The Effects of Customer Experience on Brand Equity:A Case of Platinum Credit Ltd, Kenya

Abstract

Brand equity refers to the value and profitability associated with a brand, significantly influencing a customer’s purchasing decisions. It enables customers to interpret, process, store, and recall information about a company’s products and services, ultimately enhancing their satisfaction. For microfinance institutions like Platinum Credit Ltd (PCL) in Kenya, brand equity is crucial as it can shape customer trust and loyalty. However, PCL has faced challenges with customer satisfaction, with some clients feeling underserved and voicing concerns over the quality of service provided. This study aimed to explore how customer experience impacts the brand equity of Platinum Credit Ltd. Specifically, the research examined three key areas: the extent to which communication affects customer experience, the effects of customer experience on brand equity, and the influence of customer involvement on brand equity. The study employed a mixed-methods approach, integrating both qualitative and quantitative data collection techniques. A total of 341 respondents participated in the research. The reliability of the data was assessed using Cronbach’s alpha coefficient, yielding an overall value of 0.729, which exceeds the acceptable threshold of 0.6, indicating a strong internal consistency of the measures used. Findings from the study revealed that communication significantly influences the brand equity of PCL. Effective communication not only adds value to the company’s relationship with its clients but also plays a key role in processing and retrieving important information. Customers emphasized the need for more transparency, particularly in disclosing interest rates and loan terms. Additionally, they expressed a desire for better empathy in communication, especially when facing financial difficulties. Several respondents highlighted that clear, empathetic communication is pivotal in shaping their overall experience with the company. The research also confirmed that customer experience has a direct impact on brand equity. Customer experience is shaped by both direct and indirect interactions with the company’s brand. Positive experiences, such as efficient service, understanding staff, and a trustworthy environment, contribute to enhancing brand equity. On the other hand, negative experiences, such as delays in loan processing or a lack of transparency, diminish customer trust and loyalty. Clients in the study expressed the importance of feeling valued not just as borrowers but as long-term business partners, with many calling for improved customer appreciation and loyalty programs. Customer involvement was another crucial factor identified in the study. It was found that involving customers in decision-making processes, such as tailoring loan terms to their unique circumstances, positively impacts their perception of the brand. Respondents highlighted the need for flexibility in repayment terms and competitive interest rates, which could influence their decision to repurchase PCL’s services. Handling repeat clients with care and offering personalized solutions were suggested as key strategies to retain customers and foster brand loyalty. In conclusion, the study underscores the importance of communication, customer experience, and customer involvement in shaping the brand equity of Platinum Credit Ltd. It recommends that PCL focus on building trust through clear communication, personalized service, and recognizing customer loyalty. For a deeper understanding of how these factors influence brand equity over time, longitudinal studies are suggested to track brand equity fluctuations and long-term customer satisfaction trends.