ENHANCING CUSTOMER LOYALTY THROUGH SERVICE QUALITY IN DEPOSIT MONEY BANKS IN ILORIN, KWARA STATE

Abstract

Banks in Nigeria often face challenges in maintaining consistent service quality. Instances of
delayed transactions processing, unresolved customer complaints, and inadequate communication
during service interruptions undermine customers' trust and satisfaction. The objective of the study
is to determine the relationship between service quality and customer loyalty in deposit money
banks in Ilorin, Kwara state. The study adopts a descriptive survey research design. The target
population of the study comprises of customers of deposit money banks in Ilorin, Kwara state. The
study adopts a combination of stratified and convenience sampling techniques to ensure a
representative and practical sample from deposit money banks in Ilorin, Kwara State. Data was
collected from the primary source using a structured questionnaire as instrument. The
questionnaire was subjected to a pilot test to ensure reliability and validity. 150 copies of the
questionnaire were distributed across deposit money banks within Ilorin metropolis but only 119
well-completed copies of questionnaire were used for the study. The data collected was analysed
using descriptive statistics and multiple regression analysis. The findings revealed that reliability,
responsiveness, and empathy significantly enhance customer loyalty in deposit money banks in
Ilorin, Kwara state. The study revealed that empathy was the strongest predictor, explaining
68.2% of the variation in customer loyalty (R² = 0.682, β = 1.127, p = 0.006). Reliability followed,
accounting for 54.4% of the variance (R² = 0.544, β = 0.789, p = 0.005) while responsiveness
contributed 40.3% to the variation (R² = 0.403, β = 2.261, p < 0.001). The study concluded that
service quality is a vital catalyst for sustaining customer loyalty in deposit money banks. Therefore,
by prioritising the service quality dimensions, banks can build long-lasting relationships with their
customers, improving retention and advocacy.