Factors Affecting Customer Loyalty At Co-operative Bank Of Kenya

Abstract

The main objective of the study was to determine the factors influencing customer loyalty in the banking industry and recommend effective measure to build customer loyalty in the banking industry. The survey research design was descriptive in nature. The population of study consisted of scheme of 720 clients at the Cooperative Bank of Kenya and out of which a sample of 216 respondents was drawn using stratified random sampling technique. Data was collected using questionnaires and quantitative method of data analysis was used. The descriptive statistics were analysed using Statistical Package for Social Sciences (SPSS). The study findings revealed that customer loyalty is influenced by quality of banks customer service, brand image, price fairness product mix, customer perception of the bank products, effectiveness advertisement, service value and establishment of customer trust on bank services. However, the study established that customer loyalty is not influenced by demographic factors such as gender and occupation. The study aims to build on customer loyalty which include; creation of a cordial relationship with the customer, discovery of what the customer values most, clear communication of the organizational, investigating the reasons why customers leave the bank, asking for referrals, making loyalty-building a team effort, meeting customers' expectations, creating a feedback system for the customers and handling customer complaints effectively, engaging customers in a two-way dialogue, conducting a survey of customers loyalty, creating system for correcting, linking customer loyalty to expected business outcomes and applying statistical methods to predict future customer loyalty. The study recommends a comprehensive survey of factor that affect loyalty prior to formulation of strategies to enhance customer loyalty, adoption of the identified factors in formulation of customer retention policies and further research on effective methods that banks can use to measure and predict customer loyalty were identified.