INTRODUCTION
Introduction
Customer Loyalty is always an attractive topic in marketing Long-term customers are not only the vital source of profit but also a free channel of advertisement for business
Cultivating customer loyalty is essential for businesses, as it can lead to increased sales, reduced costs, and the ability to charge higher prices Research by Reichheld and Sasser indicates that companies can enhance their profits by over 85% simply by decreasing customer defection rates by 5% Despite this potential, many businesses experience a loss of 15% to 20% of their customers annually, highlighting the importance of understanding and improving customer loyalty This has prompted extensive research by economists and marketers globally.
In Vietnam, an emerging economy, marketing remains less developed compared to the US, Europe, and some Asian nations (Khuat, 2012) Consequently, many businesses have not prioritized customer loyalty and its critical impact on performance The country has faced economic challenges in recent years, leading to numerous bankruptcies and significant uncollectible bank debts, although the recession's effects have been milder than in stronger economies (The Financeplus, 2009; Le).
In 2014, many small banks in Vietnam merged with stronger institutions to survive, leading to the closure or consolidation of numerous branches and transaction offices due to operational inefficiencies This shift has ushered in a new era of retail banking, targeting individual customers with numerous small transactions However, the growth of retail banking in Vietnam has not aligned with the market potential of nearly ninety million residents Many state-owned banks continue to overlook loyal individual customers in favor of establishing relationships with larger enterprises, inadvertently failing to foster long-term loyalty This study aims to identify key factors influencing individual customer loyalty in Vietnamese banks, serving as a valuable reference for enhancing retail banking strategies.
Research background
Vietnam's retail banking sector is recognized as an emerging market with significant potential, according to the VPBS Report (2014) and Keith Pogson (as cited in Thanh Thanh Lan, 2014) However, it faces challenges, particularly with low customer loyalty levels.
As of 2013, Vietnam's population reached approximately 90 million, with half of this figure participating in the labor force Despite this, only 20% of the population held banking accounts, indicating that the remaining 80% represents a significant potential market for retail banking Furthermore, the economic development in Vietnam over recent decades has contributed to a notable rise in Gross Domestic Product (GDP).
The Gross Domestic Product (GDP) per capita and Gross National Income (GNI) per capita indicate a rising average income and improved living standards for the Vietnamese population over the years A notable cultural characteristic in Asian countries is the emphasis on saving, leading individuals to allocate a larger portion of their income towards savings as their earnings increase Consequently, this trend has resulted in a heightened demand for financial services, creating a promising market for retail banking in Vietnam.
Despite a notable increase in banking service usage in Vietnam, with market penetration rising from 6% in 2006 to 21% in 2011, the overall adoption rate remains low compared to the Pacific region's 55% (The VPBS Report, 2014) Additionally, the usage rates of debit and credit cards among individuals over 15 years old in Vietnam are lower than those in several developed Asian countries.
Thailand is the country, which has the highest rate of over-15-year-old people using debit card
(43%), followed by China (41%), Singapore (29%) and Philippines (23%), while that is only
15% in Vietnam The rate of over-15-year-old people using credit card in Vietnam is just 1%, holding the lowest rank among countries
Vietnam's retail banking sector has significant growth potential due to the uneven distribution of banking services between urban and rural areas As illustrated in Table 1 (see Appendix A), approximately 30% of branches and transaction offices belong to State-Owned Commercial Banks, highlighting the disparity in access to banking services across the country.
In Vietnam, over 50% of banks, including foreign and commercial banks, are concentrated in just four major cities: Hanoi, Ho Chi Minh City, Danang City, and Can Tho City The remaining banks are distributed across 59 provinces and cities throughout the country, from the North to the South.
In 2013, the distribution of infrastructure within Vietnam's banking system revealed significant disparities, particularly in Hanoi and Ho Chi Minh City, which boasted transaction office densities nearly 50 times higher than the national average Consequently, the average number of customers served at each transaction office in these cities was 30% lower than the overall average across Vietnam.
Similarly, the number of customers using an ATM or POS is also approximately from 30% to
Service quality in large cities is significantly better, being 40% lower than the national average This disparity highlights the unequal development of retail banking services across regions, creating opportunities to tap into potential markets in more remote areas.
In Vietnam, the banking sector is characterized by a high level of competition, with approximately 49 banks providing similar services, which can lead to elastic customer loyalty In contrast, countries like Australia and Japan have only 3 to 4 major banks, resulting in a more stable customer base.
According to Thanh Thanh Lan (2014), bank marketing in Vietnam remains underdeveloped compared to neighboring countries, leading to customer confusion among numerous bank brands This lack of recognition is particularly significant in the banking sector, which is characterized as an intangible service The VPBS Report (2014) highlights that Agribank, one of Vietnam's four largest banks, experienced a decline of 1.91% in market share between 2010 and 2013.
Low service quality from bank personnel can result in customer defection, particularly due to the lack of professional experience among staff Research indicates that this inadequacy has led to unexpected service quality issues in some banks (Le Chi, 2013; The Infonet, 2013) Interviews with customers at prominent banks in Ho Chi Minh City highlight these service quality deficiencies.
Customers often face long wait times, exceeding an hour during peak days, due to an overload of clients for bank tellers Additionally, bank staff lack the time to promote new programs or engage in cross-selling with customers The stress of a crowded environment can lead to bank tellers interacting with customers in an unfriendly manner While bank managers concentrate on implementing policies and marketing strategies, they overlook the importance of monitoring their staff's interactions with customers This neglect in addressing customer dissatisfaction in today's information age can result in significant losses for banks, especially when negative experiences are shared on social media platforms like Facebook or Twitter.
Vietcombank branch Ho Chi Minh City, this bank lost not only one current customer but also many potential ones who indirectly have a negative brand awareness through their friend’s sharing
An interview with banking professors from Vietinbank revealed that while the banking strategy targets individual customers, some branches neglect long-term clients with established relationships in favor of acquiring new large corporate clients This trend includes the refusal of individual credit, even for loyal customers, to prioritize credit limits for major corporations Additionally, a one-sided view of service persists in certain banks, particularly state-owned ones, where bank tellers passively respond to customer requests without recognizing the significance of customer loyalty in enhancing banking performance Consequently, they often close accounts at customers' requests without inquiring about their reasons or attempting to retain them as clients.
