An Analysis of Effective External Communication Strategies that enhances Customer Satisfaction in the Banking Industry: A Case of Zambia National Commercial Bank, Lusaka, Zambia

Abstract

This thesis aimed to contribute to the understanding of effective external communication strategies employed by banks in the banking industry, with a focus on Zambia National Commercial Bank (Zanaco) in Lusaka, Zambia. The study utilised Communication Theory, Integrated Marketing Communication (IMC) Theory, and Consumer Behavior Theory in the context of an under-researched Sub-Saharan country. The primary objective was to examine successful external communication strategies that enhance customer satisfaction in the banking sector. The methodology involved gathering primary data from 197 Zanaco customers based in Lusaka, Zambia. Regression analysis was employed to evaluate the effectiveness of Zanaco's external communication strategies on customer satisfaction in Lusaka Province. Recognising the critical role of customers as key external stakeholders, the thesis emphasises on the importance of effective communication in meeting customer requirements and sustaining the success of banks. According to Katz and Kahn (1978), communication is defined as "the exchange of information and the transmission of meaning," serving as a fundamental component of an organization's social structure. Effective communication, as outlined by Kotler et al. (2012), must achieve connection, offer rewards, motivate action, and remain in the mind. The thesis highlights that communication serves diverse purposes beyond merely informing clients about product attributes; it also influences how a bank presents itself to various interest groups and stakeholders, contributing to the establishment of a desired image and brand. The findings indicated that communication channels such as social media, billboard advertising, personal selling, and website presence used by Zambia National Bank significantly enhance customer satisfaction. Despite the notable expansion and diversification in Zambia's banking sector, particularly with Zanaco, the research underscores a gap in comprehensive studies specifically focusing on the effectiveness of external communication methods on customer satisfaction in the context of Zanaco Bank in Lusaka. While existing literature on banking communication methods exists, it is often broad and lacks the specificity needed to address the unique dynamics of Zanaco's client base. The research provides valuable insights for banks aiming to optimize their external communication strategies for enhanced customer satisfaction in the evolving landscape of the Zambian banking industry.