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On a worldwide basis, there is elevated interest in installing programmes to ensure retail and commercial banking customer satisfaction (Wong and Perry, 1991). Marketers of financial services everywhere have come to accept that an aggressive customer satisfaction programme is one of the most efficient methods of retaining a higher proportion of customers and thus reducing the overallinvestment that would otherwise be required to recruit new customers; satisfied customers are known to display higher levels of source loyalty and to be less vulnerable to the marketing efforts of competitors.
Satisfied customers are known to engage in positive word-of-mouth (WOM); that is they will tell others who were external to the transaction of their pleasure with the service and the service provider. Positive WOM has traditionally been seen as a side-benefit of satisfaction and been viewed as either a boost to overall marketplace image or as a low budget promotional alternative.
However, positive WOM plays a crvcial role in marketplace dvnamics. As this research will show, positive WOM surrounding a financial services provider is a crucial factor observed as a significant determinant of bank selection taken into account among commercial accounts in selecting a financial services provider.
WORD-OF-MOUTH
Although positive word-of-mouth has been repeatedly shown to have a major effect on purchase decisions (Arndt, 1967; Herr et at., 1991; Richins, 1983), it has not received so much attention as negative word-of-mouth or complaining behaviour in the literature on satisfaction and post-purchase behaviour.
Positive post-purchase communications to the providers of the service (praise) have been associated with satisfaction in several consumer markets: automotive (Swan and Oliver, 1989), lodging (Cadotte and Turgeon, 1988; Robinson and Berl, 1980) and non-profits (Cermak et at., 1991). Positive WOM to parties external to the transaction has received even less attention, although it has been associated with both satisfaction and praise for the management (Swan and Oliver, 1989).
WOM AND BANK SELECTION
While there have been previous studies of how commercial customers go about the process of selecting financial services providers, the role of positive WOM has not been universally established. For example, commercial customers in South Africa rated such factors as overall quality, staff quality, local manager and price highly but did not identify a separate word-of-mouth factor (Turnbull and Gibbs, 1989). Similarly,...