providing meaningful incentives to current consumers makes them more devoted
| [58] | Sharmeela-Banu, S. A; Gengeswari, K. &Padmashantini, P. (2013). An extensive review on the impact of customer retention practices towards the performance of SMEs. International Journal of Academic Research in Business and Social Sciences. 3(7), 85- 94. https://doi.org/10.6007/IJARBSS/v3-i7/11 |
[58]
. The following are customer retention strategies used by businesses to increase engagement, draw in new clients, and enhance current customer relationships.
(i). Customer Relationship Management
According to Richards and Jones, customer relationship management is a comprehensive process and strategy for acquiring and retaining customers in order to generate higher value for both the firm and the customers. Companies must create and effectively implement a wide range of relationship programs to provide the desired performance that customers demand if they hope to keep their customers
. Customization, customer service, community development, and loyalty programs are some of these initiatives
| [69] | Winer, R. S. (2001). A framework for customer relationship management, California management review, 43(4), 89-105. |
[69]
. Establishing effective and consistent communication between businesses and their most valuable clients is essential. Zeithalm and Bitner, contend that the development of successful customer retention strategies is predicated on a solid client database
| [73] | Zeithalm, V. A., & Bitner, M. J. (1996). Services marketing, 1st edition. McGraw-Hill: USA. |
[73]
.
(ii). Sales Promotion
While loyalty programs and clubs typically last a long time, sales promotions only provide short-term improvements to customer values. Retention-focused sales strategies encourage customers to make more purchases. These sales promotions include, for instance: Customers who purchase the product are given an in-pack or on-pack ticket that entitles them to a discount on one or more subsequent purchases
| [46] | O'Brien, L. & Jones, C. (1995). Do rewards really create loyalty? Long range planning, 28(4), 130-130. |
[46]
.
(iii). Training of Employees
External and internal factors are the two categories of determinants of SMEs' success, and they differ between nations and industries. The external factors include supportive financial, social, and political environments, the accessibility of capital and legal resources, and the presence of vibrant local and international organization. Conversely, the inner aspects are particularly dependent on training. They consist of management, employee skills, and entrepreneurship
| [39] | Magableh, I & AL-Mahrouq, M. (2007). Small and Medium Enterprises (SMEs): Concepts, Characteristics, Importance, Merits and Obstacles, a paper prepared at Small Enterprises: an Effective Tool to Address Poverty Forum, Yarmouk University Jordan (pp. 29-31). |
[39]
. But just like training, dealing with paintings and changing circumstances requires a different component that combines pertinent education and experiences
. However, to adapt to changes in the workplace and surroundings, additional elements like pertinent education and experiences are required in addition to training
. In the past, training was not thought to be a useful tool for SMEs to generate "value" and effectively navigate environmental and competitive obstacles. But this opinion has evolved.
(iv). Quality of Service
According to Kimonye, quality of service is the degree of correspondence (fitness) between expectations and the actual service provided by the service provider. The greater the fit, the higher are the levels of satisfaction to the customer
| [34] | Kimonye, M. (1998). Service quality: Key to customer satisfaction. Marketing Review, 10. |
[34]
. The main purpose of providing quality service to our customers is to achieve a broad customer base, loyalty and retention rate. Quality of service has been given a lot prominence as a major ingredient of customer retention. According to Feigenbaum, quality is what the customer says
| [16] | Feigenbaum, A. V. (1983). Total quality control. McGraw-Hill. New York. |
[16]
. Therefore, in pursuit of quality service, organizations need to know who their customers are and what they expect from them. Parasuraman et al., categorized services into five dimensions: these are; the gap between customer’s expectation and management perception, the gap between management and customer perception on service quality, the gap between quality of service specifications and service delivery staff, the gap between service delivery and external communications and the gap between perceived and expected service
| [50] | Parasuraman, A., Zeithaml, V. A., & Berry, L. (1988). SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. 1988, 64(1), 12-40. |
[50]
. In customer retention therefore, definition of quality is not restricted to the end product or service, but include issues of employee fulfillment, continuous improvement and management directions
| [59] | Shewhart, W. A., & Deming, W. E. (1986). Statistical method from the viewpoint of quality control. Courier Corporation. |
[59]
.
2.1.4. Measurement of Performances
According to Khan et al., organizational performance can measure by the following attributes such as 1) sales growth, 2) employee turnover rate, 3) market share, 4) customer satisfaction, 5) return on investment, 6) return on assets, 7) profitability, 8) owners‘ satisfaction, 9) customers‘ referral rates, 10) delivery time, 11) waiting time, 12) new product development, 13) return on investment (ROI), 14) customer retention, 15) competitive position, 16) innovation, 17) product reliability, 18) data storing capability, 19) workflow improvement, 20) skills development, 21) inventory turnover, 22) customer loyalty achieved, 23) levels of employee satisfaction with their jobs, 24) ability of the organization to attract and employ qualified employees, 25) levels of employee retention, 26) shareholder satisfaction and by any of the models reported by various researchers. For the purpose of this study the researcher selected some performance measurements which are compatible to country‘s strategy
| [36] | Khan, A. J., & Iqbal, J. (2020). Do high performance work practices increase the organizational performance of public sector companies? An investigation of mediation mechanism. Pakistan Journal of Social Sciences, 40(2), 1007-1021. |
[36]
. Those measurements are profitability and productivity.
2.2. Empirical Review
2.2.1. Impact of Customer Retention Strategies on Organization Performance
Customer relationship management dimension ratings include customer satisfaction
| [1] | Abdullateef, A. O.; Mokhtar, S. S. &Yusoff, R. Z. (2010). The impact of CRM Dimensions on Call Center Performance. International Journal of Computer Science and Network Security, 10(12), 184-195. |
[1]
, market effectiveness and financial performance
, customers performance and finance performance
| [5] | Akroush, N. M.; Dahiyat, E. S.; Gharaibeh, S. H. & Abu-Lail, N. B. (2011). Customer relationship management implementation. An investigation of a scale’s generalizability and its relationship with business performance in a developing country context. International Journal of Commerce and Management, 21(2), 158-191. https://doi.org/10.1108/10569211111144355 |
[5]
, customers and customer retention and profit growth
. As previous studies have suggested, it is beneficial to use other performance dimensions
. According to a survey conducted by
| [42] | Maxham, J. G. (2000). The service recovery’s influence on customers’ satisfaction, positive word of mouth and purchase intentions, Journal of Business Research, Vol. 54 No. 1, pp. 11-24. |
[42]
, customer loyalty was measured in four dimensions; the company's overall satisfaction, positive words mouth; repeated intention to buy; and loyalty to the company. A subsequent study by Lin and Wu showed that there was a statistically significant relationship between quality commitment, trust and satisfaction, customer retention and future use of the product
| [34] | Kimonye, M. (1998). Service quality: Key to customer satisfaction. Marketing Review, 10. |
[34]
.
