State of Relationship Marketing in Kenya

By Stephen Osomba – May 25, 2018

Relationship marketing and customer relationship management have taken a central position in marketing strategy in the past two decades. A confluence of factors, including the transition to service-based economies; advances in communication, logistics, and computing technologies; increased global competition; and faster product commoditization has enhanced the salience of "relationship-based loyalty” to sellers compared with other marketing mix factors. Moreover, some of these trends are simultaneously increasing customers’ desire for the unique characteristics found in relationship-based exchanges (e.g., reduced perceived risk, higher trust, enhanced cooperation, and greater flexibility). Thus, in many situations globally, both sellers and customers are becoming more interested in conducting business transactions embedded within relationships.

The practice of relationship marketing in Kenya has been slowly but steadily gaining momentum in the recent years. However, before the advent of relationship marketing concept, businesses used to engage in transactional marketing. This was characterized by poor customer service and occasional con incidents which continue even today. At the time, businesses didn’t see the need for repeat purchases and wrongly imagined that customer pool was infinite. This practice was heavily influenced by Kenyan culture of get rich quick by whatever means. The cultural tradition is shaped by the exceptional respect given to people who are wealthy in the society and thus everyone aspires to be wealthy so that they could be accorded that respect. The argument thus forms a strong basis of a nexus between culture and relationship marketing among Kenyan businesses.

This custom has been transferred and infused to business practices in Kenya whereby entrepreneurs would cut corners, shortchange customers to make a quick profit without utter regard to their welfare. This approach has, by and large, inhabited the entrenchment of relationship marketing philosophy among businesses in Kenya. It can be argued that the style partly contributes to collapse of many micro, small and medium enterprises (MSMEs). The Kenya National Bureau of Statistics (KNBS) puts the number of MSMEs that collapse before their third anniversary at 95%.

While the get rich quick culture is still strong and prevalent among the Kenyans generally who form a significant portion of the business community in the country, the tide is slowly changing. Today, relationship marketing has been adopted as a competitive marketing strategy mainly by the established enterprises; blue-chip companies. Unlike MSMEs, these companies have exposure and access to best global practices. They are capable of hiring competent marketing professionals who are adept at executing innovative relationship marketing strategies to put them ahead of the competition curve.

A look at the Kenyan industry indicates that relationship marketing is most active in retail and banking sectors while others lag behind. Supermarkets which are in the retail industry estimated to be worth Ksh.700 billion, have elaborate relationship marketing strategies that ensure customers shop with them for a lifetime. For example, all supermarkets have a loyalty reward scheme that allows shoppers to redeem points for the specified value of goods. However, for the case of supermarkets, relationship marketing strategies are too generic and no particular retail chain is doing something out of the ordinary so that their strategy stands out.

For the banking industry, the banks have employed dedicated relationship marketing officers and managers whose sole duty is to take care of the customers. Each relationship marketing manager is allocated a number of clients to attend to but high net worth customers are given dedicated relationship marketing managers owing to the high volume of business they bring to the banks. In this industry as well, the relationship marketing strategies are more generic although a few banks are thinking out of the box and executing new ways to develop and maintain strong connections with customers.

In addition to having relationship marketing managers as boundary-spanners, another trend among blue-chip companies is the use of technology in executing their strategies. The big enterprises in Kenya have invested heavily in customer management (CRM) technology to optimize customer relations. They keep tabs on the customers regularly, informing them of interesting offers, new products, and just getting to know how customers are faring on in their day to day life. The highly personalized relationship marketing has propelled the brands to greater heights, for example, Safaricom, Equity Bank, KCB Bank, and Naivas Supermarket just but to mention a few. The brands have developed particularly strong connections with their customers.

Going forward, as more marketing professionals get employed by Kenyan businesses and recognize the critical role of relationship marketing, the practice will grow tremendously. The main challenges facing the businesses more so Micro, Small and Medium Enterprises (MSME) when it comes to conceptualizing and implementing relationship marketing are lack of technical know-how, inadequate resources to invest in customer services, and the high cost of prerequisite technology. The growth will also be buoyed by the Kenyan consumers who are increasingly becoming bold and demanding of better value. This will force businesses to shape up or ship out. This is a shift from the past where customers remained indifferent to poor customer services from businesses in Kenya. These two trigger factors coupled with the dynamic business environment will revolutionize relationship marketing