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The literature on customer behaviour has attracted significant attention towards customer loyalty; however, customer disloyalty has not been adequately studied. The purpose of this paper is to identify factors leading to customer disloyalty and develop a comprehensive framework for understanding various dimensions of customer disloyalty in retail banking services.

The study is descriptive in nature. Variables associated with customer disloyalty were identified from literature and subsequently factor analysis has been applied to derive the significant factors leading to customer disloyalty. Data were collected through a structured questionnaire administered to 357 retail banking customers. EFA and CFA have been employed to determine relevant factors.

This study found that customer disloyalty comprises of, both, attitudinal and behavioural components. Further, the study revealed three factors – unfair practices, unfulfilled services and poor interaction leading to behavioural disloyalty and negative image leading to attitudinal disloyalty. Surprisingly, the study found that pricing and competitor’s attraction do not affect, both, attitudinal disloyalty and behavioural disloyalty.

The study contributes to customer behaviour literature by understanding customer disloyalty as a distinct concept in comparison to much prevalent customer switching. It addition, this study empirically identified factors leading to behavioural disloyalty and attitudinal disloyalty.

The originality lies in that fact that it is the only empirical study which has studied customer disloyalty through attitudinal disloyalty lenses. Subsequently, it has also attempted to fill the gap in available literature by studying the relationship between attitudinal disloyalty and behavioural disloyalty.

The purpose of this research is to analyse how different dimensions of perceived service loyalty including price sensitivity explains the consumer defection in retail banking.

Empirical tests were conducted with survey data from nearly 1,700 consumers in Finland.

The findings support previous suggestion that service loyalty can be determined by following four dimensions, although a shade of interference in the unidimensionality of the service loyalty instrument in question was observed: purchase intention; word‐of‐mouth communication; price sensitivity; and complaining behaviour.

It was found that only the price sensitivity dimension – in which reliability and unidimensionality was strongly verified – was related to the likelihood of defection in the case of low‐price and limited product range driven sales offers. Results show that loyal customers are also open to attractive marketing information. This outcome is important since the willingness to acquire information on the rival offer was related to customer defection.