The service quality research highlights two key themes that are related to how service quality influences organizational performance. First, the literature suggests that service quality directly enhances and affects organizational performance
| [60] | Sim, K. L.; Song, C. J. &Killough, L. N. (2015). Service quality, service recovery, and financial performance: An analysis of the US airline industry. Advances in Management Accounting, 18, 27-53. |
| [53] | Ramayah, T.; Samat, N. & Lo, M. C. (2011). Market orientation, service quality and organizational performance in service organizations in Malaysia. Asia-Pacific Journal of Business Administration, 3(1), 8-27. https://doi.org/10.1108/17574321111116379 |
[60. 53]
and indirectly through organizational commitment
| [37] | Ko, C. P. &Ko, C. C. (2012). The Relationship of Training Quality in E-learning and Organizational Commitment to Organizational Performance in the Taiwan Service Industry. International Conference on Future Computer Supported Education. IERI Procedia, 2, 821-827. https://doi.org/10.1016/j.ieri.2012.06.177 |
[37]
or customer satisfaction
| [6] | Al-Hawari, M. & Ward, T. (2006). The effect of automated service quality on Australian banks’ financial performance and the mediating role of customer satisfaction. Marketing Intelligence & Planning, 24(2), 127-147. https://doi.org/10.1108/02634500610653991 |
[6]
. Second, the empirical literature suggests that the role of service quality in enhancing organizational performance is better understood when service quality mediates the relationship between several organizational and managerial practices and organizational performance. These practices include management process alignment
| [63] | Sumardi & Fernandes, A. A. R. (2018). The mediating effect of service quality and organizational commitment on the effect of management process alignment on higher education performance in Makassar, Indonesia. Journal of Organizational Change Management, 31(2), 410-425. https://doi.org/10.1108/JOCM-11-2016-0247 |
[63]
lean production, market orientation
| [3] | Agus, A. & Hajinoor, M. S. (2012). Lean production supply chain management as driver towards enhancing product quality and business performance. International Journal of Quality & Reliability Management, 29(1), 92-121. https://doi.org/10.1108/02656711211190891 |
| [53] | Ramayah, T.; Samat, N. & Lo, M. C. (2011). Market orientation, service quality and organizational performance in service organizations in Malaysia. Asia-Pacific Journal of Business Administration, 3(1), 8-27. https://doi.org/10.1108/17574321111116379 |
[3. 53]
, employee
| [70] | Yee, R. W., Yeung, A. C., & Cheng, T. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 124(1), 109-120. https://dx.doi.org/10.1016/j.ijpe.2009.10.015 |
[70]
and quality context and market orientation
| [52] | Raju, P. S. & Lonial, S. C. (2002). The impact of service quality and marketing on financial performance in the hospital industry: an empirical examination. Journal of Retailing and Consumer Services, 9, 335-348. |
[52]
. An interesting notice is that most of the literature focused on investigating the direct and indirect influence of service quality, which is abstract or intangible, on financial performance which is tangible
| [60] | Sim, K. L.; Song, C. J. &Killough, L. N. (2015). Service quality, service recovery, and financial performance: An analysis of the US airline industry. Advances in Management Accounting, 18, 27-53. |
| [6] | Al-Hawari, M. & Ward, T. (2006). The effect of automated service quality on Australian banks’ financial performance and the mediating role of customer satisfaction. Marketing Intelligence & Planning, 24(2), 127-147. https://doi.org/10.1108/02634500610653991 |
[60. 6]
. Therefore, it is hypothesized that the better service quality gives better organizational performance
Promotions focus on retaining shoppers by motivating customers to buy more and more often. Another customer retention strategy is to connect with buyers, including legal commitments, technology commitments, interpersonal commitments, and process commitments. According to Odunlami and Ogunsiji, the impact of promotion on organizational performance is: encouraging off season buying, building brand loyalty
| [47] | Odunlami, I. B. &Ogunsiji, A. (2011). Effect of Sales Promotion as a Tool on Organizational Performance. (A case Study of Sunshine Plastic Company). Journal of Emerging Trends in Economics and Management Sciences (JETEMS), 2(1): 9-13. |
[47]
, encouraging purchase of large size unit, generating trials among non-users and influencing retailers to carry new items and higher level of record
| [57] | Rotimosho (2003), Practice of Marketing; 1st Edition, Lagos: Global Annuals. |
[57]
.
In common, one general conclusion is that those researchers agreed that training facilitates has impact on performance of enterprise
| [51] | Paul Jones; Malcolm J Beynon; David Pickernell& Gary Packham (2013). Evaluating the impact of different training methods on SME business performance. Environment and Planning C: Government and Policy, 31(1) 56 – 81. |
| [45] | Njoroge, C. W. &Gathungu, J. M. (2013). The effect of entrepreneurial education and training on development of small and medium size enterprises in Githunguri District-Kenya. International Journal of Education and research, 1 (8), 1-22. |
| [4] | Ahmad, I., & Ahmad, S. (2018). Multiple skills and medium enterprises’ performance in Punjab Pakistan: A pilot study. The Journal of Social Sciences Research, Special, (4), 44-49. https://doi.org/10.32861/jssr.spi4.44.49 |
| [33] | Kessy, S. & S. S. Temu (2010). The Impact of Training on Performance of Micro and Small Enterprises Served by Microfinance Institutions in Tanzania. Research Journal of Business Management 4(2): 103-111. |
| [67] | Watson M. Ladzani&Jurie J. van Vuuren (2002). Entrepreneurship Training for Emerging SMEs in South Africa, Journal of Small Business Management 2002 40(2), pp. 153–160. https://doi.org/ 10.1111/1540-627X.00047 |
| [7] | Allan Macpherson, U. C. E., & Dilani Jayawarna, U. C. E. (2007). Training approaches in manufacturing SMEs. Education & Training, 49 (8/9), 698. |
[51, 45, 4, 33, 67, 7]
. On the other hand, there are also some studies conducted to investigate the problems affecting SMEs' involvement in training markets
| [68] | Westhead, P. (1998). Factors Associated with the Provision of Job Related Formal Training by Employers. International Journal of Entrepreneurial Behavior and Research, 4(3), 187-216. |
| [27] | Hunt, I. & Hogan, D. (2005). Moving Small Companies towards Next Generation Employability, Community of Practice (COP) Report, COP3. |
[68, 27]
. Among the findings are those lacks of time, high cost of training, low employee motivation, underestimation of training outcomes, part-time workers and high turnover rate are among the major problems that affect SMEs' involvement in training markets.
Finally, previous researchers have recorded the importance of customer retention in an effort to improve performance of MSEs. However, there still lacks in depth understanding of which strategy is ideal for customer retention. To fill the gaps, the study aimed at determining the effects of customer retention strategy on performance of MSEs in Ethiopia
2.2.2. Summary of Empirical Review
Table 1. Summary of Empirical study
Authors & Year | Title | Significant Findings |
| [58] | Sharmeela-Banu, S. A; Gengeswari, K. &Padmashantini, P. (2013). An extensive review on the impact of customer retention practices towards the performance of SMEs. International Journal of Academic Research in Business and Social Sciences. 3(7), 85- 94. https://doi.org/10.6007/IJARBSS/v3-i7/11 |
[58] | An extensive review on the impact of customer retention practices towards the performance of SMEs | Customer retention practice is considered as one of the significant weapons for these SMEs to sustain in the said competition and, hence improve their performance. |
| [8] | Asagba, Ss. & Coker, P. (2019). Customer Retention Strategies a Survey of Selected Retail C. |
[8] | Customer retention strategies and business performance: a survey of selected retail chain stores in South-South, Nigeria | The findings of the study reveal that pricing, service equality and customer service care are significant predictors of retail chain stores profitability. Customer satisfaction has a strong relationship with customer retention and business performance. |
| [20] | Gengeswari, K., Padmashantini, P., &Sharmeela-Banu, S. A. (2013). Impact of customer retention practices on firm performance. International Journal of Academic Research in Business and Social Sciences, 3(7), 68. |
[20] | Impact of customer retention practices on firm performance in the retailing sector: A comparison between a foreign and home grown retailer in Malaysia | The findings of the study reveal the four dimension customer retention namely word of mouth, price insensitivity, repeat purchase, non-complying behavior as well as demographic profile are found significantly influence firms performance (customer satisfaction). |
| [44] | Molapo, M. E. & Mukwada, Geoffrey (2011). The impact of customer retention strategies in the South African cellular industry: The case of the Eastern Free State. International Journal of Business, Humanities and Technology, 1(2), 52-60. |
[44] | The impact of customer retention strategies in the South African cellular industry: the case of the Eastern free state. | First, findings of the study indicate that though there are many retention strategies that have been adopted by cellphone network providers in South Africa; the most effective are quality of the service provided, provision of customer support services and the capacity of the network to provide the services at an affordable price. |