In conclusion, the retail banking sector in Vietnam presents significant potential for economic development Despite recent positive changes, state-owned banks have not adequately prioritized this segment, resulting in a lack of customer loyalty Focusing on long-term customers is essential, as they not only contribute to profit generation but also serve as a valuable advertising channel Therefore, conducting research on the factors influencing customer loyalty in retail banking is crucial.
Research gap
Reichheld and Sasser (1990) demonstrated that customer loyalty significantly impacts business performance, revealing that retaining just 5% of customers can lead to an 85% increase in profits Consequently, understanding the factors that drive customer loyalty has become a key area of interest for marketers globally.
Retail banking in Vietnam is emerging as a promising trend due to its large population, yet the banking system faces significant challenges Vietnamese banks, such as Vietinbank and Eximbank, prioritize acquiring new customers over retaining existing ones, as evidenced by their Key Performance Indicators (KPIs) that focus solely on new customer growth without addressing customer defection This oversight leads to marketing strategies primarily aimed at attracting new clients, with limited promotional efforts for long-term customers Additionally, there is a lack of comprehensive research on the factors influencing customer loyalty in Vietnam's retail banking sector This empirical study seeks to identify key determinants of customer loyalty that are recognized in various countries.
Key factors influencing bank selection, behavioral intention, and customer loyalty have been identified in both the United States and Asia Among these, perceived quality and customer satisfaction stand out as the primary determinants of customer loyalty, as highlighted by the research of Parasuraman et al (1988).
1991; Boulding et al., 1993; Zeithaml et al., 1996) Other scholars find out some determinants such as brand awareness (Aaker, 1996; Jing et al.,2014), service quality (Laroche et al., 1986;
The research conducted by Sinkula and Lawtor (1988) and Ying and Chua (1989) emphasizes the importance of convenience in consumer behavior, as highlighted by Laroche et al (1986) and Martenson.
1985; Lewis, 1982; Schram, 1991), social influence (Chua, 1980; Martenson, 1985), service personnel (Ying & Chua, 1989) and switching costs (Beerli et al., 2004; Cronin & Taylor, 1992;
Numerous studies have examined customer loyalty in Vietnam's retail banking sector, yet most focus on one or two specific determinants For instance, Phan and Ghantous (2013) highlighted the roles of brand associations and social influence on customer trust and loyalty, while Pham and Le (2010) explored how personal values in service impact loyalty However, there is a notable lack of comprehensive research that simultaneously evaluates a range of factors affecting customer loyalty, including brand awareness, convenience, service personnel, and switching costs This study aims to investigate the influence of these determinants, alongside satisfaction and social influence, on the loyalty of individual customers in the retail banking context.
Vietnam banking This would be a reference source for managers to improve retail banking service in Vietnam.
Research objective
Customer loyalty is crucial for the growth of retail banking services While numerous studies on customer loyalty exist globally, research in Vietnam remains limited This topic is complex and influenced by various factors, including cultural and ethnic differences Consequently, findings on retail banking customer loyalty may vary significantly across different countries and regions.
Vietnam context Therefore, reviewing previous theories in other countries and testing in
In the context of Vietnam, understanding the factors that influence customer loyalty in retail is crucial Key determinants include brand awareness, convenience, the quality of service personnel, and overall customer experience These elements play a significant role in shaping consumer preferences and loyalty within the retail sector.
This study examines the impact of satisfaction, social influence, and switching costs on customer loyalty within the Vietnamese retail banking sector While these factors are significant in other countries, their specific influence on Vietnamese customers is the focus of this research It is important to note that the study does not explore the interrelationships among the six determinants, which presents an opportunity for future research.
In order to accomplish the study purpose, the author defines and focuses on some following research objectives:
Customer loyalty in retail banking is influenced by several key determinants, including brand awareness, convenience, service personnel, customer satisfaction, social influence, and switching costs These factors play a crucial role in shaping customer relationships and loyalty in various countries.
- Constructing the research model of the relationships between each determinant and customer loyalty in Vietnam retail banking
- Testing the model in Vietnam retail banking market
Research Scope and Research Contribution
This study examines key factors influencing customer loyalty, highlighting its critical impact on business performance We focus on retail banking, which has emerged as a significant trend among Vietnamese banks in recent years The research is based on a survey conducted in Ho Chi Minh City.
This study examines the simultaneous impact of six key factors on customer loyalty in Vietnam's retail banking sector, specifically focusing on Brand Awareness, Convenience, Service Personnel, Satisfaction, and Social Influence The findings highlight the importance of these determinants in fostering customer loyalty in Chi Minh City, emphasizing the role of convenience in enhancing the overall banking experience.
Switching Costs tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
This study enhances theories and empirical research on customer loyalty in retail banking, serving as a valuable resource for banking managers aiming to improve retail banking services, which are increasingly becoming a trend among commercial banks.
Research structure
This study is divided into five chapters that provide following contexts:
Chapter 1 provides the background of this study, defines research gap and research objective This chapter also points out the scope and contribution of the current study, as well as draws out the structure of content
Chapter 2 provides the comprehensive review of literature about customer loyalty and related concepts This chapter also develops the hypothesized conceptual model
Chapter 3 provides the conceptual regarding research design and sampling The research methodology is also defined in this chapter
Chapter 4 includes data analysis, results of this study and all hypotheses testing
Chapter 5 is the discussion, implications and limitations of the study tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
LITERATURE REVIEW
Retail Banking
Retail banking has emerged as a key marketing strategy for Vietnamese commercial banks in recent years, focusing on providing banking services to individuals and small to medium-sized enterprises Unlike wholesale banking, which deals with larger transactions, retail banking is characterized by a high volume of smaller transactions.
Retail banking refers to mass-market banking services provided by larger commercial banks through local branches, catering to individual customers Key services include savings and checking accounts, mortgages, personal loans, debit cards, and credit cards.
Retail banking, unlike wholesale banking that targets large corporations, helps to mitigate business risk by serving individuals and small to medium enterprises This approach involves numerous transactions of smaller value, which collectively contribute to a more stable financial environment.
Due to differences between individual customers and small enterprises, this study restricts the concept of retail banking within individual customers.
Customer Loyalty
tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Customer Loyalty is one of the most important objectives that marketers aim to because it has a strongly positive relationship with business performance (Reichheld & Sasser, 1990;
Numerous studies indicate that acquiring new customers is significantly more expensive than retaining existing ones For instance, Reichheld and Sasser (1990) discovered that a customer in their fourth year generates three times the profit of a first-year customer for an auto-service company Given this critical insight, many scholars have focused on defining customer loyalty and identifying its key determinants.
