Mobile Banking Service Quality, Customer Perceived Value and Customer Retention in the Kenyan Banking Industry
Customer retention is increasingly becoming an important managerial issue, especially in this era which is characterized by high levels of competition and assertive customers who make stay or switch decisions guided by their rational and emotional influences. Moreover, customers are increasingly becoming quality conscious and value driven. To date, there is limited evidence of studies that investigated the effects of mobile banking service quality, customer perceived value and customer retention constructs in a single framework, hence, the study seeks to fill the gap. This study examines the effect of mobile banking service quality, customer perceived value on customer retention. Additionally, the study examines the mediating effect of customer perceived value on the relationship between mobile banking service quality and customer retention. The study was guided by the ‘leaky bucket theory’ of marketing and the MS-QUAL model. An explanatory research design was adopted, employing multistage, simple random and systematic sampling techniques in collecting data from a sample size of 400 university staff drawn from two public and two private universities based in Nairobi City County who are consumers of mobile banking services. A self-administered questionnaire was used. Hierarchical and multiple regression models using Hayes Process macro were used to analyze data obtained and to test the hypotheses. The study found that: mobile banking service quality (β= 0.565, p = 0. 000), perceived customer value (β= 0.363, p = 0.000), significantly affect customer retention. Additionally, the results show that customer perceived value mediates the relationship between mobile banking service quality and customer retention (β =. 193, CI = .127, .266). This study concludes that, customers will remain committed to patronize a bank whose services are deemed of high quality and with a high value. The study contributes to knowledge by revealing customer perceived value mediates the relationship between mobile banking service quality and customer retention. Bank management and policy makers should; develop quality assurance policies and devise value-centered strategies that focus on customer perceived value in order to enhance customer retention rates.
Angel M. T. M., Carlos Fandos Roig, J., Llorens Monzonis, J. & Sanchez Garcia, J. (2006). Customer perceived value in banking services. International Journal of Bank Marketing, 24(5), 266–283. doi.org/10.1108/02652320610681729
Chen, H. & Zhu, Y. (2012). Service fairness and customer satisfaction in internet banking: Exploring the mediating effects of trust and customer value. Internet Research, 22(4), 482–498. doi.org/10.1108/10662241211251006
Cronin Jr, J. J., Brady, M. K. & Hult, G. T. M. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioral intentions in service environments. Journal of Retailing, 76(2), 193–218.
Ehrenberg, A. S. C. (1988). Repeat-buying: Facts, theory, and applications (New ed). Griffin ; Oxford University Press. Evans, G. (2002). Measuring and managing customer value. Work Study, 51(3), 134– 139. doi.org/10.1108/00438020210424262
Groth, J. C. & Dye, R. T. (1999). Service quality: Perceived value, expectations, shortfalls, and bonuses. Managing Service Quality: An International Journal, 9(4), 274–286. doi.org/10.1108/ 09604529910273229
Hanaysha, J. R. (2018). Customer retention and the mediating role of perceived value in retail industry. World Journal of Entrepreneurship, Management and Sustainable Development, 14(1), 2–24. doi.org/10.1108/WJEMSD-06-2017- 0035
Hapsari, R., Clemes, M. & Dean, D. (2016). The mediating role of perceived value on the relationship between service quality and customer satisfaction: Evidence from Indonesian airline passengers. Procedia Economics and Finance, 35(12), 388– 395.
Keshavarz, Y. & Jamshidi, D. (2018). Service quality evaluation and the mediating role of perceived value and customer satisfaction in customer loyalty. International Journal of Tourism Cities, 4(2), 220–244. doi.org/10.1108/IJTC-09- 2017-0044
MacKinnon, D. P., Cheong, J. & Pirlott, A. G. (2012). Statistical mediation analysis. ResearchGate. www.researchgate.net/ publication/281339075_Statistical_medi ation_analysis
Manali, M. (2014). Strategic benefits and challenges of mobile banking in Kenyan commercial banks. 65.
MoyoTalak, M. (2013). Customer Retention Strategies by mobile phone Service providers in Zimbabwe: Case of Masvingo City. IOSR Journal of Business and Management, 9(4), 71–82. https://doi.org/10.9790/487X-0947182
Nguyen, N. & Leblanc, G. (2001). Corporate image and corporate reputation in customers’ retention decisions in services. Journal of Retailing and Consumer Services, 8(4), 227–236.
Rahman, D. A., Hasan, M. & Mia, A. (2017). Mobile Banking Service Quality and Customer Satisfaction in Bangladesh: An Analysis. 45(2), 8.
Siu, N. Y.-M., Zhang, T. J.-F. & Yau, C.-Y. J. (2013). The roles of justice and customer satisfaction in customer retention: A lesson from service recovery. Journal of Business Ethics, 114(4), 675– 686.
Surendra, M. (2015). Exploring Mobile Banking Service Quality Dimensions for Public and Private Sector Banks in Indore District of Madhya Pradesh. 3(1), 10.
Sweeney, J. C. & Soutar, G. N. (2001). Consumer perceived value: The development of a multiple item scale. Journal of Retailing, 77(2), 203–220.
Tamuliene, V. & Gabryte, I. (2014). Factors Influencing Customer Retention: Case Study of Lithuanian Mobile Operators. Procedia - Social and Behavioral Sciences, 156, 447–451. doi.org/10.1016/j.sbspro.2014.11.219
Yang, Z. & Peterson, R. T. (2004). Customer perceived value, satisfaction, and loyalty: The role of switching costs. Psychology & Marketing, 21(10), 799–822.
Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing, 52(3), 2– 22.
Papers published in AJCDT must be the original work of the author/s that has not been published previously in any manner. Authors retain the copyright of the published papers.