Exploring the Relationship Between Customer Satisfaction and Customer Loyalty in Banking Institutions in Ghana: A Study of Zenith Bank Ghana Limited

Abstract

Over the two decades or more, literatures on marketing have been pointing towards a shift from customer-firm relationship or what is referred to as a transactional model to a relational approach. This change has increasingly been generating keen interest in the study of the factors and mechanisms that determine the establishment, development and maintenance of successful relational exchanges in many service provider institutions in the world of which Ghana is no exception. Consequently, practices that have been common to date, which focused on attracting new customers and gaining a large market share, have given way to policies aimed at consolidating the firm’s customer base and retaining existing customers. Using both primary and secondary sources, including survey questionnaire, face-to-face interviews and peer reviewed articles obtainable from JOSTOR and universities libraries respectively, this study explored the relationship between quality customer satisfaction and customer loyalty using Zenith Bank as a case study. Findings show that the retention strategy have not been properly and carefully implemented because, on the one hand, retaining a customer is costly, and on the other hand, not all customers generate the same value for the firm. In this respect, various literatures have shown that the longer customers stay in a relationship with the company, the more value they generate, so the period a relationship is maintained is one of the fundamental factors determining the value that the customer provides the firm. Customer switching behavior is consequently a serious threat to the achievement of long-term relationships. Hence firms need to study carefully the processes determining customers’ switching decisions if they are to manage their customer base successfully. Customer loyalty as the tendency of a customer to choose one business or product over another for a particular need. In the packaged goods industry, customers may be described as being “brand loyal” because they tend to choose a certain brand over others. Loyalty becomes evident when choices are made, and actions taken by customers over certain brand.