Factors Influencing Customers Loyalty: Empirical Evidence From The Banking Industry In Ethiopia
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Date
2018-05-02
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Addis Ababa University
Abstract
During the past decade, the financial service industry has undergone drastic change and intense competition in Ethiopia. In increasingly competitive markets, being able to build customer loyalty is seen as the key factor in winning market share and developing a sustainable competitive advantage. It should be imperative to apply the modern innovative marketing strategy to the banking industry in Ethiopia that focuses on keeping and improving current customers rather than acquiring new customers. The objective of this study is to identify factors that influence customer loyalty in banking industry of Ethiopia. In order to achieve the aim of this study the researcher applied both descriptive and explanatory research design. The researcher selected five banks using simple random sampling techniques, and sample sizes of 384 questionnaires were distributed to respondent. The data gathered from respondent analysis is done using the SPSS software program. The main finding of study shows that commitment, customer satisfaction and trust have positive and a significant influence in determining customer loyalty. In addition, the result show that the first most essential factor that influence customer loyalty is commitment, the second essential factor that influence customer loyalty is customer satisfaction and the third important factor that influence customer loyalty is trust. Also the result of this study show that perceived quality and switching cost has no influence on customer loyalty. Therefore, managements in banking industry should focus on commitment, customer satisfaction and trust
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Customer loyalty, Perceived quality, Customer Satisfaction