Service quality, satisfaction, perceived value and loyalty among customers in commercial banking in Nakuru Municipality, Kenya

Service firms have increasingly recognized the role of customer loyalty in the creation and maintenance of competitive advantage. Customer loyalty positively influences firm performance. Keeping loyal customers is beneficial to organizational performance despite there being little agreement as the determinants of customer loyalty in commercial banks. Therefore, this paper examines the extent to which service quality, perceived value and satisfaction influence customer loyalty in commercial banks. To achieve this, data were collected using a questionnaire from 381 respondents who were selected through stratified random and systematic sampling procedures. Data analysis was done through Pearson correlation and regression. The findings revealed that there was a positive and significant relationship between service quality, customer satisfaction and customer value, and customer loyalty. This study also found that service quality, customer value and satisfaction are critical success factors that influence the competitiveness of an organization. It is therefore recommended that banks should adopt the model consisting of the three constructs to create and maintain customer loyalty so as to improve performance and create competitive advantage.   Key words: Service quality, satisfaction, perceived value, customer loyalty, commercial banking.