Effect of customer relationship management strategies on the competitive advantage of Savings and Credit Co-operative Societies in Kenya

Abstract

The need to sustain competitiveness has seen businesses embrace customer relationship management strategies to gain competitive advantage. Saccos utilize CRM strategies to enhance customer loyalty besides attracting and retaining customers. Although Saccos in Kenya have embraced the adoption of CRM as a strategy to enhance their competitiveness, it is not clear whether these strategies affect their competitive advantage. The goal of this study was to establish the effect of customer relationship management strategies on Saccos' competitive advantage in Kenya. The specific objectives of the study included determining the effect of operational CRM strategy on the competitive advantage of Saccos in Kenya, determining the effect of analytical CRM strategy on the competitive advantage of Saccos in Kenya, and establishing the effect of collaborative CRM on the competitive advantage of Saccos in Kenya. The study was underpinned by two theories: the Trust Commitment Theory and the Resource-based View Theory. Different studies show that the SACCO sector in Kenya has embraced the adoption of CRM but not much has been done to explore the role of CRM in influencing their competitive advantage. A descriptive research design was utilized to meet the objective of the study. The target population for the study were the 174 licensed deposit-taking Saccos that operate in Kenya. The study focused on Saccos licensed and operating within Nairobi County. 47 Saccos are licensed and operate in Nairobi County. The 47 Saccos formed the study sample. A total of 188 respondents from the human resource department, marketing and sales departments, operational department, and IT department of Saccos licensed and operating within Nairobi County were targeted. Primary data was collected from the respondents using questionnaires as data collection tools. The collected data was analyzed using Statistical Package for Social Science (SPSS) version 20. The study realized a response rate of 68%. Operational CRM strategy was found to play a key role in ensuring that Saccos can collect customer interaction data and utilize the analyzed data to respond to market changes appropriately. Analytical CRM strategy was found to positively influence competitive advantage by ensuring that firms align their products to customer needs and appropriately respond to emerging market trends. A collaborative CRM strategy was found to enhance the effectiveness of collecting and analyzing data across Saccos, hence enhancing competitive advantage. The study findings thus demonstrated that the CRM strategies (operational, analytical, and collaborative) positively influence Saccos' competitive advantage in Kenya. The study recommends that policymakers at Saccos should promote policies that enhance the adoption and integration of CRM strategies in their operations. The limitation for the study was that the data collection process was extremely time consuming due to unwillingness of some participants to share information, necessitating numerous follow-ups.