The Effect of customer perceived value on loyalty: a case of customers of commercial banks in Kenya

Abstract

In Kenya, the banking system is confronting a multitude of challenges. In order for these institutions to succeed, they must provide paramount value that will give them a distinct character. With today's globalized world and a smart population, it is extremely tough to stay up with industry developments because clients may easily learn about what is going on around the world in a fraction of a second. The challenge is that the bank's lack of successful competitive tactics in recent years has resulted in falling market share, client loss, and a detrimental impact on the bank's profitability. Consumer perceived value is an important aspect in establishing client loyalty. The main objective of this study was to determine the effect of perceived value on customer loyalty to Kenyan commercial banks. The specific objectives were to determine the impact of emotional value, social value, quality value, and pricing value on customer loyalty to Kenyan commercial banks. The study's foundations were the equity theory and the social exchange theory. The study was carried out using a descriptive research design. The target population of this study comprised of the customers of the 9 NSE listed commercial banks in Kenya. A standardized questionnaire with closed-ended questions was used to collect primary data. The collected data was examined for completeness before being coded in Microsoft Excel and SPSS for analysis. Descriptive statistics, correlation analysis, and regression analysis were used to analyze the data collected. The findings revealed a positive correlation between emotional value, price value, social value, and customer loyalty. However, there was a negative correlation between quality value and customer loyalty in Kenyan commercial banks. Furthermore, there was a relatively substantial correlation between culture and performance. This study contributes to theory by expanding on theoretical frameworks such as equity theory and social exchange theory to improve understanding of perceived value and its potential impact on consumer loyalty. Empirically, the study could help management practices by assessing perceived value as the first stages of efficiently managing customer loyalty. The findings from this research were limited to Sweeney and Soutar's perceived values and the customer loyalty adopted by the researcher. The study was also limited to data acquired via cross-sectional survey, despite the fact that customer loyalty may be altered by unprecedented occurrences and time, which may affect how customer perceive an organization. The decreased physical interaction due to online banking adoption limited the response rate.