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Customer Retention Strategies of Banks as Service Organizations in Bangladesh

A. Hossain
Assistant Professor
Department of Marketing, Patuakhali Science and Technology University, Dumki, Patuakhali-8602, Bangladesh.

Abstract/ Executive Summary:

The study reveals to understand perception and personal experiences of the account holders of the banks in Bangladesh. To measure the account holders’ perception about customer retention strategies of banks, a descriptive study is conducted but before that an exploratory research is conducted to identify the factors influencing customer retention of a bank. A sample of 205 account holders has been interviewed through a structured questionnaire from the 3 cities of which 105 from Dhaka, 50 from Barisal 50 from Patuakhali. The different statistical tools like Frequency distribution, ANOVA, Coefficients (to reduce the numbers of factors that are not needed to develop) and factor (to group the important factors needed to develop for the customer retention of the banks) analysis are used to draw the conclusion regarding the account holders’ perception. The study reveals that advertisement of the bank, electronic transactions and latest technology were found as the critical factors out of eight factors for leaving a bank.

Keywords: Customer retention strategies, Demographic characteristics, Service organization.

Location:

Start Date: 10-07-2011

End Date: 30-04-2013

Program Area: Socio-economic and Policy

Non-commodity: Credit

Objectives:

1.To identify the factors for which the customers prefer a bank

2. To identify the reasons why current customers quit.

3.To develop the retention strategies for the dissatisfied customers.

Methodology:

This is a two stage research. In the first stage, an exploratory research is conducted to identify the factors determining the consumer perception. A total of 205 respondents are interviewed through a structured questionnaire during July to September 2011 and March to April 2013. One hundred five accountholders are selected from Dhaka, 50 from Barisal and 50 from Patuakhali cities. The structured questionnaire was designed with the help of 5-point Likert scale where 1=strongly dissatisfied, 2=dissatisfied, 3=neither dissatisfied nor satisfied, 4=satisfied and 5=strongly satisfied. Then a descriptive research was conducted for the purpose of understanding consumer perception about the banks operation in Bangladesh. The manuscript is prepared through searching of various journals, published handouts, books and websites.To test the result, Pearson’s product moment correlation analysis and ANOVA are used. Coefficients analysis is used to reduce the number of factors that are not literary to develop for the customer retention of the banking service and finally to identify some important factors and for grouping the factors according to their importance (need to develop for the customer retention of banks), factor analysis is used. The statistical computer package SPSS version 11.5 is used to analyze the data.

Source of Information: J. Patuakhali Sci. and Tech. Univ. 2013, 4(1): 9-18

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The study revealed that most of the respondents made their decision to leave current banks because of the above factors. In short, the most important factor is customer satisfaction. Without customer satisfaction it is not possible to retain the customer in an organization especially in a service organization like bank because the customers are always seeking for the better and alternative option. The state-owned banks are facing the complaint about the usage of latest technology and quick service delivery. They also make their complaints against untrained staffs, promotional activities (advertisement, sales promotion etc.), ATM booth services etc.

Knowledge Management: Journal