Examining the Nexus Between Customer Engagement and Satisfaction: Evidence from A Selected Retail Bank in South Africa

Abstract

In the current retail banking environment, effective customer engagement is crucial for the success of organizations, impacting customer satisfaction, loyalty, and overall business performance. Given the competitive landscape and evolving customer expectations, it is essential for banks, especially Absa bank in South Africa, to understand the dynamics of customer engagement. This study aims to investigate how customer engagement initiatives influence customer satisfaction at Absa bank in the Durban area to provide strategic insights for enhancing competitiveness. Using theoretical frameworks such as Sashi's customer engagement cycle and Gronroos' model of service quality, this research explores the relationship between communication strategies related to organizational change and customer satisfaction levels at Absa bank in Durban. A quantitative research approach was employed, utilizing a structured questionnaire survey and convenience sampling to gather data from walk-in clients at various Absa bank branches. Statistical analyses, including descriptive and inferential methods, were used to analyze the data and test hypotheses. The results of the study offer valuable insights into customer preferences and expectations in the retail banking sector. Customers appreciate consistent messaging across different engagement channels and value personalized communication from the bank. Personalized calls, follow-up phone calls, and nonverbal cues such as a firm handshake were found to significantly impact customer perceptions and satisfaction with Absa bank's services. Customers display a high level of trust, satisfaction, and engagement with Absa bank, indicating the success of its customer engagement initiatives. The study also emphasizes the importance of social media in enhancing positive word-of-mouth and shaping consumer perceptions. Based on these findings, it is recommended that Absa bank implements a proactive customer engagement strategy focused on providing positive and personalized experiences to its existing customers. Key strategies include tailoring customer interactions, soliciting feedback, introducing loyalty programs, and utilizing various engagement platforms.