FactorsAffectingCustomerLoyaltyintheBankingIndustry:Inthe case of selected private Banks In Burayu City Branches’ Customers.

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.