“A study into the present status of customer loyalty towards the Irish banking sector and in particular ‘Allied Irish Banks’”

Abita Baral

Declaration

I certify that this dissertation which I now submit for examination for the award of BA (HONS) in Management is entirely my own work and has not been taken from work of the others save and to the extent that such work has been cited and acknowledged within the test of my work.

This dissertation was prepared according to the regulation of the University of Wales and has not been submitted in whole or part for an award in any other institution or University.

The University has permission to keep, to lend or to copy this thesis in whole or part, on the condition that any such use of material of the thesis is duly acknowledged.

Signed _____________________________________ Date __________________________

Acknowledgement

I would like to express my gratitude to all the people who have given their heart whelming full support in preparation of this dissertation.

First of all I would like to thank the God ‘the father of all’, for giving me the strength and motivation to complete this dissertation.

It is pressure to thank my family, mom and dad for their inspiration and motivation. And I would like to give special thank to my sister Sabita for her support and supervision, this dissertation would not have been possible without her help and guidance.

I would also like to thank my friends Porshia and Sujan for their special support.

I would like to express very special thanks to my supervisor Mr. Charlie Dayman for his guidance, encouragement, motivation and support from early stage to concluding stage.

Finally, I would like to express thanks to Ms. Tracy, all lectures and management team of Grafton College, Dublin.

ABITA

Abstract

Purpose: Building customer satisfaction and loyalty is the prime goal of service industry. Customer satisfaction essentially converts into loyalty. The purpose of this research is to find out the level of customers satisfaction, dissatisfaction and loyalty to AIB following the bailout.

Design/ methodology/ approach: The quantitative research method is used to carry out research, where a series of questionnaires will be distributed to a random sample of 50 customers of AIB, whereby they will be selected on the basis of their knowledge and familiarity with the product and service offered by the bank.

Finding: The level of the customer satisfaction has decreased, dissatisfaction has increased and loyalty has decreased towards AIB following the bailout.

Research limitation: The research does not include the entire Irish Banking sector, it is only limited to the AIB. It does not include how brand attitude affect customer loyalty and satisfaction.

Practical Implementation: AIB and other members of the Irish banking sector may apply finding of this survey, regarding customer satisfaction, dissatisfaction and loyalty.

Paper type: Dissertation

Table of contents

Chapter 1

1.Introduction

1.1. Allied Irish Bank (AIB)

1.2. Methodology

1.2.1. Structure of the dissertation

Chapter 2: Literature Review

2.1. Customer satisfaction

2.2. The Expectation-confirmation theory

2.3. Brand attitudes and satisfaction

2.4. Merits of customer satisfaction to business

2.5. Customer loyalty

2.6. Building loyalty

2.7. The Satisfaction-Loyalty Relation

2.8. Switching costs

2.9. Loyalty program

Chapter 3

3. Aims and Methodology

3.1. Introduction

3.2. Research question

3.3. Research objective

3.4. Research Strategy and Methodologies

3.5. Method Employed

3.5.1. Secondary Research

3.5.2. Primary Research

3.6. Limitation of Research

3.7. Ethical issues

Chapter 4 Context and Finding

4.1. Introduction

4.2. Context of the research

4.3. Observation 1:

4.4. Observation 2:

4.5. Observation 3:

4.6. Comment from some respondent during the survey:

Chapter 5 Discussion, graph and analysis

5. Quantitative Research finding:

5.1. Figure 1: How long have you had the account with AIB?

5.2. Figure 2: Why did you open an account with AIB?

5.3. Figure 3 would you say that you are very satisfy, satisfy, not sure, Dissatisfied or very dissatisfied with service of the AIB

5.4. Fig 4: Are you a loyal customer of AIB:

5.5. Figure 5: Before the problems were identified with the banks were you a loyal customer of AIB

5.6. Figure 6: Do you think the government bailout of the banks was a good idea:

5.7. Figure 7: Do you think the banks should have been left to sort it out themselves

5.8. Figure 8: Do you think the AIB would have been able to sort it out without the government help:

5.9. Figure 9: Do you think AIB’s reputation has been damaged due to the issues with the banking sector and the need for government assistance:

5.10. Figure 10: Do you think the need for the Government support has affected the loyalty of AIBs customer:

5.11. Figure 11: If you had the opportunity to switch banks would you:

5.12. Objective one:

5.13. Objective two:

5.14. Objective three

5.15. Discussion

5.16. Limitation and Future Direction for Research

Chapter 6 Conclusion and Recommendation

6.1. Conclusion

6.2. Recommendations

Bibilography

Appendix

Chapter 1 1. Introduction

The aim of this research is to establish the level of customer loyalty towards Allied Irish Bank (AIB) following the Irish banking sectors bailout by the European Central Bank (ECB) and International Monetary Fund (IMF). The research will address the impact of the bailout on the Irish Banking sector by the European Central Bank and International Monetary Fund in the mind of customer, and identify the reasons that have caused satisfaction and dissatisfaction to customers. The study will investigate the level of customer loyalty towards AIB following the bailout.

The research objectives of this study are to identify:

· The level of customer satisfaction with AIB following the bailout;

· The level of customer dissatisfaction with AIB following the bailout;

· The present level of customer loyalty to AIB following the bailout.

Remarkable service quality and satisfaction has been identified as a key antecedent of customer loyalty in banking as well as in other service industries (Dick and Basu, 1994; Lewis, 1993). Customer loyalty in service industries is more dependent on the development of interpersonal relationships (Berry, 1983), moreover in the case of the service industry the influence of perceived experience is greater, because customer loyalty acts as a barrier to customer switching behaviour (Guiltinan, 1989; Klemperer, 1987; Zeithaml, 1981). Intangible aspects such as reliability and confidence act a key role in building and maintaining customer loyalty in the service sector (Dick and Basu, 1994). The level of loyalty in the banking sectors can be measured by “tracking customer’s accounts over a defined time period and noting the degree of continuity in patronage” (Liljander and Strandvik, 1995). Meidan (1996, p. 31). In the service industry commitment plays a central role (Morgan and Hunt, 1994; Shemwell et al., 1994). Commitment is a long lasting desire to maintain a valued relationship. According to Bloemer, et al (1998) commitment is a necessary condition for customer loyalty to bank.

