Effect of Social Media Marketing on Consumer Loyalty in the Banking Industry: A Case of Equity Bank

Abstract

The purpose of this study was to evaluate the effectiveness of social media marketing on customer loyalty at Equity Bank in Kenya. To achieve its main objective, the study was guided by the following specific objectives: To determine the effects of social media tools on consumers’ brand loyalty at Equity bank; To determine the effects of social media marketing activities on brand awareness and image at Equity bank; To determine the influence of social media marketing to increase brand loyalty at Equity bank. This study adopted descriptive research design and the population for this study was 300, 000 customers of Equity Bank in Nairobi, Kenya where using Cochran sample size formula a sample of 138 respondents was selected. The study utilized the stratified sampling technique based on the banking type. A questionnaire was used for data collection and out of the target sample size only 115 respondent representing an 83% response rate. Both descriptive (mean and standard deviation) and inferential statistics (correlation and regression) was applied in the analysis using SPSS. The findings were presented in tables and figures. The first objective was to establish the effects of social media tool use on consumer’s brand loyalty in Equity banks. It was agreed that use of equity bank social media site has influenced brand awareness among respondents. The results also indicated that online reviews have affected respondent’s perception on product quality and Equity uses social media sites to communicate with their customers and many are able to join brand communities on equity’s social media site. The second objective was to establish the effects of social media marketing on consumer’s brand awareness and images. The result from the analysis show that respondents get recommendations/views from friend first before buying or using any product or services and consumers visit Equity bank social networking site because it matches their experience and expectations. Results also show that many use Equity social media site because it provides value added content. The last objective was to establish the effects of social media strategies on brand loyalty. The result from the study show that a majority agreed that they have followed an influencer who promoted Equity Bank on social media. Many also indicated that they would consider opening an account with Equity Bank after seeing an influencer promote it on social media. It was also noted that a majority have engaged with equity social media content (e.g. liked, shared, commented) because it was interesting or informative. The study also indicated that many respondents think that influencer marketing has a positive impact on Equity Bank's brand image. The study concluded that social media tool has a significant influence on consumer loyalty. The study concluded that as a bank Equity has made a point of utilizing social media to improve brand loyalty. In addition, the utilization of social media brand communication has positively influence user’s perception towards equity’s brand. Equity bank social media site has had a positive impact on respondent by creating a positive brand awareness. Secondly, social media marketing activities had a significant influence on consumer loyalty aspects of brand awareness and image. Lastly, the study concluded that social media strategies has a significant effect on brand loyalty. The study also concluded that respondents like using equity bank social media sites because they regularly update their important information. The study recommended that Equity bank should continuously use social media brand communication to positively influence more user’s perception towards equity’s brand. The study recommends that there should be a regular update of the sites with fresh content. Equity bank should continue in its effort to promote its products and services online and the content should be made very relevant to the users based on the segment they represent. Lastly, Equity Bank should continue to focus on creating informative and engaging social media content, while also utilizing influencer marketing to positively impact their brand image. Additionally, they should continue to provide efficient and effective social media customer service to ensure customer satisfaction. The study recommends that for further research a similar study should be done by increasing the scope to cover other regions outside Nairobi and beyond the Kenyan borders to other countries like Rwanda and Uganda. Similarly, a similar study may be done on other banks in order to compare the finding.