An assessment of forerunners for customer loyalty in the selected financial sector by SEM approach toward their effect on business

What is it about?

This research paper studies the forerunners for customer loyalty in the selected Financial Sector by SEM approach towards their effect on business. Here the relationship between the precursors and consequences of customer loyalty in the Indian financial sector specially banking and insurance context, taking a sample of individual customers as respondents from the Indian State of Punjab is studied. The collected data have been analyzed using uni-variate, bi-variate, and multivariate analysis techniques. Specifically, descriptive statistics have been assessed to examine the basic characteristics of the sample data. Confirmatory factor analysis (CFA) with maximum likelihood criteria has been adopted for the measurement and validation of various constructs. Independent samples t-test has been used to compare the customer loyalty of public and private firms, banks and insurance firms, and for some of the demographic variables like gender, marital status etc. One-way ANOVA has been used to compare the customer loyalty for variables having more than two groups. Structural Equation Modeling (SEM) has been used to measure the impact of customer loyalty on the business performance of financial services firms. The result shows that business performance is a higher-order construct measured in terms of word-of-mouth, repurchase intention, price premium and share of wallet. Though each of the four measures of customer loyalty is special and unique in nature, yet a high level of positive correlation has been seen among these dimensions. The study reveals that customer loyalty is not significantly different for the banking firms and insurance firms in Punjab.

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