1.1.Allied Irish Bank (AIB)

Allied Irish Bank (AIB) was incorporated in Ireland in September 1966 as a consequence of the merger of three well established banks: the Munster and Leinster Bank Limited (established in 1885), the provincial Bank of Ireland Limited (established in 1825) and the Royal Bank of Ireland (established in 1830). From that time, AIB has developed to be the largest Irish based banking group on the basic of market capitalisation at 31^st December 2008 (www.aib.ie, 2011)

Since September 2008 AIB has been on a financial life-support system, following the crash of the Irish property market, when the government stunned the financial world by announcing the liabilities of Irish-controlled banks would be subject to the newly introduced ‘Government Bank Guarantee Scheme’. The purpose of the government guarantee was to cover the losses incurred by the banks generated by the incapability of banks to repay their foreign borrowings.

The reasons for the losses, by the banks, were due to the size of the respective bank borrowing on the international money markets. This borrowing, funding the excessive growth in property development around Ireland, was in turn was fuelled by the ‘Celtic Tiger’ and the growth in the overall prosperity of those working in Ireland (Honohan, 2009).

The fundamental reason for the difficulty was the extent of the domestic mortgage lending (funded by the massive foreign borrowing by the banks) into an uncontrollable property market which saw house prices rise on a daily basis and planning permission being granted for developments far in excess of the population. The other main cause of the banks problems was a serious breach of protocol regarding the issuing and approving of mortgages with some banks providing up to 130% mortgages on the basis of future growth potential of the property (Honohan, 2009).

The root cause of the financial problems may never be known but it is generally accepted that the cause of the financial crash was driven by the collapse of ‘Lehman Brothers’ in America (due to excessive Prime Lending) and issues at ‘Fanny Mae/Freddie Mac’. The downside for Ireland was the inability of Irish banks to borrow from the larger investment banks and the overall drop in the housing market. The fall in the housing market resulted in the banks overall asset value being reduced and their debt increasing. Like any business the banks owed more than they were worth.

The Irish government realised that a strong financial sector is essential to any economy and took the decision to guarantee the ‘toxic’ loans at each bank. The plan was to transfer the toxic debt from the banks to the newly formed National Asset Management Agency (NAMA) thereby right sizing the asset to debt ratio and allowing the banks to raise borrowing from the international money markets.

NAMA was proposed in the April 2009 Irish Budget (Money Guide Ireland, 2009). The Government states that NAMA is a management agency which will be dealing with the problems caused to the Irish economy by the assets transferred from the Irish banks. NAMA aims at buying all of the land and property development loans from the banks. The total value of loans is €77 billion (Brian, 2009). By doing this, the Government hopes to put the banks in a condition where they can resume lending. In future, this will make NAMA the biggest landowner in Ireland.

The Irish Government realized the Irish banking sector needs more direct involvement of institutions in finding a solution to the crisis (Hennigan, 2011). Therefore, on Nov, 2010 the European Union and Euro zone finalized plans for Ireland financial Bailout. The International Monetary Fund (IMF) bailout loan for Ireland was approximately Euro 85 billion ($ 115 billion) with interest rate of 6.7% (Froymovich, 2010).

Today, the reputation of the banking sector has been damaged – through a combination of unsustainable practices and behaviours – and the sector has consequently lost the trust of stakeholders including the public. People feel let down by the banks. This is expressed in understandable anger and frustration on a daily basis (Farrell, 2010). Public think that, they have to pay tax to bailout reckless banks to compensate bond holders who were paid to take risk.

The purpose of this research is to determined level of customer loyalty towards the Irish banking sector and in particular ‘Allied Irish Banks’ and ‘the level of customer satisfaction and dissatisfaction with banking service of AIB.’

1.2.Methodology

The primary research will be carried out in order to find present level of customers’ loyalty to Allied Irish Bank (AIB) following the bailout. The research will be quantitative in nature, where a series of questionnaires will be distributed to a random sample of 50 patrons of AIB, whereby they will be selected on the basis of their knowledge and familiarity with products and services offered by the bank; in order to have an accurate analysis of their opinion regarding the level of customers’ satisfaction, dissatisfaction and loyalty with AIB following the bailout. The research data will be generated by means of quantitative research method via questionnaires. The reason behind using the quantitative research method is to provide a true reflection of general perception based on the findings rather than using secondary research method.

1.2.1. Structure of the dissertation

The dissertation will have a total of six chapters, it will start with an Introduction; second chapter covers ‘Literature Review’ which identifies reviews and critiques the literature; third chapter covers ‘Aim and Methodology’ which outlines the research aims and describes and justifies how these are to be met; fourth chapter covers ‘Context and Finding’ of the research; fifth chapter covers ‘Discussion and Analysis’ which discusses the finding in the context of the literature reviewed; finally the last chapter covers ‘Conclusion’ followed by Recommendations, Bibliography and Appendix.

Chapter 2: Literature Review

2. Introduction

The aim of the literature review is to create a basic understanding of the customers’ satisfaction dissatisfaction and loyalty, and also to obtain familiarity with recent literature on the topic and related topics. In addition to literature review of customers’ satisfaction and dissatisfaction and loyalty, different theories and model will be examined in order to establish how the bailout of banking sector affects the level of customer loyalty.

The topic ‘customer satisfaction and loyalty’ has drawn the attention of major literature and textbooks and considerable amount of research has been conducted to understand the concept of customer satisfaction and loyalty.

2.1. Customer satisfaction

Oliver (1997) defined customer satisfaction as a “pleasurable fulfilment response toward a product, service, benefit, or reward.” Customer satisfaction is an overall evaluation which signifies a sum of subjective reactions from a customer regarding products and service with varied attributes (Czepiel, et al 1984). Muller (1991) argues that customer satisfaction will become a key factor to the determine success of a business in the future. Satisfaction can be viewed as contentment, more of a passive response that consumer may associate with a service. It can be associated with feeling pleasure for a service that makes the consumer feel good which is associated with a sense of happiness (Zeithaml et al, 2006).

According to Kotler et al (2006) the satisfaction of a customer with a purchase depends upon the product’s performance relative to the buyers’ expectations. The customer might experience various degree of satisfaction. If the products performance fall shorts of expectations the customer is dissatisfied. If performances match expectations, the customer is highly satisfied or delighted. Customer satisfaction is a primary indicator of customers’ retention, positive word-of-mouth, improved profits, and lower marketing expenditures (Anderson et al., 1994; Oliver, 1999; Palmatier et al., 2006). Achieving customer satisfaction should be a primary goal for most firms, particularly service delivery organizations that organized intangible and assorted assets (Cronin & Taylor, 1992).

