Customer Satisfaction: a Study of Bank Customer Retention in Barbados

Table of Contents

INTRODUCTION 1

Background 1

Purpose of the Research 2

Rationale of the Research 2

LITERATURE REVIEW 4

Customer Satisfaction 5

Competitive Advantage 6

Customer Perceptions of Value 7

Switching Barriers 7

Customers’ Behavioural Intentions 8

Customer Loyalty 9

RESEARCH METHODOLOGY 11

Study Design 11

Participants 11

Research Instrument 12

Data-collection Procedures 12

Ethical Considerations 13

PROPOSED DATA ANALYSIS PROCEDURES 14

ANTICIPATED LIMITATIONS & CHALLENGES 15

TIMESCALE 16

REFERENCES 17

INTRODUCTION

Background

Aiming for customer satisfaction is one of the most challenging tasks within any organization, especially banking. The banking industry is highly competitive, with banks not only competing among each other; but also with non-banks and other financial institutions (Kaynak and Kucukemiroglu, 1992; Hull, 2002). Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment.

Customer retention is an important element of banking strategy in today’s increasingly competitive environment. The need for customer retention is relatively straightforward. It is more economical to maintain your current customers than to acquire new ones. In addition, long-term customers buy more and, if satisfied, may generate positive word-of-mouth promotion for the bank. Additionally, long-term customers also take less of the company’s time and are less sensitive to price changes (Healy, 1999). Bank management must identify and improve upon factors that can limit customer defection. These include employee performance and professionalism, willingness to solve...