The Influence of Socio-Demographic Variables on Customer Satisfaction and Loyalty in the Private Banking Industry

International Journal of Bank Marketing, Vol. 31 No. 4, pp. 235-258

Posted: 9 Aug 2013 Last revised: 9 Aug 2013

See all articles by Volker Seiler

Volker Seiler

Xi'an Jiaotong-Liverpool University

Markus Rudolf

WHU Otto Beisheim Graduate School of Management

Tim Krume

WHU - Otto Beisheim Graduate School of Management

Date Written: June 1, 2013

Abstract

Purpose – In this paper the authors aim to study the impact of customer demographics on service value, customer satisfaction, and customer loyalty in the private banking industry, i.e. a high-involvement context.

Design/methodology/approach – The authors estimate a structural equation model with the help of partial least squares (PLS). In order to examine the influence of socio-demographic variables, they conduct an analysis of variance (ANOVA) to test for differences in the means of the constructs. Furthermore, they conduct an analysis of mediation to test for an indirect influence of service value on customer loyalty.

Findings – The authors find that customer satisfaction has a strong positive impact on customer loyalty. However, service value has no significant direct effect on customer loyalty; the impact of service value on customer loyalty is completely mediated by customer satisfaction. With regards to customer demographics, the authors find significant differences in mean scores as to employment status, type of private banking service provider, and size of liquid assets.

Research limitations/implications – Further research should analyse potential moderating effects of different customer-related variables. A replication study should be conducted in order to underline the authors’ findings.

Practical implications – The authors find significant differences for customer satisfaction and customer loyalty ratings as to employment status and size of liquid assets. Hence, managers should focus on high net worth and ultra high net worth individuals as these segments show higher satisfaction and loyalty ratings. Furthermore, customers should be segmented as to employment status in addition to size of liquid assets.

Originality/value – The authors conduct their analysis in a high-involvement setting. Using a unique sample of 286 questionnaires of private banking customers, they find direct effects of sociodemographic variables on service value, customer satisfaction, and customer loyalty. Thus, the authors’ findings have important implications for managers in the private banking industry and marketing researchers alike.

Keywords: Private banking, Customer satisfaction, Customer loyalty, Partial least squares (PLS), Socio-demographic variables, ANOVA

Suggested Citation

Seiler, Volker and Rudolf, Markus and Krume, Tim, The Influence of Socio-Demographic Variables on Customer Satisfaction and Loyalty in the Private Banking Industry (June 1, 2013). International Journal of Bank Marketing, Vol. 31 No. 4, pp. 235-258, Available at SSRN: https://ssrn.com/abstract=2307203

Volker Seiler (Contact Author)

Xi'an Jiaotong-Liverpool University ( email )

111 Ren'ai Road
Suzhou Industrial Park
Suzhou, Jiangsu 215123
China

Markus Rudolf

WHU Otto Beisheim Graduate School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany
+49-(0)261-6509-420 (Phone)

Tim Krume

WHU - Otto Beisheim Graduate School of Management ( email )

Burgplatz 2
Vallendar, 56179
Germany

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