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THE INFLUENCE OF TRUST AND COMMITMENT ON CUSTOMER LOYALTY – AN APPLICATION TO THE FOUR MAJOR BANKS AND CAPITEC BANK
Ms B Le Coultre 18 ABSTRACT
The banking industry in South Africa is confronted by many external factors it cannot control. Alternative measures are required to improve the financial situation of this sector forming the most important component of the country's financial system. The efficacy of South Africa's banks directly impacts the efficacy of the country's economy. Customer loyalty strategies could assist in addressing the problem as they might result in customers staying with the bank, leading to greater profitability. It has also been established that trust and commitment can act as predictors of customer loyalty. Consequently, the primary objective of the study was to investigate the influence of trust and commitment on customer loyalty within the banking sector in Gauteng. A quantitative research approach was followed. The population included all retail customers banking with the four major banks and Capitec Bank in Gauteng. The sample consisted of 287 banking customers interviewed via a person administered mall intercept. Primary data was gathered using a structured questionnaire, with items on a 7-point Likert scale referring to trust, commitment and customer loyalty. The statistical analysis that was used in the study included descriptive statistics and multiple regression analysis to test the hypotheses. The findings emphasised that both trust and commitment exerted a positive relationship on customer loyalty. Therefore, banks can improve and maintain their relationships with customers if they have strategies in place to build both trust and commitment with their customers which include providing consistent and reliable services of high quality tailored to customers' unique sets of needs. This will ultimately contribute to customer loyalty, which will ensure financial prosperity for the bank and could lead to economic growth for the country.
KEYWORDS Banking sector, Customer loyalty, Customer retention, Trust and commitment
UNIVERSITY OF JOHANNESBURG Prof M Roberts-Lombard UNIVERSITY OF JOHANNESBURG