Diagnosing the Impact of Patronage Concentration and Cross-Buying in Retail Banking

Abstract

While information about customers who have multiple providers is not necessarily difficult to obtain managers do not seem to use this piece of information. A conceptual model was developed to diagnose the impact of customers’ disclosed disloyalty and the findings reveal that customer’s patronage concentration significantly shapes the dynamics of the customer’s relationship with his main provider.

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Correspondence to Laszlo Sajtos.

Appendices

Appendix 1

Measures of the Constructs Used in the Questionnaire

Cross-buying and Patronage Concentration:

  1. 1.

    Please tick the bank that you consider to be your main bank, that is, the bank where your salary or wages are paid into and/or where most transactions take place.

  2. 2.

    Which of the following banking products do you have with either your main bank or other banks? (Check account, savings account, Credit/debit card (Visa, Master, Diners), Mortgage, Another loan (e. personal loan), term investment/deposit)

Customer Value:

  1. 1.

    Thinking about all the monetary and non-monetary costs that you have rated previously, how would you rate your main bank for their overall costs to you? (1 = Poor and 10 = Excellent)

  2. 2.

    Overall, thinking about the quality of the service in comparison to the monetary and non-monetary costs associated with your main bank, how would you rate the overall value you received from it (e.g. worth what you are paying for)? (1 = Extremely poor value and 10 = Extremely good value)

Customer Satisfaction:

  1. 1.

    Overall, how satisfied or dissatisfied are you with your main bank? (1 = very Dissatisfied and 10 = very Satisfied)

  2. 2.

    How would you describe the overall quality of everyday banking services at your main bank? (1= Poor and 10 = Excellent)

Company Trust:

Thinking about the experience you have had with the management policies and practices of your main bank, as a company. Please rate each of these statements on the 1–10 scale shown. Overall I feel that my main bank as a company …

1. Very unreliable Very reliable
2. Very incompetent Very competent
3. Very low integrity Very high integrity
4. Very unresponsive to customers Very responsive to customers

Affective Commitment:

How do you feel your main bank cares about you? Please rate each of these statements on the 1–10 scale shown. (1 = Strongly Disagree and 10 = Strongly Agree)

  1. 1.

    They make me feel valued and wanted as a customer

  2. 2.

    I feel they are genuinely sensitive to my banking needs

  3. 3.

    I feel they are genuinely committed about wanting to keep me as a customer

Switching Costs:

Thinking now about the monetary and non-monetary costs associated with banking with your main bank, please rate your main bank on each of these cost factors. (1 = Strongly disagree and 10 = Strongly Agree)

  1. 1.

    To switch to another bank involves investing time in searching for information about other banks

  2. 2.

    To switch to another bank involves much effort in deciding which other bank to use

  3. 3.

    To switch to another bank involves a risk in choosing another bank which might turn out not to satisfy me

Customer Loyalty:

  1. 1.

    I intend to continue doing business with my main bank over the next few years (where 1 = strongly disagree and 10 = strongly agree)

  2. 2.

    I would recommend my main bank to friends and acquaintances in the future (1 = strongly disagree and 10 = strongly agree)

Appendix 2

Cross Buying & Patronage Concentration

CAMB: Customer’s number of accounts with main bank

CAALL: Customer’s number of accounts with all banks (including main bank)

\( {{{\rm{CA}}_{\rm{MB}}}/{{\rm{CA}}_{\rm{ALL}}}}\): Patronage Concentration

CAMB > 1: Cross Buying

CAMB = CAALL: Patronage Concentration = 100%

  1. 1)

    CAMB = CAALL and CAMB = 1: Patronage Concentration = 100%, no cross-buying

  2. 2)

    CAMB = CAALL and CAMB > 1: Patronage Concentration = 100%, cross-buying

CAMB ¹ CAALL: Patronage Concentration < 100%, partial customer

  1. 3)

    CAMB > CAALL: Patronage Concentration < 100%, partial customer, cross-buying

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Sajtos, L., Kreis, H. Diagnosing the Impact of Patronage Concentration and Cross-Buying in Retail Banking. J Bus Mark Manag 4, 151–165 (2010). https://doi.org/10.1007/s12087-010-0037-1

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Keywords

  • Patronage concentration
  • Cross-buying
  • Customer value
  • Relationship quality
  • Retail banking