Dissertation Writing Help-Project Report on How to Retain Bank Customers
This Research Paper will help us to write dissertation on Jordanian Banking Industry on Topic-How to Retain Bank Customers
1. Introduction
In an industry that is characterised by intensive competition; Jordanian banks are struggling to keep their customer. This paper studies how banks in Jordan promote long-term strategies in an effort to attract and retain loyal customers. Banks are trying to reduce costly customer defections through applying relational strategies aiming at continuing patronage with their customers due to the positive effects that can result from customer retention.
2. Jordanian Banking Industry
Jordanian banking system is relatively small. Nevertheless, the Jordanian banking industry is one of the fastest growing industries in the Middle-East. A free market economic policy led to the emergence of diverse types of banks competing freely in the market. The Jordanian banking sector is important to the local economy, contributing an estimated 20% to the Jordanian GDP (Dwairi et al., 2007). This booming industry has developed markedly in terms of electronic services and operations, information technology and communications that led to the introduction of new banking services.
All of this is reflected on the financial performance of many Jordanian banks that moved up in the list of top banks and financial institutions in the Middle East region (ASSOCIATION OF BANKS IN JORDAN, 2009).
The banking sector is one of the most important sectors in the Jordanian economy. Privately owned banks provide capital for industry, construction, and trade. The banks are also the most heavily traded securities on the Amman Financial Market (Al-Shammari and Salimi, 1998).
The Jordan government is helping banks to supply adequate credit to businesses and consumers at reasonable and competitive prices. However, lending is quiet in Jordan (Siam, 2007). Banks in Jordan are learning to become conservative in their lending due to past experiences of other banks that have become bankrupt, this may positively affect the banks tendency towards the development of relational strategies aimed at achieving customer retention. Therefore, studies about Jordanian banking industry are important from the view point of investors, creditors, researcher and the government.
3. Literature Review
Recent environmental changes, especially the rapid growth of competition and the changing consumer landscape, increased customer choice. Due to these changes businesses have witnessed a strategic move away from “offensive marketing” aimed mostly at getting new customers to “defensive marketing” focused on customer retention (Lee-Kelley et al., 2002).
Many studies emphasize the benefits of customer retention in improving firm value and ultimately increases a firm’s profits (Hidalgo et al., 2008) . hence, for managers to compete successfully in today’s marketplace/space; it is a top priority for managers to develop a sound and profitable customer retention strategy (Weinstein, 2002).
Customer retention is a critical factor in achieving customer satisfaction (Danesh et al., 2012). It is an effective tool that banks can use to gain a strategic advantage and survive in today’s banking competitive environment (Pal, 2011). Keeping the customer has become regarded as equally as, if not more important, than creating a new customer. There is a growing recognition that customers can be managed overtime since they have a life-cycle were they are acquired, retained and can be grown in value (Ang and Buttle, 2006).
Customer retention can be viewed as a measure of relationship continuation. It is a result of a kind of repetitive behavior ultimately aims at achieving customer loyalty (Liu and Wu, 2007). Most bank product developments are easily imitated and they provide nearly identical services. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in this highly competitive industry (Cohen et al., 2007).
Customer retention involves a focus on existing customers with an intention to develop a long-term relationships with them which will lead to the generation of further business (Harrison and Ansell, 2002). According to Ang and Buttle (2006) focusing on customer retention can yield several economic benefits; the longer customers stay with the firm, the repeated patronage results in increase in the volumes purchased, customer referrals will increase as well. Concurrently, customer and supplier learn more about each other which will result in relationship maintenance costs to fall. Customer replacement costs will fall also because fewer customers churn. All of these conditions increase the net present value of retained customers.
This paper is interested in answering a number of questions related to customer retention. What are the relationships between the variables of customer satisfaction, customer retention, and customer loyalty? But what are the elements that contribute to retaining customers, achieving satisfaction, and creating loyalty? How does customer loyalty differ from customer retention? Are all repeat customers loyal to the firm?
4. Research Methodology
This section explains the research methodology. It reports the methods used in this research. The interviews were coded manually by subdividing the data into categories, each of these categorise answers a question, explores the research context or gives an insight about the research problem codes were attached to phrases, sentences or whole paragraphs in the interviews manuscripts, content analysis of qualitative data seeks to reduce the data into manageable categories and highlight main parts that will help in drawing conclusions.
