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Faculty of Management Sciences

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Subject: search.filters.subject.Customer loyalty

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    Customer experience and customer loyalty : an assessment of retail multichannel banking in the Durban area
    (2023) Kiliswa, Nancy Gathoni; Gathoni, Nancy
    Customer experience (CX) has received substantial attention in empirical research in the recent past. While there has been growing research interest in customer experience, few studies have examined its relationship with other concepts such as customer loyalty, customer satisfaction and service quality. This study investigates the relationship between customer experience and customer loyalty in retail banking with multiple channels of distribution. Further, the study seeks to advance research on the relationship between customer experience and customer loyalty by exploring the mediation roles of customer satisfaction and service quality in the retail banking industry in South Africa. The South African retail banking industry is increasingly competitive and regularly confronted with new entrants. Technological innovations, regulatory requirements, changing customer expectations, demographics and new non-traditional industry entrants are disrupting the banking industry. The services offered by retail banks are highly undifferentiated and hence there is a need for banks to look for other ways to compete than through differentiation of products. When one of the banks introduces a new service to the market, other banks typically follow suit quickly by imitating it. Subsequently, core services offered by all banks tend to be very similar in nature and form. In addition, customers are highly knowledgeable and selective, and they are increasingly raising their expectations in terms of the quality of services they receive from the banks. In view of this, banks therefore need to have a clear understanding of their customers’ needs and develop relevant offerings that can retain their customers. Relationship marketing is believed to be one of the ways in which banks can create long-term relationships with their customers, thereby gaining their loyalty. Specifically, focusing their efforts on creating advantageous customer experiences, essential to forming long-term loyal relationship with the customers. Thus, this study is aimed at determining the relationship between customer experience and customer loyalty. This is achieved by exploring the influence of selected constructs, namely service quality and customer satisfaction, in order to analyse the role of customer experience as a predictor of loyalty. To achieve the objectives of the study, a quantitative descriptive research approach that was cross-sectional in nature was adopted. A non-probability convenience sampling method was followed to select a sample of 500 bank customers across the Durban region in KwaZulu-Natal, South Africa. A questionnaire was developed from validated measurement scales from previous studies and a literature review. Data was collected by means of a self-administered questionnaire that was distributed physically and online to bank customers. A total of 466 responses was received from the data collection process. The Statistical Package for the Social Sciences (SPSS) 24.0 and Smart Partial Least Square (SmartPLS4) were used to analyse the data. Using data from the survey and Partial Least Squares Structural Equation Modelling (PLS-SEM), a theoretical model was created and empirically tested. This model indicates that customer loyalty can be achieved by improving customer experiences, enhancing service quality and improving customer satisfaction. The results of descriptive statistics indicated an overall mean below 2.5. The presentation then progressed to the SEM analysis, which was done in two stages. The first stage examined the measurement model. As stated, the model in this study is a reflective hierarchical model. The CX construct is a reflective-reflective HOC, and its dimensions of feeling, behavioural, sensorial, cognitive and social are the LOCs; hence, a repeated indicator approach was used to assess the measurement model. The reliability of the reflective measurement model was assessed using indicator reliability, Cronbach’s alpha and composite reliability (rho_c). The convergent validity of the constructs was examined using AVE, while the Fornell Larker technique and the heterotrait-monotrait (HTMT) ratio were used to assess the discriminant validity of the constructs. Thus, using CFA, the validity by means of convergent and discriminant validity as well as the reliability of the model were established. After the measurement model was deemed fit, the structural model was examined by means of path coefficients, variance explained (R2 ) and predictive relevance (Q2 ). The R2 results for the structural model were above 0.65 for all variables, which is considered a substantially good fit, while the Q2 the values obtained were 0.616, 0.694 and 0.712 for customer loyalty, customer satisfaction and service quality respectively. The model was found to be satisfactory for both measurement and structural models, after which relationships among variables were tested for significance. All relationships were found to be positive and significant The results show the key role of customer experience and its impact on customer loyalty and that this relationship is mediated by customer satisfaction and service quality. These findings contribute towards improving the theoretical knowledge of the influence of customer experience on loyalty, and guide retail banks in developing and implementing appropriate customer experience strategies.
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    Perceptions of retail service quality at supermarkets in the context of the Covid-19 pandemic in South Africa
    (2023) Diamond, Busisiwe Anetia; Corbishley, Karen Margaret
    The fast-moving consumer goods (FMCG) retail sector is growing rapidly, and competition has become intense as new supermarkets enter the retail marketplace. It is important for retailers to align themselves with the constant fluctuations of customer demands and their expectations of service quality (SQ) in order to stay ahead of the competition. SQ plays a vital role in the retail industry as it assists retailers to increase value for their customers, to retain customers, and maintain their competitive advantage. Recently, the world has been subjected to enormous environmental changes, due to the global outbreak of the coronavirus pandemic (Covid-19). Associated with this has been a dramatic economic downturn which has been strongly felt in South Africa. As a result, shopping patterns have been impacted as customers have felt insecure and searched for safer methods (for example, patronising smaller retailers and shopping online) to secure their daily needs. Customer satisfaction, trust and customer loyalty are all important attributes that retailers desire from their customers. This study aimed to evaluate how customer perceptions of retail service quality (RSQ) dimensions might affect customer satisfaction, trust and customer loyalty in supermarkets, considering the context of the Covid-19 pandemic in South Africa. To accomplish this, a quantitative study was conducted by means of an online questionnaire that was distributed via social media platforms. The researcher incorporated the five dimensions of the retail service quality scale (RSQS), namely physical aspects, reliability, personal interaction, problem-solving and policy, to assess customers’ perceptions of RSQ, with hygiene incorporated as an additional dimension to this scale. Respondents were selected by means of a convenience method which is a non-probability sampling method. The snowball technique was selected due to the difficulty of approaching people individually during the Covid-19 crisis, as well as the prohibitive cost of using a commercial database. Data was analysed by means of the latest SPSS software (version 25). The findings of this study shows that the RSQS is a suitable and reliable tool to measure RSQ under the circumstances of the Covid-19 pandemic. Moreover, this study reveals that excellent RSQ has a positive contribution towards customer satisfaction, trust and customer loyalty during the Covid-19 pandemic. The findings of this study reveal that five dimensions of RSQS (hygiene, physical aspects, reliability, problem solving and personal interaction) had a significant and positive effect on customer satisfaction and trust, but the policy dimension was not found to be significant. This study should assist supermarket managers to understand customers’ perceptions of RSQ since the advent of the Covid-19 crisis, and their effect on satisfaction, trust and customer loyalty. This will enable retailers to make better strategic decisions regarding the quality of the services that they offer going forward, thereby becoming more attractive to customers. It will also contribute towards ongoing academic research on RSQ.
