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October 1, 1996International Journal of Service Industry Management1,870 citations

The relationships of customer satisfaction, customer loyalty, and profitability: an empirical study

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RHRoger H. Hallowell

Key Points

  • The study aims to investigate how customer satisfaction influences customer loyalty and how loyalty affects profitability in retail banking.
  • Analyzed data from a large bank's retail-banking operations.
  • Used multiple measures to assess customer satisfaction, loyalty, and profitability.
  • Estimated effects of increased customer satisfaction on profitability.
  • Increased customer satisfaction is linked to higher customer loyalty.
  • customer loyalty positively correlates with profitability.
  • Hypothesized increases in satisfaction could lead to significant boosts in profitability.

Abstract

Presents the findings of a study performed on data from a large bank’s retail‐banking operations. Illustrates the relationship of customer satisfaction to customer loyalty, and customer loyalty to profitability, using multiple measures of satisfaction, loyalty, and profitability. An estimate of the effects of increased customer satisfaction on profitability (assuming hypothesized causality) suggests that attainable increases in satisfaction could dramatically improve profitability.

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Cite This Study

Roger H. Hallowell (1996) studied this question.

synapsesocial.com/papers/6a0b94c7faed69294fd0a084https://doi.org/10.1108/09564239610129931
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