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Researcher of the Month: Stella Nyongesa – Customer Retention by Microfinance Institutions

Marketing lecturer Stella Nyongesa is a calm spirit who has made great strides in the field of marketing and has been assessed on a number of occasions by her students as a very knowledgeable lecturer.

Ugandan by origin and Kenyan by marriage Stella, is grateful to God for giving her the strength to study her 4 year PhD course, and is currently working at using her knowledge and skills to improve students’ learning experience as well as marketing practice in the country. This she hopes to achieve through providing research-driven solutions to industry problems and training.

What is your education and family background?

I have a Bachelor of Commerce Degree (Marketing Specialization) and a Master of Science Degree (Marketing), both from Makerere University. I also have a Master of Banking and Finance Degree (Microfinance) from Moi University. I undertook this second Master’s out of a desire to understand better the nature of financial services and industry players, in particular providers of microfinance services. This is because microfinance institutions have a unique mandate, to empower poor people economically and socially through the provision of relevant financial services. Besides the degrees, I have the Chartered Institute of Marketing professional qualification (CIM), and over the last four years I have been pursuing my PhD studies at Strathmore University, currently in the final stages.

With regard to my family background, I consider myself a true East African because I am a Tanzanian by birth, a Ugandan by origin, and a Kenyan by marriage. After my university education (in Uganda) I got married to a Kenyan and acquired Kenyan citizenship in 2002.  We are blessed with four children- 1 girl and 3 boys.

How did you end up at Strathmore University?

Prior to moving to Kenya, I worked at Uganda Breweries Ltd (Sales & Marketing Department) and at the same time I was a tutorial fellow at Makerere University. A few years later, I was given a full-time Teaching Assistant position there. When I moved to Kenya, my first job assignment took me to Standard Chartered Bank, however I was still interested in a teaching career at university level, therefore I proceeded to apply to universities and I was employed by Kenyatta University in 2003. Shortly after, I was offered a position to teach at Strathmore on a part-time basis. In 2007, I officially joined the university as a full-time lecturer.

 What is your PhD topic and why?

My PhD topic is: The Influence of Relationship Marketing, Social performance Management and Firm Characteristics on Customer Retention by Microfinance institutions in Kenya.

When I was seeking a topic for my PhD, I strongly felt the need to pursue a multidisciplinary issue by investigating a marketing and microfinance research problem. In particular, the practice of social performance management within microfinance was of interest to me because it espouses the tenets of the societal marketing philosophy. On reading more around this concept, I found out that although this practice was advocated by microfinance stakeholders, because of its potential to make MFIs clients focused, many institutions seemed reluctant to adopt social performance management practices.

I therefore began to find out if social performance management matters within marketing operations, given the variety of micro-finance institutions with different firm characteristics. A key objective of my study thus was to establish the extent to which social performance management practices and firm characteristics influence the strength of the association between relationship marketing and customer retention.

I targeted microfinance institutions that were members of AMFI (Associations of Microfinance Institutions in Kenya). Within the institutions, I sought data from 55 employees in charge of either relationship marketing or social performance management and also collected data from 495 customers of these institutions.

My supervisors are Prof. Francis Kibera, from the University Of Nairobi School Of Business and Prof. Ruth Kiraka, Dean of the School of Graduate Studies at Strathmore University.

What are your findings?

My findings show that relationship marketing and customer retention are strongly related. However, the findings also suggest that when you introduce social performance management, it enhances the strength of this original relationship. Social performance management was thus a moderating variable used to check if it has any influence on the relationship marketing-customer retention association.

The findings on the moderating effect of firm characteristics on the same relationship (relationship marketing –customer retention), however, were surprising, as they revealed that their effect, though statistically significant, was negative and weak. This implies firm characteristics on their own e.g. technology factors, or how long one has been in business, do not necessarily boost customer retention, but rather must be combined with other initiatives to improve customer retention.

My findings further revealed that, jointly, relationship marketing, social performance management, and good technology platforms are initiatives that bring about better customer retention outcomes, than if an institution relies only on relationship marketing to boost customer retention. This finding seems to affirm what some scholars echoed some years back – that relationship marketing on its own does not guarantee customer retention.

How beneficial is your research?

For the university and other businesses, my study has practical implications on stakeholder relationship management. In order to succeed at retaining customers, organizations need to build customer relationships characterized by trust, commitment, shared values and open communication. Besides this, my study sheds light on the benefits of social performance management; giving confidence to organizations to embrace these practices because they seem to matter to customers.

There are policy implications of my findings whereby the regulator of microfinance institutions (Central Bank of Kenya) may use these results as a basis for enhancement of policy on social performance management. This can be achieved by developing guidelines for microfinance institutions on the measurement and reporting of social performance data, just as they do for financial data. This will provide the regulator with parameters on which to improve their oversight role aimed at making microfinance institutions sustainable through the achievement of both financial and social goals.

What challenges did you encounter on your PhD journey?

Studying for a PhD while working is a big challenge to start with. But at Strathmore, the work-load is reduced as you progress in your studies. After collecting data, I was given time off to focus on analyzing my data and writing my report.

Also, as a family person, I had to continue with my responsibilities at home. Multi-tasking between teaching, studying, and parenting takes a heavy toll on someone; but with the support of colleagues and family it becomes bearable by the day.

Another challenge I faced was during data collection while undertaking the interviews. Managers from the institutions targeted, as expected, are very busy people and therefore making the time to fill out the questionnaires was not easy. This prolonged my time for collecting data.

You won an award in one of your conference papers; tell us about it.

Yes, as part of the PhD requirements, a student is required to write research papers and present these at conferences. In the process, I have written three papers and I have presented two of these at international conferences. The first paper was presented at the University of Oxford (UK) where I received valuable feedback from the scholars who participated, and at this conference I was given an opportunity to chair one of the sessions. Indeed, this was a really good experience. The second paper was presented at a conference in Melbourne, Australia organized by the World Business Institute and it’s at this conference that my paper was awarded Best Journal Paper and was recommended for publication in the World Journal of Management. The paper is currently under review for publication.

What do you wish to achieve in the next 5-10 years?

I plan to continue researching in the same area but with a focus on the business-business perspective. I also intend to research further on impact assessment studies on social performance management possibly through engaging in Post-Doctoral fellowships as a way to sharpen my research skills. I intend to continue increasing my list of publications as well engage in writing books with my colleagues in this field. My ultimate aim, with God’s grace, is to transition my academic career up to the level of a professor within the next 10 years.

What motivates you?

Despite the challenges, I am motivated by my passion for teaching and my joy in being challenged to think at a higher level. I feel happy with my contribution to nurturing young minds and helping them realize their full potential.

What would you advise PhD potential students?

It is normal to feel scared and confused about where to start from as you think of the PhD journey; however, I have learnt that there are three main pillars of the PhD studies;

  1. To understand and embrace the fundamental principles of research,
  2. To work closely with your supervisor(s)
  3. To be self- driven.
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