Effect of Social Media Marketing on SMEs’ Customer Loyalty in Nairobi Central Business District

Abstract

The business environment today is defined by different dynamics, which necessitates regular modifications to all business operations, strategies, and alignment to assure the long-term success of these businesses. This general objective of this study was to determine the effect of social media marketing on SMEs' customer loyalty in Nairobi Central Business District. The specific objectives were as follows: to determine the effect of social media marketing on customer retention by SMEs, to determine the effect of social media marketing on achieving customer satisfaction by SMEs and to determine the effect of social media marketing on customers' repeat purchase intention. The literature review provided information on existing research regarding the matter with specific objectives mentioned. The research design used was the descriptive research design. The population comprised of 34701 SMEs in Nairobi Central Business District. The sample size of 132 respondents were selected. The data collection instrument used was a structured closed-ended questionnaire which was administered online. The questions were based on a liken scale where 1= strongly disagree, 2= disagree 3= neutral, 4= agree and 5= strongly disagree. A pilot test was done and a reliability test performed using the Cronbach's alpha in SPSS. The reliability was 0.981 which indicated a high level of internal consistency. With strict observance to the ethical considerations, data collection was done by the researcher. The methodologies used to analyze the data included regression analysis and descriptive analysis where raw data was convened into tables, charts, frequency distributions and percentages. The findings were presented in tables and figures. The findings on the effect of social media on customer retention revealed that most of the respondents agreed that social media marketing has enabled them to identify and acquire new customers, most of them also agreed that building trust with customers on social media enabled them to retain their customers. Some of the respondents were neutral on the statement that rewarding their customers on social media with discounts on enabled them to retain their customers. A significant number of respondents disagreed that social media marketing had a positive impact on customer retention. The findings on the effect of social media marketing on achieving customer satisfaction by SMEs revealed that most of the respondents agreed that providing customer support on media enabled them to their customers' needs. Most of them also agreed that improving their products/services based on customers' suggestions on social media has helped to increase customer satisfaction. The results on the effect on social media marketing on customers' repeat purchase intention revealed that most of the respondents agreed that building customer trust and ensuring their social media pages provided safe transactions for their customers enabled customers to do a repeat purchase. Some of them disagreed that good customer service led them to do a repeat purchase. The study showed that social media marketing had a positive impact on the customers' repeat purchase intention. Recommendations on the effect of social media marketing on customer retention by SMEs suggest that small and medium businesses should increase their spending on social media marketing and educate themselves on its efficient application to guarantee customer retention. SMEs should also develop new ways to engage with customers and build meaningful relationships with them in order to retain them. Businesses should also conduct research and understand how to respond to their consumers' different needs, as social media has exposed SMEs to worldwide clients, which might be a great potential for SME growth. Recommendations on the effect of social media marketing on achieving customer satisfaction by SMEs suggest that SME owners should educate themselves about their customers by collaborating with them in order to successfully meet their needs. Additionally, businesses should aim to get customer feedback in order to identify customer needs and expectations which will be useful in achieving customer satisfaction. The study also recommends that SMEs should engage with their customers and provide other platforms via which they can easily communicate with their clients and collect feedback from them. Recommendations on the effect of social media marketing on customers' repeat purchase intention suggest that firms should attempt to educate and inform clients about their new products/services and business-related topics. Additionally, SME brand profiles on social media communication platforms should be improved. Businesses should also optimize their procedures before, during, and after a transaction to ensure that clients have a positive experience while interacting with the company. Recommendations for further research include employing the use of mixed methods of research where both quantitative and qualitative research designs should be used so as to bring a broader understanding of the study.