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Article
Publication date: 1 March 2001

Bernd Stauss, Klaus Chojnacki, Alexander Decker and Frank Hoffmann

Customer clubs belong to the most important and particularly cost‐intensive elements of customer retention systems. By offering specific advantages to club members, they…

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7963

Abstract

Customer clubs belong to the most important and particularly cost‐intensive elements of customer retention systems. By offering specific advantages to club members, they are supposed to increase customer satisfaction and loyalty. However, up to now there is no certainty with respect to the existence and degree of the expected loyalty effects. Thus, there still is also no sufficient foundation for an estimation whether investments in customer clubs can be justified in comparison to several alternatives of gaining new customers or customer retention. To fill this gap in information, this paper focuses on the question of which kind of retention effects of customer clubs might exist and whether there is a scientific evidence of these effects. In the first step, a theoretical model and propositions of different retention effects of customer clubs are developed. Afterwards the results of an empirical study among members of the Volkswagen Customer Club, Germany’s largest automotive customer club are presented. They indicate that customer club satisfaction has a remarkable impact on the customer’s relationship satisfaction and customer retention. Consequently it can be concluded that a customer club certainly is an important issue of retention management.

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International Journal of Service Industry Management, vol. 12 no. 1
Type: Research Article
ISSN: 0956-4233

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Article
Publication date: 30 May 2018

Mushtaq Ahmad Darzi and Suhail Ahmad Bhat

The purpose of this paper is to report the findings of a study undertaken to understand customer satisfaction and customer retention in business-to-consumer markets. The…

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1814

Abstract

Purpose

The purpose of this paper is to report the findings of a study undertaken to understand customer satisfaction and customer retention in business-to-consumer markets. The study investigates the effect of personnel capability and customer satisfaction on customer retention in the banking sector. The influence of the control variable (gender) on customer retention and mediating role of customer satisfaction has also been examined.

Design/methodology/approach

The study has used structural equation modeling (SEM) for data analysis across a sample of 409 bank customers of a private bank operating in Jammu and Kashmir state of India. Questionnaires were distributed and respondents were selected through a cluster sampling technique.

Findings

The empirical analysis through SEM has confirmed that personnel capability and customer satisfaction have a significant positive impact on customer retention. Customer satisfaction partially mediates the effect of personnel capability on customer retention. Moderation analysis was performed and established that gender moderates the effect of personnel capability on customer satisfaction. It was also found that gender has no effect on other relations. Furthermore, the study shows that personnel capability has a stronger impact on customer retention as compared to customer satisfaction. However, the relationship between personnel capability and customer satisfaction is significant.

Research limitations/implications

The study has been conducted on the customers of a private bank in India. Therefore, generalizations may be limited. As personnel capability is the predictor of satisfaction and retention, individuals with proper social and technical skills – in addition to other skills – should be hired for managing relationships with customers.

Originality/value

The study has added to the understanding of the relationship which exists among the following variables: gender, personnel capability, customer satisfaction and customer retention. These variables have not been studied together previously.

Details

International Journal of Bank Marketing, vol. 36 no. 4
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 1 February 2004

Ove C. Hansemark and Marie Albinsson

The purpose of this study was to explore how the employees of a company experience the concepts of customer satisfaction and retention. A phenomenological method was used…

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41604

Abstract

The purpose of this study was to explore how the employees of a company experience the concepts of customer satisfaction and retention. A phenomenological method was used, allowing the informants’ own interpretations to be discovered. Satisfaction was discussed from three perspectives: definition of the concept, how to recognise when a customer is satisfied, and how to enhance satisfaction. The informants’ experience pertaining to these three categories varied, and a total of seven ways to define, recognise or enhance satisfaction were discovered. These were: service, feeling, chemistry, relationship and confidence, dialogue, complaints and retention. All except the first two of these categories of experience were found to enhance retention, implying that the informants have found that strategies for enhancing both satisfaction and retention are similar. The strongest connection between retention and satisfaction strategies turned out to be in terms of relationship and confidence.

Details

Managing Service Quality: An International Journal, vol. 14 no. 1
Type: Research Article
ISSN: 0960-4529

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Article
Publication date: 1 January 2006

Lawrence Ang and Francis Buttle

Customer retention has been a significant topic since the mid‐1990s, but little research has been conducted into management processes that are associated with excellent…

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21655

Abstract

Purpose

Customer retention has been a significant topic since the mid‐1990s, but little research has been conducted into management processes that are associated with excellent customer retention performance. This research investigates the associations between customer retention outcomes and a number of management processes including customer retention planning, budgeting and accountability and the presence of a documented complaints‐handling process.