| [2] | Abera, A. (2012). Factors affecting the performance of micro and small enterprises in Arada and Lideta Sub-Cities, Addis Ababa. MBA Thesis unpublished, School of Graduate Studies, Addis Ababa University, Ethiopia. |
[2] | Factor that Affecting Business Performance of small and medium Size Manufacturing Enterprise in the Case in Kolfe, Keraneo sub-city of Addis Ababa | Research indicated that lack of capital, lack of market, unfavorable policy, and inadequate infrastructure, absence of adequate and relevant training, governmental structure and processes are among constraints faced by MSEs. |
| [48] | Omolo, J. W. (2015). Training and development on performance of small and medium enterprises in Kisumu County, Kenya. |
[48] | Training and development on performance of Small and Medium Enterprises in Kisumu County, Kenya | The finding of the study showed that the performance of an SME is associated with the status of training and development and that the better the status of training and development in an SME, the higher the performance of the SME. |
| [10] | Chong, B. & Wong, M. (2005). Crafting an effective customer retention strategy: a review of halo effect on customer satisfaction in online auctions. International journal of management and enterprise development, 2(1), 12-26. https://doi.org/10.1504/IJMED.2005.006021 |
[10] | Crafting an effective customer retention strategy: a review of halo effect on customer satisfaction in online auctions | This study makes an important managerial contribution to the small e-business start-ups and SMEs who are planning to start an online business. It helps them to understand the satisfaction attributes of online consumers, especially, the auction buyers, & hereby, provides useful guidance for them in crafting the most effective customer retention strategy. |
| [62] | Stephen, P.; Aliyu, U. F. & Ibrahim, A. (2017). Impact of sales promotional strategies on organizational performance in Nigeria. European Journal of Research and Reflection in Management Sciences, 5(4). |
[62] | Impact of Sales Promotional Strategies on Organizational Performance in Flour Mills of Nigeria Maiduguri, Borno State branch | The result signifies that sales promotional strategies have positive and significant effects on organizational performance. |
| [15] | El-Borsaly, A. & Hassan, S. (2020). The impact of service quality on organizational performance in the mobile telecommunications sector in Egypt. Proceedings on Engineering, 2(1), 93-104. https://doi.org/10.24874/PES02.01.010 |
[15] | The impact of service quality on organizational performance in the Mobile Telecommunications Sector In Egypt | The findings reveal that SQ is a true driver of OP in an intensive knowledge- based industry. This is one of few researches to study the relationship of SQ and OP and the first to investigate this relationship in Egypt within the mobile telecommunications setting. |
| [30] | KameswaraRaoPoranki&AsifPerwej (2015). Assessment of the Employees Effectiveness through Training and Development at Hyundai Motors India Ltd. theinternationaljournal. org > RJSSM: Volume: 04, Number: 11. |
[30] | Assessment of the employees effectiveness through training and development at Hyundai Motors India Ltd | The findings reviled that; every organization needs to study the role, importance and advantages of training and its positive impact on development for the growth of the organization. |
| [25] | Henry, O. & Jennifer, C.N. (2011). Training and development practices in an organization: an intervention to enhance organizational effectiveness. |
[25] | Training and Development Practices in an Organisation: an Intervention to Enhance Organisational Effectiveness | The major finding of the study indicated that training and development of employees increases organisational effectiveness and enhances competitiveness. |
| [51] | Paul Jones; Malcolm J Beynon; David Pickernell& Gary Packham (2013). Evaluating the impact of different training methods on SME business performance. Environment and Planning C: Government and Policy, 31(1) 56 – 81. |
[51] | Evaluating the impact of different training methods on SME business performance | The results presented offer novel insights into the relationships between training methods and business performance. |
2.3. Conceptual Framework
The figure below shows the relationship between customer retention strategies on SMEs performance.
Figure 1. Conceptual Framework.
3. Materials and Methods
Research Design
It is acknowledged that several options are available in social research but the choice of approach depends largely on the objectives of the study. The study was used both descriptive and explanatory research design. The main reason for using this design was due to the fact that this design was supposed to help to briefly assess the major strategy encountering the MSEs sector performance along with the future prospects. The target populations of the study were covering the entire staff’s, owner/managers of MSEs that are available in three Wallaga Zones cities, Therefore, these groups of respondents who was selected in this study are believed to have better exposure in the area.
To get the determined sample size, stratified and purposive sampling techniques employed to select the sample. A stratified sampling method was used to select: manufacturing, services, trade, construction, & agriculture sector from each zone and purposive sampling technique was used to select the exact respondent from the sample. The researchers were used the formula which was developed by
| [71] | Yamane Tara (1967), Taro Yamane Method For Sample Size Calculation. The Survey Causes Of Mathematics Anxiety Among Secondary School Students In Minna Metropolis. Mathematical Association of Nigeria (Man), 46(1), 188. |
[71].
where n is the sample size,
N= is the population size, and e = is the level of precision or sampling error = (0.05)
n = 3,743=362
1+3,743 (0.05)2
Table 2. Sample size of the target population.
Zones | No. of SME | Total number of population | Total number of Sample |
East Wollega Zone (Nekemte) |
Manufacturing | 18 | 89 | 9 |
Services | 138 | 675 | 65 |
Trade | 106 | 312 | 30 |
Construction | 60 | 540 | 52 |
Agriculture | 5 | 35 | 4 |
Sub Total | | 1,651 | 160 |
HoroGuduruWollega Zone (Shambu) |
Manufacturing | 3 | 16 | 3 |
Services | 18 | 86 | 8 |
Trade | 58 | 133 | 13 |
Construction | 58 | 448 | 43 |
Agriculture | 2 | 14 | 2 |
Sub Total | | 697 | 67 |
West Wollega Zone (Gimbi) | | | |
Manufacturing | 35 | 175 | 17 |
Services | 105 | 525 | 51 |
Trade | 45 | 135 | 13 |
Construction | 75 | 525 | 51 |
Agriculture | 5 | 35 | 3 |
Sub Total | | 1,395 | 135 |
Grand Total | | 3,743 | 362 |
Source: From documented data of three Wollega Zones, 2020.
Finally, to select each respondent from the MSEs, purposive sampling was used to select the representatives of each stratum for the respondents. Therefore, the total sample size of the study was 362 respondents.
The study employed both primary and secondary sources of information from selected MSEs of three Wollega Zones. The primary sources of data was include information that is gathered from the questionnaires that was administered to the respondents, aims to obtain data from a purposely selected group of individuals. To gather primary data, the researchers were used questionnaires.
In order to analyze the data, the two sets of Statistics: Descriptive and Inferential statistics were used. Descriptive statistics summarizes and describes quantitative information in the form of frequency distribution and measures of central tendency (mean and standard deviation), whereas multiple regression analysis was used to analyze the effect of customer retention strategy (independent variable) on performance (dependent variable).
The following model is formulated for the research is as follows:
Whereas Y= organization performance
X1= Customer relationship management
X2 = sales promotion
X3 = Quality of service
X4= training of employees
ε= denotes the error terms. Moreover 𝛽o = intercept/constant, 𝛽1-4= slope coefficients
4. Data Analysis, Discussion, and Interpretation
4.1. Response Rates
From the 362 questionnaires distributed to the respondents of MSE, 351 were returned out of which 5 were incomplete so they were eliminated and 11 were unreturned. Finally, 346 questionnaires were completed and usable questionnaires. This indicates that the existence of good response rate which accounts 346 (95.6%).
4.2. Descriptive Analysis
Table 3. Demographic profile of the respondents.
S.No | Variables | Classification of Variables | Frequency | Percentage (%) |
1 | Gender | Male | 224 | 64.7 |
Female | 122 | 35.3 |
Total | 346 | 100.0 |
2 | Age | 18-30 Year | 63 | 18.2 |
31-43Year | 173 | 50.0 |
44-56 Year | 99 | 28.6 |
57-69 Year | 11 | 3.2 |
Above 69 Year | 0 | 0.0 |
Total | 346 | 100.0 |
3 | Marital Status | Single | 137 | 39.6 |
Married | 203 | 58.7 |
Divorced | 6 | 1.7 |
Widowed | 0 | 0.00 |
Total | 346 | 100.0 |
4 | Education Qualification | Primary | 9 | 2.6 |
Secondary school completed | 128 | 37.0 |
Certificate | 92 | 26.6 |
Diploma | 105 | 30.3 |
First Degree and Above | 12 | 3.5 |
Total | 346 | 100.0 |
5 | Work experience | Less than 2 Years | 59 | 17.1 |
2-5 Years | 171 | 49.4 |
5-7 Years | 98 | 28.3 |
7-9 Years | 15 | 4.3 |
>10 Years | 3 | .9 |
Total | 346 | 100.0 |
6 | Monthly Income | Less than 4,000 Birr | 31 | 9.0 |
4,001-8,000 Birr | 124 | 35.8 |
8,001-12,000 Birr | 116 | 33.5 |
12,001- 16,000 Birr | 61 | 17.6 |
Greater than 16,001 Birr | 14 | 4.1 |
Total | 346 | 100.0 |
Source: Own Survey Data, 2021
Table 3 above, shows that from the total population majority of the respondents were male. The finding of the study implies that, majority of the respondents’ of MSEs age range is between 31-43. Similarly the finding indicates that the majority of the respondents work experiences were between 2-5 years range which accounts 49.4%.
