Customer Relationships in Banking: Does relationship strength influence relationship quality and outcomes?

Abstract

This study investigates how customer-bank relationship strength dimensions, reflected by relationship length, depth and width, influence the associations between customer-perceived relationship quality and relational outcomes in retail bank service industry. To date, it’s still unclear whether relationship strength could contribute to, or detract from, customer relationship quality and outcome. A total of 2,029 bank customers in Kuwait are surveyed and data collected is analyzed using PLS-SEM modeling to validate the proposed conceptual framework followed by Multi-Group Analysis to test study hypotheses. Obtained findings show that the linkages between relationship quality components (satisfaction, trust and commitment) and relational outcomes (loyalty and Word-of-Mouth) are affected by the level of relationship length and depth, while relationship width only influenced the association between satisfaction and relational quality. The inclusion of relationship strength that represents past customer behavior provides a more accurate and comprehensive view of the dynamics of the interrelationship between key antecedents and consequences of relationship marketing in the retail banking industry.