EFFECT OF SERVICE ENVIRONMENT ON CUSTOMER LOYALTY OF COMMERCIAL BANKS IN NAKURU TOWN, KENYA
Abstract
Commercial banks are important financial institutions in any economy because they mobilize savings for investments and wealth creation. The service industry is very competitive while products offered are similar hence their only source of competitive strategy is differentiation of service offered. Consequently this study selected one of the service quality dimensions (service environment) and examined its effect on customer loyalty among major commercial banks in Nakuru town. The objective was to examine how bank service environment discriminates between performances (customer loyalty) of the major banks in Nakuru Town. It adopted descriptive research design and selected 120 customers from the six major banks in Nakuru town. Data collected was analyzed using SPSS to test the independence and relationship using Kruskal-wallis difference test, Pearson correlation coefficient and OLS multiple regression analysis. The banks service environment is strongly associated with customer loyalty (r=0.7). The factor was also a significant predictor of customer loyalty among the sampled banks in Nakuru town at the 0.05 level of significance. It was also apparent that customer loyalty between the sampled banks did not differ significantly based on the nature of service environment provided by the respective banks. The recommendation was that bank managers and staff need to focus their attention at modernizing their facilities, providing sufficient lighting and ventilation and strive to be more empathetic to their customers.
Key Words: Service Environment, Customer Loyalty, Commercial Banks
CITATION: Kabaa, G. W., Gichuhi, D., & Onyiego, Z. (2019). Effect of service environment on customer loyalty of commercial banks in Nakuru town, Kenya. The Strategic Journal of Business & Change Management, 6 (3), 907 – 914.
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DOI: http://dx.doi.org/10.61426/sjbcm.v6i3.1367
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