Effectiveness of digital marketing strategies on performance of commercial banks in Kenya

Abstract

In a competitive business environment, organizations try to reach their customers in the best possible way and this requires these firms to develop strategies that will create customer satisfaction, value and loyalty. The ability of commercial bank operators to respond rapidly and appropriately to the environmental challenges depends largely on the information systems management to reflect hopes, dreams and realities of real business situation. A substantial portion of business operator’s responsibility lies in his creative abilities driven by new knowledge and information. Digital marketing strategies therefore, plays a crucial role in helping commercial banks to design and deliver new products and services with unique features and redirecting and redesigning their business processes to meet current changes. The objective of the study was to determine the effectiveness of digital marketing strategies on the Performance of commercial banks in Kenya. The research design was descriptive cross sectional survey. The population of the study comprised of all the 43 commercial banks operating in Kenya. The study used primary data that were collected through self-administered questionnaires. The data was analyzed by the use of descriptive statistics. The regression analysis was used to assess the effects of digital marketing strategies and performance. The study found out that digital marketing platforms used by the commercial banks were mobile apps strategy, social media, website design/development, online advertising, display advertising and email marketing. Marketing communication strategy was found to have enabled commercial banks to communicate with international customers, avail customers a 24 hour service platform, availability of online technical support, quick response of inquires, increase efficiency, reduce cost of communication, improve product and price information. The study found out that transaction strategy enabled the commercial banks to customize promotion, flexible pricing, maintain lower inventory level, lower cost of transaction, reduction on procurement and reduction errors. Digital marketing distribution enabled customers to track transactions, reduce waiting time to receive product for digital product/ services, lower cost of delivery for digital product /services and reduce the number of customer service representatives. The study found out that digital marketing strategies improved the performance of commercial banks as it enhanced uptake of bank products by the consumer, lower costs, lower working capital, increased revenue, increased customer base of the bank, increased market share, increased web traffic, lower fixed capital, accelerate cash flows, reduce revenue volatility and reduce risk. The regression analysis established that marketing communication strategy, transaction strategy and distribution strategy jointly influences the performance of commercial banks.