Effects of Service Quality on Customer Loyalty in the Banking Sector, Nairobi County, Kenya

Abstract

Today's changes in Global business environment pushes banks to engage into more strategies apart from marketing in order to ensure a lasting impression is created to the customers on their unique products to ensure that they are loyal to the companies. Commercial banks in Kenya offer homogeneous products to the customers thus the need to ensure that their products stand out among their competitors. Commercial banks have failed to maintain their existing customers largely due to the increased competition amongst each other and also providing homogenous products which are not uniquely distinguished from each other; they therefore are instead forced to engage in costly campaigns for attracting new ones. Based on this background, the study examined the effects of service quality on customer loyalty in commercial banks relying on sensory approach, relationship marketing and cognitive approach theories to draw on its objectives. The study was conducted amongst commercial banks in Nairobi County. The study applied both descriptive and explanatory research designs to achieve the set objectives. The study utilized primary data. The target population was 156 customers of three commercial banks branches within Nairobi County. A sample of 144 customers was taken using both stratified and simple random sampling methods. The data was analyzed with the aid of the SPSS statistical package through the application of ordinary least square method.