Document Type

Thesis

Publication details

Avramakis, E 2011, 'Relationship management in Swiss financial services : an investigation into relationship and bonding values of highly-involved and confident customers', DBA thesis, Southern Cross University, Lismore, NSW.

Copyright E Avramakis 2011

Abstract

The Swiss Financial Services (FS) industry has seen major changes characterized by regulatory and growth issues, increased competition, development of new delivery channels commoditizing bank products, customer preferences, and technological advances. These have impacted revenue, profits, shareholder, and market value generation. Therefore, financial institutions need to transform their business models making them customer-centric. They must understand critical customer value drivers in accordance with customer profitability indicators. Given the highly competitive environment relationship marketing (RM) strategies aim to build loyal long-term relationships. Active customers are suggested to be highly-involved, confident and more profitable. For this research, depending on the type of relationship with their FS provider, three distinct customer groups namely self-directors, semi-self-directors, and delegators were identified and investigated. This study investigates the following research questions:

1. How can highly-involved and confident FS customers be characterized?

2. How do highly-involved and confident customer groups differ in terms of relationship value dimensions?

3. How do highly-involved and confident customer groups differ in terms of bonding value dimensions?

4. Which relationship dimensions drive behavioural loyalty among highly-involved and confident customers?

Based on the literature review seven relationship value dimensions namely involvement, confidence, self-advocacy, service quality, satisfaction, trust, and loyalty were identified. Seven bonding value dimensions were derived, namely financial value, technical value, functional value, social value, temporal value, spatial value, and product value. A theoretical loyalty model comprising previously identified relationship value dimensions was developed.

An online survey applying respondent driven sampling (RDS) technique was administered over 130 valid respondents. Descriptive analysis, multivariate analysis of variance (MANOVA), value opportunity algorithm analysis, discriminant analysis, and structure equation modelling (SEM) technique were applied using statistical software analysis package SPSS 17 and AMOS.

The results suggest that customer groups differ in terms of socio-demographic and financial behavioural characteristics.

With respect to relationship value dimensions loyalty is influenced by trust, satisfaction, and service quality. The results also indicate that involvement, confidence and self-advocacy are potentially different among customer groups. Self-directed FS customers are more involved, more confident and thus more self-advocate compared to semi-self-directors and delegators. True and loyal relationship was found to coexist for all customer groups investigated. With respect to value bonding dimensions customer groups differ in the way they perceive spatial values and product values vis-a-vis importance and to some extent fulfilment. For all customer groups technical and temporal values were similarly decisive. While spatial values were regarded to be over served by all customer groups social and functional values showed to some extent improvement opportunities for delegators, product values showed improvement opportunities for semi-self-directors.

This study has provided insights on how customers can be better managed enabling efficient and effective bonding strategies that imply RM as well strategic management considerations. It has provided the first empirical and systematically conducted investigation of highly-involved and confident FS customers with respect to descriptive, relationship value and bonding value dimension considerations.

Finally, the managerial and research implications and guidelines for strategic management and RM practice are discussed including directions for a potential business model targeting in particular the customer segments investigated.

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