The educational status of the respondents shown in
Table 3, indicates 9 (2.6%) primary school and 128 (37.0%) secondary school completed, while 92 (26.6%), 105 (30.3%), and 12 (3.5%) of the respondents were certificates, diploma and first degree holders and above respectively. Generally, this finding indicates that the majority of the respondents were secondary school completed followed by diploma. With regard to monthly income the table shows that 124 (35.8%) of the respondents earn between 4,001-8,000, and followed by 116 (33.5%) the earning range between 8,001-12,000 Birr; on the other hand, 61 (18%) earns between birr 12,001- 16,000 Birr, while the remaining respondents earning were less than 4,000 Birr, accounts to 31 (9%) and greater than 16,001 Birr which accounts 14 (4.1%) respectively. Although, the finding of the study revealed that, majority of the respondents earns an average income between 4,001-8,000 Birr.
The marital status of the respondents also shows that majority of the respondents 203 (58.7%) were married and 137 (39.6%) were single or unmarried. While 6 (1.7%), of the respondents were divorced. This implies that the majority of the respondent for this study were marred.
4.2.1. Analysis of Customer Retention Strategy Dimensions
Table 4. Customer relationship Management Construct N= 346.
Item | Mean | Std. Deviation |
Your SMEs has personal records and contacts of all its clients | 3.61 | 1.216 |
The customer information used with your SMEs is to create the products satisfy their needs | 3.62 | 1.215 |
Your SMEs frequently issues questionnaire via phone or mail to its clients, evaluating its quality of services | 3.57 | 1.130 |
Your SMEs motivates for promoting positive relationship with customers. | 3.63 | 1.198 |
Your SMEs are facilitating different IT supporting tools to increases customer relationship | 3.51 | 1.130 |
The customer relationship management strategy helps to retain the potential customers | 3.42 | 1.190 |
Your SMEs give attention to maintain and enhancing customer relationships management | 3.57 | 1.175 |
Your SMEs organizational structure and arrangement is good for customer relationship. | 3.06 | 1.253 |
There is a cross-functional team to organized to coordinate its CRM | 2.95 | 1.216 |
Your SMEs communicates with its customers through telephones to meet their urgent requests and needs. | 2.98 | 1.354 |
Your SMEs has assigned the right technical personnel to provide technical support for the building customer relationships. | 3.82 | 1.083 |
Grand Mean | 3.4 | |
Source: Own Survey Data, 2021
As indicated in the above table, the mean score of the response ranges from 3.82 to 2.95 which is related with assigning the right technical personnel to provide customer support and build customer relationships and related with keeping personnel records of their clients respectively. The results of the mean score shows majority of the sub construct of CRM were well practiced the enterprises and also the standard deviation showed that the responses given for all items were relatively similar; which means CRM activities were practiced in SMEs in each study areas,.
Table 5. Sales Promotion Construct N= 346.
Items | Mean | Std. Deviation |
Your SMEs offers gifts for its potential customers | 3.39 | 1.324 |
Your SMEs use different sales promotional tool to retain customers. | 3.55 | 1.267 |
Your SMEs offers sale discount for potential customers | 3.94 | 1.031 |
Your SMEs offers non-financial incentives to retain the customers. | 3.97 | .997 |
The enterprise gives adequate fringe benefits to its potential customers. | 3.91 | 1.040 |
Your SMEs has different motivational programs to its customers | 3.49 | 1.295 |
Grand mean | 3.7 | |
Source: Own Survey Data, 2021
As shown in
table 5 above, the result implies that majority of the responses to the sub constructs indicate that the construct influence the organizational performance. And the standard deviation indicates that, the degree of variation among the responses were low.
Table 6. Service Quality Construct N= 346.
Item | Mean | Std. Deviation |
You handle the customers ‘complaints responsively | 3.77 | 1.104 |
You teach customers how they can use your products or services | 3.87 | 1.125 |
You treated customers the way they demand/best interest of customers | 3.39 | 1.321 |
Your organization has giving professional based service | 3.39 | 1.326 |
Your SMEs keeps their promised service | 3.82 | 1.031 |
You are providing timely and proper touch point interaction with service. | 3.77 | 1.119 |
The enterprise readiness/ willingness to help customers | 3.83 | 1.091 |
Your service is friendliness based | 3.84 | .962 |
Your SMEs staff provide undivided attention to the customer | 3.94 | 1.061 |
Your SMEs guarantees reliable service | 3.85 | 1.049 |
The enterprise billing and payment systems are error free | 3.87 | 1.084 |
Your SMEs service delivery process is highly standardized and simple | 3.89 | .988 |
Your SMEs services for customers are technology-based nature | 4.37 | .853 |
Grand mean | 3.81 | |
Source: Own Survey Data, 2021
As indicated in
table 6 above, the study result shows majority of the sub construct of service quality were well practiced in the SMEs and it affects organizational performance. And also the standard deviation of this construct ranges from 1.1 to 0.85 which shows the existence of service quality practices in the SMEs; because responses given by the study participants were relatively similar and the degree of variation among the response was low.
Table 7. Training &Development Construct N= 346.
Item | Mean | Std. Deviation |
I feel motivated by the development plans that are offered in enterprise. | 4.05 | .853 |
I believe my career aspirations can be achieved at this organization | 3.99 | .931 |
I receive training how to retain customers. | 3.94 | 1.031 |
Opportunities to receive training are distributed fairly. | 3.97 | .997 |
The training is seen as a key to success rather than a cost. | 3.91 | 1.040 |
The learning and development (trainings) that offered is regarding to our services | 3.49 | 1.295 |
I received an adequate training for my current job | 3.40 | 1.257 |
There is an opportunity for personal and professional growth in the enterprise. | 4.01 | .871 |
The MSE’s provides me a platform to develop my career. | 4.06 | .847 |
The training offered in enterprise is based on the assessment of gap in job | 3.40 | 1.328 |
Grand Mean | 3.8 | |
Source: Own Survey Data, 2021
As indicated in the
table 7 above, the results of the mean score majority of the items developed for the variable revealed a practice of training and development in SMEs and it affects their organizational performance. And also the standard deviation of the items ranges from 1.3 to 0.84 which shows the existence of training and development practices in the SMEs; because responses given by the participants were relatively similar and the degree of variation among the response was low.
4.2.2. Organizational Performance
Table 8. Organizational Performance Constructs N=346.
Item | Mean | Std. Deviation |
Our SMEs market share is increased through giving good customer services | 4.00 | 1.058 |
Profitability of our SMEs is because of retaining and satisfying customers | 3.91 | 1.040 |
Our SMEs sales volume are increasing because of customer relation management | 3.95 | 1.073 |
Our SMEs success is achieved because good customer service and that make competitive enterprise | 3.96 | .968 |
Our SMEs success is built on positive image | 3.88 | 1.069 |
Our SMEs success is because of overall performance | 3.79 | 1.117 |
Grand Mean | 3.9 | |
Source: Own Survey Data, 2021
As shown in
Table 8 above, the result implies that the majority of the respondent’s responses to the sub constructs indicate the construct was influencing the organizational performance. And the standard deviation indicates that, the degree of variation among the responses given was low.
4.3. Correlation Analysis
According to
| [23] | Gupta, R. D., & Kundu, D. (1999). Theory & methods: Generalized exponential distributions. Australian & New Zealand Journal of Statistics, 41(2), 173-188. |
[23]
take as a guide line, correlation coefficient (r), 0.1-0.29 is low, 0.3-0.49 is medium and r>0.5 show high relationship. The other author a
| [10] | Chong, B. & Wong, M. (2005). Crafting an effective customer retention strategy: a review of halo effect on customer satisfaction in online auctions. International journal of management and enterprise development, 2(1), 12-26. https://doi.org/10.1504/IJMED.2005.006021 |
[10]
correlation result that is greater than 0.7 are considered strong. Additionally, Correlations less than 0.3 are considered weak. Correlations between 0.3 and 0.7 are considered moderate.