Ostrom and Iacobucci (1995) also believed that customer satisfaction is a multiple-item dimension which evaluates such items as product price, service efficiency, service personnel attitude, overall business performance, and ideal business service. From integration of various theories Kotler (1996) forward satisfaction as a difference function between perception and or disappointment. Consequently, customer satisfaction is an expression of pleasure or disappointment rising from compares and contrasts between perception and expectation of product or service function/effect. From compare and contrast between pre-consumption expectation and post-consumption perception, customer satisfaction as a subjectively positive or negative feeling arise.

2.2. The Expectation-confirmation theory

The confirmation and /disconfirmation theory (Churchill and Surprenant, 1982; Oliver, 1980) justifies that satisfaction is attained when a customer’s expectation is confirmed (fulfilled); positive disconfirmation will result in enhanced satisfaction and negative disconfirmation of expectation will consequence in dissatisfaction.

http://www.istheory.yorku.ca/ect.htm

Expectation-confirmation has four main parts in the model: expectations, performance, disconfirmation and satisfaction. An expectation is a sign of expected behaviour (Churchill and Suprenant, 1982). They are predictive, demonstrating belief in the product and service qualities at some range in the future (Spreng et al. 1996). Expectations serve as the judgment standard in this theory: with what customers judge performance and outline a disconfirmation judgment (Halstead, 1999). Disconfirmations are considerations which affect satisfaction, through positive disconfirmation resulting towards satisfaction and negative disconfirmation resulting towards dissatisfaction.

There is a major debate in the literature concerning the effect of disconfirmation on customer satisfaction. The debate’s problem lies in the definition of predictive expectations comparing standard for perceived performance. The confirmation of negative expectations may not lead to satisfaction (Santos and Boote 2003).

2.3. Brand attitudes and satisfaction

Brand attitudes and satisfaction are considered as different models in the literature of customer satisfaction (Oliver, 1980, 1997; Yi, 1990). According to Oliver (1981), customer satisfaction is comparably changeable and is specific on consumption, whereas attitudes are comparably long lasting. Westbrook and Oliver (1981) argued satisfaction is an evaluation of the sum of purchase conditions related to the expectation of customer, while brand attitude is a preference for the product/service which lacks the aspect of comparison. Applying a path-analytic model, Oliver (1980) found that satisfaction acquired from past experience precedes and impacts on after-purchase approach. Bolton and Drew (1991) believed attitudes as an outcome of satisfaction. Sometime, attitude can possibly develop on the basis of indirect experience and understanding (such as: concept from advertisement or corporate image).

2.4. Merits of customer satisfaction to business

According to Lovelock, Patterson, and Walker (1998) businesses can have advantages from customer satisfaction in many ways. Satisfaction is accordingly connected with customer loyalty and relationship commitment. Customers who are highly satisfied and pleased with a service or a product spread positive word of mouth and in consequence it becomes a walking, talking advertisement for an organization. Highly satisfied customers may be more forgiving. Customers who had taken pleasure of a good service delivery in past are more likely to suppose, that service failure (disappointment) is a deviation from the norm. Accordingly if there is more than one unsatisfactory incident or matter for strongly loyal customers, subsequently customer may not change their views and think about switching to alternative brand or supplier. And happy and delighted customers are unsusceptible to competitive offerings (Ndubisi, et al 2009).

Customer satisfaction is significant for the service industry. Customer satisfaction depends on an individual judgment of services, which is one of the excellent bases for evaluating services. Regarding the service quality customer satisfaction has been accepted. Due to the Intangibility (cannot be seen, tasted, felt or smelled before purchasing); Inseparability (production and consumption from provider); Variability (service quality depends on who provides and under what conditions); Perish ability (Cannot be stored for resale or later use) features of services, it is complicated to maintain consistent service performance (Cronin & Taylor, 1992; Dobholkar, Shepherd, & Thorpe, 2000; Parasuraman, Zeithaml, & Berry, 1994, kolter et al, 2009).

Wakefield and Blodgett (1996) examine the connections between consumers’ service quality perceptions, customer satisfaction, and repurchase purposes across the service industry. The result was that customer satisfaction with the service atmosphere had an important effect on repurchase intentions in all settings. Customer satisfaction is not only a principle to evaluate service quality, but is also a forecaster of repeat sponsorship and investment.

2.5. Customer loyalty

Customer loyalty is an outcome of satisfaction and brand attitudes (Oliver, 1999). Dick and Basu (1994) defined loyalty as a behavioural response that is expressed over time through the decisions that are made among alternatives. Oliver (1997) defined loyalty as a sincerely held commitment to re-purchase or re-patronize a favoured product or service in the future. In this research, similar to Oliver’s (1997, 1999), customer loyalty is concluded from re-purchase intentions of customer. Despite the fact, brand attitudes may persuade re-purchase intentions all the way through impact on attitudes towards the behaviour of re-purchasing (Ajzen & Fishbein, 1980), the degree of this impact may be affected by consequence of social norms, budget, valuation of costs, inconvenience, inaccessibility and lack of choice. Selnes (1993) indicates that customer loyalty associates the likelihood of future consumption, sustained service contracts, decreased likelihood of brand change, and provide positive public recommendation and suggestion. According to Jones and Sasser (1995) the desire of customer to continue consuming a specific service or product is customer loyalty.

According to Jones and Sasser (1995), there are two types of customer loyalty, namely long-term and short-term. The long-term loyal customer is honest and real, which signifies that a customer will not willingly turn to another business operator/supplier. The short-term loyal customer may not be honest, which signifies that likely to switch to a different business operator/supplier for a superior equivalent service. Customer loyalty depends on a customer willingness to purchase a product/service from same operator/supplier, which is regarded as a competitiveness of a business the market. In general consideration, a very loyal customer is likely to bring more potential customers to the business through positive word of mouth, many industries including the service industry highlight customer loyalty as one of their main business goals (Tsai, Tsai and Chang, 2010).

Fornell (1992) recommends a technique to determine customer loyalty in the course of repeated purchase intention and price acceptance. Similarly Jones and Sasser (1995) and Oliver (1999) classify loyalty into two types: short-run and long term. However, Oliver determines short-run customer loyalty as word-of-mouth, post-purchase recommendation behaviour, and complaints. While, long-term loyalty is determined by four different phases: cognitive, affective, conative, and active.

A quick observation of customer loyalty is repeated purchase (Ball et al., 2004; Copeland, 1923; Newman and Werbel, 1973; Tellis and Chandy, 1998). In practical terms, firms want repeated purchases mainly because such behaviour can:

· Reasonably indicate the customer favour for a brand or product (Bowen and Shoemaker, 1998);

· Indicate a customer’s purchase intention (Mellens et al., 1996); and

· Probability can increase and maintain profitability (Reichfeld and Sasser, 1990; Rust et al., 2004; Reinartz et al., 2005) by increasing market share (Chaudhuri and Holbrook 2001).