Most of the early studies consider customer loyalty just on the aspect of behavior which expressed by repeat patronage (Cunningham, 1956; Massy et al, 1970; Kahn et al., 1986)
Research on repurchase behavior alone fails to clarify the reasons behind customer loyalty to a brand (Dick & Basu, 1994) As a result, some researchers acknowledge the importance of psychological factors in addition to behavioral aspects in understanding customer loyalty Customer loyalty is characterized as a blend of relative attitude and consistent patronage (Day, 1969; Dick & Basu, 1994).
Jacoby and Kyner (1973) define loyalty as a consistent behavioral response over time by a decision-making unit towards specific brands, influenced by psychological processes This definition highlights that loyalty involves selective purchasing behavior rather than random choices among alternatives.
In 1973, the idea of a "decision-making unit" was introduced, focusing on the individuals responsible for making purchase decisions rather than the actual users or buyers, which is crucial for understanding customer loyalty.
Oliver (1999) defines loyalty as the dedication to repeatedly purchase a preferred brand, even when external factors or marketing strategies may lead to changes in consumer behavior.
Customer loyalty can be categorized into various levels based on the interplay between attitude and behavior, ranging from no loyalty to spurious, latent, and true loyalty (Dick & Basu, 1994) Additionally, Kuusik (2007) identifies three types of customer loyalty: loyalty that is forced, loyalty that arises from inertia, and functionally driven loyalty.
In the purchasing process, the consumer passes through three “successive related phases”, which are cognitive, affective-evaluative and conative (Lavidge & Steiner, 1961; Dick & Basu,
This study defines Customer Loyalty in retail banking as the strong relationship between customers' positive attitudes and their consistent patronage of a chosen bank.
Customer loyalty plays a crucial role in enhancing business performance, leading to numerous studies identifying its determinants in retail banking However, the majority of this research has been focused on the United States and Europe, with official studies in the Asian context remaining limited.
Moreover, these studies are predominantly fulfilled by surveys on student segmentation
In examining theories of customer loyalty, it is essential to clarify the connections between bank selection, behavioral intention, and customer loyalty The factors influencing bank selection determine why customers choose one bank over another, while customer loyalty reflects the frequency of repeat transactions with a preferred bank Consistent selection of the same bank fosters loyalty, indicating that the determinants of bank selection also impact customer loyalty Additionally, behavioral intention serves as a key determinant of loyalty, suggesting that the factors influencing behavioral intention likewise affect customer loyalty.
Surveys conducted among residents and students in the United States and Asia reveal key factors influencing bank selection, behavioral intention, and customer loyalty Notably, perceived quality and customer satisfaction emerge as the primary determinants of customer loyalty.
(Parasuraman et al., 1988; Parasuraman et al., 1991; Boulding et al., 1993; Zeithaml et al., 1996)
Previous studies indicate a positive relationship between perceived quality, customer satisfaction, and customer loyalty However, these factors alone do not fully account for loyalty, as some consumers remain loyal despite dissatisfaction with the service Researchers have identified additional determinants of loyalty, including brand awareness (Aaker, 1996; Jing et al., 2014) and service quality (Laroche et al., 1986; Sinkula & ).
Lawtor, 1988; Ying & Chua, 1989), convenience (Laroche et al., 1986; Martenson 1985; Lewis,
1982; Schram, 1991), social influence (Chua, 1980; Martenson, 1985), service personnel (Ying
& Chua, 1989) and switching costs (Beerli et al., 2004; Cronin & Taylor, 1992; Hellier et al.,
Chua (1980) discovered that social influences, particularly from family and friends, play a significant role in the bank selection process among Singapore students In contrast, the impact of third-party influences is minimal in determining the banking choices of Singapore undergraduates.
Previous studies on the factors influencing customer loyalty in Vietnam, along with interviews conducted with individual customers, provide valuable insights into the determinants of loyalty in this market.
This study examines the factors affecting customer loyalty in Vietnam's retail banking sector, specifically focusing on brand awareness, convenience, service personnel, customer satisfaction, social influence, and switching costs The following sections will provide a detailed analysis of each determinant.
Brand Awareness
Brand awareness is a component of brand equity, which expresses the ability of consumer to recall and recognize the brand among the alternatives under different conditions (Aaker, 1991;
Keller, 1998) Brand awareness symbolized for the strength of a brand’s presence in the consumer’s mind” (Aaker, 1996)
Brand awareness encompasses both brand recall and brand recognition, varying significantly among consumers While some individuals may recognize a brand amidst its competitors, they may struggle to recall it.
1995) The highest brand awareness is unaided recall when consumer is aware of a brand without any external stimulus (Mariotti, 1999; Laurent et al, 1995)
Brand awareness belongs to cognitive phase, which is a part of relative attitude in customer loyalty (Lavidge & Steiner, 1961; Dick & Basu, 1994) Hence, brand awareness has an influence on relative attitude
Increased brand awareness significantly enhances the likelihood of consumer repurchase, as individuals tend to remember only those brands they recognize and consider for purchase Prior to making a buying decision, brand awareness serves as a crucial factor in selecting a brand from their consideration set (Hoyer & Brown, 1990) Consequently, brand awareness plays a vital role in influencing purchasing behavior.
Brand awareness significantly impacts customer loyalty by affecting both relative attitude and purchase behavior Therefore, we propose the following hypothesis:
Hypothesis 1: Brand awareness has a positive relationship with customer loyalty.
Convenience
As society develops, individuals are increasingly busy, leading them to seek convenience in their shopping experiences Customers are less likely to spend time visiting familiar stores when similar services are available nearby Consequently, the demand for convenient services has surged, prompting service providers to devise innovative strategies to enhance customer convenience Numerous studies have explored the concept of convenience in both retail services and retail banking.
Service convenience, as defined by Morganosky (1986), is the ability to complete a task quickly and with minimal effort, highlighting the importance of saving time and energy for customers (Brown, 1990) Michael et al (2003) note that convenience can influence customer defection in standardized services like banking, making it a crucial factor in retaining customers when satisfaction declines Lee and Marlowe (2003) point out that perceptions of convenience vary among individuals; for younger customers, it may relate to the availability of ATMs, while older customers prioritize branch locations and transaction hours This study emphasizes the significance of location, transaction hours, and ATM accessibility in assessing service convenience.
