Effects of Relationship Marketing on Customer Loyalty: Evidence from Petrol Service Stations in Uasin-Gishu County Kenya

Abstract

In order to maximize business profit and general performance of the business, it is critical to keep a customer with “ultimate loyalty”. For this reason, any organization must strive to keep loyal customers as long as possible. This is the reason behind the popularity of customer loyalty programs developed by marketing practitioners. Yet, despite efforts for attracting and retaining customers by many organizations, customer attrition exists for every organization. The main reason is that most organizations are still employing the traditional methods to attract and maintain customers with little emphasis if any on developing long lasting relationships with customers. The main objective of this study was to determine the effect of relationship marketing on customer loyalty in Uasin-Gishu County with a view of making recommendations towards effective utilization of relationship marketing strategies to retain and maintain customers.The study employed mainly explanatory survey design. Simple random and systematic sampling techniques were used to select a sample of 354 customers of petrol service stations within Uasin-Gishu County who participated in the survey. Factor analysis was used to validate the preconceived variables while correlation analysis and Multiple Regression were be utilized to test the hypotheses of this study. The findings of this study supported the hypotheses of the study using both correlation and regression analysis. For instance, the R of the independent variables (level of commitment, level of communication, level of trust, conflict handling capacity) on the dependent variable (level of customer loyalty) is 0.72; this showed that the level of customer loyalty was positively and highly affected by thelevel of trust, level of commitment, level of communication effectiveness and conflict handling capacity of the service providers. Consequently, the determinant of regression (R²) is 0.519; it shows that 51.9% of the variation in level of customer loyalty was explained by the four independent variables. The regression model achieved a satisfactory level of goodness of fit in predicting the variance of level of customer loyalty in relation to the four predictor variables mentioned above. These findings hold implications that firms wishing to retain and develop loyal customers should be trustworthy and committed to the service ethic, should communicate timely and accurately, and must resolve conflicts in a manner that will eliminate unnecessary loss and inconvenience to customers.

Keywords: Customer Loyalty, Relationship Marketing, Trust, Commitment, Communication, Conflict Handling Capacity