Dick and Basu have categorized such loyalty as spurious (false) loyalty or loyalty by inertia (disinterest) because it only signals behaviour as a customer response. The consideration of attitudes in behavioural representation, makes loyalty not only richer conceptually but also more useful for practical purpose such as influencing customers both attitudinally and behaviourally (Dick and Basu, 1994; Jacoby and Chestnut, 1978; Jacoby and Kyner, 1973; Oliver, 1999; Olson and Jacoby, 1971).

Attitudinal loyalty reflects customer’s cognitive, affective, and conative willingness to carry on connecting to the brand or company which is often related to customer commitment or, trust, after an initial experience of customer satisfaction (Oliver, 1999, Bravo et al. 2005; Vasquez-Parraga and lonso, 2000; Zamora et al., 2004, Bloemer and Kasper, 1994; Morgan and Hunt, 1994; Solomon, 1992).

Consequently, true loyalty (behavioural and attitudinal) is more commanding and powerful, not only in influencing the foundation line but also the reconciling processes towards the foundation line such as:

· The personal intention of customers to favourably recommend the brand or company to others (Getty and Thompson, 1994);

· The positive horizontal communication (mouth to mouth or customer to customer) in particular (Gremler and Brown, 1999; Reynolds and Arnold, 2000; Srinivasan et al., 2002);

· customer’s resistance to competitors’ offerings (Gundlach et al., 1995) and persuasive tactics to attract new customers (Dick and Basu, 1994); and

· Buzz marketing (Grifiin, 1995).

Finally, loyalty is often regarded to be a forecaster of the firm’s financial performance. The relationship, however, is often established as part of a triple: customer satisfaction customer loyalty will evaluate the firm’s performance (Reichfeld and Sasser, 1990; Zeithaml et al., 1990; Anderson et al., 1994; Storbacka et al., 1994; Rust et al., 1995; Hallowell, 1996; Fornell, 1992)

2.6. Building loyalty

For customer- centred companies, customer satisfaction is both a goal and a marketing tool. Companies need to be especially concerned today with their customer satisfaction level because the internet provides a tool for consumers to spread bad word of mouth- as well as good word of mouth- to rest of the world.

2.7. The Satisfaction-Loyalty Relation

Primarily an overall evaluation of personal consumption experience influence past experience which represent consumer satisfaction. Previous research has found that customer satisfaction persuade and influences loyalty. Satisfaction is directly based on past experience; therefore it is likely to be attainable and to accept behavioural intentions of other concerns. Numerous studies and research carried out by (Bagozzi, 1981; Bagozzi, Baumgartner, & Yi, 1992) have come up with the idea that past behaviour has straight effects on intentions which are not determined by attitude. According to Bagozzi et al. (1992), ““past behaviour serves as one type of informational input to the decision to act …”. Customer satisfaction has direct impact on intention which detains nature of behaviour as an outline of the consumption experience. However research carried by (Jones & Sasser, 1995) has shown customer satisfaction essentially converts into loyalty. Oliver (1997) argued that even loyal consumers depend on situational factors such as competitors’ sales promotion, coupons or price cuts; therefore satisfaction may not be the sole reason of loyalty (Reichheld, 1996). According to (Mittal & Kamakura, 2001) the normal satisfaction ratings into re-purchase behaviour depend on customers’ demographic characteristics. Furthermore, other variable such as brand attitudes may mediate the customer satisfaction and loyalty (Oliver, 1980; Yi, 1990).

The translation of average satisfaction ratings into repurchase behaviour can depend on consumers’ demographic characteristics, such as age or education (Mittal & Kamakura, 2001). Mittal, Kumar, and Tsiros (1999) argued that product and service satisfaction jointly determine repurchase intentions. Other variable s can also mediate the customer satisfaction-loyalty link. For example, brand attitudes, which are likely to be a consequence of customer satisfaction (Oliver, 1980; Yi, 1990), may in turn be a determinant of repurchase behaviour (Ajzen & Fishbein, 1980).

2.8. Switching costs

Porter (1980) defined switching cost as the cost involved in shifting from one service supplier to another. Other than monetary measurement of cost, switching costs may also affect time and psychological attempt concerned in facing the uncertainty of dealing with new service provider (Dick and Basu, 1994; Guiltinan, 1989). Quinlan (1991) argues that for some services and products which are in high competition (e.g. fast food restaurants, retailers such as Tesco, Dunnes) switching costs are low for the mass of identified and unidentified customers. In contrast, switching costs for services which are fundamentally difficult to evaluate, or for which there are only limited number of suppliers and less competitive market (e.g. banks, legal services, medical services), are high (Brown and Swartz, 1989; Patterson and Johnson, 1993). For instance: Switching behaviour in banking service is low. Switching from one bank to other bank may involve forgoing points (Dick and Basu 1994; Patterson and Smith 2001) such as: time and efforts spend in signing up for a new account, customize PIN numbers, re-applying for credit card, loan and mortgage, the history of credit card, mortgage, and bank loan and the subject related to direct debit. According to Ausubel (1991) ‘switching costs may explain the high interest rates on credit card balances’. Many consumers show psychological obstacles against changing the bank; i.e. switching costs are perceived to be high (Jones and Sasser, 1995). It shows there is a positive connection between the switching costs and customer loyalty in services industries.

The research shows that there is link between switching cost and satisfaction–loyalty. When switching costs are high; the switching processes are particularly painful and even dissatisfied customers will continually maintain relationships with existing service providers and refuse to discontinue the relationship (Jackson, 1985; Port, 1980). Research has shown that switching costs can show a significant consequence on customer loyalty through satisfaction (Kim, Kliger and Vale, 2003).

2.9. Loyalty program

According to (Gruen 1994; Yi and Jeon 2003), customers generally take part in loyalty program to obtain economic advantages (discount), emotional advantages (sense of belonging), reputation or recognition, and/or to access absolute treatment or service. Frequency programs and club marketing programs are the customer loyalty programs that companies can offers (Kotler et al 2009). Frequency programs are designed to provide rewards to customers who buy often and in considerable amount (Dowling and Uncles, 1997). Service industries such as hotel and airlines companies adopted frequency programs, followed by banks which issues credit cards.

Many super market and retail store offers club marketing programs which can be open to anyone who buy a product or service, or can be limited to an attraction group. Club cards attract and keep those customers who are responsible for largest portion of business. Club cards of play station of Sony and Harley-Davidson motor car are example of highly successful club (Kotler et al 2009).

