Customer satisfaction and

retention of private sector banks

With special refernce banks in

kumaon region
the banking industry is highly competitive with banks, not only
competiting among each other but also with non banks and other
financial institutions.
Most bank product development are easy to duplicate and when
bank provides nearly identical services they can only distinguish
themselves on the basis of price and quality.
Therefore, customer retention is potentially an effective tool that banks
can use to gain strategic advantage & survive in todays ever
increasing banking competitive environment
Basically kumaon bank have non kumaon owners & is
not diversified in terms of product and services they
offer, so we find that private sector bank has reached
the maturity phase of PLC. So it carries a danger of
creating a downward spiral of perpetual price
discounting and fighting for customer share.
the argument for customer retention is relatively straight
forward. So it is more economical to keep customer
than to accquire new ones.
 Review of literature
1. Colgate et al 1996; Reichheld & sasser1990: startic:et
al 1994
customer retention gives benefit to an organisation
for ex. The longer the customer stays with an
organisation the more utility the customer generates.
This is an outcome of no. of factors relating to the time
customer spends with with the organisaton
2. Rust & Zahorik(1993) argue that the financial
implication of attracting new customers may be five
time as costly as keeping existing customer.
cost of customer retention activities are less than
the cost of acquiring a new customers
3. Beckett et all(2000) draw a tentative conclusions as to
why customers appear to remain loyal to the same
service provider, even though in many instances they
hold less favourable views towards these sevice
providers.
Many customer apper to perceive a little
differentiation b/w service provider
Customers appear to be motivated by
convenience
High switching cost in terms of potential sacrifies
and effort involved
 Hypothesis
H0: customer satisfaction has a positve
impact on customer retention
H1: there is no coordination between
customer satisfaction and customer
retention
Methodology and data collection
Sample: resident of haldwani and nainital
Source of data collection- primary
Type of data collection questionnaire
Correspondence through- email
Scaling technique- 5 point likert scale
where1= strongly disagree
3= neither disagree nor agree
5= strongly agree
Sampling procedure- based on recommendations of
malhotra(1999) & proctor(1997)
 source of data: name, address and email address drawn
form bsnl bband internet user register form bsnl
office haldwani.
Sample size: n-1920 , was computed & a skip interval of
73 was calculated from 140462 email listing.
response rate= 28% around 514 useable surveys
were returned
Result and discussion