The Research On The Relationship Of Relation Quality,Switching Cost And Customer Retention

With the full-scale opening up of Chinese financial markets and the deepening reform of the financial system, the competitive intensity between Chinese commercial banks has been aggravated. In the past two years, many domestic commercial banks have been active in striving to new patterns and new changes of the financial competitive environment by applying new business competitive strategy. After years of financial reform, the scale effects, by setting up large-scale branches to expand new customers, are gradually disappearing. In the new round of horizontal competition, the banks turn their targets to the old customers again, reducing the customer churn rate by5%which will increase the customer value by25%, therefore, the banks expect to improve the customer retention rate for higher competitive profits. As the complexification of the financial market environment and the increasing demand of bank customers, personal customer retention largely determines the survival and development of the commercial banks in the future fierce competition. At present, Chinese commercial banks have gradually implemented the new management model for customer relationship management, which is strived to enhance and improve the relationship between banks and their customers, for the purpose of achieving customer retention. Nevertheless, the data of’"Chinese banks retailing business services Competitiveness Report2010" show that, in the tree higher level areas (Beijing, Shanghai, Guangzhou) of business services in China, the personal customer turnover rate of domestic commercial banks is more than40%in average, and the banking retail business overall personal Customer Retention index and public praise factor are far behind the global average. In order to enhance own competitiveness and access to good operating results, retaining the personal customer by services and other ways has become an important issue for all the commercial banks. Banks to increase the customer retention, firstly, by product promotion, secondly, by relation upgrade. The financial products offered by banks are with a high degree of homogeneity and ease of imitative, which leads the author to explore with interests in how Relation Quality effects on Customer Retention Relationships. In addition, with the complexity of the market environment and diversification of customer needs, customer choices for the banks are added with more subjective factors, from the customer’s point of view, whether switching banks is cost-effective will also affect customer retention. Therefore, we will explore the relationships and effects of Relation Quality, Switching Cost on commercial bank Customer Retention.Based on the domestic and foreign scholars’research of the relevant variables, I think relation quality has direct and indirect positive effect on the customer retention of the commercial banks, switching cost has a direct positive effect on customer retention, relation quality has a direct positive effect on switching cost. In order to verify the reasonableness of the assumptions, the empirical analysis for the research model is applied through SPSS and AMOS software, according to the ranking of total revenue, net profit, development prospects and etc. of the various banks, I selected the top10commercial bank individual customer as the research object. The principal research place is around the cities of Shandong province, a total of320questionnaires, which has a response rate of81.86%, were collected. By constructing an empirical model and analyzing of the survey data, the two hypotheses of this research were all through the check, and the following research conclusion was found:relation quality has a direct effect on commercial bank customer retention; through switching cost, relation quality has an indirect effect on customer retention; in the path of relation quality to customer retention, switching cost has a partial intermediary role.The conclusions of this research enrich the research results of the relation quality and other problems under the background of Chinese local culture, and develop ideas for the future theoretical researches on the relationship marketing, customer relationship management and other theories. The conclusions of this research will deepen the understanding of the commercial banks on the relationship marketing and customer relationship management, the banks further recognize the importance of customer retention, as well as they can help Chinese commercial banks to achieve the goals of operation and management by using the promotion of relation quality and positive switching cost to guide the customer relationship management practice activities of customer retention.