Customer Satisfaction: A study of bank customer retention in ICICI Bank, UK.

Aim of the Project:

The aim of this research is to analyze the impact of several customer satisfaction-relevant constructs that influence customer's decision to stay or leave their bank. These constructs were rated by customers as having strong effects on loyalty on their banks. An effort will also be made to ascertain the views of those who are using the service of ICICI Bank, and afterward give some recommendation how to increase the customer satisfaction and market share through better customer service.

Research Background:

The banking industry is highly competitive, with banks not only competing among each other; but also with non-banks and other financial institutions. Most bank product developments are easy to duplicate and when bank provide nearly identical services, they can only distinguish themselves on the basis of price and quality. The competition gave the customer bargaining power and switching power to choose the product and service. To retain the customer and satisfy the customer is the major issue for the organization to become cost leadership and to become product/ service differentiation. To maintain the service quality in the cost conscious market is the challenge to the organization. The organization use various driver of the customer satisfaction to retain the customers, such as service quality, customer value and customer loyalty.

In the retail banking industry the service quality is the main criteria to enhance the business. Heskett et al. (1997) said that the high quality of service believed to be influenced by customer value and customer satisfaction, again the customer satisfaction directly influence the customer loyalty.

Day (1990) said that in order to become cost leadership and product/service differentiation it is required to create superior customer value. The customer were satisfied when they feel they were getting more out of what they paid in, therefore it is important for the banking industry to meet the expectation of the customers. Higher the perceived benefit, higher the customer value and result in high satisfaction and loyalty.

Rational of the Project:

I have proposed to research on this particular topic due to my past experience, I have been associated with ICICI Bank, India for one year. While working with them I witnessed the tremendous competition and growth of stakeholders, customers and company. I noticed that customer satisfaction is the most important element of banking sector in today's increasingly competitive environment to retain the existing customers as well as to gain new customer. Bank management must identify and improve upon factors that may create customer dissatisfaction. Though, understanding human nature and satisfying them according to their need is a tough job, customer satisfaction always exited me to do a study on it.

Research Objective:

The following are the objectives of this research,

1. To discuss the importance of customer satisfaction in an organization.

2. To discuss and identify the theories of customer satisfaction, particularly emphasizing on the service quality, customer value and customer loyalty.

3. Analyzing and finding the customer satisfaction, of ICICI Bank, UK regarding factors of customer service quality, customer value and customer loyalty.

4. To verify the relationship between the customer satisfactions, customer value, customer service quality and customer loyalty of the ICICI Bank, UK.

5. To make recommendations to the ICICI retail banking industry in UK to increase the Customer satisfaction through service quality, customer value and customer loyalty.

Literature Review:

The literature review explores the existing knowledge on the topic of Customer Service. The review of literature is important so as to develop a thorough understanding of the subject and to analyze the academic literature and its applicability to the research. As a case the section includes description about customer service in banking sector. This literature review has been divided into some sectors related to customer service, like customer value, customer royalty, service quality and the relation between all of them.

Customer Satisfaction:

The Greek philosopher, Epictetus says that “What concerns me is not the way things are, but rather the way people think things are ”.The concept of the consumer satisfaction were depend on the thinking of the consumer.

Oliver (1997) gave a static definition of the consumer satisfaction by analyzing the total consumption process and experience of the customer. “Satisfaction is defined as a pleasurable fulfillment. That is the consumer senses that consumption fulfils some needs, desire, goals, or so forward and that this fulfillment is pleasurable. Thus satisfaction is the consumer's sense that consumption provides outcomes against the standard of pleasure versus displeasure. For satisfaction to affect loyalty frequent or cumulative satisfaction is required so that individual satisfaction episodes become aggregated or blended” (Oliver 1997).

Customer Value:

A firm which gives value to its customers receives the customer satisfaction as an out come. Day (1990) advocated that in today's competitive environment, creating superior customer value is most important for company's performance. Porter (1980) said that a company can adopt two market strategies (1) cost leadership and, (2) product differentiation. But Day (1990) argued that both the strategies have same objective to create superior customer value. Without the superior customer value the achieving of market leadership is in vain. Again Khalifa (2004) said that the concept of customer value is used not only in different fields such as finance, economics, management, information system, justice, ethics, etc., but including relationship marketing, customer behavior, pricing and strategy. The consumer value signifies how the customers recognize product or services, not what the firm wants to deliver to its customers. Customer value is linked to use of a product or services. Customer value is related to the trade off between what the customer pays in exchange for acquiring and using a product or services from seller and what the customer viewed what he/she received.

