Influence of Children Savings Accounts Attributes on Brand Loyalty among Commercial Banks in Kenya: Mediating Role of Savings Culture

Abstract

Financial institutions predominantly rely on marketing strategies to expand their markets and retain their present customers. In banks performance specifically, customer retention is observed through brand loyalty which is an important strategic performance indicator consistent with the current conversation in strategic management which is about winning a profitable loyal customer. Whilst banks spend billions of monies to attract and retain adult customers, they have an opportunity to engage young people early on money matters especially how to save, spend and invest through Children Savings Account (CSAs). Although several studies have explored the impacts of different banking strategic investment initiatives and products on customer retention and brand loyalty, little is known on the influence of the children savings account on the brand loyalty. This study aimed establish the effect of price-worthiness, customer satisfaction, product functional value on brand loyalty in Kenyan commercial banks, as well as the mediating effect of savings culture on the relationship between children saving accounts attribute and brand loyalty. A positivist research philosophy linked with a quantitative research method to accomplish the research goals where a cross-sectional research design to gain an understanding of the various study variables and how they relate to brand loyalty. The population was parents or guardians who had CSAs within Kenyan banks. The study utilized Cochran’s formula to estimate a sample size of 385 respondents, who were systematically and randomly sampled from three stratified tiers of banks. Self-administered questionnaires were deployed to collect relevant data. The collected data was entered into MS Excel template, cleaned, and exported to SPSS software for analysis. Both descriptive statistics including frequencies and percentages were used to summarize the results while inferential analysis comprising correlational and regression analysis were used to establish the relationship between each of the study variables (CSA attributes) and brand loyalty. Price worthiness (r= .588, p<0.001), customer satisfaction (r= .720, p<0.001), product function value (r= 0.323, p<0.001), and savings culture (r= 0.684, p<0.001) had significant positive correlation with the brand loyalty (p<0.050), though only customer satisfaction and savings culture had strong correlation with brand loyalty, while variables had moderate correlations. Further, price worthiness, customer satisfaction, and product function value, influenced brand loyalty among commercial banks in Kenya (p< .05). Additionally, saving culture had a mediating effect on the relationship between children saving accounts attributes and brand loyalty (p< 0.05). Overall, the findings indicate that high levels of brand loyalty among holders of CSAs are the direct result of satisfaction with the products and services based on value and worthiness. Therefore, there is a need for commercial banks to enhance customer satisfaction, product value, and product functional value, specifically aimed at fostering brand loyalty. Additionally, while banks can leverage this novel knowledge to develop innovation products regulations to steer children savings account model adoption, financial literacy initiatives should be pioneered to enhance knowledge and encourage individuals and families to develop a strong commitment to savings culture. future researchers. Moreover, future research studies should focus on all the tier 1 banks in Kenya and also broaden the independent variables and attributes studied to include attitudinal factors and their impact on brand loyalty.