Analysis of the Relationship between Customers’ Bank Selection Factors, Satisfaction and Loyalty: In the Case of Selected Banks in Ethiopia
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Date
2016-06
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Addis Ababa University
Abstract
This paper deals with the analysis of customers’ bank selection factors, customer satisfaction
and loyalty. The purpose of the study was to find out the impact of customers’ bank selection
factor on customers’ satisfaction and loyalty. Accordingly, five factors were proposed the
factors identified were: Product Variety, Service Quality, Reputation, Physical Appearance and
Accessibility. The research models were composed of five independent v ariables and two
dependent variable. Namely; Product Variety, Service Quality, Reputation, Physical
Appearance, Accessibility and Customer Satisfaction & Loyalty respectively.
To this end, a structured 5-point Likert scale questionnaire-based survey is employed to collect
data. For the customers of eight commercial banks found in Addis Ababa 400 questionnaires
were distributed and 326 (81.5 %) were returned back for analysis. The relationship and impact
of the factors was analyzed using Pearson correlation and multiples regression. Descriptive
statistics and sample t-test also conducted in the research through the aid of Statistical Package
for Social Science version 20.0 software.
The results show that, Service Quality, Reputation, Physical Appearance and Accessibility
positively influence Customers’ Satisfaction at significant level. The other dependent variable
Customer Loyalty is significantly influenced by the factors Product Variety, Service Quality,
Reputation and Accessibility. The leading factor that most contribute for both customers’
satisfaction and loyalty of bank customers is Reputation. And also according to the research
findings, Product Variety could not influence customers’ satisfaction significantly. For Customer
Loyalty the factor Physical Appearance could not influence significantly. The researcher
conclude that except product variety for customers’ satisfaction and physical appearance for
customers’ loyalty all variables described above positively influence customers’ satisfaction and
loyalty at a significant level.
Consequently, the researcher recommend for the management of the banks to focus on the above
statistically significant factors in order to satisfy their customers’ as well to make them loyal
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Keywords
Customers’ Bank Selection Factors, Customer Satisfaction, Customer Loyalty