Effects of customer satisfaction and switching cost on customer retention in ATM services

Abstract

The strong development of Automated Teller Machine (ATM) card market has received considerable attention recently. To meet increasing demand of e-banking market, customer satisfaction on current ATM services should be studied for effective customer retention strategies. To assess customer satisfaction level, the research follows Sureshchandar et al (2002) model that customer satisfaction should be measured along with the same factors of service quality. The results have indicated that there are significant correlations between service quality and customer satisfaction with respect to non-human element and social responsibility. Customer satisfaction is the significant factor to influence customer retention. In addition, if switching cost is a retention strategy found in Jones et al (2002) model, there is no evidence to shows switching cost is a significant factor of customer retention process in this research. Keywords: customer satisfaction, service quality, customer retention, switching barrier, switching cost, ATM services.