Design/methodology/approach

This is carried out using a quantitative survey of 170 companies in Australia. Participants represented all major standard industrial classification (SIC) codes.

Findings

It was found that excellence at customer retention is positively and significantly associated with the presence of documented complaints‐handling processes. None of the other variables is significantly associated with the dependent variable.

Research limitations/implications

This research has limited generalisability to other regions and the self‐report nature of the data is not independently corroborated.

Practical implications

The research emphasises the importance of developing and implementing documented complaints‐handling processes. Future research should examine whether standardised processes such as those embodied in ISO 10002 are more effective than ad hoc processes.

Originality/value

The major contribution of this paper is the clear link that it establishes between customer retention performance and the presence of a documented complaints‐handling process.

Details

European Journal of Marketing, vol. 40 no. 1/2
Type: Research Article
ISSN: 0309-0566

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Article
Publication date: 1 October 2003

Chatura Ranaweera and Jaideep Prabhu

Adopts a holistic approach that examines the combined effects of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting…

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20211

Abstract

Adopts a holistic approach that examines the combined effects of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting. Argues that such an approach helps uncover hitherto neglected effects on retention and, in the process, unveils more cost effective ways of retaining customers. Drawing on this framework develops several hypotheses regarding the main and interaction effects of customer satisfaction, trust and switching barriers on retention. Tests these hypotheses on data from a large‐scale mail survey of fixed line telephone users in the UK, finding that both customer satisfaction and trust have strong positive effects on customer retention. Contrary to some assertions in the literature, however, finds that the effect of trust on retention is weaker than that of satisfaction. Nevertheless, the interaction between trust and satisfaction also has a significant effect on retention, indicating that building both customer satisfaction and trust is a superior strategy to a focus on satisfaction alone. Qualitative evidence from the survey offers further support for this finding. Even a “satisfying” service recovery process might be inadequate to prevent loss of trust, with significant implications for future consumer behaviour. Finally, the results show that switching barriers have both a significant positive effect on customer retention as well as a moderating effect on the relationship between satisfaction and retention. While service providers may be able to retain even dissatisfied customers who perceive high switching barriers, argues that ideally, firms should aim at a combined strategy that makes switching barriers act as a complement to satisfaction.

Details

International Journal of Service Industry Management, vol. 14 no. 4
Type: Research Article
ISSN: 0956-4233

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Article
Publication date: 6 September 2011

Jiun‐Sheng Chris Lin and Chung‐Yueh Wu

Customer uncertainty of future contacts with the service provider creates a wide range of expectations of the relationship. Such variation and effective management of…

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2829

Abstract

Purpose

Customer uncertainty of future contacts with the service provider creates a wide range of expectations of the relationship. Such variation and effective management of customer expectations have been not been well studied. The purpose of this research is to investigate the role of customers' expected future use in relationship based customer retention for continuously provided services, proposing and testing an empirical model that explores the interconnectedness of relationship quality, expected future use and customer retention.

Design/methodology/approach

A theoretical framework is developed to suggest the role of expected future use in relationship‐based retention. Extant research from various academic fields, including marketing and psychology, is reviewed, deriving our hypotheses. Data collected from customers of a health club is examined through structural equation modeling (SEM).

Findings

The study supports the assertion that that the effect of relationship quality (trust, commitment, and satisfaction) on service retention is mediated by customers' expected future use. Results show that relationship quality (satisfaction, trust and commitment) is related to expected future use and retention, while expected future is also related to retention.

Research limitations/implications

This study represents an early attempt at exploring the role of customer's anticipation of future use in service retention. Future research is discussed, with an emphasis on developing additional indicators of relationship quality and future expectation related variables.

Practical implications

Service firms can increase retention through enhancing relationship quality and expected future use. Customers' expected future use plays an important role in service retention, and represents a valuable marketing opportunity in customer relationship management. Marketing managers will find it beneficial to integrate expected future use into marketing communication, retention‐based marketing, and other marketing interactions.

Originality/value

This research represents one of the first studies in service retention literature by empirically examining the role of expected future use in relationship‐based retention. Existing theories of relationship quality may also be improved with such an inclusion of customer psychological mechanism. The model provides insights into the effects of customer's expectations of future usage on customer intentions beyond traditional relationship marketing models.

Details

Managing Service Quality: An International Journal, vol. 21 no. 5
Type: Research Article
ISSN: 0960-4529

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Article
Publication date: 12 February 2018

Dian Anggraece Sigit Parawansa

The purpose of this paper is to investigate the effect of commitment and customer’s satisfaction on the relationship between service quality and customer retention.

