Customer Loyalty Case Study

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2.2 Customer Loyalty Customer loyalty in banking institutions has been a main concern due to severe competition and customer expectations (Rezaei, Velashani, Afrough, Haghshenas, & Shakeri, 2015). Customer satisfaction has been the main focus of every organization for some times. However, various researchers proposed that only gaining customer satisfaction is not enough. A shift in emphasizes from customers satisfaction to loyalty appears to be a more effective change in strategy for most organizations because they understand the impact of having a loyal customers on profit. According to Kibeh (2013), loyalty is defined as a deeply held commitment to re-buy and re-patronize a preferred product or service in the future despite situational influences…show more content…
Active loyalty behaviour is the customers’ proactive behaviour that requires a conscious and deliberate effort to undertake, reflected in purchase behaviour and purchase intention. Passive loyalty behaviours are identified when customer purchase behaviour or behavioural intentions are affected by the significant changes in price or switching cost. Ravesteyn (2005) classify loyalty into good loyalty and bad loyalty. Good loyalty is recognized when a customer is willing to support the particular financial institution although the price of the product and services offered by a competitor is lower. This type of customer valued on their relationship with the existing financial institution. While bad loyalty happen when a customer continues to support the particular financial institution for the wrong reasons. The customer will continues to support the institution based on sentiment, although they are receiving poor service from the institution. Besides that, Sivesan (2012) indicate that loyalty has both attitudinal and behavioural dimensions. Attitudinal loyalty is about reviewing concept of good and favourable attitude towards particular product/service provider such as trust and emotional attachment. Behavioural loyalty focus on customer’s behaviour such as repurchasing and word of mouth (Taleghani et al.,…show more content…
Behavioural approach considers consistent, repetitious purchase behaviours as the measurement of loyalty. Attitudinal measurement approach infers customer loyalty from emotional and psychological attachment towards a product or services. It is concern with the customers’ sense of loyalty and engagement. Composite measurement approach is the combination of both behavioural approach and attitudinal approach. In order for a consumer to be truly loyal to a company, they must hold favourable attitude to the product, and purchase it repeatedly (Petrick, 2005). According to Howcroft, Hewerb, & Durkin (2003), majority of the customers are behaviourally loyal rather than attitudinally loyal in relation to financial service providers. Many customers said that they only remain loyal because of the hassle factor, laziness and lack of differentiation. However, the customers also realized that loyalty is personalised and it is based on long-term relationship with an individual when relational products and services are needed. Sound advice and good service provided by financial service providers over a sustained period of time will result in increased loyalty (Ravesteyn,

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