An assessment on customer loyalty among customers of Banking organizations in Pakistan

Abstract

The concept of customer loyalty has received much consideration and attention from both academics and
practitioners in different industries. In increasingly competitive markets, being able to build consumer loyalty
is seen as the key factor in winning market share and developing a sustainable competitive advantage.
Banking industry is no exception as it has high interaction with the customers, so managers must
understand the factors which influence the loyalty of the customers towards their respective banks. It is
always costly to attract new customers, so the managers always try to find ways to retain their current
customers and concentrate on different factors which enhances the customer loyalty among the customers
of the organizations. This research attempts to find the factors of customer loyalty and their relationships
with the banking industry in one of the developing countries, which is Pakistan. Then analyzing the
relationship among different factors, a model for the customer loyalty is proposed at the end of the research.
In order to do this, a questionnaire is designed and validated, then based on the data which is gained from
the 316 respondents' answers to the designed questionnaire, the analysis is done and the results and the
relations among the factors are explained. Perceived quality, satisfaction, trust, switching cost and
commitment are the factors which influence the loyalty of the customers. Theses factors also influence each
other as well. The relationships of different factors with each other are also studied and the SPSS software is
used to analyze the data gathered from the respondents.