Table 9. Inter CorrelationResult of the Analysis N= 346.
| 1 | 2. | 3 | 4. |
CRM | Pearson Correlation | 1 | | | |
Sig. (2-tailed) | | | | |
SP | Pearson Correlation | .150** | 1 | | |
Sig. (2-tailed) | .005 | | | |
SQ | Pearson Correlation | .054 | .243** | 1 | |
Sig. (2-tailed) | .320 | .000 | | |
T & D | Pearson Correlation | .219** | .887** | .272** | 1 |
Sig. (2-tailed) | .000 | .000 | .000 | |
OP | Pearson Correlation | .457** | .341** | .365** | .526** |
Sig. (2-tailed) | .000 | .000 | .000 | .000 |
A Pearson correlation coefficient was calculated for the relationship between customer relationship management, sales promotion, service quality, training and development, with organizational performance. A strong as well as moderate positive correlation and a significant linear relationship are obtained between all factors and overall organizational performance level. The correlation coefficients (r) for independent variables with dependent variable range from 0.526 to 0.341, which show a weak and high correlation.
4.4. Multiple Regression Analysis
A multiple linear regression analysis was conducted to see the predictive power of customer relationship management, sales promotion, service quality and training and development for customer retention strategy by talking organizational performance as a dependent variable. Furthermore, the analysis explains the relative contribution of each independent variable on customer retention.
Table 10. Model Summary.
Mode | R | R Square | Adjusted R Square | Std. Error of the Estimate | Change Statistics |
R Square Change | F Change | df1 | df2 | Sig. F Change |
1 | 0.716a | 0.512 | 0.506 | 0.46574 | 0.512 | 89.502 | 4 | 341 | .000 |
The model was analyzed by using all the four customer retention strategy predictors on organizational performance. As per Field (2009), the table shows a value of R2, which we already know is a measure of how much of the variability in the outcome is accounted for by the predictors.
The results of the regression analysis showed that, the value of the multiple correlation coefficient of the independent and the dependent variable is the value of r = 0.716, indicating a strong correlation. The R-squared of the coefficient determination, that is, the square of the correlation coefficient (R2) was 0.512, which indicates that 51.2% of the changes in organizational performance of the SMEs are caused by those variables according to the investigation, and the remaining 48.8% is due to other variables not included in this investigation. The adjusted R-squared is the change explained by the combined effect of the regression of organizational performance on the segregated account (50.6%).
Model | Sum of Squares | Df | Mean Square | F | Sig. |
1 | Regression | 77.657 | 4 | 19.414 | 89.502 | .000b |
Residual | 73.968 | 341 | .217 | | |
Total | 151.625 | 345 | | | |
As indicated in the
Table 11 above, as p is less than 0.05, the model is significant; from the estimated total observation 151.625 wanted to be explained by the regression model; 77.657 with the mean square 19.414 was explained and the remaining 73.968 with mean square of .217 of the total estimated observation was error or not explained by the regression model. According to table above, the independent variable significantly predicts the dependent variable. Thus, the combination of the variables significantly predicts the dependent variable (F=19.414/.217= 89.502; p < 0.05). Which is statistically significant at P<0.05 because the value in the column labeled (signal less than <0.05)) or the significance value is 0.000, which is less than 0.05. This means that the probability of these results occurring by chance is less than 0.05, indicating that the model is suitable for study. This means that the combination of independent variables (customer relationship management, sales promotion, service quality, training and development) significantly predicts organizational performance and, at the same time, has an impact on organizational performance of the SMEs.
Table 12. Coefficientsa.
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. |
B | Std. Error | Beta |
(Constant) | .089 | .240 | | .371 | .711 |
Customer Relationship Management | .286 | .033 | .336 | 8.628 | .000 |
Sales Promotion | -.487 | .077 | -.523 | -6.355 | .000 |
Service Quality | .332 | .054 | .243 | 6.194 | .000 |
Training and Development | .932 | .092 | .850 | 10.121 | .000 |
The last output in the analysis of the multiple linear regression models represents the output for the beta coefficients of each service quality dimensions.
The regression equation for this research is presented below.
Y=β0-β1X1-β2X2+β3X3+β4X4 +ε
Where, Y= Organization performance,
X1= Customer relationship management
X2= Sales promotion
X3= Service Quality
X4= Training and Development
β0= Constant, β1 to β4= beta coefficients, and
ε =the error term
Substituting the results in the model gives us:-
Y= -0.089 +0.286X1 -0.487X2 + 0.332X3 + 0.932X4 + ε
According to the results in the above table (
Table 11) customer relationship management variables of the study is positive and statistically significant at 1% significance level, since the sign value of respective variable is 0.000. The coefficient of the customer relationship management implies that as relationship to a customer increase by 1 the organizational performance that measured by sales volume will increase by 0.286% per unit. Therefore, customer relationship management has positive and statistically significant on impact on organizational performance that measured by sales volume.
According to the results in the above table (
Table 11) sales promotion variable of this study is negative and statistically significant at 1% significance level, since the sign value of respective variable is 0.000. The coefficient of the Sales promotion implies that as sales promotion increase by 1 unit the organizational performance that measured by sales volume will decrease by 0.487% per unit. Therefore, Sales promotion has negative and statistically significant on impact on organizational performance that measured by sales volume.
According to the results in the above table (
Table 11) service quality variables of the study is positive and statistically significant at 1% significance level, since the sign value of respective variable is 0.000. The coefficient of the service quality implies that as service quality increase by 1 level the organizational performance that measured by sales volume will increase by 0.332% per unit. Therefore, service quality has positive and statistically significant on impact on organizational performance that measured by sales volume.
According to the results in the above table (
Table 11) training and development variables of the study is positive and statistically significant at 1% significance level, since the sign value of respective variable is 0.000. The coefficient of the training and development implies that as training and development of employees increase by 1 round the organizational performance that measured by sales volume will increase by 0.932% per unit. Therefore, training and development has positive and statistically significant on impact on organizational performance that measured by sales volume.
5. Summary, Conclusion and Recommendations
5.1. Summary of the Findings
The researchers were collected 346 questionnaires from the total 362 sample size and the collected data inserted into SPSS version 24. To achieve the objective of the study multiple linear regressions was employed. Besides, before going into data analysis testing, internal consistency measure such as Cronbach alpha reliability, multi-collinearly diagnostic, normality, linearity homoscedastic were employed. As result, 52 measurement items were reduced to 46 items in order to use regression model. Finally, the study findings are presented as follows:
With regard to the demographic profiles the finding revealed majority (64.7%) of the respondents were male, while the remaining 35.3 were female. In terms of the age category majority of the respondents were between 31-43 years which accounted 50.0% and followed by 44-56 years which constituted 28.6%, and from the data collected there was no filled question for the age range above 69 years. In terms of marital statuses majority of the respondents were married which constituted to 58.7% and followed by single 39.6%. And the remaining respondents were divorced and widowed which constituted (6.0% & 0.00%) respectively.
Concerning to the work experiences majority of the respondents’ have 2-5 years’ experience which accounted to171 (49.4%) and followed by 5-7 years’ experience which accounted to 98 (28.3%). Generally, according to the survey result a few respondents had greater than ten years work experience. With regard to educational qualification, the majority of the respondents were secondary school completed which accounts to 128 (37.0%) and followed by diploma holders which accounted to 105 (30.3%) of the analysis results. In terms of average monthly income, majority of the respondents’ income range was between 4,001-8,000 Birr which accounted to 35.8% and followed by income range between birr 8,001-12,000 and accounted to 33.5% of the analysis result.
The descriptive analysis finding results of customer retention strategy dimensions and organizational performance were presented as follows:
The descriptive analysis found out that the grand mean score value for the four components of customer retention strategy were: customer relationship management = 3.4, sales promotion= 3.7, service quality= 3.8 training and development, = 3.8 and the mean for the dependent variable (organizational performance) was 3.9. All grand mean values, fall between ranges from 3.4 to 3.9. This indicates that all the mean scores were above average and it suggested that respondents were agreed on those constructs.
Subsequently, the Pearson’s correlation the findings were confirmed that the independent variables had moderate and strong positive correlation ranging from (0.341 to 0.526) with the overall the variable. Specifically, with regard to the Pearson correlation analysis, it can be clearly seen as that the four customer retention strategies were positively related to performance SMEs.
CRM and organizational performance have positive relationship, r=0.457.
Sales promotion and organizational performance have positive relationship, r= 0.341.
Service quality and organizational performance have positive relationship, r= 0.365.
Training and development have positive relationship, r= 0.526.
