Customer Satisfaction and Customer Loyalty in the Post-Crisis Banking Sector of Ghana

Frank Boateng ,Michael Adesi ,Edward D Yeboah ,Linda Maysel Oduro ,Margaret Mary Sackey

doi:10.7176/jmcr/76-04

Abstract

The banking industry is immensely important to the socio-economic development of emerging economies by facilitating the exchange of money between depositors and borrowers. The banking industry in Ghana is facing corporate governance challenges, which has led to non-performance and subsequent withdrawal of operating licenses. The withdrawal of the licenses by the Bank of Ghana has impact on customer loyalty and satisfaction, which has not been significantly investigated in a post crisis banking sector of Ghana. This has resulted in many companies undertaking numerous product design and innovation to satisfy customers. This study therefore is aimed at investigating the relationship between customer satisfaction and customer loyalty in the post crisis banking sector of Ghana. The study adopts the positivist traditional stance with a quantitative approach. Participants were drawn from among the customers of universal banks in Ghana. The purposive sampling technique was used to administer 250 questionnaires to customers of universal banks in Ghana in which 170 usable questionnaires were retrieved for analysis with a response rate of 68 per cent. The investigation revealed that customer satisfaction variables have significantly influenced the loyalty of customers of banks involved in this study. The results indicated that tangibles, reliability, responsiveness, assurance and empathy, and dimensions of service quality have positive influence on customer satisfaction.The investigation largely focused on quantitative analysis of results, hence; a further study adopting the qualitative approach would contribute to the body of knowledge on customer loyalty and satisfaction in the banking sector. This study provides a strong evidence for banks that have been negatively impacted by the banking crisis in Ghana and want to recover from the associated impacts on their customers to enhance their customer satisfaction by improving the tangibility and reliability of services to clients. It is recommended that Banks in Ghana focus on achieving high customer satisfaction by focusing on high quality services delivery based on the service quality dimensions. Keywords: Banking, Industry, Customer, Satisfaction, Loyalty DOI: 10.7176/JMCR/76-04 Publication date: February 28 th 2021

Highlights

Customer satisfaction contributes significantly to the retention of existing customers and improves their loyalty for repeat business (Kotler and Keller, 2006)
This study proposes to ascertain the relationship between customer satisfaction and customer loyalty in a post crisis banking sector of Ghana
The aim of this study is to investigate the relationship between customer satisfaction and customer loyalty within the banking industry of Ghana, which has been confronted with noncompliance and closure of banks

Summary

Introduction

Customer satisfaction contributes significantly to the retention of existing customers and improves their loyalty for repeat business (Kotler and Keller, 2006). Many organisations depend on the satisfaction of their customer to assess the performance of their service delivery through feedback (Nimako, 2012). Customers tend to evaluate their satisfaction by discrepancies service delivery to their prior expectations and the functional performance of the product/service (Chang et al, 2020). The gap in a customer’s emotional response and assessment of perceived service quality and original expectations are critical to ascertaining customer satisfaction (Anwar et al, 2019). Product performance affects customers’ satisfaction, which tends to affect customer loyalty (Kotler and Armstrong, 2012)

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