Customer Loyalty:

Dawes and Swailes (1999) said that the high customer loyalty is a central to the successful customer retention, and companies on the basis of loyalty will win over competition. It reflects the behavioral intention related to the product or services. Tucker (1964) says that no consideration should be given to what the subject thinks or what goes on in his central nerves system, his behavior represents the full statement of what brand loyalty is. The personality is the indication of the branding attachment. Keller, (1993) suggested that loyalty is present when favorable attitudes for the brand are manifested in repeat buying behavior.

Jacoby and Chesnut, (1978) said that the brand loyalty was simply measured in terms of the outcome variables. “Customer loyalty has focused on primarily on the product-related or brand loyalty, whereas researchers on the customer loyalty to the service organisation has remained limited”, (Gremler and Brown, 1996). He added that the concept of loyalty to the intangible products, and their definition of service loyalty include three specific components that are, (1) Purchase, (2) attitude and, (3) cognition. The service loyalty is the level at which customer shows repeat purchasing behavior from service provider.

Service Quality:

The service quality and the customer service are interred related. According to Parasuraman et al. (1988), the desired service quality is a global judgment, or attitude, relating to the superiority of the service, whereas satisfaction is related to specific transaction. That means that the service quality is mean for long-run evaluation about service, where as satisfaction is a transaction-specific evaluation.

Cronin and Taylor (1992) used the structural analysis to analyse the relationship between the customer satisfaction and service quality. He found that the coefficient of the service quality is related to the satisfaction. The satisfaction is having the relation with the purchase intention path where all appeared not to be important. And the service quality is having the relation with the purchase intension which appeared to be unimportant. Based on this analysis he they concluded that service quality is an antecedent of the customer satisfaction.

Relation between Customer Satisfaction, Value, Loyalty and Service quality:

Bolton and Drew (1991) found a model to know how the customer experience measure the service performance level, overall service quality and service value. He has found that the customer assessment of quality and the value is main function of the disconfirmation. This disconfirmation are generating from the discrepancies between anticipated and desired performance level. He has also found that the performance level is directly related to the effect in quality and value assessment.

Cronin and Taylor (1992) examined the relation between service quality and consumer satisfaction and the impact of service quality and customer satisfaction on purchase intensions. He concluded his research as

1. Service quality is an antecedent of customer satisfaction.

2. Customer satisfaction has a major effect on the purchase intension.

3. Service quality has less effect on the purchase intension then the customer satisfaction.

Hartline and Jones (1996) examined the process of delivery of service quality and value, and their effect on the customer behavioral intension. The finding of this research is that,

1. The performance of the front desk employees has the largest total effect on the word-of-mouth intensions.

2. All effects are indirect and mediated by overall quality and value.

Methodology and Data Collection Method:

The methodology can be defined as the “overall approach to the research process, from the theoretical underpinning to the collection and the analysis of the data” (Hussey and Hussey, 1997).To accomplish the desired aims and objective both the Qualitative as well as Quantitative types of data collection methods would be vital for this research.

The methodology includes several methods to achieve both approaches and that are:

1. The collection of secondary data, defined as “the data that already exists” (Hussey and Hussey, 1997). The types of secondary data used of this research are:

Desktop research

* By collecting all secondary information through reports, articles, case studies, projects that have been carried out in the past, and having relevance to the study brief.

* The proposal will also be supported by academic work from journals and books. The library catalog and online databases like ABI Inform which will be accessed off campus with Athens password.

* Journals have also provided vital assistance in the literature review.

Survey based secondary data

Survey based secondary data is defined as, the “data collected by questionnaires which have been already analyzed for their original purpose” (Sunders, Lewis and Thornhill, 2000)

* Questionnaire: This method would be very logical way of collecting information from customers that have been using the services of ICICI, UK.

The aim of the questionnaire was to gain an understanding of the customer's level of satisfaction for the service of ICICI, UK. The questions talked about levels of satisfaction of the organization involved, how adaptable ICICI is to meet requirement of the customers as well as their employees.

2. The collection of primary data, defined as “the data collected at source” (Hussey and Hussey, 1997). The type of primary data was obtained for this research is interviews.

o Personal Interviews: This method include face to face interview. By taking open-ended interview of few representatives from ICICI Bank.

o Focus group interview: This method includes interviewing the Customers who have been using the service of the bank.

