The moderating role of high- and low-involvement product types on customer loyalty and satisfaction in banking: an Australian perspective

Abstract

Purpose

The study aims to develop a holistic model identifying the constructs that impact customer loyalty in retail banking and introduce product type as a moderating variable to the model.

Design/methodology/approach

A conceptual model of customer loyalty is introduced and empirically tested with 416 valid samples obtained from Australian retail banking customers. The data were analysed using partial least squares structural equation modelling and multigroup analysis.

Findings

This study confirms the moderating effect of high- and low-involvement products on the relationship between customer loyalty and satisfaction, trust, service quality, commitment and perceived value. Surprisingly, the effect of satisfaction on loyalty was much stronger with low-involvement product types and the effect of commitment on loyalty was much stronger with customers who utilise high-involvement products.

Research limitations/implications

The study uses a sample population in Australia who utilise one of the top four banks and investigates three product types. Further research could expand the product selection and include customers who use credit unions and other banks not in the top four categories.

Originality/value

This study is the first to confirm the moderating effect product type has on the customer loyalty relationship in retail banking in regard to high- and low-involvement product categories. The research provides a deeper understanding of the factors that influence customer loyalty and identifies which types of products influences customer loyalty the most. Additionally, this study highlights the importance of understanding the different needs and priorities of customers using different product types in order to effectively influence their loyalty.

Citation

Hinchcliff, M., Kyriazis, E., McCarthy, G. and Mehmet, M. (2023), "The moderating role of high- and low-involvement product types on customer loyalty and satisfaction in banking: an Australian perspective", International Journal of Bank Marketing, Vol. 41 No. 7, pp. 1974-2004. https://doi.org/10.1108/IJBM-01-2023-0027