Role of Customer Retention Equity in Creating and Developing Brand Value

Abstract

ABSTRACTThe present study attempts to explore and establish a customer retention equity scale and examines its impact on brand value in the Indian banking sector. The data were collected from 500 account holders of the five nationalized banks—State Bank of India, Punjab National Bank, Industrial Credit and Investment Corporation of India, Housing Development Finance Corporation, and Jammu and Kashmir Bank from Jammu City, North India—using a purposive sampling technique. Structural equation modeling was applied to test the study hypotheses. The study finds that customer retention strategies that include loyalty and affinity schemes, special treatment benefits, a customer feedback survey, a courtesy system, and content marketing significantly contribute to retention equity. Further, the study also reveals that retention equity has a positive and significant impact on brand value and its dimensions—brand loyalty, brand association, and brand awareness. The study contributes to the extant literature by developing and validating the customer retention equity scale from customer perspectives in the Indian banking sector. In addition, the study also integrates the research stream of retention equity with brand value to signify the contributory role of customer retention equity on brand value and its dimensions. Since the study is limited to assessing customer retention equity and brand value relationship, their relationship with other constructs, such as relational quality, customer equity, and customer loyalty, should be explored in further work.