Regression analysis result of the study indicated 51.2% of the SMEs organizational performance was explained by the dimensions of customer retention strategy used in this study. As indicated in the ANOVA table, as p was less than 0.05, the model is significant; from the estimated total observation 151.625 wanted to be explained by the regression model; 77.657 with the mean square 19.414 was explained and the remaining 73.968 with mean square of .217 of the total estimated observation was error or not explained by the regression model. The ANOVA result revealed combination of the variables significantly predicts the dependent variable (F=19.414/.217= 89.502; p < 0.05). This means that the probability of these results occurring by chance is less than 0.05, indicating that the model is suitable for study.
With regard to regression analysis results of coefficient table were indicated as follow:
1) 0.336% of organizational performance is significantly explained by CRM.
2) -0.523% of organizational performance is significantly explained by sales promotion.
3) 0.243% of organizational performance is significantly explained by service quality.
4) 0.85% of organizational performance is significantly explained by training and development.
Customer relationship management has positive and statistically significant on impact on organizational performance that measured by sales volume.
Sales Promotion has negative and statistically significant on impact on organizational performance that measured by sales volume.
Service quality has positive and statistically significant on impact on organizational performance that measured by sales volume.
Training and development has positive and statistically significant on impact on organizational performance that measured by sales volume.
Generally, by considering the above coefficient result, from customer retention strategy customer training and development have the highest influence on organizational performance followed by relationship management strategy respectively. And service quality has the lowest influences. Finally study result revealed sales promotion negatively affects the performance of SMEs.
5.2. Conclusion
The purpose of this study was to investigate the effect of customer retention strategies on the performance of MSEs in three Wollega zones from the viewpoint of the owners/managers and employees.
From the foregone discussion on the observed findings, the researchers were concluded that a significant relationship exists between customer retention strategy and the performance of MSEs. Customer retention strategy contributes for MSEs market share, growth and profitability. Consequently, the implication of the study were Ethiopian MSEs sectors should generally increase their customer retention strategies so as to enhance their level of business viability and specifically review their customer attraction and retention policies in order not to lose customers by competitors.
Based on the summary of the finding, the researchers’ conclusions were indicated as follows:
First, the findings of the study indicated that though there were many retention strategies that have been adopted by MSEs in the world as well as in Ethiopia. Based on the findings of the study result the researchers suggested that the most effective customer retention strategies were training and development, customer relationship management and service quality. And the remaining dimension of customer retention strategy sales promotion was negatively influences the performance; MSEs as per the findings of the researchers and in the real world the result might be reverse; but by its nature sales promotion used to increase short term sales volume, so if the incentives provided was not appropriate (do not matches with the MSEs objectives) and made for un appropriate customers the result might be negative and it requires further investigation by future researchers.
Second, as a result of high levels of poverty and unemployment within the study area as well as the country, MSEs enterprises should consider the society’s problems and as well as affordability of their products and it is not as an option of adopting customer retention strategy in MSEs. Though the provision of quality service has various benefits but according to the researchers investigation it is not sufficient for customer retention in MSEs and it needs more attention and consideration in order to retain the customer.
Third, the researchers also concluded that in the study area effective customer retention can be better achieved not just by enhancing the quality of service provided but through effective marketing. That was the key problems of customers’ retention strategies influenced by a series of distinct gaps often neglected by the MSEs.
Finally, the study findings indicated some variables exhibit weak associations, further researchers were needed to examine the nature of the association between customers’ retention strategies.
5.3. Recommendation
Suggestions for corrective and complementary measures to enhance the potential performance of MSEs are essential. Such recommendations demand an in-depth analysis of the influence of different factors regarding the sectors. Based on the findings and conclusions of the study, the following recommendations were forwarded.
The findings of this research can be important evidence for managers who take charge of customer retention. It is helpful for managers and for marketers to understand the effectiveness and importance of customer retention strategy.
As it is known, customers are the reason for the survival of the MSEs. So, MSEs are expected to invest more on retaining the existing ones as well as attracting new customers.
Effective customer relationship management should be put in place in order to promote and retain the existing customers and enhancing the performance of the organization.
Management should always try to emphasis on the provision of quality service to enhance the customers’ retention strategies in MSEs and train workers of the enterprises for the increment of MSEs performance.
For the MSEs to boost their performance level recruiting appropriate employee, for appropriate training and development should be worked on to enhance their performance.
Management should try to select appropriate sales promotion method that was preferred for MSEs in order to survive in the market as well as to increase sales performance. Unless, simply sales promotion increases cost. The respected body should give more attention when, why, how and what types of sales promotions were appropriate for the enterprise’s product in order to increases performance of enterprises.
Furthermore, MSEs’ top management should also treat their suppliers/producers as long-term partners as they are integral part of the organizations business and as materials and manufactured products used as inputs pose quality challenges. This will promote and facilitate understanding of the right material/product specifications with attributes as retaining and satisfying customers’ needs.
Abbreviations
MSEs | Micro and Small Enterprises |
SME | Small and Micro Enterprise |
SDT | Self-Determination Theory |
Conflicts of Interest
The authors declare no conflicts of interest.
References
| [1] |
Abdullateef, A. O.; Mokhtar, S. S. &Yusoff, R. Z. (2010). The impact of CRM Dimensions on Call Center Performance. International Journal of Computer Science and Network Security, 10(12), 184-195.
|
| [2] |
Abera, A. (2012). Factors affecting the performance of micro and small enterprises in Arada and Lideta Sub-Cities, Addis Ababa. MBA Thesis unpublished, School of Graduate Studies, Addis Ababa University, Ethiopia.
|
| [3] |
Agus, A. & Hajinoor, M. S. (2012). Lean production supply chain management as driver towards enhancing product quality and business performance. International Journal of Quality & Reliability Management, 29(1), 92-121.
https://doi.org/10.1108/02656711211190891
|
| [4] |
Ahmad, I., & Ahmad, S. (2018). Multiple skills and medium enterprises’ performance in Punjab Pakistan: A pilot study. The Journal of Social Sciences Research, Special, (4), 44-49.
https://doi.org/10.32861/jssr.spi4.44.49
|
| [5] |
Akroush, N. M.; Dahiyat, E. S.; Gharaibeh, S. H. & Abu-Lail, N. B. (2011). Customer relationship management implementation. An investigation of a scale’s generalizability and its relationship with business performance in a developing country context. International Journal of Commerce and Management, 21(2), 158-191.
https://doi.org/10.1108/10569211111144355
|
| [6] |
Al-Hawari, M. & Ward, T. (2006). The effect of automated service quality on Australian banks’ financial performance and the mediating role of customer satisfaction. Marketing Intelligence & Planning, 24(2), 127-147.
https://doi.org/10.1108/02634500610653991
|
| [7] |
Allan Macpherson, U. C. E., & Dilani Jayawarna, U. C. E. (2007). Training approaches in manufacturing SMEs. Education & Training, 49 (8/9), 698.
|
| [8] |
Asagba, Ss. & Coker, P. (2019). Customer Retention Strategies a Survey of Selected Retail C.
|
| [9] |
Bryan. (2006). Training and Performance in Small Firms. International Small Business Journal. 24(6): 635-660.
https://doi.org/10.1177/0266242606069270
|
| [10] |
Chong, B. & Wong, M. (2005). Crafting an effective customer retention strategy: a review of halo effect on customer satisfaction in online auctions. International journal of management and enterprise development, 2(1), 12-26.
https://doi.org/10.1504/IJMED.2005.006021
|
| [11] |
Cronk, C. (2014). Motivation, metacognition and performance (Doctoral dissertation, University of the Witwatersrand, Faculty of Humanities).
|
| [12] |
Dawkins, J. & Lewis, S. (2003). CSR in stakeholder expectations: And their implication for company strategy. Journal of Business Ethics, 44(2), 185-193.
|
| [13] |
Deci, E. L. & Ryan, R. M. (1985). The general causality orientations scale: Self-determination in personality. Journal of research in personality, 19(2), 109-134.
|
| [14] |
Edet, N.; Etim, U. &Etesin, U. (2013). Effective customer service: A tool for client retention among stock broking firms in Nigeria. African Journal of Business Management, 5(20), 7987-7991.
https://doi.org/10.5897/AJBM09.234
|
| [15] |
El-Borsaly, A. & Hassan, S. (2020). The impact of service quality on organizational performance in the mobile telecommunications sector in Egypt. Proceedings on Engineering, 2(1), 93-104.
https://doi.org/10.24874/PES02.01.010
|
| [16] |
Feigenbaum, A. V. (1983). Total quality control. McGraw-Hill. New York.
|
| [17] |
Field, A. (2009). Discovering Statistics Using SPSS Third. Los Angeles: SA.
