Future-proofing bank loyalty among students: A New Zealand study

Authors:
John Walker, Massey University
Thamer Al Thaqafi, Massey University

Abstract: Due to their potential high-earning status, tertiary student customers could become considerably more profitable for a bank after graduation, provided they do not decide to switch. The research reported here adapted Keaveney’s (1995) model to explore bank switching behaviour among New Zealand students and the impact of Customer Relationship Management (CRM) on decisions to switch. The findings confirmed the key role of price and service quality in student bank switching decisions, while the fresh light was thrown on customer migration from bricks to clicks, the waning influence of traditional word-of-mouth sources, and the importance to students of bank ethical conduct. Bank CRM actions could shape and possibly reverse student switching decisions, but there was room for improvement. An effective CRM strategy focused on developing a long-term relationship with student customers would go some way towards future-proofing their loyalty to banks and retaining them as valued customers.