Determinants of customer loyalty in the banking sector: The case of Pakistan

African Journal of Business Management 07/2010; 4:1040-1047.

ABSTRACT The concept of customer loyalty has received much consideration and attention from both academics and practitioners in different industries. In increasingly competitive markets, being able to build consumer loyalty is seen as the key factor in winning market share and developing a sustainable competitive advantage. Banking industry is no exception as it has high interaction with the customers, so managers must understand the factors which influence the loyalty of the customers towards their respective banks. It is always costly to attract new customers, so the managers always try to find ways to retain their current customers and concentrate on different factors which enhances the customer loyalty among the customers of the organizations. This research attempts to find the factors of customer loyalty and their relationships with the banking industry in one of the developing countries, which is Pakistan. Then analyzing the relationship among different factors, a model for the customer loyalty is proposed at the end of the research. In order to do this, a questionnaire is designed and validated, then based on the data which is gained from the 316 respondents' answers to the designed questionnaire, the analysis is done and the results and the relations among the factors are explained. Perceived quality, satisfaction, trust, switching cost and commitment are the factors which influence the loyalty of the customers. Theses factors also influence each other as well. The relationships of different factors with each other are also studied and the SPSS software is used to analyze the data gathered from the respondents. During the past decade, the financial service sector has undergone drastic changes, resulting in a market place which is characterized by intense competition, little growth in primary demand and increased deregulation. Government of Pakistan has privatized quite a number of banks which further increases the competition and com-plexity among the banks. Finding a place in this heating sun becomes vital to the long-range profitability and ultimate survival of the bank. This can be done both by maintenance or having new ones. In this research we tried to find the main determinants of the customer loyalty in banking industry of Pakistan in order to help this key industry to have a wider look for supporting their customers and finally having more loyal ones.

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    ABSTRACT: Over the last few years, the concept of online loyalty has been examined extensively in the literature, and it remains a topic of constant inquiry for both academics and marketing managers. The tremendous development of the Internet for both marketing and e-commerce settings, in conjunction with the growing desire of consumers to purchase online, has promoted two main outcomes: (a) increasing numbers of Business-to-Customer companies running businesses online and (b) the development of a variety of different e-loyalty research models. However, current research lacks a systematic review of the literature that provides a general conceptual framework on e-loyalty, which would help managers understand their customers better, take advantage of industry-related factors, and improve their service quality. The present study is an attempt to critically synthesize results from multiple empirical studies on e-loyalty. Our findings illustrate that 62 instruments for measuring e-loyalty–with two or more items—are currently in use, influenced predominantly by Zeithaml et al. (J. Marketing 60(2):31–46, 1996) and Oliver (Satisfaction: a behavioral perspective on the consumer. New York: McGraw Hill, 1997). Additionally, we propose a new general conceptual framework, which leads to e-loyalty dividing antecedents into prepurchase, during-purchase and after-purchase factors, based on the act of purchase. To conclude, a number of managerial implementations are suggested in order to help marketing managers increase their customers’ e-loyalty by making crucial changes in each purchase stage.
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