Abstract
During the past decade, the financial service sector has undergone significant changes, resulting into a market place that is characterized by intense competition, little growth in primary demand and increased deregulation (Chaudhuri and Halbrook, 2002). Liberalization in banking industry Jed to entry of new private banks (NPBs) which subsequently Jed to greater competition at the market place and fierce fight for customers. Finding a place in this heating sun becomes vital to secure long-range profitability and sustained survival for banks. Customer Loyalty is widely acknowledged as a competitive weapon across most of the highly competitive industries. In banking industry context, customer loyalty can be understood as continued patronage towards a bank over time. According to Yi and Jeon (2003), the degree of customer loyalty can be gauged by tracking customer accounts, over defined time periods and noting the degree of continuity in patronage. To obtain enhanced profits and accelerated business growth, banks need to be aware about their customers and the state of loyalty prevailing among them. Accurate assessment of loyalty can act as a sound base for making decisions and formulating strategies for business growth. Though, the conceptual domain of loyalty is quite rich and the extant literature provides ample knowledge and understanding of loyalty and its various dimensions, its measurement is still an area of Jess explored and least validated concern. Unlike marketing variables, such as service quality, customer satisfaction, etc. customer loyalty still lacks a comprehensive, objective and standardized scale. The present study seeks to contribute to the existing literature of customer loyalty by developing an understanding of the factors responsible for building loyalty among the customers. The study delineates the relationship between diverse marketing variables and customer loyalty. It is therefore of immense significance to appraise the relative strength of different popular scales used to measure customer loyalty. The study compares two distinct measurement tools through survey of retail banking customer namely the ‘Antecedent Based Approach’ which uses antecedents of Customer Loyalty and the ‘RAPID Loyalty Approach’ which is a method of identifying and assessing customer loyalty based on the constituents of retention, advocacy and purchasing.
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