The effect of customer relationship tactics toward customer loyalty in banking industry

Year 2018, Volume: 4 Issue: 2, 381 - 392, 30.06.2018

Masrul Hayati Kamarulzaman , Nurain Farahana Zainal Abidin Siti Nur Shahira Dahari

https://doi.org/10.24289/ijsser.428486

Abstract

The purpose of this study is to examine
the effects of how Customer Relationship Marketing Tactics (CRMTs) on customer
loyalty in banking industry specifically the credit card users. Through data
from credit card users of MBB and CIMB, we discuss five elements of CRMTs which
are direct mail, preferential treatment, interpersonal communication, tangible
rewards and membership and their influence on credit card users’ loyalty
towards their main banks. The credit card industry in Malaysia has been
shrinking since the intervention from Bank Negara Malaysia in 2009 which has
led to greater competition among credit card issuers. One reason being,
customers nowadays are not loyal to their providers as they tend to switch to
other substitute services and to other banks. Therefore, to retain the
customers, successful Relationship Marketing can be achieved by considering
customers’ attitude towards their service provider through CRMTs. This will
encourage both parties to appreciate the involvement in the relationship. This
research findings’ support that all CRMTs have significant relationship with
credit card users’ loyalty. Through multiple regressions, it was found that the
most significance in contributing to credit card users’ loyalty was membership
and direct mail. Therefore, the outcome of this research provides a guide for
MBB and CIMB and also other financial institutions in charting strategic
actions to maintain and retain their existing customers.

Keywords

Customer Relationship Marketing Tactics (CRMTs), Direct mail, Preferential Treatment, Interpersonal Communication, Tangible Rewards, Membership, Banking Industry

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