The relationship between customer satisfaction and revenue: an empirical study within the corporate banking division of a South African bank

摘要

This is a quantitative study which explores whether there is a positive relationship between customer satisfaction as perceived by corporate customers and revenue generated from such customers of the corporate division of a single South African bank. This research report has three sections, namely the (1) academic paper which comprises a condensed literature review, research methods, results and discussion, (2) an expanded literature review, and (3) an expanded research methodology. Although these three sections are interrelated, they may be considered stand-alone documents. A review of literature contends that customer satisfaction has been a topic of interest for over four decades when, in 1965, the concept was first introduced to literature by Cardozo. Even in these early stages it was hypothesized that higher customer satisfaction would lead to repeat purchasing and cross selling. Thus, for some time, researchers have proposed that a link exists between customer satisfaction and a company’s bottom line, ultimately alluding to the notion of positive associations between customer satisfaction, revenue and profitability. The corporate banking division of a South African bank has dedicated significant time and economic resources to monitoring and improving the satisfaction of their corporate customers each year. With a focus on this single corporate banking division, this quantitative study used secondary customer satisfaction data to establish whether a positive relationship between customer satisfaction with a bank representative or more formally termed, the ‘transactional banker’ (TB) and revenue at an account level exists. The study used a one-dimensional customer satisfaction construct summated from several variables or a one-dimensional multi item scale. This quantitative study made use of secondary data obtained through customer satisfaction surveys conducted with the division’s clients in three waves during September 2010, March 2011 and September 2011. At the time of data collection, telephone interviews were conducted with individuals in corporations who were customers of the corporate division within the bank. These individuals in their respective corporations were identified and surveyed because they (a) managed the primary relationship of the corporation with the banking division and (b) were senior financial decision makers of their organization’s (i.e. had the ability to influence a decision to change banks). Sample sizes of 273 (September 2010), 259 (March 2011) and 310 (September 2011) individual corporate customers were achieved through a method of stratified sampling. In this study, customers were stratified according to the TB who is responsible for their account. Within each stratum a random sample of 10 – 15 participants were included for each of the 30 TB’s. Monthly revenue data, recorded as a) credit revenue, b) overdraft revenue and c) total revenue was sourced from internal company records for each month from September 2010 to January 2012. Pearson’s correlation coefficient was used to assess whether a positive correlation between the two variables of customer satisfaction and revenue exists. This was followed by Ordinary Least Square Regression to investigate the magnitude and nature of the relationship between customer satisfaction and revenue using customer satisfaction as the independent variable and revenue as the response variable. Cronbach’s alpha was also used for internal scale validity. The results of the research indicated no statistically significant relationship between a customer’s satisfaction with the performance of their TB and either the credit, overdraft or total revenue generated from such a customer through their account. By highlighting this, these findings, nevertheless, contribute to the growing body of knowledge examining the impact of customer satisfaction efforts on revenue. On the basis of the findings of this study, it cannot be practically recommended that customer satisfaction efforts be terminated or changed within the organization of study owing to several study limitations which were present. Firstly, the study was hampered by small sample sizes due to a lack of the availability of revenue data in some instances, particularly in the case of overdraft revenue. Secondly, the study only focused on a single bank account held with the bank and increases and decreases in revenue based on the balances held within that single account. Since one of the purported consequences of improved customer satisfaction is the purchase of additional products, the current design of the study does not take into account the take up of additional accounts or banking products with the bank. Thus, an increase in revenue for the bank as a whole due to the purchase of additional accounts may be masked. Similarly, the scope of the study does not extend to examining the effect of recommendations made by these corporate customers to others and hence growth of divisional or bank revenue due to the addition of new customers. Finally, this quantitative study does not examine revenue growth when compared to customer satisfaction improvements over time due to a limited sample of customers taking part in the study over a number of periods as well as incomplete revenue data. The recommendations for future research are to examine the relationship between changes in customer satisfaction and changes in revenue at divisional level in the long run within the South African banking industry as the impact of an increase in customer satisfaction may be obscured by salient factors in the short run. It is also suggested that future research look at the correlation between dissatisfaction and revenue, where adequate sample sizes are available. Theoretically, the results of this research do bring into serious question the universal application, especially in the context of the South African banking industry of the Service Profit Chain and Satisfaction Profit Chain which propagate the existence of a positive relationship between customer satisfaction and revenue.