The qualitative information provides new insights into the behaviours and attitudes of Jordanian banks toward developing relational strategies aimed at achieving customer retention. The interviews helped in understanding the drivers that captures strategies adapted by Jordanian banks aimed at achieving customer retention.
Qualitative research is used to help explore the topic in depth with experts who happen to have an in depth knowledge in the field. Qualitative research allows for flexibility in gathering information. Interviews were conducted with key employees in nine different Jordanian banks.
5. Discussion of Findings
This study found a number of factors that are critical in achieving customer retention. These include trust, satisfaction, commitment, loyalty, closeness, communication transparency, privacy, cost, reputation and organisational culture.
A considerable body of research has tested the main effect of satisfaction on retention and has generally found a significant positive effect of satisfaction and the findings of this study is consistent with previous literature. However, some previous research has provided limited empirical insight into the impact of trust on customer retention (Ranaweera and Prabhu, 2003). However; This research confirms the expected positive effect of trust on retention. This is consistent with (Lee et al., 2011) who states that it is critical for organizations to develop and nurture consumer trust in order to build a long-term relationship.
Trust and commitment are two highly interrelated concepts; they both stimulate a relational bond between the supplier and the customer that facilitates the collaborations that reduces uncertainty and increases value for both parties (Gounaris, 2005). Accordingly, customer satisfaction is a direct determinant of customer loyalty, which, in turn, is a central determinant of customer retention (Gerpott et al., 2001). An abundance of research shows that customer loyalty has important implications for customer satisfaction and that customer satisfaction positively affects customer loyalty (Jung and Yoon, 2013).
Closeness can be controversial in a commercial relationship. Bove and Johnson (2001) stresses that the term relationship closeness should only be used in a commercial setting when the relationship between a customer and service provider has gone beyond a commercial exchange and has developed into a communal (friendship) relationship. This close customer relationships can bring some disadvantages to service workers where some customers may take advantage of this friendship.
Marketing communications with existing customers and prospects plays an important role in their continued existence (Kumar, 2010). Interactive technologies allow customers to interact with each other and provide tools for communication and negotiation among buyers and sellers, and significantly enhance the customers' experience (Varadarajan et al., 2010). This is consistent with the results of this research which stresses that continuous two-way communication is critical for retaining customers and increasing the longitude of the buyer-seller relationships.
Murphy et al. (2007) stresses the important role that transparency plays in a relationships; relationships should occur with transparency of communication and action. Transparency is an important development in the field of marketing and is directly related to the ethical basis of relationship marketing. Transparency is reflected in the openness and clarity of a relationship and it is very important for relationship marketing to occur and flourish. customer loyalty is strongly dependent on the customers’ trust in the vendor (Enzmann and Schneider, 2005). Thus, if customers are convinced that vendors will not harm their privacy their loyalty may even increase. This is particularly important to attract privacy sensitive customers.
Switching barriers provide disincentives for the customer to leave to another organisation by making it costly for customers to switch (Cohen et al., 2007). High switching costs are an important factor binding the customer to the organisation. The customer continues to patronise the service provider even with relatively low levels of satisfaction because repurchasing is easier and more cost effective than searching for a new service provider (Curasi and Kennedy, 2002)
It is critical for a bank to manage its reputation since a favourable reputation contributes to customers' perceptions of the trustworthiness of a bank, which will ultimately increase customer retention (Liu and Wu,
2007).
There is a significant and positive association between marketing culture and customer retention. Firms with a strong marketing culture are perceived to be retaining customers at a better rate than competitors with a relatively weak marketing culture (Appiah-Adu et al., 2000).
6. Conclusions
The current study investigated the significant role that customer retention and relational approach can have on keeping Jordanian bank customers. The study findings showed that there are a number of predecessors to achieving longevity in a relationship that will finally lead to lessen the defection rates in banking industry.
Source-How to Retain a Bank Customer: A Qualitative Study of Jordanian Banks Relational Strategies by Muhammed S. Alnsour taken from International Journal of Marketing Studies; Vol. 5, No. 4; 2013
Custom Dissertation Writing Help and Project Report on How to Retain Bank Customers containing Abstract, Introduction, Literature Review, Research Methodology, Data Analysis, Recommendations, Conclusion, References and Questionnaire can be purchased by filling up the contact form on the right side of the blog.
