CONTRIBUTING FACTORS ON CUSTOMER RETENTION FOR SUSTAINABILITY OF MALAYSIAN COMMERCIAL BANKS
DOI:
https://doi.org/10.24191/VoA.v17i2.11920Keywords:
Customer Retention, banks, relationship marketing, priceAbstract
Bank management has a great responsibility to generate enough revenue to keep the bank running. Due to stiff competition among the banks in Malaysia, it is significantly importance of retaining its customers in order to be sustainable and competitive. Customer retention can reward banks with their continuous support with repeat purchases which directly contribute to a stream of revenues. Additionally, customers can contribute positive word-of-mouth and referral that serve as a “walking advertisement” by providing recommendations that are more workable than the bank spending on advertisement fees. As shown in the banks' yearly financial record for the past decade, their profit was inconsistent. The challenges facing the banking industry seem unimaginable due to the stiff competition among the banks to attract customers. The banking industry is expected to face dramatic in customer retention. With the execution of relationship marketing and pricing, the chances for the bank's success and growth will be secured. Marketing is based on a relationship in understanding customers’ needs by initiating close bonding between bank employees and customers. Therefore, this paper intends to discuss factors that may contribute to customer retention in the banking industry by applying relationship marketing and pricing factors that lead to customers' repeat purchases.
References
Abtin, A., & Pouramiri, M. (2016). The impact of relationship marketing on customer loyalty enhancement (Case study: Kerman Iran insurance company). Marketing and Branding
Research, 3, 41-49.
Aldaihani, F. M. F., & Ali, N. A. B. (2018). The mediating role of customer empowerment in the effect of relationship marketing on customer retention: an empirical demonstration from Islamic banks in Kuwait. European journal of economics, finance and administrative sciences, 99, 42-52.
Allred, A. T., & Lon Addams, H. (1999). Cost containment and customer retention practices at the top 100 commercial banks, savings institutions and credit unions. Managing Service Quality: An International Journal, 9(5), 352-359.
Anders G., Michael D. J, and Inger R., (2005). The Effects of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention. Journal of Marketing, Vol. 69, pp 210–218.
Ang, L., & Buttle, F. (2006). Customer retention management processes: A quantitative study. European journal of marketing, 40(1/2), 83-99.
Asnawi, N., Sukoco, B. M., & Fanani, M. A. (2019). The role of service quality within Indonesian customers satisfaction and loyalty and its impact on Islamic banks. Journal of Islamic Marketing.
B W Yap, T. Ramayah and W Nushazelin, (2012). Satisfaction and trust on Customer Loyalty: a PLS Approach. Business Strategy Series, VOL. 13 NO. 4, pp. 154-167.
Bataineh, A. Q., Al-Abdallah, G. M., Salhab, H. A., & Shoter, A. M. (2015). The effect of relationship marketing on customer retention in the Jordanian’s pharmaceutical sector. International Journal of Business and management, 10(3), 117-131.
Bolton, Ruth N. (1998). A Dynamic Model of the Duration of the Customer’s Relationship with a Continuous Service Provider: The Role of Satisfaction. Marketing Science, 17 (1), 45–65.
Chiung-Ju Liang, Hui-Ju Chen and Wen-Hung Wang, (2008). Does online relationship marketing enhance customer retention and cross-buying? The Service Industries Journal, Vol. 28, No. 6, pp 769–787.
Coussement, K. (2014). Improving customer retention management through cost-sensitive learning. European Journal of Marketing, Vol. 48 Iss 3/4 pp. 477 – 495.
Dawes, J. (2009). The effect of service price increases on customer retention: The moderating role of customer tenure and relationship breadth. Journal of Service Research, 11(3), 232-245.
Grönroos, C. (1991). The marketing strategy continuum: towards a marketing concept for the 1990s. Management decision, 29(1).
Gronroos, C. (1994). From marketing mix to relationship marketing: towards a paradigm shift in marketing. Management decision, 32(2), 4-20.
Grönroos, C. (2004). The relationship marketing process: communication, interaction, dialogue, value. Journal of business & industrial marketing, 19(2), 99-113.
Guo, L., Xiao, J. J., & Tang, C. (2009). Understanding the psychological process underlying customer satisfaction and retention in a relational service. Journal of business research, 62(11), 1152-1159.
Hettiarachchy, B. S., & Samarasinghe, D. S. R. (2016, December). Influence of Relationship Marketing on Customer Retention in Sri Lankan Banking Industry. In University of Sri Jayewardenepura, Sri Lanka, 13th International Conference on Business Management (ICBM).
Hundre, S., Kumar, P. R., & Kumar, G. D. (2013). Customer Retention--Key to Success for Organization: A Case Study of Banking Industry. Research Journal of Agricultural Science,4.
