Abstract:
It is always costly to attract new customers ,so the managers always try to find ways to
retain their current customers and concentrate on different factors which enhances the
customer loyalty among the customers of the banks. The aim of this research is to
assess the determinants of customer’s loyalty in the banking industry, incase of
selected private banks of Cooperative bank of Oromia, Bank of Abyssinia, Awash bank,
Dashen bank, Oromia bank and Hibret Bank of Burayu branches .The research is based
on the five determinants of customer’s loyalty namely, complaint handling company
commitment, trust, customer satisfaction, and perceived service quality. The research is
based on mixed research approach and it is used cross sectional survey design. Both
primary and secondary data were used for this research, primary data was collected from 391 sample respondents which were selected by convenient sampling technique
from sample banks. The questionnaire items were measuresbasedon5-pointlikert
scaleandthequestionerwastestedforvalidityandreliablyoftheitems.Cronbanch’s
alphawasusedtomeasurereliabilityandcontentandfacevaliditywasmeasuredby
expertsandprincipalcomponentanalysiswithvarmaxrotation,factoranalysiswas
usedforextractingitemsforbettervalidity.Ontheotherhand,theregressionresults
show thatallvariablessuchascomplainthandling,companycommitment,trust,
customersatisfaction,andperceivedservicequalityhavepositiveandsignificance
influenceonthecustomersloyalty.Thisstudyinvestigatedtheinfluentialdimensionsof
customerloyaltythatmakesconsumerstobeloyaltotheBanks.Inordertoenhance
customerloyaltythebankshouldmakecontinuousefforttoenhancetheeffectofall
statedloyalty’sdimensions.Finallythebanksarerecommendedtoutilizethebanking
technologyand thestrategyimplementationactivitiesincollecting thenecessary
customerdatathatwillhelpinretaincustomersandmakesureofitsapplicationineverystageofservice.
