dc.description.abstract |
Diverse and uncertain environments have forced organizations to restructure
themselves in order to enhance their chances of survival and growth. Restructuring
efforts have included, among others, the emergence of relationship marketing.
Relationship marketing acknowledges that a stable customer is a core business asset,
which is achieved through customer loyalty. This study was designed to assess factors
that influence customer loyalty in savings and credit co-operative societies (Saccos) in
Uasin Gishu County, Kenya. Studies have shown that companies are losing customers
at a staggering rate, without really hearing from most of them. Each year the average
company loses 10-15% of its customer base, "84% of customers, who leave, do so
because of poor service” and a typical business only hears from 4% of its dissatisfied
customers, the other 96% leave, 91% for good. Co-operatives in Kenya are also facing
a similar challenge and reports have shown that their customer base is declining and
with it the financial base which constitutes share capital and deposits. Businesses
today are faced with stiff competition (Beerli et al, 2004) and in the case of Co-
operatives; this comes from banks, micro- finance institutions, and self-help groups/
welfare organizations among others. This study therefore sort to find out the factors
attributed to decline in customer base in co-operatives and was guided by five specific
objectives, namely, to determine the extent to which quality service delivery,
satisfaction, perception of switching costs, trust and corporate image influence
customer loyalty. The study was based on the social exchange theory which indicates
that individuals are willing to maintain relationships because of that expectation that
to do so will be rewarding. To achieve these objectives; data was collected from a
sample of 174 respondents using structured questionnaires with close ended
questions. Questionnaires were administered to individual members of Sacco
societies. The data was analyzed quantitatively with the use of descriptive statistics to
present the profile of the respondents and inferential statistics method specifically
correlation and multiple regression were used to establish the relationships of the
variables. The results shows that trust (p< 0.001), service quality (p <0.01), switching
cost (p < 0.05) and image (p < 0.05) all significantly affect the customer loyalty. The
results further indicated that the most important predictor variables that affected the
customer variables are trust followed by service quality but satisfaction was found not
to be significantly associated with customer loyalty. It is recommended that since trust
is a major concern for customers in Saccos, deliberate efforts should be made to build
it by improving service quality and the overall image of these organizations. The costs
of the Sacco products should be kept at reasonable levels so that the customer’s stay
in the Sacco is by choice and not out of fear of losing shares or deposits built over a
long period of time. |
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