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Understanding the impact of Service Recovery and Switching Costs on the Customer Loyalty in Indian retail banks

Dhakate, Shubham (2019) Understanding the impact of Service Recovery and Switching Costs on the Customer Loyalty in Indian retail banks. Masters thesis, Dublin, National College of Ireland.

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Abstract

Customer retention has become a critical issue for Indian bank managers in recent years due to liberalized economy, amplified competition and decreasing switching costs. Correspondingly, complaints against banks have noticeably increased. Therefore, the main purpose of this academic research is to explore and investigate the factors influencing Customer Loyalty in Indian Retail banks after Service Failure and Recovery efforts.

Based on Adams’s Justice theory and typologies of Switching Costs, a conceptual model was developed encompassing constructs of Perceived Justice, Switching Costs and Customer Loyalty. For data collection, an online questionnaire envisaging five - point Likert scale was deployed by the researcher to inquire Indian customers about their Service Recovery experience. Thereafter, responses were analyzed using Structural Equation Modelling (SEM) technique in SPSS AMOS software.

Subsequently, the results indicated that there was logical and empirical support for the argument that, all three factors (viz. Dimensions of Perceived Justice, Service Recovery Satisfaction and Switching Costs) affects Customer Loyalty. Judging from the findings, Distributive Justice (DJ) was found to be having strongest relationship with Service Recovery Satisfaction compared to the other two dimensions. On the other hand, considering the types of Switching Costs, Relational Switching Costs (RSC) was found to be most effective in preventing customer defection to other banks.

However, perhaps the most noteworthy contribution of this research was the revelation that, Switching Costs helps more in retaining customers than Service Recovery Satisfaction. Thus, bank managers can prevent customer defection not only offering by fast and fair compensation, but also by increasing Relational Switching Costs.

Inarguably, this is amongst the few investigations, which simultaneously examined the impact of all three types of Switching Costs on Customer Loyalty in Indian banks. Similarly, the study exhibits novelty as it proposed and tested new conceptual model.

Item Type: Thesis (Masters)
Subjects: H Social Sciences > HG Finance > Banking
H Social Sciences > HF Commerce > Marketing > Consumer Behaviour
H Social Sciences > HF Commerce > Customer Service
H Social Sciences > HD Industries. Land use. Labor > Specific Industries > Retail Industry
Divisions: School of Business > Master of Science in International Business
Depositing User: CAOIMHE NI MHAICIN
Date Deposited: 22 Oct 2019 11:22
Last Modified: 22 Oct 2019 11:22
URI: http://trap.ncirl.ie/id/eprint/3993

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