Bank Customers' Satisfaction, Customers' Loyalty and Additional Purchases of Banking Products and Services. a Case Study from the Czech Republic

By Chochol'áková, Anna; Gabcová, Lenka et al. | Economics & Sociology, July 1, 2015 | Go to article overview

Bank Customers' Satisfaction, Customers' Loyalty and Additional Purchases of Banking Products and Services. a Case Study from the Czech Republic


Chochol'áková, Anna, Gabcová, Lenka, Belás, Jaroslav, Sipko, Juraj, Economics & Sociology


Introduction

A commercial bank achieves its basic goals through offering banking products and services to its clients. Consequently, bank clients have important status: they are buying the bank's products and thereby creating appropriate profits for the bank and support its competitive ability.

Bank customers' satisfaction is currently at the center of attention of researchers and bankers, as it represents an important marketing variable for most companies, especially those working in more competitive markets. Banking experience proves that achieving a reasonable rate of customer satisfaction represents a challenge for the bank and it is a permanent process with varied results.

A satisfied customer is of great importance for the bank. Keeping a current customer faithful requires five times less effort, time and money than getting a new one. Such a customer is willing to pay higher prices, is a free form of advertising for the bank, and is inclined to purchase further products. He or she raises in bank employees a sense of satisfaction and pride in their work and business (Koraus, 2011; Titko and Lace, 2010). In this context, Bilan (2013) states that consumers don't want to play games - if they feel that something has gone wrong, they go away and choose another supplier.

Banking practice confirms that achieving a reasonable level of customer satisfaction is an extremely difficult task for a bank and is a permanent process with varied results. Customers in many countries show a significant level of dissatisfaction and many banks recognize the fact that there is a need to increase the level of customer care.

Krawcheck (2012) states that the current incompatibility between customer dissatisfaction (relatively high) and customers' willingness to purchase other products (relatively low) is unsustainable. Bank management is usually rewarded on the basis of bank income. However, the financial crisis demonstrated the fact that not all profits are made in the same way. Profits resulting from the additional purchases of satisfied customers are in the medium and long term more valuable than the profits resulting from trading, cutting costs or increasing net interest income. According to Krawcheck, bank management should pay more attention to other factors than profit only: above all, to customer satisfaction. Additional purchases by satisfied customers lead to more solid profits. Retaining dissatisfied customers who do not switch banks because of some pragmatic obstacle, such as high switching costs, is really risky. At the same time this means a business opportunity for competing banks.

Brush, Dangol and O'Brien (2012) share the same opinion. They declare that a bank's capability to increase revenues is contingent on the extent to which it can increase the quantity of products sold by attracting new customers and/or selling complementary products to its existing customers. Customers are more likely to purchase complementary products from the same firm when they face capability-based switching costs.

Banking customer care should lead to a higher level of overall client satisfaction and also the satisfaction partial activities of commercial banks. It is generally assumed that a satisfied customer is a loyal customer and that loyalty is proved by a higher level of additional purchases in comparison to customers who are dissatisfied. More satisfied customers tend to be more loyal and to recommend the bank to other consumers.

These aspects of commercial banks are examined in detail below.

1. Theoretical background

The achievement of a high degree of banking customer satisfaction and loyalty represents an important field for banking management.

Customers of retail banks with favorable perceptions of service quality had higher satisfaction. Customer satisfaction mediates the impact of service quality on loyalty (Karapete, 2011). This study investigated customer satisfaction as a mediator of the effects on loyalty of service environment, interaction quality, empathy, and reliability. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Bank Customers' Satisfaction, Customers' Loyalty and Additional Purchases of Banking Products and Services. a Case Study from the Czech Republic
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.