Numerous studies indicate that convenience significantly affects customer loyalty and repurchase intentions (Jones et al., 2003), as well as influencing bank selection (Laroche et al., 1986; Martenson, 1985; Lee & Marlowe, 2003) This highlights the critical role of convenience in fostering customer loyalty Additionally, convenience is a key component in various perceived service quality measurement scales, including the SERVQUAL (Parasuraman et al., 1988) and SERVPERF scales.
Convenience is a crucial factor in assessing service quality, which is a significant predictor of behavioral intention Research indicates that convenience positively impacts customer loyalty Therefore, we propose the following hypothesis.
Hypothesis 2: Convenience has a positive influence on customer loyalty.
Service Personnel
Service Personnel encompasses the skills and demeanor of employees during customer interactions Despite Jones et al (2003) categorizing banking as a semi-customized and less personal service, the role of service personnel remains crucial in distinguishing banking competitors.
In Vietnam, commercial banks exhibit minimal differences in service and interest rates due to government-controlled ceiling rates The key distinguishing factors are the capital size and the quality of service provided by staff Banking, as an intangible service, relies heavily on employees with strong backgrounds, and customers gauge service quality through their interactions with banking officers Consequently, the quality of banking staff is crucial; however, it varies significantly across the country due to diverse backgrounds and regional cultures.
Similar to convenience, service personnel is also one of standards used to estimate service quality Service personnel is also mentioned in SERVQUAL scale (Parasuraman et al.,
The SERVPERF scale (Cronin & Taylor, 1992), DTR scale (Dabholkar et al., 1996), and MLH model (Mehta et al., 2000) are key frameworks for assessing service quality Research indicates that service quality is positively correlated with behavioral intention, as supported by studies from Parasuraman et al (1988, 1991) and Boulding et al (1993).
Zeithaml et al., 1996) Therefore, service personnel also influences on the loyalty The hypothesis 3 is supposed as follow
Hypothesis 3: Service Personnel has a positive influence on customer loyalty.
Customer Satisfaction
Customer satisfaction is the key antecedent of customer loyalty (Oh, 1999; Cronin &
Customer satisfaction is a uni-dimensional construct that reflects feelings after consumption It is often viewed as a trade-off between expected service quality and perceived service quality When consumers perceive the quality of service to be better than their expectations, they feel satisfied; conversely, if the perceived service quality falls short of expectations, dissatisfaction arises.
Dick and Basu (1994) define satisfaction as the post-purchase response to a brand after matching expectations and perceived performance
Numerous studies indicate that customer satisfaction significantly enhances repurchase intention (Cronin & Taylor, 1992; Oh, 1999) Satisfied customers are more likely to repurchase compared to their dissatisfied counterparts, making repurchase behavior a key indicator of customer loyalty While Fornell (1992) notes that loyal customers may not always be satisfied, it is evident that satisfied customers are more inclined to demonstrate loyalty Thus, satisfaction serves as a crucial precursor to customer loyalty (Bitner, as cited in Dick & Basu, 1994).
Due to previous points of view on the relationship between satisfaction and loyalty, the hypothesis 4 is given as below
Hypothesis 4: Customer satisfaction has a positive influence on customer loyalty.
Social Influence
Social influence refers to the influence caused by reference groups such as media, family, friends, and peers on an individual’s consumption behavior (Ryan, 1982; Ryan & Bonfield,
According to Deutsch and Gerard (as cited in Phan & Ghantous, 2013), consumers are influenced by others in two key ways: they may seek information about products or services through informative influence, or they may choose products or services that are endorsed by others through normative influence.
Social influence is a determinant of patronage behavior (Darden, as cited in Evans et al.,
1996) Many previous studies show the social influence on purchase behavior (Bloch et al.,
1994; Feinberg et al., 1989; Evans et al., 1996)
Hofstede (as cited in Phan & Ghantous, 2013) highlights the impact of collectivism and individualism on consumer behavior Collectivist individuals tend to be interdependent and group-oriented, while those from individualistic cultures are more independent and self-focused Consequently, behaviors in collectivist cultures are significantly shaped by social factors, such as reference groups and social norms, compared to individualistic cultures This leads to a stronger tendency for consumers in collectivist societies to conform to social influences (Dogerlioglu-Demir & Tansuhaj, Gupta, as cited in Phan & Ghantous, 2013).
Vietnam exhibits a strong collectivist culture, which significantly shapes consumer purchasing behavior and customer loyalty through social influences Research by Phan and Ghantous (2013) highlights the effect of social influence on loyalty within the Vietnamese retail banking sector Building on these findings, we propose the following hypothesis.
Hypothesis 5: Social influence has a positive influence on customer loyalty.
Switching Costs
Switching costs play a crucial role in customer loyalty, encompassing both financial and non-financial expenses These costs include the time and effort customers invest when transitioning to a different service provider, which can deter them from making a change.
Ruyter et al., 1998) Selnes (1993) defines switching costs as technical, financial or psychological factors, which creates the barriers of difficulty and expensiveness for customers when altering to another brand
About the impact of switching cost on customer behavior, it can be explained as follow
When customers are dissatisfied with their current brand, they often consider switching to another one; however, this decision comes with various costs These costs include the time and effort spent searching for alternatives, account closure and opening fees, and the risk of selecting a subpar service The impact of dissatisfaction must outweigh these switching costs for customers to make a change For instance, if a customer is unhappy with their bank's service and contemplates transferring their savings, they must weigh the fees associated with early withdrawal, high remittance charges, and the potential risks of carrying cash or choosing a new bank with inadequate service Ultimately, customers compare their dissatisfaction against the perceived costs of switching to determine their final decision.
Research indicates that higher perceived switching costs make competitive brands less appealing, reducing the likelihood of customers switching to alternatives (Selnes, 1993; Klemperer, 1995; De Ruyter et al., 1998) These switching costs create a barrier that can lead to spurious loyalty, characterized by a low relative attitude but high repeat patronage (Dick & Basu, 1994) Consequently, this study introduces Hypothesis 6 based on previous findings regarding switching costs.
Hypothesis 6: Switching costs have a positive influence on customer loyalty.
Research Model
According to research objective and questions, research model is established based on literature review and the relationships between customer loyalty and its determinants in
Hypothesis 1: Brand awareness has a positive relationship with customer loyalty in Vietnamese retail banking tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Hypothesis 2: Convenience has a positive influence on customer loyalty in Vietnamese retail banking
Hypothesis 3: Service Personnel has a positive influence on customer loyalty in Vietnamese retail banking
Hypothesis 4: Customer satisfaction has a positive influence on customer loyalty in Vietnamese retail banking
Hypothesis 5: Social influence has a positive influence on customer loyalty in Vietnamese retail banking
Hypothesis 6: Switching costs have a positive influence on customer loyalty in Vietnamese retail banking
The six hypotheses above are presented in the figure of research model below
Figure 4 – Research Model tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
RESEARCH METHODOLOGY
Research Design
According to Singleton and Straits (2005), there are various research methods available such as survey research, experimental research, qualitative research and historical research
Researchers select various methods to design their studies based on their objectives In this research, the survey method is utilized to examine the relationships between customer loyalty and its influencing factors.
