Abstract
In today's high competitive and globalize banking context, increasing Customer loyalty emerges as the most important challenges faced by marketers. Cultivating loyal customers is frequently argued to be the single most important driver of organizations’ long-term financial performance, which can lead to increased sales and customer share, lower costs, and higher prices. Therefore marketing scholars emphasize the influence of relationship marketing as a strategically important tool from which customer loyalty can be secured and, as a result, the attainment of higher competitiveness and enhanced customer satisfaction can be achieved. The purpose of this study is to empirically investigate the impact of relationship marketing orientation on customer loyalty. The study also aims to test the impact of demographic variables, in association with relationship marketing dimensions, on customer loyalty. The study was carried out in 2008 on a convenience sample of 450 respondents through the distribution of structured questionnaires to bank customers within the area of Amman, Jordan. The data were factor analyzed to determine the key dimensions of relationship marketing orientation measurement scale. Results confirm that the five dimensions scale (Bonding, trust, communication, satisfaction and commitment) possess adequate reliability and internal consistency as well as convergent validity. Results of regression analysis show that relationship marketing orientation is significant in explaining the variation in customer loyalty. In addition, sex and income displayed a significant impact on the relationship marketing-customer loyalty relationship. The findings contribute to understanding the relationships between different dimensions of relationship marketing orientation, customer loyalty and demographic variables; provide critical implications for bank managers; and highlight directions for future research.
Highlights
The marketplace today is very dynamic, vibrant and competitive
An exploratory factor analysis with varimax rotation was performed to determine the underlying dimensions of Relationship marketing orientation construct and testing of the measurement model for relationship marketing orientation construct in order to determine if the extracted dimensions in step 1 offered a good fit to the data
This study provides initial empirical evidence of the relationship marketing orientation on customer loyalty
Summary
The marketplace today is very dynamic, vibrant and competitive. The customers are smarter, more informed, and have an access to many channels and choices which they take little time to exercise. Customer can defect to competitors who promise better offerings at lower prices (Bhardwaj, 2007). Present day business environments are characterized by increasingly saturated markets, caused by changes in the nature of competition and an ever-growing imperative to attain a comprehensive appreciation of customer needs. Matching the growing complexity of the business environment has led to an ever-more diversified and demanding customer base. In an ever expanding and rapidly changing environment, companies cannot maintain attitudes characterized by attracting customers or expanding in new markets. The key success factor to survive in mature markets relies on sustaining long-term relationships with stakeholders (De madariaga and Valor, 2007). The challenge all marketers face today is in finding ways of increasing customer loyalty and retention. Transforming indifferent customers into loyal ones and establishing a long term relationship with customers is critical for organizational success. (Bhardwaj, 2007)
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