Customer satisfaction, loyalty and financial performance

Abstract

PurposeThe present paper is an attempt to provide a holistic approach of the Greek banking sector and how it operates.Design/methodology/approachA survey was carried out in the banking sector of Greece in order to gather information regarding customer satisfaction and loyalty, while the financial data of the banks were attained from their annual financial statements. Structural equation modelling was used to test the hypotheses.FindingsIt has been found that neither customer satisfaction nor loyalty has a significant impact on the financial performance of banks, while the remaining factors have indicated unprecedented results.Research limitations/implicationsThe main limitation of the study is the economic environment of Greece and the general crisis of the banking sector.Practical implicationsThe study provides an insight into the Greek banking sector and the interrelationships among the investigated factors, and how customer satisfaction and loyalty could be enhanced through the remaining factors.Originality/valueA new factor, the economics factor, was created and included in the study. Moreover, the tangibles factor was tested as an individual and not as part of service quality. Additionally, the present study is among the few that have incorporated customer satisfaction, loyalty and the financial performance of banks. To take it one step further, some more factors were included to present a more holistic approach of how customer satisfaction and loyalty are enhanced.

Digital banking, customer experience and financial performance

“…Many studies have examined contact activities or DB uptake, while this research investigates DB experience attributes. Keisidou et al (2013) find no relationship between customer satisfaction and loyalty, and financial performance in Greek banks, while Chi and Gursoy (2009) find a relationship between employee and customer satisfaction and financial performance in the USA hospitality sector. Liang et al (2009) find that product characteristics impact customer satisfaction, trust/commitment and customer loyalty, and increase financial performance in Taiwanese banks.…”

“…Research has linked service quality, customer satisfaction and loyalty, and employee competencies (Klaus and Maklan, 2013;Verhoef et al, 2009) and profitability (Keisidou et al, 2013). However, studies into various DB channels (e.g.…”

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“…The global financial crisis and the Greek government-debt crisis (Repousis, 2015) have shaken the banking sector stability, which resulted in the introduction of new strategies and measures to accelerate a return of confidence in the local economy and banking sector. In such circumstances, customers' retention was recognized as a crucial point towards stability more than ever before (Keisidou et al, 2013). Today, the banking sector of Greece consists of 45 credit institutions that operate in the country.…”