Personnel capability and customer satisfaction as predictors of customer retention in the banking sector

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.

Influencing Factors on Customer Satisfaction and Retention in Online Transportation in Indonesia

“…Satisfied customers are believed to make more repeat purchases and to share their positive experiences with others [37], which in the end is turning become as customer retention. The more satisfied the customers are, the higher their retention is [8]. This statement in-line with previous research that showed that customer satisfaction has a positive effect on customer retention [8], [38].…”

“…The more satisfied the customers are, the higher their retention is [8]. This statement in-line with previous research that showed that customer satisfaction has a positive effect on customer retention [8], [38]. Thus, the hypothesis developed as follows: H6: Satisfaction has a positive effect on customer retention.…”

“…Service satisfaction is a result of perceived quality or value [9] nd has been considered as a fundamental determinant of long-term customer behavior [8]. Customer satisfaction defined as a feeling or judgment of customers toward products or services after they have used them [10].…”

“…Customer retention is one of the most crucial factors for a company due to the cost of acquiring new customers in volatile market environments is very high, and customers have become more profitable as they continue the business relationship with companies [8]. Customer retention as a customer's continuation of a business relationship with a firm [36].…”

“…There are a lot of research on consumer retention in previous studies in medical tourism [5], retail industries [6], [7], banking sector [8]. However, still limited study, particularly in investigate, Grab online transportation mode on customer satisfaction in Indonesia with data analyzing using the Smart PLS program.…”