Survey research is conducted to analyze the characteristics, attitudes, behaviors, or opinions of a specific population This method allows for the collection of extensive information from a large group, enabling direct data gathering from real-life situations.
Straits, 2005) Singleton and Straits (2005) also claims that survey research is the most effective mean of social description
The measurement scales for seven concepts in the research model were developed based on the theories reviewed in Chapter 2 An initial questionnaire was created using these scales and tested through in-depth interviews with eight customers of commercial banks in Vietnam The interviews aimed to ensure that respondents fully understood the questionnaire, enhancing the quality of the measurement scales and the collected data Following the interviews, all feedback was documented to refine the initial questionnaire into a final version.
The final questionnaires were distributed through email, Google surveys, and direct distribution to the defined study population Data was filtered, collected, and entered into an Excel file for SPSS analysis Incomplete questionnaires and those with identical responses for all statements were excluded from the dataset Subsequently, the SPSS program was utilized to conduct essential tests.
- Test of Reliability to ensure the measurement scales were reliable and significant
- EFA test to clutch 25 items into meaning groups
- Correlation test to make the necessary condition for regression
- Test for the assumption of Regression Model to ensure the model did not violate the assumption
- Regression Model Research process is below in figure 5:
Research Objective Literature Review Initial
Questionnaire Pilot Test Final Questionnaire
Regresstion Analysis Factor Analysis Reliability Analysis Main Survey
(n = 258) tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Sampling
Sampling is a crucial step in hypothesis testing, as it reduces costs and saves time To ensure accurate results, the sample must be representative of the research population There are two main types of sampling: probability sampling, which offers better representation but is more time-consuming and costly, and non-probability sampling This study opts for non-probability sampling due to its efficiency.
This study aims to test the relationships of Brand Awareness, Convenience, Service Personnel, Customer Satisfaction, Social Influence and Switching Costs on Customer Loyalty in
Vietnam retail banking service Therefore, the sample is towards to individuals and households who are customers of commercial banks in Vietnam
Ho Chi Minh City was selected as the sample area due to its status as Vietnam's largest and most developed city, where a significant number of banking service users reside The urban population has greater access to modern banking facilities, and the quality of banking services in Ho Chi Minh City is regarded as the best in the country, surpassing that of Hanoi and rural regions Additionally, many residents possess a solid background and knowledge of banking services, leading to improved interactions between bank staff and customers Consequently, conducting surveys in Ho Chi Minh City provides a diverse and representative sample of the population.
Secondly, there are about 49 banks competing in Vietnam Ho Chi Minh City is the unique place in Vietnam where almost commercial banks have branches Sampling in Ho Chi
Minh City provides a comprehensive overview of the retail banking sector in Vietnam, highlighting key trends and developments.
This study focuses on customer loyalty within the retail banking sector in Vietnam, specifically targeting individuals and households who are bank customers in Ho Chi Minh City.
Conducting surveys on current customers is advantageous due to the ease of launching questionnaires Additionally, key concepts in the research model, such as service personnel and customer satisfaction, are based on personal experience To obtain more accurate data, measurement scales for these concepts should be administered to individuals who have experienced banking services.
Defining an appropriate sample size is crucial for research, as it impacts the generalizability of findings to the target population The sample size should be determined based on the study's nature and the statistical methods selected for data analysis Ensuring a sufficient sample size is essential for generating adequate statistical power in the research outcomes.
(Hair et al, 2009) Babbie and Mouton (2001) recommends that for validation purpose, the survey needs approximately 50 subjects, depending on the number of assessments used
Determining sample size typically follows a common rule that focuses on a minimum size Various methods exist for selecting the appropriate sample size, with the chosen number meeting all technical analysis requirements for the research This study utilized Exploratory Factor Analysis.
To effectively conduct Exploratory Factor Analysis and multiple regression techniques, a sufficiently large sample size is essential Hair et al (2009) recommend a minimum of five observations per item and at least 100 total observations for Exploratory Factor Analysis For regression models, the minimum sample size, denoted as \( n \), is calculated using the formula \( n = 50 + 8k \), where \( k \) represents the number of independent variables (Nunnally & Bernstein, as cited in Nguyen, 2011) This study utilized a multiple regression model with one dependent variable, Customer Loyalty, and six independent variables, including Brand Awareness, Convenience, Service Personnel, and Customer Satisfaction.
The study examines social influence and switching costs, utilizing measurement scales that include 25 items For the Exploratory Factor Analysis, a minimum sample size of 125 observations is required, calculated as n = 25*5 Additionally, the regression model necessitates at least 98 observations, determined by the formula n = 50 + 8*6.
To conclude, the minimum sample size for this study is 125 observations because it satisfies all requirements of Exploratory Factor Analysis and regression model.
Questionnaire Design
A questionnaire translates research concepts into measurable items based on respondents' answers Researchers can create this tool through in-depth interviews or by leveraging existing theories This study developed a measurement scale for seven concepts grounded in prior research.
The measurement scale of Brand Awareness was adapted from Aaker (1996) with five items Three items adapted from Lee and Marlowe (2003) measured Convenience factor The
The Service Personnel scale, developed based on the research by Hellier et al (2003), consists of five items Additionally, three items from the Customer Satisfaction scale were adapted from the work of Cronin et al (2000) Furthermore, Social Influence was assessed using three items derived from Phan and Ghantous (2013).
Finally, the measurement scales for Switching Costs and Customer Loyalty included in each of three items from Beerli et al (2004) Totally, the initial questionnaire had 25 items
The initial questionnaire was tested by a diverse group of eight individuals, all of whom are customers of banks in Ho Chi Minh City, specifically Vietinbank, Vietcombank, and Asia Commercial This group comprised one architect, one pharmaceutical representative, one student, one retired person, two logistics staff members, and two business professionals.
The group demonstrated a strong understanding of 25 items, although some statements require clearer wording All feedback from interviewees has been recorded for adjustments to the questionnaire (refer to Appendix B) The measurement scales for the seven concepts of the research model are detailed in the table below.
