Impact of Customer Retention in Banking Sector
Essay Preview: Impact of Customer Retention in Banking Sector
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ABSTRACT
To retain the customer in banking sector you need to provide quality service because today the customer attracts towards such bank who facilitates the customer in a better way and that is quality service today banks are competing on quality service .Providing quality service to the customer means serving customer at best . The second role is the main focus of this paper. Using survey as a data collection tool, this study explores quality service in banking sector for customer retention .Respondents mostly are on job persons but data is also collected from respondents related to other fields as well. Multiple regression analysis shows that there is 30% relationship between customer retention and credibility, reliability, accessibility, transferability and responsiveness. Personal relations, better interest rates and ease in using bank facilities also have strong influence on customer retention. The correlation values show that there is a positive correlation of customer retention with credibility, reliability, accessibility, transferability and responsiveness. Model summary shows there is a approximately 30% relationship of credibility, reliability, accessibility, transferability and responsiveness.
Key words Quality, Retention, Service, Banks
Introduction
The study is about quality service in banking sector for customer retention. People want some wise and perceptive statements like, “Quality is ballet, not hockey” [Philip Crosby (1979)] and that what are the most effecting aspects of customer retention as we have selected some most effecting, common and easily understandable factors that effects on the customer retention in banking sector. If bank provides certain services or facilities to the customer it will provide bank customer retention. As we have selected some concrete Factors like a) Reliability; is suggested by Jacques Nantel, James Agarwal (2000), Parasuraman et al (1985), b) Accessibility is a well known factor for a bank to provide service to the customer, recommended by Shaohan Cai (2001) c) Credibility is the most important factor for a bank and Lan wu (2004) made a contribution to make it an important requirement for quality service for retaining the customer, d)Transferability e) Responsiveness. These are some of the factors which are affecting Pakistani banking sector customers in the matter of choosing the right bank. As we know today every bank is trying to cover and engage maximum number of clients specially corporate clients because they create huge profit for bank but in this study we also study that how a single person as a client could be beneficial for the bank. People in Pakistan mostly get information through word of mouth and those factors which we have mentioned above if works in a favorable manner to the customer