Prior research done by O’Malley (1998) suggests that loyalty programs work effectively with those customers whose psychological connection to brand is comparatively low. On the other hand, highly committed customers are expected to be more loyal to their brand despite of the advantages and benefits offered by the company reward program.

Perceived switching cost and loyalty program are linked to customer participation in the loyalty program. Switching costs increase when loyalty programs are involved. Offering smart and attractive loyalty program, firms can enhance barrier to switching cost. According to Wirtz, Mattila and Lwin (2007) high switching cost connected with loyalty program, encourage customer to stay with a specific brand in spite of low attitudinal loyalty.

Chapter 3 3. Aims and Methodology

3.1. Introduction

This chapter aims to describe the research objective and methodology used during this dissertation. Quantitative research and analysis has been chosen as the primary method of collecting and analysing the information. By employing quantitative methods a greater emphasis can be placed on the quality of the potential information collected. In this manner, this dissertation attempts to achieve an in-depth analysis of customer satisfaction and loyalty toward the AIB following the bailout rather than just a broad understanding of customer satisfaction and loyalty.

3.2. Research question

According to Malhotra and Biks (2003), ‘research questions are refined statements of specific components of the problem’. Research questions serve to collect specific information when analysed will answer the research problem and test hypothesis. The main focus of this study is to examine the degree of customer satisfaction and loyalty towards AIB following the bailout in November 2010 (Froymovich, 2010). This study will also expect to analyse the activity of switching from one bank to another due to dissatisfaction. In this respect, the dissertation will aim to answer/address the following question:

· What is the level of customer satisfaction with AIB, following the bailout?

· What is the level of customer dissatisfaction with AIB, following the bailout?

· What is the level of customer loyalty towards AIB, following the bailout?

3.3. Research objective

The purpose of this study is to demonstrate how the bailout has effected in the level of the customer satisfaction and loyalty towards AIB. This study will involve an in-depth examination of customer satisfaction and loyalty following the bailout.

3.4. Research Strategy and Methodologies

The survey strategy has been carried out as the main research strategy for the purpose of this dissertation. Saunders et al, (2007) stated ‘the survey strategy is usually associated with the deductive approach.’ A survey strategy attempts to gather quantitative data which can examine quantitatively using descriptive and inferential statistics. It is a popular and common strategy in business and management research and is most frequently used to answer who, what, how much and how many questions. It is therefore tends to be used for exploratory and descriptive research. The data gathered by the survey strategy is not likely to be as widespread as those data which are gathered by other research strategies (Saunders et al, 2007).

This study will obtain its data through theoretical sampling; Mason (1996) describes the link between sampling and theory as follows:

Theoretical sampling means selecting groups or study on the basis of their relevance to your research question, your theoretical position... and most importantly the explanation or account which you are developing. Theoretical sampling is concerned with constructing a sample.... which is meaningful theoretically, because it builds in certain characteristics of criteria which help to develop and test your theory and explanation (Mason, 1996).

According to Kirch (2008) the aim of quantitative research studies is ‘to quantify attitudes or behaviours, measure variables on which they centre, compare and point out correlations.’ Quantitative researches are generally carried out through survey on sampling; therefore the outcomes can be concluded to whole population studies. It requires the development of standardized measurement instruments such as questionnaire (Kirch, 2008).

Myers (2009) stated that, quantitative research is the best method to address the large sample size and can be generalized to the large population. The objective of quantitative research is to examine a particular topic over the large number of people or organizations. The major drawback of quantitative research is that many social and cultural aspects are lost and are treated in a superficial manner. The context of quantitative research is treated as ‘noise’ (Myers, 2009). However due to its nature quantitative research can be useful and applied to measure the level of customer satisfaction and loyalty following the bailout of the banking sector.

3.5. Method Employed

The research method chosen is affected by the nature of the research questions and the theoretical perspective. In this study both primary and secondary methods will be employed as a means of complimenting one another. The information presented in this study has been collected from both primary and secondary sources.

3.5.1. Secondary Research

A number of secondary sources of information were used in completion of this study. Secondary data include both raw data and published summaries (Saunders et al, 2007). Byrman (2001) offers a number of advantages of conducting secondary analysis: access to high quality data at a lower cost, opportunity for longitudinal analysis, opportunity for cross- cultural analysis, more time for data analysis, broader scope of information. However, secondary information was examined in relation to all of the research questions; it proved most useful for the study of customer satisfaction and loyalty.

Furthermore, Byrman (2001) does also offer a number of limitations of secondary data analysis such as: lack of familiarity with data, complexity of the data, no control over the quality of the information, and the absence of key variables.

The sources of secondary information included in this study were industry reports, books, journal, research paper, computers files, various internet websites and trade newspapers. Secondary data had main advantage for this study of providing a broad overview and understanding of customer satisfaction and loyalty. Furthermore it allows the relation between customer satisfaction, loyalty and switching cost in relation to service industry such as bank.

Secondary data includes both internal and external data, all of which have been outlined in the bibliography section accompanying this dissertation. This source of information was readily accessed and publically available. As it does not apply exactly to researchers’ discussion and can become quickly outdated more systematic primary sources needed to be examined.

3.5.2. Primary Research

In order to address the problem of secondary data analysis, particularly the issues of inaccuracy, inadequacy and bias, primary data was collected. Primary research is collected in order to investigate deeper understanding of a specific research (Malhotra and Birks, 2003). The ‘primary research objectives’ were achieved through the use of questionnaires.

For this purpose a series of questionnaires were distributed to sampling of 50 customers of AIB. This method was chosen in order to identify the level of customer satisfaction and loyalty to the AIB following the bailout. Participants were selected randomly, whereby they were selected on the basis of their knowledge and familiarity with products and services offered by bank.

Questionnaire contains 17 standard set of question in order to obtain the related information regarding customer satisfaction and loyalty. A copy of questionnaire can be found in appendixes accompanying this report.

The reason for using questionnaire as survey instrument is that it has many advantages. Downs and Adrian, (2004) stated the primary advantage of questionnaire are it is ‘efficiency, large sample size, cheap costs assured confidentiality, sampling of many topic, and having a permanent original copy of the responses’. Furthermore it can be disturbed to all participants at the same time frame; therefore it is the best means of gathering information (Downs and Adrian, 2004).

3.6. Limitation of Research

The outcome of the research cannot form a definite stand on level of customers’ satisfaction and loyalty following the bailout as only 50 customers of AIB participates in research, which cannot reflect the true level of customer loyalty of entire customer of bank. However, it will provide a guideline through the sample of customers.