Table 3 - Construction of Measurement scale
I clearly know my bank Adapted from
Aaker (1996) When talking about banking, I will remember my bank
I can recognize my bank among others
I can distinguish my bank from others
Characteristics of my bank could come to me quickly
This bank has convenient location Adapted from Lee and Marlowe
(2003) This bank has many ATMs
This bank has convenient hours
Employees understand my specific needs Adapted from
Hellier et al (2003) Employees are always willing to help me
Employees tell me exactly when a service can be provided
Behavior of employees instills confidence to me
Employees give me prompt service
My choice to avail this bank service is a wise one Adapted from
I made the right choice by selecting this bank for its services, ensuring I have access to the latest resources and support for my academic needs.
Services of this bank are exactly same what I need
I often consult other people to help choose the best banking service from various banks
Adapted from Phan and Ghantous
I frequently gather information from other people about the banking service I intend to use
I often observe what banking service others are using
To change to another bank requires me to invest time in searching for information about other banks
Adapted from Beerli et al (2004)
To change to another bank involves me much effort in deciding which bank to use
To change to another bank involves me a risk in choosing another bank which might turn out not to satisfy me
I do not like to change to another bank because I value the selected bank
Adapted from Beerli et al (2004)
I am a customer loyal to my bank
I would always recommend my bank to someone who seeks my advice
The final questionnaire for the survey research was revised based on prior studies and in-depth interviews with a Vietnamese group (refer to appendix C) To adapt foreign theories to the Vietnamese context, the 25 items were translated into Vietnamese.
(see Apendix D) before launching to the study population
The questionnaire consisted of two sections, each aimed at gathering essential information.
Section I : is the main part beginning with the two open questions about the bank the respondents frequently visit and the kinds of banking service they are using in that bank The purpose of these two questions is to help the respondents focus on the bank they answered to do the whole survey The next in this section was 25 items constructed above, measured with five- point Likert Scale from 1-Strongly Disagree, 2-Disagree, 3-Neutral, 4-Agree to 5-Strongly agree
This section measures all seven concepts in the research model
Section II: is the general information of the respondent, including gender, age, occupation and average monthly income This section was designed to acquiring specific demographic information.
Data Collection Result
In the sampling section, we defined the minimum size for this survey is 125 observations
A total of 330 questionnaires, translated into Vietnamese, were distributed to bank customers in Ho Chi Minh City through email, Google surveys, and direct distribution at bank branches.
In the direct questionnaire distribution, 120 papers were sent randomly and directly to customers of some banks in Ho Chi Minh City, including Vietinbank Branch 7, Eximbank Tan
The study involved Dinh Branch and Vietcombank Phu My Hung Branch, receiving a total of 283 questionnaires However, 25 responses were deemed invalid due to missing statements or uniform answers across all questions Consequently, the final analysis was based on 258 valid observations, as detailed in the accompanying table.
Table 4 – Source of questionaire collection
Source Distributed Collected Eliminated Valid
Data Analysis Method
The collected data was conducted by SPSS software version 19 using enter method
Various statistical tests were also extracted Firstly, the validity and reliability of the measurement scales were checked using Cronbach’s Alpha analysis and Exploratory Factor
In the analysis phase, items failing to meet reliability and validity criteria were removed prior to conducting regression analysis Subsequently, six hypotheses were evaluated through multiple regression to explore the relationship between various determinants and customer loyalty.
This chapter outlines the research methodology, covering aspects such as research design, sampling techniques, measurement scale development, data collection, and data analysis methods The findings derived from the data will be presented in the subsequent chapter.
DATA ANALYSIS
Descriptive Analysis
The demographic statistic conducted by SPSS in the table below illustrated the study population
No Demographic Description Frequency Percent
This study investigates the factors influencing retail banking customer loyalty in Vietnam, focusing on current customers of various banks in Ho Chi Minh City A convenient survey was conducted, revealing that a majority of respondents, 58%, were female, with 150 females out of a total of 258 participants, while 42% were male.
This is consistent with Vietnamese culture In most of Vietnamese families, managing financial budget is allotted to women
In this sample, office staff and businesspersons represent the largest group, comprising 70% of respondents, followed by workers at 17.8% and students at 7.4% These individuals are the primary customers of retail banking services, with a significant demand for credit, accounts, money remittance, payments, and savings Consequently, the insights gathered from these respondents will be valuable for the study.
Over half of Vietnam's population is of working age, with a significant concentration of the labor force in major cities that host financial centers and large industrial zones This demographic trend presents a substantial opportunity for retail banking in the country Notably, over 70% of survey respondents are aged between 18 and 45, a crucial period for earning and wealth accumulation, making this age group one of the most vital segments for retail banking services in Vietnam.
In the study population, more than 50% respondents earned from 10million to 20million dongs per month; whereas, nearly 23% people surveyed had their monthly income in the range of
In Vietnam, only 15.1% of individuals earn over 20 million dongs per month, while the lowest income group, earning under 5 million dongs, represents 10% of the population According to Maslow's hierarchy of needs, individuals prioritize their income for basic physiological needs such as food and living expenses before considering savings and banking services Consequently, as income increases, the likelihood of utilizing banking services also rises Notably, over 90% of respondents in this study earn more than 5 million dongs per month, highlighting a significant trend in financial behavior.
The survey conducted on individual customers of various banks in Ho Chi Minh City revealed valuable demographic insights, indicating that the sample is suitable for examining the factors influencing customer loyalty in retail banking The unique advantages and characteristics of Ho Chi Minh City as a major financial hub further enhance the relevance of these findings.
The study population from the city is indicative of the retail banking market in Vietnam Therefore, testing the model with this sample is significant and may provide insights into the development of the retail banking industry in Vietnam.
Reliability Test
Before running any regression model, it is essential to conduct a reliability test Cronbach’s alpha serves as a key measure of internal consistency, helping to assess the reliability of measurement scales The coefficient ranges from 0 to 1, with a value above 0.6 indicating a reliable measurement scale Additionally, a corrected item-total correlation above 0.4 is necessary for reliability If the correlation score is negative or below 0.3, it is important to review the item for potential wording issues or conceptual fit, and to consider whether to delete such items.
The reliability test results for the 25 items in this study are detailed in the table below.
