Customer loyalty in banks at salem-an empirical study

This article attempts to study customer loyalty among the private and public sector banks in Salem district, South India. An analysis is carried out to identify the factors that determine customers' loyalty among customers of private and public sector banks. This becomes imperative in an era where private sector banks have started dominating the Indian Market. If the public sector banks want to have an competitive edge they should strengthen the existing loyal customers base and this becomes necessary to identify of factors that determine customer loyalty. A structured questionnaire is used to collect the data from 192 customers across the banks in Salem District. The authors have used cronbachAlpha, factor analysis, ANOVA, “t” test for analysis of data. The purpose behind this is to extract the relevant factors that determine customers' loyalty and analyze whether there is any significant association between profile variables and customer loyalty factors of various banks. The use of factor analysis has led to the identification of five customer loyalty factors namely, Bank Image, Quality Assured, Timely Service, Cost effectiveness and Benefit. Furthur, the findings indicate that there is a significant association between the bank image and the profile variable-location of the bank. It is also inferred that there is a significant association between the bank image and the profile variable namely duration of customers association with the bank. The results indicate that among the customers in the public sector banks the highly perceived customer loyalty factors are Timely service, customer benefit and cost effectiveness since their mean score are 4.54, 4.30 and 4.25 respectively. Likewise the highly perceived customer loyalty factors in the private sector banks are Customer Benefits, Timely service and Cost effectiveness since their mean scores are 4.57,4.49and 4.37 respectively.