Impact of Service Quality and Demographic Characteristics on Iranian Bank Customers Retention

Arezou Pour Mirza, Åsa Wallström, Mohammad Taghi Hamidi Beheshti

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Customer retention is an important factor of banking industry. If retention criteria are well managed, the customer's retention rate might be increased. A sample of 281 customers took part in this study. Data were collected using survey questionnaire and some related bank documents. The current paper reports finding from a survey which looked into the impact of service quality and customer demographic characteristics on its satisfaction which are two retention relevant elements that influence customers’ decisions to stay with or leave their bank. One of the main findings is that service quality was rated by customers as having a strong impact on retention. Our findings also indicate that there is a strong relationship between customers’ length of stay and satisfaction. Demographic characteristics such as gender, educational level, age and income were also evaluated for their contribution to intentions of staying with or switching for alternative banks. Findings indicate that customers’ age groups and educational level contributed to explaining customers' propensity to stay with their bank. It is essential for bank managers to focus on bank services quality in order to increase retention rates, so that banking sector can exploit the potential advantages of retention to remain competitive.
Original languageEnglish
Title of host publicationInternational Conference on Banking Services Marketing
Place of PublicationTehran, Iran
Publication statusPublished - Dec 2009

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