Scale Mean if Item Deleted
Scale Variance if Item Deleted
Cronbach's Alpha if Item Deleted
LOY25 9.13 1.796 591 720 tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
The analysis revealed that the Cronbach’s alpha values for all seven variables exceeded 0.6, indicating acceptable reliability Notably, the Cronbach's Alpha if Item Deleted for items BAW1, BAW2, BAW3, BAW4, and BAW5 were all lower than the overall Cronbach’s alpha of Brand Awareness, which stood at 0.842 Additionally, the variable Convenience included three items—CON1, CON2, and CON3—each contributing to the reliability assessment.
Deleted values lower than its Cronbach’s alpha 0.626 This is similar for the other variables
The study examined the relationships between service personnel, customer satisfaction, social influence, switching costs, and loyalty Notably, all 25 items assessed showed a Corrected Item-Total Correlation above 0.4, indicating that the measurement scale for the seven variables was reliable, and no items needed to be removed.
Exploratory Factor Analysis (EFA)
Exploratory Factor Analysis (EFA) is a valuable method for assessing construct validity by extracting items into distinct components, each representing a specific concept The determination of the number of components to extract typically relies on the eigenvalue criterion, where an eigenvalue greater than 1.0 indicates that the factor accounts for more information than a single item Conversely, an eigenvalue below 1.0 suggests that the factor provides less explanatory power than an individual item.
This study involved two Exploratory Factor Analysis (EFA) tests utilizing Principal Component Analysis for extraction and the Varimax Rotation Method The first test analyzed 22 items across six independent variables, while the second test focused on the remaining three items of the dependent variable.
In Exploratory Factor Analysis, it is essential to consider various indicators to ensure accurate results.
The Kaiser-Meyer-Olkin (KMO) value is a crucial measure in factor analysis, with a recommended threshold of greater than 0.70 for adequate sampling A KMO value of 0.60 is considered acceptable, while values below 0.50 indicate poor sampling adequacy (Leech et al., 2005) This test assesses whether there are sufficient items predicted by each factor.
- The Bartlett test should be significant to prove that the variables are correlated highly enough to provide a reasonable basis for factor analysis (Leech et al, 2005)
The first EFA test included 22 items to consider whether the items were grouped into clusters as in the measurement scale construction designed above The results of KMO and
Bartlett’s Test, Rotated Component Matrix and Total Variance Explained run by the SPSS program were presented in the tables below
The KMO value in the Exploratory Factor Analysis of independent variables was 0.843, indicating a sufficient number of items for each factor, as it exceeds the threshold of 0.7 Additionally, Bartlett’s Test was significant with a p-value less than 0.05, confirming that the variables were adequately correlated for factor analysis.
Table 7 – KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
After rotation, Table 7 indicated that six components were extracted from 22 items based on the criterion of eigenvalue > 1 These components included items with high factor loadings greater than 0.5 The Rotated Component Matrix confirmed that all items were successfully categorized into the six components, aligning with the measurement scale developed in the previous section.
Extraction Method: Principal Component Analysis
Rotation Method: Varimax with Kaiser Normalization a Rotation converged in 6 iterations
The Total Variance Explained by the six extracted components is 72.374%, which exceeds the 50% threshold, indicating that these components account for a significant portion of the information derived from the six independent variables.
From all indicators analyzed above, the items of each construct of six independent variables were well conceptualized
The KMO value was acceptable at over 0.6, indicating that the three items were sufficient for the dependent variable Additionally, Bartlett’s Test was significant, with a p-value less than 0.05.
Extraction Method: Principal Component Analysis tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Table 10 – KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
The Total Variance Explained table revealed that a single component was extracted from the three items of the dependent variable, exhibiting high factor loadings (refer to Table 10) with an eigenvalue greater than 1 This component accounts for 69.648% of the variance in the dependent variable.
Initial Eigenvalues Extraction Sums of Squared Loadings Total % of
Extraction Method: Principal Component Analysis
Extraction Method: Principal Component Analysis a 1 components extracted
In conclusion, the Loyalty factor identified through Exploratory Factor Analysis (EFA) met all necessary criteria for data reduction, paving the way for subsequent multivariable regression analysis.
Correlation Matrix
The reliability test and Exploratory Factor Analysis established initial criteria for regression analysis Additionally, testing the correlation among variables is essential, as it serves as a crucial criterion for the regression model.
Table 13, generated by the SPSS program, indicates that the correlations between the six independent variables (BAW, CON, SP, SAT, SI, SC) and the dependent variable (LOY) are significant at the 0.01 level (2-tailed), allowing for the conduct of regression analysis on this survey.
BAW CON SP SAT SI SC LOY
N 258 258 258 258 258 258 258 tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
** Correlation is significant at the 0.01 level (2-tailed)
* Correlation is significant at the 0.05 level (2-tailed).
Regression Assumption Tests
According to Leech et al (2005), there were some main assumptions for a multiple regression model
Assumption 1: There was a linear relationship between independent variables and dependent variable
Assumption 2: The residual was distributed normally Assumption 3: There was no multicollinearity among independent variables
The next sections would apply some techniques of SPSS program to consider whether any assumption of the regression model was violated
To test assumption 2, the overall regression plot's shape is crucial; a curvilinear shape suggests that the predictors do not have a linear relationship with the dependent variable The plot presented in Appendix E supports this assumption effectively.
The validity of this assumption can be verified through the residual scatter plot A scattered arrangement of the dots in the chart indicates that the data satisfies the condition of normally distributed residuals.
This research confirmed the initial assumption, as detailed in Appendix E.
Multicollinearity is a critical assumption to address before conducting multiple regression analysis, as it can distort the significance of the results This issue arises when there are high inter-correlations among independent variables, potentially leading to misleading conclusions in data analysis.
(Leech et al., 2005) To test this assumption, the correlation matrix presents how the variables correlate to each other
The correlation matrix indicated that all Pearson correlation values between variable pairs were below 0.8, with significance levels under 0.05 This suggests that the correlation among predictors is not sufficiently high to lead to multicollinearity.
In other words, this matrix proved that there would be a low possibility of multicollinearity
Although the Correlation matrix was helpful in identifying multicollinearity, sometimes it failed in testing such problem Therefore, it is necessary to consider the VIF value in the table of
The analysis revealed that all predictors had a Variance Inflation Factor (VIF) value lower than 2, indicating the absence of multicollinearity, as supported by Leech et al (2005) Additionally, the Tolerance values exceeded the threshold of (1 - R²) = 0.339, confirming that the model met the necessary assumptions.
In summary, the data almost met all the required assumptions Therefore, all predictors were qualified enough for multiple regression analysis.
