The Drivers of Customer Loyalty to Retail Banks: An Empirical Study in Bangladesh

Abstract

The main aim of this study is to identify the most important drivers of customer loyalty in the retail banking settings in Bangladesh. The study also sought to identify the interrelationships between service quality, customer satisfaction, corporate image, customer value and customer loyalty in the retail banking sector in Bangladesh. In Bangladesh, no study has yet investigated the above mentioned interrelationship. The purpose of this study is to fill this gap. A review of literature was conducted to find out the relationship between service quality, customer satisfaction, corporate image, and customer value and customer loyalty. The literature review confirms the positive relationship between each of the study constructs. A survey was conducted to collect data. The sample size of 100 retail banking customers was drawn from two public and four private banks in Bangladesh. A set of developed questionnaire distributed to retail bank customers in Bangladesh. Five post graduate students (interviewers) administered the survey. They administered the survey in Dhaka and Comilla during four weeks period in November and December, 2010, between 5^th November to 3^th December, 2010. The result shows that all the study constructs are positively correlated with each other in the retail banking settings in Bangladesh. The researcher has removed the customer satisfaction item from the scale due to its cronbach alpha value. The result confirms that customer value is the most important drivers of customer loyalty in the retail banking sector in Bangladesh.

Key Words: Retail banking, service quality, customer satisfaction, customer value, corporate image, customer loyalty.