The Impact of Service Quality and Customer Satisfaction on Customer Retention in the Indian Banking Industry: An empirical analysis.

jayalakshmi gopalkrishnan, bibhu bhusan mishra, vijay kumar gupta, adimoolam vetrivel

Abstract


The Impact of Service Quality and Customer Satisfaction on Customer Retention in the Indian Banking Industry: An empirical analysis.


1. PROF J.GOPALKRISHNAN, ASBM, SHIKSHA VIHAR, CHANDAKA, BHUBANESWAR
2.Dr .B.B MISHRA,PROFESSOR,UTKAL UNIVERISTY,BHUBANESWAR
3.Dr.V.K GUPTA,DEAN,INDIAN INSTITUTE OF MANAGEMENT,INDORE
4.PROF A.VETRIVEL,THE NEW SCHOOL UNIVERSITY,NEW YORK




Abstract

Previous banking studies on customer retention focused narrowly on service quality and cus- tomer satisfaction without attempting to link them in a model to further explore or explain cus- tomer retention. If retention strategy is not planned than customers will defect, irrespective of the efforts put in by banks. This study empirically examines the potential constructs in customer retention by investigating the effects of service quality and customer satisfaction. Customer’s levels of satisfaction, perception about service quality and loyalty are constructs that influence the customer to retain with the present bank. It is assumed that when the customer is completely satisfied, then loyalty towards the bank is strengthened.

This study was designed to examine the relationship between service quality, customer satisfaction and customer’s retention with a bank in the Indian Banking industry. The respondents were 398 banking customers who completed the self-administered questionnaire. Pearson Correlation analysis indicated that service quality and customer satisfaction had a direct positive effect on customer’s retention intentions. Multiple Linear Regression highlighted customer satisfaction as a stronger predictor of customer retention intentions compared to service quality. Possible interpretations, limitations, and implications for marketing professionals are discussed.

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ISSN : 2251-1571