Regression Analysis
tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
The analysis demonstrated that a regression model is applicable due to the identified correlation between six determinants and customer loyalty, with all regression assumption tests being satisfied The model incorporates six independent variables: Brand Awareness (BAW), Condition (CON), Service Personnel (SP), and Satisfaction (SAT).
Social Influence SI, Switching Costs SC) and one dependent variable (Loyalty LOY) was then conducted simultaneously by the SPSS program via multiple regression with the enter method
Std Error of the Estimate
1 818 a 669 661 36872 669 84.588 6 251 000 1.671 a Predictors: (Constant), SC, SP, CON, SI, BAW, SAT b Dependent Variable: LOY
The result in the table 14 showed that the correlation coefficient (R) was 0.818, R square was 0.669 and Adjusted R Square was 0.661; meaning that 66.1% the variance of Loyalty in
Vietnam retail banking could be predicted by the six independent variables (Brand Awareness
BAW, Condition CON, Service Personnel SP, Satisfaction SAT, Social Influence SI and
Switching Costs SC) In other words, the regression model in this study was strongly fit
Model Sum of Squares Df Mean Square F Sig
The analysis reveals a total of 103.125 observations with 257 data points The dependent variable in this study is LOY, while the predictors include SC, SP, CON, SI, BAW, and SAT.
The table 15 showed the F value was 84.588 and the significance value was lower than 0.05 This means that the model significantly predicted the changes of dependent variable
B Std Error Beta Tolerance VIF
Table 16 presents the significance values, Standardized Coefficients Beta, and Collinearity Statistics for each independent variable, which are crucial for evaluating the six hypotheses (refer to Table 17) As all six determinants exhibited significance values below 0.05, we accepted all six hypotheses Additionally, the Unstandardized coefficients were analyzed.
Coefficients of six variables were all greater than 0, showing that these six factors had the positive influence on the loyalty
Brand awareness has a positive relationship with customer loyalty in Vietnamese retail banking
0.27 0.000 Supported tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Convenience has a positive influence on customer loyalty in Vietnamese retail banking
Service Personnel has a positive influence on customer loyalty in Vietnamese retail banking
Customer satisfaction has a positive influence on customer loyalty in Vietnamese retail banking
Social influence has a positive influence on customer loyalty in Vietnamese retail banking
Switching costs have a positive influence on customer loyalty in Vietnamese retail banking
The SPSS program was utilized to convert Unstandardized Coefficients B into Standardized Coefficients Beta, allowing for the comparison of various determinants affecting customer loyalty in Vietnam's retail banking sector The analysis revealed that Brand Awareness, Satisfaction, and Switching Costs were the most significant factors influencing customer loyalty, with Betas of 0.270, 0.240, and 0.212, respectively Among these, Brand Awareness emerged as the strongest influence on customer loyalty, while Service Personnel, Convenience, and Social Influence had lesser impacts, with Betas of 0.163, 0.158, and lower.
The upcoming section will provide a detailed analysis of each hypothesis.
Hypothesis 1: Brand awareness has a positive influence on customer loyalty in Vietnamese retail banking
This hypothesis was accepted because of the significance value lower than 0.05
Moreover, the Unstandardized Coefficient B was 0.262 (greater than 0) showed that Brand
Awareness has a positive influence on customer loyalty The Standardized Coefficient Beta
Brand Awareness emerged as the most significant factor influencing customer loyalty in retail banking in Vietnam, with a value of 0.270 among six determinants This indicates that retail customers are more likely to remain loyal to their banks when they can easily recall and recognize them These findings align with previous research, highlighting Brand Awareness as a key cognitive antecedent that impacts customer loyalty.
Hypothesis 2: Convenience has a positive influence on customer loyalty in Vietnamese retail banking
This hypothesis was accepted because of the significance value lower than 0.05
Moreover, the Unstandardized Coefficient B was 0.172 (greater than 0) showed that
Convenience positively influences on customer loyalty This was consistent to previous research
(Lee & Marlowe, 2003; Mokhlis et al., 2009; Almossawi, 2001; Thwaites & Vere, 1995;
In Vietnam's retail banking sector, the Standardized Coefficient Beta for Convenience was the lowest at 0.158 among six determinants, indicating that customers prioritize this factor the least This finding aligns with the research conducted by Laroche et al (1986) and Schram (1991).
Thwaites and Vere (1995) identified convenience, particularly the location of banks and ATMs, as a key factor influencing the choice of banking institutions among Canadian and British consumers However, in Vietnam, convenience plays a lesser role for banking customers This is attributed to the rapid expansion of bank branches and ATMs in major cities like Hanoi, Ho Chi Minh City, and Danang, alongside the widespread adoption of advanced technology that enables customers to conduct transactions at any branch within the same banking system, regardless of where they opened their accounts Consequently, the significance of location as a barrier has diminished.
Hypothesis 3: Service Personnel has a positive influence on customer loyalty in Vietnamese retail banking
This hypothesis was supported because of the significance value lower than 0.05
Moreover, the Unstandardized Coefficient B was 0.139 (greater than 0), the Standardized
Coefficient Beta (0.163) showed that the influence of Service Personnel on customer loyalty is positive This result was consistent to aforementioned research (Laroche et al., 1986; Khazeh &
Decker, 1993; Thwaites et al., 1997; Almossawi, 2001)
Hypothesis 4: Customer satisfaction has a positive influence on customer loyalty in
The significance value of Satisfaction in Table 15 was below 0.05, leading to the acceptance of the hypothesis The Unstandardized Coefficient B of 0.177 indicates a positive influence on customer loyalty, while the Standardized Coefficient Beta of 0.240 positions Satisfaction as the second most important factor affecting customer loyalty in Vietnam's retail banking, following Brand Awareness This suggests that higher customer satisfaction with retail banking services correlates with increased loyalty Conversely, growing dissatisfaction can lead customers to switch banks, supporting previous research on the positive relationship between satisfaction and loyalty.
Hypothesis 5: Social influence has a positive influence on customer loyalty in Vietnamese retail banking
The hypothesis was accepted due to a significance value below 0.05 This study aligns with the findings of Ta and Har (2000) and Gerard and Cunningham (2001), which examined bank selection among Singapore undergraduates Notably, the influence of referrals from others emerged as the least significant factor affecting customer loyalty in Vietnam's retail banking sector, as indicated by the lowest Standardized Coefficient.
Beta (0.158) However, the impact of Social Influence on Loyalty was still significantly positive
The study found a significant relationship (p