Indounas, K. (2014). The antecedents of strategic pricing and its effect on company performance in the case of industrial service firms. Journal of Services Marketing, 28(5), 402-413.
Jamil B et al., (2013). The empirical link between relationship marketing tools and consumer retention in retail marketing. Journal of Consumer Behaviour, pp. 171–181.
Jillian D. Farquhar (2003). Customer retention in retail financial services: an employee Perspective. The International Journal of Bank Marketing, Vol. 22 No. 2.
Jumaev, M., & Hanaysha, J. R. (2012). Impact of relationship marketing on customer loyalty in the banking sector. Far East Journal of Psychology and Business, 6(4), 36-55.
Kaura, V., Prasad, C. S. D., & Sharma, S. (2015). Service quality, service convenience, price and fairness, customer loyalty, and the mediating role of customer satisfaction. International journal of bank marketing.
Liu, T. C., & Wu, L. W. (2007). Customer retention and cross-buying in the banking industry: An integration of service attributes, satisfaction and trust. Journal of Financial Services Marketing, 12(2), 132-145.
Lymperopoulos, C., Chaniotakis, I. E., & Soureli, M. (2013). The role of price satisfaction in managing customer relationships: the case of financial services. Marketing Intelligence & Planning.
Magasi, C. (2015). Customer relationship marketing and its influence on customer retention: a case of commercial banking industry in Tanzania. East Conference on Global Business.
Mecha, E. K., Martin, O., & Ondieki, S. M. (2015). Effectiveness of Customer Retention Strategies: A Case of Commercial Banks, Kenya. International Journal of Business and Management, 10(10), 270.
Morgan, R.M, & Hunt, S.D., (1994). The commitment – trust theory of Relationship Marketing. Journal of Marketing, 53(3), 20.
Muhammed S. Alnsour1, (2013). How to Retain a Bank Customer: A Qualitative Study of Jordanian Banks Relational Strategies. International Journal of Marketing Studies; Vol. 5, No. 4.
Ndubisi, N. O., Malhotra, N. K., & Wah, C. K. (2008). Relationship marketing, customer satisfaction and loyalty: a theoretical and empirical analysis from an Asian perspective. Journal of International Consumer Marketing, 21(1), 5-16.
Nelson Oly Ndubisi, (2007). Relationship quality antecedents: the Malaysian retail banking perspective. International Journal of Quality & Reliability Management, Vol. 24 Iss 8 pp. 829 – 845.
Nitzan, I., & Libai, B. (2011). Social effects on customer retention. Journal of Marketing, 75(6), 24 38.
Nurul Afiqah M. Z, Nor Erne N.B and Noorfa Haszlinna M, (2013). Exploratory Study on the Effect of Discount Pricing Strategies for New Product Introduction. AIP Conf. 1522, pp 720 – 726.
Oly Ndubisi, N. (2004). Understanding the salience of cultural dimensions on relationship marketing, it’s underpinnings and aftermaths. Cross Cultural Management: An International Journal, 11(3), 70-89.
Rakesh. R (2012). Marketing of Bank Products and Services: Emerging Trends. Golden Research Thoughts, Vol.1, Issue. IX, pp.1-4.
Ranaweera, C., & Neely, A. (2003). Some moderating effects on the service quality-customer retention link. International journal of operations & Production management, 23(2), 230 248.
Reichheld, F.F. and Sasser, W.E. (1990). Zero defections: quality comes to services. Harvard Business Review, September and October, 105 - 111.
Rust, R. T., & Chung, T. S. (2006). Marketing models of service and relationships. Marketing science, 25(6), 560-580.
Said, R. M., Nor, F. M., Low, S. W., & Rahman, A. A. (2008). The efficiency effects of mergers and acquisitions in Malaysian banking institutions. Asian Journal of Business and Accounting, 1(1), 47-66.
Varki, S., & Colgate, M. (2001). The role of price perceptions in an integrated model of behavioural intentions. Journal of Service Research, 3(3), 232-240.
Verhoef, Peter C. (2003). Understanding the Effect of Customer Relationship ManagementEfforts on Customer Retention and Customer Share Development. Journal of Marketing, 67 (July), 30–45.
Wang, K. Y., Hsu, L. C., & Chih, W. H. (2014). Retaining customers after service failure recoveries: a contingency model. Managing Service Quality, 24(4), 318-338.
Zeithaml, V.A. Berry, L.L. Parasuraman, A. (1996). The Behavioural Consequences of Service Quality. Journal of Marketing, 2: pp 31-46.
Downloads
Published
Issue
Section
License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
