Effects of Procedural Justice Complaints Resolution Strategies on Customer Satisfaction in Kenya�s Banking Industry.

Chepkwony Joel; Lagat Charles

Volume : IV, Issue : II, February - 2015

Effects of Procedural Justice Complaints Resolution Strategies on Customer Satisfaction in Kenya�s Banking Industry.

Chepkwony Joel, Lagat Charles

Abstract :

Banking industry is one of the world�s biggest and oldest industries in the world and more so the engine of the economy. Its stability and growth is therefore paramount to economic performance of individual countries including Kenya. However, with the increasing competition banks have had to refocus on various strategies aimed at maintaining a stable and profitable customer base. Maintaining a loyal customer base has seen banks invest in various marketing strategies among them complaint resolution strategies so as to have an ever satisfied clientele. The purpose of this study therefore was to establish the effect of procedural justice customer complaint resolution strategies on customer satisfaction. The study employed an explanatory survey design and targeted all the 20 banks based in Eldoret operating and licensed by Central Bank of Kenya as at June 2013. Additionally, 2300 customers were targeted for the study. A sample size of 372 customers was selected using systematic sampling techniques. A self administered questionnaire was used to collect primary data. With the aid of Statistical Package for Social Sciences (SPSS), both descriptive statistics that included frequencies, percentages, mean, and standard deviation as well as inferential tests such as Pearson chi–square, Pearson correlation, Exploratory Factor Analysis and Multiple Regression Analysis were performed. Exploratory factor analysis was used to validate and test the indicators of the preconceived complaints resolution variables. The study revealed four dimensions of complaint resolution strategies; Procedural justice strategies (Timing Communication, Decision control, and Effort) accounted for 60.723% ( R) of the total variance hence justice theory on complaint resolution is valid in developing countries including Kenya. Results of the Hypothesis testing via multiple regression analysis indicated that procedural justice factors were significant (p<0.05) and accounted for 42.9% ( R2) of customer satisfaction. The study concludes that customer complaints resolution strategies are an important feedback mechanism to establish customer satisfaction levels and banks are therefore advised to invest in them. Further, the study recommends that Timing, Effort, Decision Control and communication related strategies should be pursued on the procedural front. Accessibility related strategies should however be done away with given it�s negative effect on customer satisfaction. Further studies should be carried out to establish the relevance of accessibility related strategies on customer satisfaction in other industries and study areas. A comparative study with special emphasis on managers� perspectives could also be undertaken.