|
| [18] |
Fisher, A. (2001). Winning the battle for customers. Journal of Financial Services Marketing, 6(2), 77-83.
|
| [19] |
Fluss, D. (2010). Fluss, D. (2010). Customer retention is a priority for mobile phone providers.
http://www.customerthink.com/article/customer_retention_priority_mobile_phone_providers
|
| [20] |
Gengeswari, K., Padmashantini, P., &Sharmeela-Banu, S. A. (2013). Impact of customer retention practices on firm performance. International Journal of Academic Research in Business and Social Sciences, 3(7), 68.
|
| [21] |
Gopaal, E. G (2007). Marketing and Business Management. (3rd ed) England: Colleen publishers’ ltd.
|
| [22] |
Gulati, R. (2010). Reorganize for resilience: Putting customers at the center of your business. Harvard Business Press.
|
| [23] |
Gupta, R. D., & Kundu, D. (1999). Theory & methods: Generalized exponential distributions. Australian & New Zealand Journal of Statistics, 41(2), 173-188.
|
| [24] |
Hamilton-Ibama, E. L., & Ihunwo, E. (2022). Service quality and customer retention in deposit money banks in Port Harcourt, Rivers State, Nigeria. American Journal of Economics and Business Management, 5(2), 27-41.
|
| [25] |
Henry, O. & Jennifer, C.N. (2011). Training and development practices in an organization: an intervention to enhance organizational effectiveness.
|
| [26] |
Hossain, M.A., & Quaddus, M. (2011). Expectation–confirmation theory in information system research: A review and analysis. Information systems theory: Explaining and predicting our digital society, Vol. 1, 441-469.
https://doi.org/10.1007/978-1-4419-6108-2_21
|
| [27] |
Hunt, I. & Hogan, D. (2005). Moving Small Companies towards Next Generation Employability, Community of Practice (COP) Report, COP3.
|
| [28] |
Hurley, T. (2004). Managing customer retention in the health and fitness industry: a case of neglect. Irish Marketing Review, 17 (1/2), 23.
|
| [29] |
Kakuru J. (2000). Financial Dimensions and the Business (1st ed). Cambridge, UK: Cambridge: University Press.
|
| [30] |
KameswaraRaoPoranki&AsifPerwej (2015). Assessment of the Employees Effectiveness through Training and Development at Hyundai Motors India Ltd. theinternationaljournal. org > RJSSM: Volume: 04, Number: 11.
|
| [31] |
Kanyiri, F. K. (2009). Factors That Inhibit Innovation in Financial Intermediaries for SMEs in Kenya: A Case Study of the Perspectives of Entrepreneurial Members of SACCOs in Nairobi City. Unpublished MA Thesis. Nairobi: USIU.
|
| [32] |
Keramati, A., Mehrabi, H., & Mojir, N. (2010). A process-oriented perspective on customer relationship management and organizational performance: An empirical investigation. Industrial Marketing Management, 39(7), 1170-1185.
https://doi.org/10.1016/j.indmarman.2010.02.001
|
| [33] |
Kessy, S. & S. S. Temu (2010). The Impact of Training on Performance of Micro and Small Enterprises Served by Microfinance Institutions in Tanzania. Research Journal of Business Management 4(2): 103-111.
|
| [34] |
Kimonye, M. (1998). Service quality: Key to customer satisfaction. Marketing Review, 10.
|
| [35] |
Kinnear, S., & Ogden, I. (2014). Planning the innovation agenda for sustainable development in resource regions: A central Queensland case study. Resources Policy, 39, 42-53.
https://doi.org/10.1016/j.resourpol.2013.10.009
|
| [36] |
Khan, A. J., & Iqbal, J. (2020). Do high performance work practices increase the organizational performance of public sector companies? An investigation of mediation mechanism. Pakistan Journal of Social Sciences, 40(2), 1007-1021.
|
| [37] |
Ko, C. P. &Ko, C. C. (2012). The Relationship of Training Quality in E-learning and Organizational Commitment to Organizational Performance in the Taiwan Service Industry. International Conference on Future Computer Supported Education. IERI Procedia, 2, 821-827.
https://doi.org/10.1016/j.ieri.2012.06.177
|
| [38] |
Lin, J. S. C., & Wu, C. Y. (2011). The role of expected future use in relationship-based service retention. Managing Service Quality: An International Journal, 21(5), 535-551.
https://doi.org/10.1108/09604521111159816
|
| [39] |
Magableh, I & AL-Mahrouq, M. (2007). Small and Medium Enterprises (SMEs): Concepts, Characteristics, Importance, Merits and Obstacles, a paper prepared at Small Enterprises: an Effective Tool to Address Poverty Forum, Yarmouk University Jordan (pp. 29-31).
|
| [40] |
Mandal, P. C. (2016). Dimensions affecting customer satisfaction in retail banking: A literature review. International Journal of Applied Research, 2(1), 302-306.
|
| [41] |
Mandal, P. C. (2021). Changing nature of customer relationships: strategies and initiatives to beat the competition. International Journal of Competitiveness, 2(1), 1-16.
https://doi.org/10.1504/IJC.2021.115539
|
| [42] |
Maxham, J. G. (2000). The service recovery’s influence on customers’ satisfaction, positive word of mouth and purchase intentions, Journal of Business Research, Vol. 54 No. 1, pp. 11-24.
|
| [43] |
Mendzela, J. (2003). Leadership and management how central banks can measure efficiency and deliver effective reform. Central Banking, 13(3), 59-66.
|
| [44] |
Molapo, M. E. & Mukwada, Geoffrey (2011). The impact of customer retention strategies in the South African cellular industry: The case of the Eastern Free State. International Journal of Business, Humanities and Technology, 1(2), 52-60.
|
| [45] |
Njoroge, C. W. &Gathungu, J. M. (2013). The effect of entrepreneurial education and training on development of small and medium size enterprises in Githunguri District-Kenya. International Journal of Education and research, 1 (8), 1-22.
|
| [46] |
O'Brien, L. & Jones, C. (1995). Do rewards really create loyalty? Long range planning, 28(4), 130-130.
|
| [47] |
Odunlami, I. B. &Ogunsiji, A. (2011). Effect of Sales Promotion as a Tool on Organizational Performance. (A case Study of Sunshine Plastic Company). Journal of Emerging Trends in Economics and Management Sciences (JETEMS), 2(1): 9-13.
|
| [48] |
Omolo, J. W. (2015). Training and development on performance of small and medium enterprises in Kisumu County, Kenya.
|
| [49] |
Ouma, B. O.; Ndirangu, A. W.; Munyaka, F. G.; George, G. E.; Mandere, E. N.; Maringa, A. K. &Maswari, E. (2013). Organizational Customers’ Retention Strategies on Customer Satisfaction: Case of Equity Bank Thika Branch, Kenya. Research Journal of Finance and Accounting, 4(10), 8-16.
|
| [50] |
Parasuraman, A., Zeithaml, V. A., & Berry, L. (1988). SERVQUAL: A multiple-item scale for measuring consumer perceptions of service quality. 1988, 64(1), 12-40.
|
| [51] |
Paul Jones; Malcolm J Beynon; David Pickernell& Gary Packham (2013). Evaluating the impact of different training methods on SME business performance. Environment and Planning C: Government and Policy, 31(1) 56 – 81.
|
| [52] |
Raju, P. S. & Lonial, S. C. (2002). The impact of service quality and marketing on financial performance in the hospital industry: an empirical examination. Journal of Retailing and Consumer Services, 9, 335-348.
|
| [53] |
Ramayah, T.; Samat, N. & Lo, M. C. (2011). Market orientation, service quality and organizational performance in service organizations in Malaysia. Asia-Pacific Journal of Business Administration, 3(1), 8-27.
https://doi.org/10.1108/17574321111116379
|
| [54] |
Reichheld, F. (2006). The microeconomics of customer relationships. MIT Sloan management review, 47(2), 73.
|
| [55] |
Reichheld, F. F. & Kenny, D. W. (1990). The hidden advantages of customer retention. Journal of Retail Banking, 12(4), 19-24.
|
| [56] |
Richards, K. A., & Jones, E. (2008). Customer relationship management: Finding value drivers. Industrial marketing management, 37(2), 120-130.
http://dx.doi.org/10.1016/j.indmarman.2006.08.005
|
| [57] |
Rotimosho (2003), Practice of Marketing; 1st Edition, Lagos: Global Annuals.
