30 - International Journal of Business and Social Science Vol 2 No 16 September 2011 Impact of Customer Satisfaction on Customer Loyalty and Intentions

30 - International Journal of Business and Social Science...

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International Journal of Business and Social Science Vol. 2 No. 16; September 2011263Impact of Customer Satisfaction on Customer Loyalty and Intentions to Switch: Evidence from Banking Sector of Pakistan Faizan Mohsan Hailey College of Commerce, University of the Punjab, Pakistan E-mail: [email protected] Muhammad Musarrat Nawaz Hailey College of Commerce, University of the Punjab, Pakistan E-mail: [email protected] M. Sarfraz Khan Hailey College of Commerce, University of the Punjab, Pakistan E-mail: [email protected] Zeeshan Shaukat Hailey College of Commerce, University of the Punjab, PakistanE-mail: [email protected] Numan Aslam Hailey College of Commerce, University of the Punjab, Pakistan E-mail: [email protected] Abstract Top performing financial institutions always look into the needs and demands of their customers in order to survive and compete successfully in today’s dynamic corporate environment. That is the reason why organizational researchers from all around the globe have continuously emphasized on the importance of customer satisfaction, loyalty and retention. The current research study attempts to find the impact of customer satisfaction on customer loyalty and intentions to switch. The data were collected from 120 customers visiting the banks counters and had an account with banks serving in Pakistan. The collected data then analyzed using the Microsoft Excel and SPSS 16. The results of the study revealed that customer satisfaction was positively correlated with customer loyalty and negatively correlated with customer intentions to switch. Some recommendations for future research are also made. Key Words:Customer Satisfaction, Customer Loyalty, Intentions to Switch, Banking Sector, Pakistan. Introduction The importance of customers has been highlighted by lots of researchers and academicians all around the world. Top performing financial institutions believe that customers are the purpose of what they do and they very much depend on them; customers are not the source of a problem and they should never make a wish that customers „should go away‟ because their future and security will put in jeopardy. That is the main reason why financial institutions of today are focusing much attention on customer satisfaction, loyalty and retention (Zairi, 2000). Satisfaction is an overall customer attitude or behavior towards a service provider, or an emotional reaction towards the difference between what customers expect and what they receive, regarding the fulfillment of some desire, need or goal (Hansemark, & Albinsson, 2004;Kotler, 2000; Hoyer, & MacInnis, 2001). Customer loyalty, on the other hand, is the result of an organization‟screating a benefit for customers so that they will maintain and increasingly repeat business with the organization (Anderson, & Jacobsen, 2000). It is in fact a deeply held commitment of customers to prefer products or services of a particular organization in future despite situational
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