3.7. Ethical issues

In agreement with law which aims in protecting the grace and privacy of each individual who participate in research, customers are not requested to make available their commercial and valuable information for making research successful. The researcher has to notify some information to individual before an individual become a subject of research which are:

· The main purpose, benefits and possible risk of the research.

· The individual right to decline from participate and right to bounce at anytime of participate.

The researcher cannot force anyone to become a subject of research until an individual agree to participate. Any kinds of pressure cannot be applied by researcher to make an individual part of research. The researcher have to convince the customer their personal information such as their personal detail, account name, account number, branch code will not be included in the research paper.

All the information of participants, which were obtained in time of research, will be kept confidential. And at the end, any information which discloses the identity of an individual who are subject of research will be destroyed. Any information concerning to identity of an individual shall not be included in final report, unless an individual has given permission in writing to its inclusion beforehand.

Chapter 4 Context and Finding

4.1. Introduction

This chapter examine the subject matter which is under survey, which is based on primary and secondary data collected.

4.2. Context of the research

AIB customers comprise the study's population. The research requested AIB’s customers to take part in the survey and also encouraged them to complete and return the questionnaire. The exercise was conducted over period of two weeks. Of the 48 customers who accepted to take part in the survey, 26 finished and returned it. Yet, only 20 were usable for this analysis: 6 were not included either because of incomplete data or because of useless information. This resulted in 42 percent response rate.

Observation

The analysis observed some of the result matter during the survey before the actual outcome was obtained which is present as observation.

4.3. Observation 1:

The analysis observed that the bailout has not affected the level of customer satisfaction in AIB. The only thing that makes them disappointed with the bank is the crashing of banking sector in the nation. The level of customer satisfaction might have decreased, but they are still satisfied. The reasons for satisfaction are:

· AIB provide good customer service, with fast response to enquiries of customer.

· Friendliness of the employee

· Additional service it provides such as internet banking.

4.4. Observation 2:

The analysis observed most of the respondents are disappointed with the Irish banking sector, which definitely indicate that the level of loyalty to AIB will also decrease. Customers are disappointed to the Irish banking because they believe:

· Banking sector is the one which brings a crisis in the nation.

· Irish citizen and taxpayer are the one who are suffering from recklessness of the banking sector.

· Irish citizen and taxpayer have to bailout the banking sector.

· The economic crisis and recession are the result of careless of the banking sector.

4.5. Observation 3:

The analysis observed that most of the respondents are against the bailout of the banking sector. The following are the reasons why customers believe the bailout was not good idea:

· Banks are the private company therefore they should be treated as such.

· When bank are not loyal to the nation, why should the government bailout.

· Customers believe the Government can invest that money to create some employment in country than to bailout the bank sector.

4.6. Comment from some respondent during the survey:

· Do you think the government bailout of the banks was a good idea?

“Definitely not: It has crippled the country. It is unbelievably unfair why the tax payer should pay for the negligence, stupidity, profligacy of greedy, amoral bankers, developers and politicians. It is a rip-off.”

“it increased the burden of the nation due to huge interest”

“As anyone can see, this money only serves the purpose of going back into German banks' coffers. Why on earth should Irish taxpayers pay the bill of German banks, suffering years of high taxes and low growth to compensate for reckless lending of those banks? To add insult to injury, the lenders are bullying the Irish government into raising the corporate tax rate: this will certainly bury any possibility of an Irish revival.”

“There was no other option, Government was compelled”

“Government help is a much needed help for AIB’s faster banking recovery”

Comments from questionnaires show, customer are not happy with the bailout of the banking sector. Some participants believe that the banking sector bring the crisis to the nation. Furthermore, the respondents asked ‘why should taxpayer pay for the mistake of the banker?’

On the other hand, other respondents argue, there was no option for the Government, they have to support the banking sector because if the banking sector collapse the economy will collapse.

· How can AIB restore customer confidence and loyalty?

“It can’t, they are damaged beyond repair. Its lifeblood is/was mortgage lending. And look at the pain that has brought people.”

“It is impossible, if you are loyal to a bank, you need to your head examined”

“Importance to have national source, show loyalty to Irish people, the bank have a bad figure so have to be taken by international bank but we should have some control for it.”

“Through ensuring customer that if we stay together happy days will come back”

Comments from the questionnaire shows, customers lost their trust to banking sector. Some participants believe AIB cannot restore the confidence and loyalty of customer because it is beyond the ability to restore. Furthermore, customers believe only ill people can be loyal toward the banking sector in current situation.

On the other hand, other respondents assumed the banking sector should be loyal to the Irish people by ensuring customers all should stay together in bad days, and then happy days will come back soon.

Chapter 5 Discussion, graph and analysis

5. Quantitative Research finding:

The charts below indicate the results of the finding based on the questionnaires distributed to different customers of AIB. The results are used to find out level of customer satisfaction and loyalty following the bailout.

5.1. Figure 1: How long have you had the account with AIB?

Note: X-axis: number of year, Y-axis percentage of customer.

Figure 1 indicates that about 45% of the customers have been banking with the AIB for more than 10 year, 30% of the customers have been banking with the AIB between 5 and 10 years, 20% of the customers have been banking with the AIB between 1 and 5 years and 5% of the customers have been banking with the AIB for less than 1 year. The main concern is has the bailout affect customer loyalty toward the AIB. The AIB has get customer in less than one year which is after bailout of the banking sector. But the trend of customers banking with AIB has decreased significantly looking at the figure last 10 years.

5.2. Figure 2: Why did you open an account with AIB?

The alphabet in y axis indicates followings:

a. My employer banks with AIB + My salary is paid direct to my bank

b. My family bank with AIB

c. I know someone who works in AIB

d. The bank was the closest to where I live/work

e. The bank give the best student loans

f. My mortgage is with AIB

g. It is so long ago I don’t remember

h. AIB was recommended to me

i. Other

From figure 2, it shows that most of the customers open an account with AIB because the bank was the closest to their house/workplace and another reason was their employer bank with AIB and salary is paid direct to their bank. It is noticed; some customers open an account for multiple reasons.

5.3. Figure 3 would you say that you are very satisfy, satisfy, not sure, Dissatisfied or very dissatisfied with service of the AIB

Figure 3 indicates all participate are satisfied with service of the AIB. The research shows good customer service, friendliness of staff, quick response to customer inquiries were the main reason for satisfaction. Furthermore, some customers even compare AIB with its competitors such as bank of Ireland, Anglo Irish Bank, and specify the service of AIB is better.

