Retaining customers is key in giving a competitive edge in the banking industry. Banks must identify factors that they need to improve on so as to increase customer retention. Management takes cognizance of the importance of Customer retention in a competitive market or slow increase of new customers. The Kenyan banking industry has been facing challenges in customer retention in the face of increasing competition. Customers are hopping from one bank to another in the hope of finding the one that fit their needs. The following objectives guided this: to establish the retention strategies adopted by commercial banks in Kenya; and to determine the management perception of the effectiveness of such customer retention strategies. This research employed a descriptive research design. The target population comprised of all 44 commercial banks in Kenya. A total of 44 managers involved in strategy implementation were picked to represent the entire population. The sample size was preferred because it was manageable. A semi-structured questionnaire composed of three sections was used to collect primary data where the respondents were accessed through an interview and drop-and-pick later method. The study used a five-point Likert scale to measure the extent of customer satisfaction on effectiveness. Data was collected and analyzed using SPSS package. The study found that commercial banks applied product innovativeness to a very great extent. Commercial banks applied employee training and customer relationship management. The study established that employee training, product innovativeness were perceived as effective as well. Firms need to analyze their customers before coming up with retention strategies. Banks need to come up with ways of rewarding the sales force for retaining customers. Organizations should endeavor to create value for their customers.
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