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Abstract
In the past decade, the level of competition in the banking industry has become fierce, relational bonds has grown and become a strategic tool to retain customers. It is important to understand how relational bonds can enhance customer loyalty. To achieve this goal, we propose a conceptual model in which relational bonds are considered including three aspects (financial bonds, social bonds and structural bonds) which affecting customer loyalty through trust and customer satisfaction. In addition, we also consider the regulatory role of switching costs. Based on data collected from 418 customers at Vietnamese commercial banks, we have tested the conceptual model using by Structural Equation Modeling (SEM). The results show that relational bonds affect customer loyalty through intermediaries as trust and satisfaction. However, switching costs do not play a regulatory role in the relationship between satisfaction and loyalty. The study provides results that allow bank managers understand how relational bonds contribute to enhance customer loyalty.
Keywords: relational bonds; satisfaction; trust; switching costs; customer loyalty.
1.Introduction
Nowadays, businesses are eager to build customer loyalty, because of the economic advantages associated with retaining existing customers as opposed to recruiting new ones, academics and practitioners today are paying increasing attention to relationship marketing (Ndubisi, 2007). In order to remain competitive, firms indeed need to build and enhance customer relationships that deliver value beyond that provided by the core product. In the financial services industry context, Asian businesses tend to collect information through formal channels and personal relationships (Adamson, Chan and Handford, 2003), thus relational bonds is considered as a particularly appropriate strategic tool in the Asia context in general and Vietnam context in particular. Indeed, Roberts etal., (2003) supposed relationship marketing therefore represents a strategy for achieving a distinct and sustainable competitive advantage to keep customers loyal and achieving customer loyalty is the aim of relationship marketing (Too, Souchon and Thirkell, 2001).
The main objective of relationship marketing is an increase in customers' loyalty and customers' consumption through interactive relationship marketing programs (Wang et al., 2006) such as relational bonds. Besides, the use of relational bonds is considered as the core of relationship marketing to foster customer loyalty (Lin et al., 2003). Researchers have considered relational bonds which includes financial, social and structural - as the...