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1806

Abstract

Purpose

The purpose of this paper is to investigate the effect of commitment and customer’s satisfaction on the relationship between service quality and customer retention.

Design/methodology/approach

The research was conducted on the entire customer rural banks (BPR) in Makassar, South Sulawesi Province; the sample size comprised 300 respondents. Analysis equipment used in this study is a quantitative approach that is inferential statistical analysis with structural equation modeling based variance is known as a method WarpPLS.

Findings

The results of the analysis show that there is significant influence between the variables of service quality, commitment, customer satisfaction, and customer retention. It was also found that the results of the variables commitment and customer satisfaction mediate the effect of service quality on customer’s retention.

Originality/value

The study showed the mediation effect (using the Sobel test) of service quality on customer retention using commitment and customer satisfaction as intervening variables in rural banks; and the study was conducted in the customer rural banks (BPR) in Makassar, South Sulawesi Province, where no such study for this relationship has been conducted previously.

Details

Journal of Management Development, vol. 37 no. 1
Type: Research Article
ISSN: 0262-1711

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Article
Publication date: 10 August 2021

Sulemana Bankuoru Egala, Dorcas Boateng and Samuel Aboagye Mensah

In this paper, the authors investigated the impact of quality digital banking services delivered during the COVID-19 pandemic on customers' satisfaction and retention intentions.

Abstract

Purpose

In this paper, the authors investigated the impact of quality digital banking services delivered during the COVID-19 pandemic on customers' satisfaction and retention intentions.

Design/methodology/approach

This study combined constructs drawn from the E-S-QUAL and BSQ models to measure the impact of digital banking services on subscribers of digital banking services in Ghana. The study utilized structural equation modeling with partial least squares (PLS-SEM) to analyze 395 responses.

Findings

Results revealed a significant direct effect between digital banking services satisfaction and customer retention decision. The results also revealed that digital banking services quality dimensions such as ease of use, efficiency, privacy/security and reliability impact customers' satisfaction and retention intentions.

Research limitations/implications

Digital banking service portfolios and their quality dimensions vary among banks. This offers an opportunity for banking institutions and other non-bank financial service providers to be wary of the impact of quality service delivery on customers' decisions. This paper makes significant theoretical contributions and practical implications on the relevance of quality digital banking services in customers' retention strategies for competitive advantage.

Originality/value

This study has underlined the significance of quality digital banking services in developing countries. The study underscored the need for banking and non-bank financial institutions to embrace the much-anticipated quality service demanded by customers and the need for continuous service improvement relative to the growing deployment of financial technologies.

Details

International Journal of Bank Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-2323

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Book part
Publication date: 5 December 2018

Paulina Nillie Adzoyi, Robert Jan Blomme and Ben Quarshie Honyenuga

Increased competition amongst the hotel industry players has challenged managers not to focus their attention exclusively on ways to attract and satisfy their customers

Abstract

Increased competition amongst the hotel industry players has challenged managers not to focus their attention exclusively on ways to attract and satisfy their customers, but to invest in customer retention strategies with the potential to ensure superior performance of their hotels. This study aims to determine strategies to retain customers in hotels in Ghana, an emerging market. A cross-sectional survey was employed to collect data from 677 hotel employees in 56 Ghanaian licensed hotels. Based on SmartPLS, study findings indicate that customer satisfaction, loyalty and retention embedded in the tangibility and reliability dimensions of the lodging quality index are important for customer retention among hotels in Ghana.

Details

Advances in Hospitality and Leisure
Type: Book
ISBN: 978-1-78769-303-6

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Article
Publication date: 1 June 2002

Rizal Ahmad and Francis Buttle

Customer retention is increasingly being seen as an important managerial issue, especially in the context of saturated market or lower growth of the number of new customers

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18746

Abstract

Customer retention is increasingly being seen as an important managerial issue, especially in the context of saturated market or lower growth of the number of new customers. It has also been acknowledged as a key objective of relationship marketing, primarily because of its potential in delivering superior relationship economics, i.e. it costs less to retain than to acquire new customers. This paper reports an investigation, through case studies, that is concerned with testing whether or not a theoretical position relating to strategies for retaining customers reflects practices in four firms. The assumption is that generalised theories, which imply universal applicability, tend to overlook the distinctive impact of contextualised business conditions on effective customer retention strategies. The paper recommends that both theoreticians and managers should consider “business context” in developing and implementing customer retention strategies.

Details

Marketing Intelligence & Planning, vol. 20 no. 3
Type: Research Article
ISSN: 0263-4503

Keywords

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