E-loyalty in digital platforms
How do the employees in banks experience their work with customer e-loyalty, individually and in relation to each other?
Written by N. Al Amin, J. N. Johansen
Business Administration>Banking & Insurance
Master Thesis 2.2 Customer Loyalty and Satisfaction The relationship between banks and their customers can be a way of creating competitive advantages (Srinivasan et al., 2002; Heffernan et al., 2008; Arokiasamy, 2013; Larsson & Viitaoja, 2016) and retaining existing customers. The key success factor bank’s customer costs are lower than the cost of creating a new bank (Cohen et al., 2006). Due to increasing customer awareness of their rights, changing needs, and fierce competition within the financial sector, it has become more important for banks to create satisfaction and loyalty among customers (Arokiasamy, 2013). Satisfied customers usually build loyalty and generate positive word of mouth, and these customers are usually not price sensitive (Lam & Burton, 2006; Kumar & Gangal, 2011). Arokiasamy (2013) believes that dissatisfaction is one of the main reasons for bank customers to switch banks. All employees who interact with bank customers can increase or decrease customer satisfaction, so it is important for these employees to understand customer needs and be able to respond quickly to these needs (Hansemark & Albinsson, 2004). Customer satisfaction can be achieved by meeting customer needs (Kumar & Gangal, 2011; Arokiasamy, 2013) and needs, which will lead to long-term relationships and buyback behavior (Arokiasamy, 2013). According to Arokiasamy (2013) and Kheng et al. (2010) Loyalty is generated through continuous contact over a period of time and service exceeding customer expectations. Customer loyalty is defined as "...the customer shows repeated purchase behaviors towards the service provider, has a positive attitude towards the provider, and considers only using the provider when the service is needed" (Kheng et al. , 2010, p. 58). It is said that there is a positive correlation between customer satisfaction and customer loyalty, and the two influence each other (Ehigie, 2006). The difference between customer expectations of service and their perception of service lies in the degree of service execution (Kheng et al., 2010). Due to rapid changes in the environment due to deregulation, globalization and new technologies (Malik & Wood-Harper, 2009; Berger et al., 2015), banks have encountered difficulties in meeting customer expectations in an effective manner (Arokiasamy, 2013). Levy (2014) It is believed that the more customers use online services, the weaker the relationship with the bank. If the customer is dissatisfied, the traditional baking relationship is considered a moderating factor, but this moderating effect will be reduced in the digital platform (Levy, 2014). Levy (2014) further believes that the more satisfied customers are with the use of digital services, the more loyal and loyal customers will be. 2.3 Consumer relationship management In an increasingly competitive market in the financial sector, the use of customer relationship management (CRM) is becoming more and more common. According to Malik and Wood-Harper (2009, p. 312), CRM helps banks “understand the current needs of customers, what they have done in the past, and what they plan to do to achieve their goals.” CRM can be Known as a combination of people, processes, and technology, it aims to understand and manage the interaction with the company's customers (Chen and Popovich, 2003; Malik and Wood-Harper, 2009). In some organizations, this process is a tool specifically designed for customer communication, or is the responsibility of sales/service, call center, or marketing departments (Chen and Popovich, 2003). Therefore, the CRM process varies from organization to organization. The most critical part of the successful implementation of a CRM system is infrastructure, client/server computing, business intelligence applications, and process digitization (Peppard, 2000). These systems store, maintain, and distribute customer knowledge throughout the organization. The effectiveness of management information is critical (Peppard, 2000; Chen & Popovich, 2003). Companies that use CRM will have more loyal and satisfied customers (Chen & Popovich, 2003). Popovich, 2003)). In addition, Chen and Popovich (2003) claimed that the additional benefits of CRM are the ability to optimize customer service, maximize profitability, and reduce customer interaction costs. From the customer's point of view, this leads to customization and simplicity of products and services, regardless of the channel of interaction (Chen and Popovich, 2003). The transition from offline CRM to electronic channels is called eCRM (Sivaraks et al., 2011). eCRM is a combination of traditional CRM methods, techniques and tools obtained through e-commerce (Fjermestad, 2016). This strategy achieves the same benefits as traditional CRM, but it can be formed into a specific service level tailored to each customer, and quickly identify and serve valuable customers online (Fjermestad, 2016). Due to faster transactions and better interactions between employees and customers, the implementation of eCRM may have a positive impact on customer relationships, and therefore also have a positive impact on customer loyalty and satisfaction (Dalir et al., 2017). Sivarax et al. (2011) pointed out that eCRM has a wide range of definitions, and some researchers use the CRM concept when referring to eCRM. Therefore, we will use these concepts interchangeably in this research. Read Less