5.4. Fig 4: Are you a loyal customer of AIB:

Figure 4 indicates 60% of the total customers of the AIB prefer to say they are loyal customer; in contrast 40% prefer not to be loyal. According to Lovelock, Patterson, and Walker (1998) satisfaction is linked with customer loyalty and relationship commitment, however this research shows that most of respondents are satisfy with the service of AIB but still only 60% of respondents consider themselves as loyal towards AIB. Customers clarify the reason for their loyalty is, they believe it is the best bank in the present time and they prefer to do their all transaction with the same bank. Furthermore the high switching cost of the bank is another reason for their loyalty. According to Dick and Basu (1994) switching activity involves forgoing points such as time and effort in signing new account, credit card, mortgage, direct debit bills, history of credit and loan; which act as psychological obstacles against switching the bank.

On the other side, the reasons for customers not being loyal to AIB are AIB has damage their reputation and the trust. Furthermore customers argue ‘when the banks are not loyal to their country and customer how can we as a customer be loyal to bank’.

5.5. Figure 5: Before the problems were identified with the banks were you a loyal customer of AIB

Figure 5 indicates 90% of AIB customers were loyal to the bank before the problems were identified with the bank. There is 30% decrease in the customer loyalty after the problem was identified. The analysis assumed the reason behind the decrease in the level of the loyalty is lack of relationship commitment and trust.

5.6. Figure 6: Do you think the government bailout of the banks was a good idea:

Fig 6 indicates about 60% of the AIB customers are against the idea behind the bailout. Customers believe banking sector is the main reason of economic crisis in the nation. Customers express their anger towards the banking sector. Here are some comments from the customer which was express when bailout came in Ireland:

“I am appalled and outraged by the bail-out of greedy, selfish bankers and developers who will get away completely with their destructive selfishness while ordinary working people in Ireland will suffer hugely by the draconian cuts. Those who fuelled the reckless lending should be made to pay for their behaviour. And the markets should be made to wait as long as it takes to get their money to give the Irish government a chance to reboot the economy. The budget cuts will do nothing to develop recovery. In fact they will make it take even longer and be far more painful than it needs be. The wealthy will always protect its own, and politicians will make sure they don't have to pay.”

“The government should never have bailed out the banks. Every time the government pumps taxpayer money into the banks, their share prices go up only to fall again. Some people out there are making a lot of money”.

“We have a severe winter ahead with many hardships and a country reeling and shuddering from calamity to calamity. Terms and conditions that are part of any bail-out will have to be severe and so should be the treatment of unbelievably irresponsible so-called bankers.” (www.bbc.ie, 21 November 2010)

5.7. Figure 7: Do you think the banks should have been left to sort it out themselves

Figure 7 shows about 60% of the customers believe banks should have been left to sort it out themselves. Customers assumed they were private companies and should have been treated as such. On the other hand, some customers believe that the Government is there to help them, if bank collapse, the economy collapse, therefore government must help them.

5.8. Figure 8: Do you think the AIB would have been able to sort it out without the government help:

Figure 8 shows that 100% of the respondents believe AIB would not have able to sort out the problem without government help. It indicates customer does not trust financial ability of the bank. About 60% of respondents argue that bank should have been left to sort it themselves, when they are already sure AIB would not be able to sort it out without government help. The question is: Do customers want bank to collapse or they only want government to bailout only their bank ‘AIB’.

5.9. Figure 9: Do you think AIB’s reputation has been damaged due to the issues with the banking sector and the need for government assistance:

Figure 9 shows 100% of customer believed the reputation of the bank has been damaged due to the issues with the banking sector and the need for the government assistance. Respondent assumed the Irish banks are a sick joke. The reputation of the Irish banking sector has been damaged; the trust of the customer has already been ruined.

5.10. Figure 10: Do you think the need for the Government support has affected the loyalty of AIBs customer:

Figure 10 indicates the need for the financial support from the Government has affected the loyalty of AIBs customer. The research show 35% of respondents assumed their loyalty is affected by the financial aid; in contrast 65% of the respondents assumed their loyalty has not affected by the financial aid. Customers argue ‘the loyal customer stay loyal but they lose their trust towards banking sector.’ Furthermore customers argue they are relaxed because the Irish Government and EU have guaranteed their savings. Customers suppose financial support has not affected their loyalty.

On the other hand, other respondents showed their anger towards bank, ‘when there is no trust there is no loyalty. Banks are not loyal with customers so customers are not loyal, why should customer bother.’

5.11. Figure 11: If you had the opportunity to switch banks would you:

Figure 11 indicates that 15 % of the respondents want to switch their bank. Those customers want to switch in particular to Ulster Bank. According to them, Ulster Bank is recommended by government official and they believe it can do better job than AIB.

As mentioned before, the objective of this survey is to examine the level of the customer satisfaction and loyalty toward the Irish banking sector in particular to AIB following the bailout.

Looking at the result from the survey, it shows the bailout of the Irish banking sector has effect loyalty to some extent.

5.12. Objective one:

The level of customer satisfaction with AIB following the bailout;

The result from the survey shows, there is no decrease in level customer satisfaction with AIB following the bailout. All the respondent of the survey, are satisfied with service of AIB. Good customer service, friendly of staff, quick respond to the customers inquires, providing accurate information and good internet banking are the reason for customer satisfaction.

5.13. Objective two:

The level of customer dissatisfaction with AIB following the bailout:

The survey indicates the level of customer dissatisfaction with AIB is same; there is little increase in customer dissatisfaction. Although every respondent assumed they are satisfied with service of the bank. About 15% respondents want to switch to another bank, although switching cost is high; which indicate slight increase in level of customer dissatisfaction with AIB.

5.14. Objective three

The present level of customer loyalty to AIB following the bailout:

The survey indicates the level of the customer loyalty to AIB following the bailout has decrease. About 90% of the customers were loyal to AIB before the bailout; but the present level of customer loyalty toward AIB following the bailout is 60%. Therefore the level of the customer loyalty to AIB following the bailout has decrease by 30%.

5.15. Discussion

The purpose of this study was to examine the level of the customers’ satisfaction, dissatisfaction and loyalty to the Irish Banking sector in particular to AIB following the bailout. Through the information which was gather from primary and secondary research, an effort has been made to identify the antecedents and consequences of satisfaction, dissatisfaction and loyalty in the context of banking sector; hence the author supposes the study makes a significant contribution to the literature in different ways. First, the study contribute to the marketing literature by identifying relative impacts of both service spectator satisfaction, and ultimately on behavioural intentions. Second, the study contributes to identify relation between satisfaction and loyalty, by recognizing how customer satisfaction and dissatisfaction impact to loyalty. Third, the study contributes to identify the relationship between switching cost and customer satisfaction, dissatisfaction and loyalty in relation to the banking sector.

