ABSTRACT
In present days banks realize the importance of customer loyalty and its potential to help them acquire new customers and retain existing ones and maximize their lifetime value. This study employed the binary probit model to investigate the determinants of customer loyalty to the banking sector of Bangladesh by interviewing 1000 randomly selected bank customers. It reveals that the levels of loyalty were high among customers of private commercial and development banks relative to customers of government banks. Although customer loyalty was observed as a key determinant of a customer’s satisfaction with a bank, these were indeed related to the levels of services provided to the customer. Good ATM services promote customer’s convenience and flexibility thereby ensuring loyalty. For reducing the difficulties in choosing a proper banking scheme proper guidance from bank staff is another determinant of customer loyalty. Adequacy of other banking facilities like mobile banking and availability of help counter in bank causes a customer to be loyal to a bank. Also, in order to increase loyal customers, banks should consider establishing branches at convenient locations to bring banking to the doorstep of their customers. Overcrowding in the banks and increasing the time taken to transact for this reason customers have to wait too long loyalty may decrease. Thus sufficient seating arrangement in banks has influence in increasing customer’s loyalty. In order to increase the customer’s loyalty bank must take all complains and problems seriously and solve them using advanced technology.
Keywords: Customer Relationship Management (CRM), Loyalty, Binary, Probit regression, and Goodness of fit.
Citation: Uddin MA. (2020). Determinants of customer loyalty towards bank: a probit regression based approach, Can. J. Bus. Inf. Stud., 2(6), 141-147. https://doi.org/10.34104/cjbis.020.01410147