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    Factors influencing the adoption and implementation of customer relationship management strategies by small and medium enterprises in KwaZulu-Natal
    (2020-11) Garatsa, Cletos; Dlamini, Bongani Innocent
    Purpose The aim of this study is to identify and investigate the factors that influence the adoption and implementation of CRM strategies by SMEs in the province of Kwa-Zulu Natal in South Africa. Background Small to medium enterprises (SMEs) play an important role in the development of economies both in the developed and developing countries. SMEs face many obstacles in their path to survival and much has been discussed in terms of helping the small enterprises to survive and grow to fulfil their economic potential and derive the benefits that come with it. However, there is limited literature when it comes to the use of CRM as a tool for survival. This study suggested that CRM can also be used to help SMEs to grow and thrive. It was within this scope that this study examined the factors that influence the adoption of CRM by SMEs in KZN. The goal was to move away from the misconception that CRM is a technology but gravitate towards treating CRM as a holistic strategy that should diffuse within the whole organisation. Technology is thus viewed as an enabler of the CRM strategy. Organisational, environmental, technological and information culture factors should all be integrated and help the firm to make a well-informed decision when it comes to adopting CRM strategies. CRM adoption and implementation are not without their problems, but the promises are too good to ignore; and, indeed, the future prosperity of SMEs may lie in CRM adoption and implementation. Methodology The research used a quantitative research approach to evaluate the major factors affecting KwaZulu Natal SMEs in the process of adopting and implementing CRM programs. A questionnaire that was divided into owner-specific and organisational profile demographics and CRM factors was used as the survey instrument to collect the data. The statistical package, SPSS version 25 was utilised to analyse the accumulated data. Logistic regression and t-tests were used to assess validity and reliability Findings The study outcomes revealed that technological, environmental, organisational contexts and information culture factors play an important role in the adoption and implementation of CRM innovations by SMEs in KZN. The study identified education and technological factors like security and complexity as the major drivers of innovation adoption among the SMEs that were investigated. It must, however, be noted that successful adoption can only be realised when all the factors are combined. Recommendations The TOE can be used by managers and practitioners as a guideline for the adoption and implementation of CRM innovations. The outcomes of this study revealed that all the interrelations of the framework are very important when deciding to adopt and implement CRM projects. Adoption of CRM in an incremental manner is needed to allow integration between the innovation and the current needs and culture of the enterprise. Simple technology can be used in the adoption and effective implementation of CRM strategies. Future Research Future research can test the TOE framework on the wider KZN SME population including those not under incubation programmes. This study examined the whole SME sector. It would be interesting to examine one sector and also post adoption research studies can be undertaken. A study can also be commissioned to examine the success and failure of the adopted strategies.
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    Service quality at retail banks in Durban
    (2013-06-05) Zungu, Nkululeko PraiseGod; Raap, Peter John; Mason, Roger Bruce
    The aim of this study is to investigate service quality at retail banks, such as Standard Bank, ABSA Bank, First National Bank and Nedbank in Durban. The four objectives of this study are set as: Firstly, to identify the level of satisfaction with customer service received from different retail banks in Durban; Secondly, to identify customers’ expectations in terms of quality services provided by retail banks; Thirdly, to ascertain the perceptions of customers towards the service provided by retail banks in Durban; Fourthly, to measure the gaps between customer expectations and perceptions of service quality, using a modified version of the SERVQUAL model. The instrument used to assess the retail bank customer’s expectation and expectations of service quality, was the SERVQUAL questionnaire, measuring expectations and perceptions according to five quality dimensions. A total of 448 students were surveyed. Quota sampling was used in this study, in order to improve representativeness. Using quota sampling involves selecting the characteristics that are required in the sample and then sampling until enough representatives of each category are achieved. Although this is a form of non-probability sampling, a quota sample can provide a good approximation to a probability sample. It means that distributing questionnaires to a certain group would be stopped after the prescribed quota is reached. Data were analysed using descriptive and inferential statistical techniques. Conclusions and recommendations were thereafter drawn from the literature and the findings of the study. The study shows that retail bank customer expectations of service quality exceeded their perceptions in the five service quality dimensions used in the SERVQUAL questionnaire. This study is also important because it will assist bank managers to convert negative perceptions to positive impressions. Consequently, customers will benefit from the improved, outstanding customer service.