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International Journal of Business and Social Science Vol. 3 No. 16 [Special Issue –August 2012]200 The Impact of Service Quality, Customer Satisfaction and Loyalty Programs on Customer’s Loyalty: Evidence from Banking Sector of Pakistan.Samraz Hafeez SZABIST Islamabad, Pakistan. Bakhtiar Muhammad Faculty Member SZABIST Islamabad, Pakistan Abstract Top organizations know that the road to success runs through their customers. Hence in today’s world, the companies who do not provide value to their customers bring an opportunity for the competitors to steal these customers. Same rule applies in banking sector hence this research focuses on finding the impact of service quality, customer satisfaction and loyalty programs on customer’s loyalty in banking sector of Pakistan. A questionnaire was designed and survey was conducted to collect the data from 331 customers having bank accounts in different banks of Pakistan. The research concluded that service quality, customer satisfaction and loyalty programs are the important factors that can increase the loyalty of a customer so banks must focus on providing loyalty programs to their loyal and valued customers. Research also indicates that banks should focus on improving the quality of their services for better and greater customer satisfaction and customer loyalty. Key Words:Service Quality, Customer Satisfaction, Loyalty Programs, Customer’s Loyalty, Banking Sector, Pakistan. 1.Introduction In today’s world, economy is one of the core subjects for the development of any country hence banking sector plays a key role as circulation of money is done through the banking system. Actually banking is an evolutionary concept which is in continuous expansion concerning its different activities and functions. Development in Pakistan is also dependent upon its banking sector. The State bank of Pakistan is the main bank of Pakistan. Some of functions performed by it include giving advances, accepting deposits, payments and withdrawals. Statistics of scheduled banks are compiled and disseminate through state bank. Hierarchy of banks working in Pakistan involves State Bank as parent node, others are mainly categorized as domestic private banks, public sector banks and foreign banks. Public sector is splitted further as commercial banks and specialized banks. State bank of Pakistan is also supporting special banking known as Islamic banking which is specially designed according to Islamic laws and sharia principles. According to current data of State Bank of Pakistan almost 44 banks are working in Pakistan, they are classified as Pakistani Banks which are 32 in number while foreign banks are 12 in number. Pakistani banks are divided as public sector banks and domestic private banks. Public sector are total 9 in number these 9 banks are splitted as commercial banks which are 5 in number while specialized banks are 4 in number. And the domestic private banks working in Pakistan are 23. (Tariq et al., 2011)
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loyalty programs, Customer Satisfaction and Customer Loyalty