|
| [58] |
Sharmeela-Banu, S. A; Gengeswari, K. &Padmashantini, P. (2013). An extensive review on the impact of customer retention practices towards the performance of SMEs. International Journal of Academic Research in Business and Social Sciences. 3(7), 85- 94.
https://doi.org/10.6007/IJARBSS/v3-i7/11
|
| [59] |
Shewhart, W. A., & Deming, W. E. (1986). Statistical method from the viewpoint of quality control. Courier Corporation.
|
| [60] |
Sim, K. L.; Song, C. J. &Killough, L. N. (2015). Service quality, service recovery, and financial performance: An analysis of the US airline industry. Advances in Management Accounting, 18, 27-53.
|
| [61] |
Sin L. Y. M.; Tse A. C. B. &Yim F. H. K. (2005). CRM: conceptualization and scale development. European Journal of Marketing, 39(11/12), 1264-1290.
https://doi.org/10.1108/03090560510623253
|
| [62] |
Stephen, P.; Aliyu, U. F. & Ibrahim, A. (2017). Impact of sales promotional strategies on organizational performance in Nigeria. European Journal of Research and Reflection in Management Sciences, 5(4).
|
| [63] |
Sumardi & Fernandes, A. A. R. (2018). The mediating effect of service quality and organizational commitment on the effect of management process alignment on higher education performance in Makassar, Indonesia. Journal of Organizational Change Management, 31(2), 410-425.
https://doi.org/10.1108/JOCM-11-2016-0247
|
| [64] |
Vallerand, R. J. (1997). Toward a hierarchical model of intrinsic and extrinsic motivation. Advances in experimental social psychology, 29, 271-360.
https://doi.org/10.1016/S0065-2601(08)60019-2
|
| [65] |
Vernon, R. (2013). Storm over the Multinationals. Harvard University Press.
|
| [66] |
Waithaka, L. W. (2014). Influence of customer retention strategies on performance of insurance companies in Nairobi, Kenya. Unpublished Msc Marketing Project, University of Nairobi.
|
| [67] |
Watson M. Ladzani&Jurie J. van Vuuren (2002). Entrepreneurship Training for Emerging SMEs in South Africa, Journal of Small Business Management 2002 40(2), pp. 153–160.
https://doi.org/ 10.1111/1540-627X.00047
|
| [68] |
Westhead, P. (1998). Factors Associated with the Provision of Job Related Formal Training by Employers. International Journal of Entrepreneurial Behavior and Research, 4(3), 187-216.
|
| [69] |
Winer, R. S. (2001). A framework for customer relationship management, California management review, 43(4), 89-105.
|
| [70] |
Yee, R. W., Yeung, A. C., & Cheng, T. E. (2010). An empirical study of employee loyalty, service quality and firm performance in the service industry. International Journal of Production Economics, 124(1), 109-120.
https://dx.doi.org/10.1016/j.ijpe.2009.10.015
|
| [71] |
Yamane Tara (1967), Taro Yamane Method For Sample Size Calculation. The Survey Causes Of Mathematics Anxiety Among Secondary School Students In Minna Metropolis. Mathematical Association of Nigeria (Man), 46(1), 188.
|
| [72] |
Yim, F. H.; Anderson, R. E. &Swaminathan, S. (2004), Customer Relationship Management: Its Dimensions and Effect on Customer Outcomes. Journal of Personal Selling and Sales Management, 24(4), 265–280.
https://doi.org/10.1080/08853134.2004.10749037
|
| [73] |
Zeithalm, V. A., & Bitner, M. J. (1996). Services marketing, 1st edition. McGraw-Hill: USA.
|
Cite This Article
-
APA Style
Biru, H. D., Yasin, M., Abdeta, O. E. (2025). Effect of Customer Retention Strategy on Performance of Micro and Small Enterprise of Three Wollega Zones: In Case of Selected Town (Nekemte, Gimbi and Shambu). Journal of Business and Economic Development, 10(2), 58-75. https://doi.org/10.11648/j.jbed.20251002.12
Copy
|
Download
ACS Style
Biru, H. D.; Yasin, M.; Abdeta, O. E. Effect of Customer Retention Strategy on Performance of Micro and Small Enterprise of Three Wollega Zones: In Case of Selected Town (Nekemte, Gimbi and Shambu). J. Bus. Econ. Dev. 2025, 10(2), 58-75. doi: 10.11648/j.jbed.20251002.12
Copy
|
Download
AMA Style
Biru HD, Yasin M, Abdeta OE. Effect of Customer Retention Strategy on Performance of Micro and Small Enterprise of Three Wollega Zones: In Case of Selected Town (Nekemte, Gimbi and Shambu). J Bus Econ Dev. 2025;10(2):58-75. doi: 10.11648/j.jbed.20251002.12
Copy
|
Download
-
@article{10.11648/j.jbed.20251002.12,
author = {Hika Debela Biru and Musefa Yasin and Oliyad Ejeta Abdeta},
title = {Effect of Customer Retention Strategy on Performance of Micro and Small Enterprise of Three Wollega Zones: In Case of Selected Town (Nekemte, Gimbi and Shambu)
},
journal = {Journal of Business and Economic Development},
volume = {10},
number = {2},
pages = {58-75},
doi = {10.11648/j.jbed.20251002.12},
url = {https://doi.org/10.11648/j.jbed.20251002.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jbed.20251002.12},
abstract = {These days, a highly competitive corporate climate may increase the need to improve customer retention and fortify customer connections. The aim of this study is investigating how customer retention strategies affect small and microenterprise performance in three Wollega Zones. An explanatory and descriptive research design was employed. Additionally, a combination of qualitative and quantitative methodologies was used. The study's target population included all SMEs' owners and managers as well as their employees. To choose the study's sample size, the researchers employ both stratified and purposive selection strategies. Data was gathered from 346 participants. Both primary and secondary data were gathered for this investigation. The data was analyzed using the mean, frequency, percentages, and standard deviation. The association between SMEs' performance and customers’ retention strategy was measured and predicted using regression analysis. The study's conclusions demonstrated a relationship between SMEs' performance and their customer retention strategy status, with higher performance being related with better customer retention strategy status. Additionally, it was discovered that the businesses were not employing the right sales marketing tools for the right audiences to raise awareness of their goods and services. Additionally, it comes to the conclusion that the performance of small and micro enterprises was significantly correlated with customer retention strategies.
},
year = {2025}
}
Copy
|
Download
-
TY - JOUR
T1 - Effect of Customer Retention Strategy on Performance of Micro and Small Enterprise of Three Wollega Zones: In Case of Selected Town (Nekemte, Gimbi and Shambu)
AU - Hika Debela Biru
AU - Musefa Yasin
AU - Oliyad Ejeta Abdeta
Y1 - 2025/06/06
PY - 2025
N1 - https://doi.org/10.11648/j.jbed.20251002.12
DO - 10.11648/j.jbed.20251002.12
T2 - Journal of Business and Economic Development
JF - Journal of Business and Economic Development
JO - Journal of Business and Economic Development
SP - 58
EP - 75
PB - Science Publishing Group
SN - 2637-3874
UR - https://doi.org/10.11648/j.jbed.20251002.12
AB - These days, a highly competitive corporate climate may increase the need to improve customer retention and fortify customer connections. The aim of this study is investigating how customer retention strategies affect small and microenterprise performance in three Wollega Zones. An explanatory and descriptive research design was employed. Additionally, a combination of qualitative and quantitative methodologies was used. The study's target population included all SMEs' owners and managers as well as their employees. To choose the study's sample size, the researchers employ both stratified and purposive selection strategies. Data was gathered from 346 participants. Both primary and secondary data were gathered for this investigation. The data was analyzed using the mean, frequency, percentages, and standard deviation. The association between SMEs' performance and customers’ retention strategy was measured and predicted using regression analysis. The study's conclusions demonstrated a relationship between SMEs' performance and their customer retention strategy status, with higher performance being related with better customer retention strategy status. Additionally, it was discovered that the businesses were not employing the right sales marketing tools for the right audiences to raise awareness of their goods and services. Additionally, it comes to the conclusion that the performance of small and micro enterprises was significantly correlated with customer retention strategies.
VL - 10
IS - 2
ER -
Copy
|
Download
Share This Article
Twitter
Linked In
Facebook
Email: