The Impact of Service Quality and Service Characteristics on Customer Retention: Small Businesses and their Banks in the UK¹

Abstract

The recent developments in relationship marketing have increasingly focused attention on the beneficial effects of customer retention. The notion of building relationships and delivering quality service in order to encourage loyalty is perhaps of particular importance in the service sector where it is often argued that customer attraction costs are significantly higher than retention costs. Central to the idea of investment in the development of service quality and customer relationships is the belief that such investments will enhance loyalty, retention and profitability. Empirical evidence on the extent to which such links exist is still partial. This paper explores the relationship between service qualitylcustomer relationships and customer loyalty and retention using evidence from the UK banking sector and its small business customers.

Service quality and customer retention in mobile telephony

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The Impact of Service Quality on Customer Loyalty: A Study of Banks in Penang, Malaysia

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“…A customer may demonstrate his/her retention propensity in many ways: by expressing preference for a company over others, by continuing to buy from it or by increasing its business in the future (Zeithaml et al, 1996). Meanwhile, Enne and Binks (1996) [31] differentiated between two dimensions of retention: the continuance of a particular relationship (e.g. contract renewal) and the retention of the customer, which gives firms the opportunity to sell a variety of products and services.…”