Analysis of Marketing Factors Influencing Banks’ Customer Loyalty: A Survey of Commercial Banks in Nairobi, Kenya

Abstract

Customer loyalty is commonly cited as a requirement for providing effective service. Customers compare perceptions to expectations when judging a company's product and service quality. It may be tough to keep a customer in the banking business because it is so competitive and identical. Several banks have encountered problems that have caused consumers to switch to other banks and financial institutions. Therefore, this1study1aimed1to establish1the1factors1that1influence1customer1loyalty1on1commercial1banks in Nairobi, Kenya. Specifically, the study focused on influence of brand perception, price regimes, service quality and product variety influences customer1loyalty1on1commercial1banks in Nairobi, Kenya. The theory of Disconfirmation served as the foundation for this study. This study was hinged on expectancy disconfirmation theory, value-percept disparity theory and adverse selection theory. The study took the form of a descriptive survey. In Nairobi CBD's Tier11,1Tier12,1and1Tier131bank1branches, the target population was 1199327 bank customers (retail and corporate). Stratified and simple random selection was used to select 384 persons for the study. A self-administered semi-structured questionnaire was used to collect data. Prior to administering the questionnaire, the respondents' permission was asked. After that, the researcher1organized1the1data,1coded,1revised,1and1tabulated it to guarantee accuracy1and1completeness1before1saving1it1in1the appropriate format. For all quantitative variables, descriptive1statistics1were1produced1using1frequencies, percentages, mean score, and1standard1deviation, and the data was presented in tables. The qualitative data from the open-ended questions was processed and presented in prose using conceptual content analysis. Regression and correlation analysis were used to perform inferential data analysis. To determine the relationships between the independent and dependent variables, regression analysis was used. The Statistical Program for Social Studies (SPSS) version 28 was used to generate the statistical data output. The analysis' findings were presented in the form of a narrative, bar graphs, pie charts, and other visual aids. According to the study, bank employees1are1always1willing1to1help, and the bank's services are dependable. According to1the1study,1the bank has competitive1loan interest rates. According to the report, the bank was also thought to be powerful and stable. The consumer is most satisfied with the bank's large selection of products. The study found that product1diversity1had1the biggest impact on customer1loyalty1at1Nairobi1commercial banks, followed1by1service1quality, price regimes, and brand perception, with brand perception having the least impact. Banks should focus on product quality, according to the report, in order to keep the1loyalty1of their quality-seeking clients. According to the survey, banks may boost their consumer image by participating in a variety of CSR projects that allow them to assist people seeking new opportunities.