Analysis of Customer Loyalty and Profitability Drives in Iran's Banking Industry

The purpose of this study is to investigate the loyalty and customers profitability drivers in the banking industry in Iran. A questionnaire was designed to elicit responses on the main constructs investigated in this study to gather primary data. Next a pilot study carried out to test the relevance of the questions. Five hypotheses have been tested in this study. Findings of this study reveal that the five dimensions of service quality to varying degrees are important determinants of customers satisfaction and loyalty in Iran’s banking Industry. In addition, customers’ perception of their banks’ image and reputation was another important determinant of their loyalty affiliations. Price competitiveness also, was found to be relatively unimportant to perceived customer satisfaction and loyalty. However there was not enough evidence to support the hypothesis that increased customer loyalty results in increased profitability.

Keywords:

customer loyalty , Profitability , Banking Industry