INFLUENCE OF CUSTOMER SERVICE STRATEGY ON PERFORMANCE OF SMALL AND MICRO ENTERPRISES IN WEST POKOT COUNTY, KENYA

Abstract

The study sought to evaluate the influence of customer service strategy on performance of small and micro enterprises (SMEs) in the County of West Pokot, Kenya. The study was conducted due to the increased cases of SMEs folding up within five years of operation in the county of West Pokot. Majority of SMEs are not sustainable and the research sought to know whether application or non-application of pricing strategy influence their performance. The study was guided by Economic Theory, Kirzner’s Alert Theory of Entrepreneurship and Task Technology Fit (TTF) Theory. The study employed concurrent triangulation design. The target population consisted of SMEs (different sectors) which were 528 out of which 205 were selected through simple random and stratified random sampling (SRS)/probability techniques. A structured questionnaire, pilot-tested in Kitale town to obtain an overall Cronbach Alpha value of 0.815, was adopted for data collection. The data was analysed using descriptive statistics as well as Karl Pearson correlation to test the research hypothesis at 95.0% confidence level. The outcome of the data was presented in frequency tables. The findings indicated that customer service strategy had R² = 0.146), hence giving 14.6% variations in the performance of SMEs in West Pokot County. When customer service strategy was modified by one unit, there was a related shift in performance of SMEs in West Pokot County by 0.382 units. It was concluded that how customers are treated and served determines the performance of the SMEs. Therefore, the outcomes of the SMEs in terms of performance are largely hinged on the customer service. Improved customer service ultimately leads to enhanced performance of the businesses. To business owners, entrepreneurial strategies benefits according to this study have proved to be instrumental in enhancing SMEs performance. In addition, business owners need to invest more in ICT infrastructure and also train their staff on customer service and also use of technology devices so as to increase efficiency in service delivery. This could be attained through proper implementation of entrepreneurial strategies on performance to meet customer’s needs.

Key Words: Customer Service Strategy, Performance of Small and Micro Enterprises, West Pokot County