The relationship among customer satisfaction, loyalty and financial performance of commercial banks

Jaroslav Jr. Belas · Lenka Gabčová

102 citations0/0 files storedE+M Ekonomie a Management

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Customer Service Quality and Loyalty Banking Sector Performance and Management Customer churn and segmentation

Abstract

In the current banking sector, characterized by an increasing competition, efficient management of selling additional products and services to existing satisfied customers represents a significant opportunity to improve the financial performance of a commercial bank. To sum up, the conclusion of the up to date literature is an idea that customer satisfaction leads to customer loyalty and loyalty leads to willingness to purchase additional products. However, there are practically no papers quantifying the influence of loyalty on additional products purchases. The aim of this paper is to create a model among customer satisfaction, loyalty and financial performance of commercial banks in the Czech Republic. It is based on our original research realized as a survey with a total of 459 respondents that have been reached. The created model has proven that product quality, recognition of customers' financial needs and acceptance of prices by a customer have an impact on customer satisfaction, which then influences customer loyalty and this in return influences additional purchases potential of a customer. The regression model of relation between customer satisfaction and loyalty of bank customer has this form: CL = 0.01163 + 0.9191 x CS, where: CL customer loyalty, CS customer satisfaction. The regression model of relation between customer loyalty and additional purchases: APP = -0.05667 + 0.5848 x CL, where: APP additional purchases potential, CL customer loyalty. At the end, the paper is dedicated to a model example showing that if a commercial bank is able to increase the number of satisfied customers by 10,000, it can obtain additional yearly income of EUR 9.6 million.

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References

2010Satisfaction: a behavioral perspective on the consumer 2000Service Quality, Profitability, and the Economic Worth of Customers: What We Know and What We Need to Learn 2017Interrelationship of Migration and Housing in Slovakia 2004Building and sustaining profitable customer loyalty for the 21st century 2008Employee satisfaction, customer satisfaction, and financial performance: An empirical examination 2000A Longitudinal Analysis of Satisfaction and Profitability 2002Assessing the Service-Profit Chain 2000The Impact of Anticipating Satisfaction on Consumer Choice

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