Data Analysis:

This research proposes to use a combination of qualitive and quantative data analysis approach. The analysis will be done in informal way and will base on the data obtained from secondary data and primary data. In addition to this the researchers will analyze data collected from the companies, including personal contacts in ICICI, UK, to understand the current situation of ICICI in UK market. The data collection method aims to support the development of ICICI Bank's customer service in UK, thorough considering the review of research papers.

Logistical and ethical consideration:

The data will use in this research from authentic secondary sources. Primary data will extract from interview with customers of this bank and relevant persons within the company. And the conclusion will base on a recommendation for the bank for their future customer service. No particular ethical issues regarding the research can be foreseen at the moment.


As ICICI is an Indian bank, mostly they have got the trust of huge number of Indian customer. These customers have different bank account in UK as well. Then also customer used ICICI Bank UK as their primary bank. Indian customer mainly keeps this bank as a first choice. ICICI bank is basically Indian bank so most of the Indian customer is very loyal of this bank. Here customer loyalty works.

Finding concluded that ICICI Bank, UK isn't fulfilling the customer's expectations. It has found out that compare to other banks in the UK, ICICI is lacking customer satisfaction. Then also customers are very loyal with this bank and they also want to stay with this bank.

The researcher got result from primary and secondary data that employee performance of the ICICI bank UK is not fully satisfied. Front desk employee is highly responsible for satisfaction and dissatisfaction but here researcher observed that from desk employees are not those much effective to satisfied the customer. Employee performances fail to fulfill to make the buying decision.

Researcher noticed one thing that in the case of ICICI Bank UK customer loyalty is main factor to make customer. Basically here loyalty satisfied the customer. Customers are not 100% dependent on service quality and customer value.

The other significant factors in the banking industry are functionality of the machines, reliability of transaction, and integrity of staff and confidentiality of service. The staff should maintain flexibility, friendliness, courtesy, Communication and competence.

Research Gantt chart (Week commencing 20th January 2010)































Work Commencing


Read Literature/



Final Objective/ Start Proposal



Read Methodology Literature




Devise research and method


Draft research and method



Feedback of Proposal


Revise Research Proposal


Print & Submitted Research Proposal


Developed schedule of question for interview and Questionnaire



Schedule for Survey and interview



Start survey




Start Data analysis




Draft report to Supervisor


Find Some Related Information



Finalize & Complete Report



Revise Report



Print Report


Submitted Report



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2. Cronin, J. J, and Taylor S.A, (1992). Measuring Service Quality: A Re-examination and Extension. Journal of Marketing, 1956 July, pp. 55-68.

3. Dawes, J., and Swailes, S, (1999). Retention Sans Frontiers: Issues for Financial Service Retailers. The international journal of Bank Marketing. 17 (1), pp. 36-43.

4. Day. G.S, (1990), Market driven strategy. New York, NY: Free Press, pp. 132-179.

5. Hartline, M. D., and Jones K.C (1996). Employee Performance Cues in a Hotel Service Environment: Influence on Perceived Service Quality, Value and Word-of-Mouth Intentions. Journal of Business Research, Vol. 35, pp. 207-215.

6. Jacoby, J., and Chesnut R.W, (1978). Brand Loyalty: Measurement and Management. John Wiley. New York, NY.

7. Khalifa, A. S. (2004). Customer Vale: A review of recent Literature and Integrative configuration. Management Decision, 42, pp. 645-666.

8. Kotler.P and Gary Armstrong, 1997, Marketing An Introduction: Prentice Hall

9. Kotler.P, 2003, Marketing Management: Prentice Hall

10. Oliver, R.L and Roland T R (1997). Customer Delight: Foundations, Findings, and Managerial Insight. “Journal of Retailing”, Vol. 6, Pp. 12-27.

11. Parasuraman, A., Zeithaml, V.A., and Berry, L.L. (1988). SERVQUAL: A Multiple-Item scale for Measuring Consumer Perceptions of Service Quality. Journal of Retailing, pp. 12-40.

12. Saunders, M, Lewis, P & Thornhill, A 2003, Research methods for business students, 3rd edition, Pearson Educational,

13. Szwarch, P, 2005, “part of market research in practise series”. Kogan page publishers, p-3.

14. Tucker, W.T. (1964). The Development of Brand Loyalty. Journal of Marketing Research, 1st August, pp. 32-35.

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