Factors influencing consumer loyalty: evidence from the Ghanaian retail banking industry

Abstract

Purpose The increasing number of banks in the Ghanaian banking industry has brought about intense competition in the industry. The purpose of this paper is, therefore, to examine the factors that influence retail banking customers’ loyalty intentions. Design/methodology/approach In order to validate the proposed research model, the study adopts a survey design. Data were collected from 565 customers of the top performing banks in terms of customer deposits. Data analysis employed the partial least squares structural equation modeling (PLS–SEM) using SmartPLS version 3. Findings Results from the PLS–SEM analysis indicated that satisfaction, service quality and trust had significant effect on loyalty, with satisfaction having the most significant effect. Interestingly corporate image was found to have a significant effect on both satisfaction and trust but not on loyalty. In all, the proposed model accounted for 63.3 percent of the variation in loyalty. Research limitations/implications The current study samples customers from only the top performing banks in Ghana. The use of cross-sectional data makes it impossible to study how customers’ perceptions change over time. Results from this study could, however, help managers of banks in designing strategies aimed at improving customer loyalty in order to consolidate their market share. Originality/value This paper adds to existing works that focus on loyalty in the retail banking sector, especially from the context of a developing economy. The study draws attention to the interrelationship among service quality, perceived value, satisfaction, image, trust and loyalty.

role of customer satisfaction in mediating the influence of service quality and perceived value on brand loyalty

“…Data were collected through a questionnaire with measurements using a 5-point Likert scale. This research variable construct adapts and modifies indicators from research conducted by Jiang & Zhang (2016), Hapsari et al (2017), Joudeh & Dandis (2018), Omoregie (2019), Nikhasemi et al (2016, and Leong et al (2015). Responses of a sample of 128 have been tested using PLS-SEM modeling approach.…”

“…For customers, to subscribe to a service continuously, they must feel some value in the product or service and with the delivery process and the image of the service provider or customer to feel the value, the benefits of enjoying the product or service, for example, the service provided must be more worth the price offered. In other words, the price must be worth the services offered (Omoregie, 2019;Kasiri et al 2017).…”

The Effect of Trust and Brand Image on Customer Retention with Customer Loyalty as Intervening Variables to Customers of Sharia Commercial Banks

“…Meanwhile, Omoregie et al (2019) believe that the higher customer loyalty, the higher the customer retention. This study contradicts a study conducted by Hofman-Kohlmeyer (2016), which reveals that customer loyalty does not guarantee customer retention.…”

Analysing the importance of sustainability‐oriented service quality in competition environment

“…In the dynamics of a new market structure, as long as firms' strategic decisions about activities fit the values of society and environment, firms can shape long‐term positioning to be an important player in the market (Çotur & Öztürkoğlu, ). With the discernment that innovation in services and processes is not sufficient to maintain profitability in a competitive environment, firms in the service sector are now focusing on sustainability strategies to realize their achievements (Laari, Töyli, & Ojala, ; Omoregie, Addae, Coffie, Ampong, & Ofori, ).…”

“…A concept of service is quite difficult to evaluate with certain lines. Unlike the manufacturing industry, which shows up with standardized information and analysis to examine the quality, the service industry includes perception of quality that is created through the process of interaction between customers and firms (Omoregie et al, ). In this regard, quality of service includes interpretations depending on customers' perceptions that are judgments or attitudes formed subjectively about a service's overall superiority (Zietsman, Mostert, & Svensson, ).…”