The moderating effect of perceived customer value on the relationship between relationship quality and customer loyalty among bank customers in Kenya

Abstract

The banking industry globally has evolved over the years owing to a number of factors that include but are not limited to technological advances, customer tastes and preferences, more dynamic segmentation of products and services, competition which from no not only traditional banks but also mobile companies and micro finance institutions. The customers have also become more demanding and informed hence the banks have to put in place strategies that will lead to having more loyal customers. This must be informed by clear understanding of customer needs and the nature of businesses in society today. The aim of this paper is to assess the moderating effect of perceived customer value on the relationship between relationship quality and customer loyalty based on a study of various commercial banks in Kenya. The Th study was grounded on three theories; the commitment and trust theory, relationship marketing theory and social exchange theory. The study adopted a positivist approach because of the use of quantitative dat data. The study further utilized explanatory research design. A questionnaire was used to collect data from a sample of 309 bank customers in major cities and towns in Kenya. Correlation analysis was used to establish the relationship among the variables. Multiple and moderated regression analysis was used to test the hypotheses at α=.05 level of significance. Model effect size was measured using R-square. Thefindings of the study indicated that perceived customer value moderated the relationship between communication and customer loyalty; further perceived customer value moderated the relationship between conflict handling and customer loyalty while the relationship between commitment and customer loyalty was not moderated by perceived customer value. The study recommends that bank managers should put more emphasis on relationship quality by improving the relationship commitment, regularly communicating with customers, and resolving conflicts promptly whenever they arise