1IMPLICATIONS OF BANKING SERVICES ON CUSTOMER LOYALTY 2003

8/7/2019 1IMPLICATIONS OF BANKING SERVICES ON CUSTOMER LOYALTY 2003

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The IIS University

Submitted by:- Gaurav Poddar

(MBA II trimester)


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What is Customer Loyalty? The term customer loyaltyis used to describe

the behavior of repeat customers, as well asthose that offer good ratings, reviews, ortestimonials. Some customers do a particularcompany a great service by offering favorableword of mouth publicity regarding a product,telling friends and family, thus adding them to

the number of loyal customers.

Brand loyalty implies that the consumer iswilling, at least on occasion, to put aside theirown desires in the interest of the brand.


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Dos DontsDo invite customers to participate Don't assume the customers are

going to ask for the ability toparticipate in a company'sactivities

Do find ways to bring customerstogether regularly.

Don't allow even one employee tobe grumpy or haughty towardcustomers.

Do remember that loyalty is builtover time through a collection of

positive experiences.

Don't treat your customers as ifthey were expendable

They must feel good about theirrelationship with the companythey must believe the companyunderstands and values them,listens to them, and shares theirunderlying principles.

Dont over do follow up activitieslike phone calls, promotional calls,unnecessary mails etc


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Problem Definition:

How the customers loyalty towards his bankeris being affected by the services being offeredby bank?

Research Objective: To identify customers needs, wants and

expectations from the services offered by banks. To identify different types of services offered by

banks which influence customers loyalty. To analyze the bearing of each type of service

on customers loyalty and identify the crucialservices from the point of view of customers. Based on the analysis, making suggestions and

recommendations to improve the services tomaximize customer loyalty for banks.


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Research Design: Empirical Research Design.

Sampling Design: Sampling Sample Size

Data Collection Techniques Primary Data Secondary Data

Interpretation and Report Writing Findings Recommendations Conclusion


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Respondent Distribution

HDFC Bank

28%

ICICI Bank

37%

State Bank

of India

35%

Highest number of respondents were from ICICI Bank i.e. 37%. Marginally short than ICICI, respondents of SBI were 35%.

The respondents of HDFC bank were 28%.

Analysis


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Mode of Transactions

Visiting

Branch 46%ATMs 42%

Phone

Banking 2%

NET banking

10%

Analysis

Branch visits of respondents came to be at 46% and ATMtransactions were at 42%.

NET banking and phone banking still havent seen a liking

with respondents because only 2% of phone bankers and


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Frequency to Visit Branch by

respondents

Monthly

45.00%

Daily 0% Weekly16.00%

Fortnight

39.00%

Analysis

Most respondents visit branch on a monthly basis i.e. 45%respondents.

Where as 39% respondents were fortnightly visitors to the

branch. Lastly there were 16% weekly visitors and no daily visitor was


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Analysis

51% felt no special treatment or WOW kind of behaviour from the banksstaff

Only 27% respondents responded to be satisfied with the behaviour of the

banks staff

A marginal of 12% said that they are highly satisfied

2% and 8% of very dissatisfied and dissatisfiedrespectively

Perception towards staff of bankVery

Dissatisfactory2%

Dissatisfactory8%

NeitherSatisfactory NorDissatisfactory

51%

Satisfactory27%

VerySatisfactory

12%


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Most appealing factors for respondents in

choosing their bankFinancial

Soundness

30%

Word of

Mouth 3%

Association

with other

Agencies 9%

Product

Performance

23%

Operational

Excellence

20%

Infrastructure

15%

Analysis

This question was designed to take the observation regarding

what factors influence a person before he chooses his bank.


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Analysis

This question is formed to know the customers view towards

their banking services.


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Analysis

This question was framed to know about in-house finance

facilities of banks.


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Analysis

This question was framed to review the attention of customers

by various modes of advertisement.


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Analysis

This is basically formed to know about the various choices of

customers i.e their competitors.


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This was formed to make out free net banking services provided

by banks.

Analysis


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Analysis

This question is framed to gain knowledge about facilities

through ATM Cards to the customers.


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From the survey above, we can observe the findings thatout of 11 service factors that were under consideration,

the following are the crucial ones: Product Performance. Queue handling at branch. Response time to solve customer query. Quality of operations

Staff behavior. Most transaction by ATMs. Most of the respondents felt no special treatment or

WOW kind of behavior from the banks staff, thus thevery need of feeling special as a customer is missingwhich hinders the creation of a long term relationship ofa customer with his bank, leading to non creation ofcustomer loyalty.

A marginal of respondents said that they are highlysatisfied with the behavior of the banks staff, thus bankshould leverage upon such customers as they are

perfectly poised to become a typical loyal customer infuture or long run.


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The factors like Financial Soundness of bank, its productperformance compared with competitors and operationalexcellence are the main drivers for making a choice of bankto make a deposit with, among the respondents.

Customer loyalty is repeat purchasing behavior of a productor services from the same provider.

Customer loyalty is the level of commitment that a customershows towards a particular product or service.

Customer loyalty is the long-term relationship between the

customers and the provider of the product or services. Service quality is identified as the main antecedent to

customer loyalty.

Creating satisfied and loyal customers are the most focalobjectives of the loyalty programs, and creating satisfied and

loyal customers is a critical matter for many corporationssurvival.


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Customer Loyalty is very crucial for survival of any business inthe long run because the cost to make a new customer upon aloss of existing customer is too high compared to maintain a

loyal customer and simultaneously convert the prospects intocustomers.

The outcome of this research helped in understanding thatservices like better product performance, efficient handling ofqueues, faster response time to customer queries, exceptional

quality of operations and elegant hospitality treatmentshowed by the employees/staff of the bank, are few of theimportant services that are crucial from the point of view ofcustomers. Thus, banks should focus upon these points as wellas promoting/rewarding loyal customers who will stimulate theprospects as well as the existing satisfied but not loyal

customers to be part of the loyalty club.


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The results are derived out of the sample of 50

respondents so when this project will becompared with the result of a bigger samplethen chances are there that some findings maychange or new ones will be observed.

This study was conducted in few part of Udaipur,

thus taking a similar sample but outside thearea of study for this project may result indifferent outcomes.

The result of this study was concluded by doingfactor analysis, so by using any other tool mayresult in different outcomes.

This study shall not match 100% with theoutcomes of the literature review because of thedifference in sample, tools and area of study.


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ThankYo

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1IMPLICATIONS OF BANKING SERVICES ON CUSTOMER LOYALTY 2003

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