5.16. Limitation and Future Direction for Research

Several limitations and assumption may have prejudiced the study’s results. The first limitation might be the omission of important variables. For example, this study did not include the entire Irish Banking sector to find out the level of the customer satisfaction, dissatisfaction and loyalty following the bailout. It is only limited with AIB. Furthermore, this study did not examine the moderating effect of the customer satisfaction, dissatisfaction and loyalty toward the banking sector. Second, regarding the exploratory analyse of the brand attitudes; the survey did not analysis how brand attitude affect the level of customer satisfaction, dissatisfaction and loyalty toward service industry such as the banking sectors. The third limitation is in relation to respondent applicant in survey. Author target to request 50 customers to participate to take part in survey, 46 take part, and only 20 were useable one; which cannot reflect the true level of customer satisfaction, dissatisfaction and loyalty toward the AIB.

At minimum, the current study offers new ideas regarding knowledge of the level of customer satisfaction, dissatisfaction and loyalty to AIB following the bailout. The propose study also serves to advance the study of the marketing sector of bank by examining the impact of the bailout on customer mind. This is particularly important in relation to conflict management. The proposed study and recommendations for future research provide numerous opportunities to continue advancing knowledge for the marketing of banking sector.

Chapter 6 Conclusion and Recommendation

6.1. Conclusion

In conclusion customer satisfaction is most important for service industry. Customer trust and loyalty are consequences of the customer satisfaction. When customers are more satisfy with bank, their level of trust toward the bank is high as well as they are more loyal to the bank. While if they are not satisfy with services their level of trust decrease and they are not loyal towards the bank. Most of the firms give more attention to their market share than customer satisfaction, which may be mistaken. According to Kotler (2003) ‘market share is a backwards- looking metric; customer satisfaction is a forward-looking metric’. If the levels of customer satisfaction start falling, then market share will decrease soon. Customer satisfaction is connected with loyalty and commitment. Highly satisfied customers are loyal and spread a positive word of mouth.

Customer loyalty is a sign of revisit on relationship which is revealed the idea of "lifetime value of customers,”. Furthermore, it reflect the idea, ‘it costs 5 to 10 times more for a firm to find a new customer as it costs to keep an existing customer’ (Gummesson, 1999).Customer loyalty in service industries is more dependable on progress and development of interpersonal relationships; additionally in the service industry the influence of perceived experience is superior and greater, because customer loyalty acts as a barrier to customer switching behaviour.

The purpose of this study was to find out the level of customer satisfaction, dissatisfaction and loyalty with AIB following the bailout. The outcome of the research showed that most of customers are satisfy with the service of AIB; however some of the customers are dissatisfy with the service of AIB.

The study also showed the level of customer loyalty has decrease by 30% to AIB. Before the bailout 90% of customers assumed they were loyal to AIB. After the bailout only 60% of customers assumed they are loyal to the bank. Customers who assumed they are not loyal to bank also do not want to switch their bank to another bank. Therefore, author supposes that high switching cost may the reason behind the loyalty of the customer. High switching cost increase loyalty and put existing customer.

Although the switching cost of bank from one to another is high; 15% of the customers want to switch to another bank which indicates they are not satisfied with the banking service of AIB. Despite the fact that the entire banking sector in Ireland are in same condition, some of customers like to switch over to another bank. The outcome of research showed, 100% assumed that they are satisfy to bank, however 15% of they still want to switch. From this circumstance the conclusion is 15% of the customer are dissatisfied.

6.2. Recommendations

In the current situation of economic crisis, building customer satisfaction and loyalty is the challenging job for AIB and other Irish banking sector. After the bailout, AIB has lost their reputation and trust significantly. Following are the recommendation for AIB

· All satisfy customers of AIB are not loyal toward the bank. Through research and development (R & D) the bank has to find out the specific reason behind it.

· Customers specially want to switch their bank account to Ulster Bank; AIB has to conduct research to find out the reason, ‘why customers particularly want to switch to Ulster Bank’.

· Still most of the existing customers of AIB are loyal. Therefore, AIB should identify the actual need of the customer and try to find out different alternative to increase loyalty.

· From this research it is observed that customers are angry with AIB because of the bailout, but in fact they are angry with government than with the banks. Therefore, AIB has to conduct a press release and public relation (PR) program to inform the customers; about important of the bailout to the Irish banking sector. Furthermore has to inform them, in fact the bailout has strengthened a financial ability of AIB as well as other Irish bank. So that, AIB could inform all merit of the bailout to customers to rebuild the loyalty.

· Bank should promise to customer from today bank will never repeat such mistake, for this AIB should make some changes in mortgage and loan lending policy.

· Bank should show their and respect loyalty toward the nation and its customers to restore the loyalty of customers.

· AIB should start taking feedback from customers about the problem with service and how can improve service. As per research, most of the customers are happy with customer service of the AIB. Therefore AIB should maintain their services through regular training and development of employees.

· AIB may follow the personalized banking system which involve individual marketing, so that an individual needs of customer can be fulfilled, which can increase loyalty.

· AIB should use customer relationship management (CRM) as a tool to increase customer loyalty and satisfaction.

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Appendix

Research questionnaire

1. Do you have a bank account with AIB?

a. Yes

b. No

If yes how long have you had the account?

a. Less than 1 year

b. Between 1 and 5 years

c. Between 5 and 10 years

d. More than 10 years s

2. If your account is less than a year why did you open account with AIB?

__________________________________________________________________________________________________________________________________________

3. If your account is more than a year, why did you open an account with AIB?

a. My employer banks with AIB + My salary is paid direct to my bank

b. My family bank with AIB

c. I know someone who works in AIB

d. The bank was the closest to where I live/work

e. The bank give the best student loans

f. My mortgage is with AIB

g. It is so long ago I don’t remember

h. AIB was recommended to me

i. Other

Please explain

______________________________________________________________________________________________________________________________

4. Would you say that you are:

a. Very satisfy with the service of AIB

b. Satisfy with the service of AIB

c. Not sure

d. Dissatisfy with the service of AIB

e. Very dissatisfy with the service of AIB

5. In relation to question 4 above could you explain your choice:

_______________________________________________________________________________________________________________________________________________________________________________________________________________

6. Are you a loyal customer of AIB:

a. Yes

b. No

Please explain

__________________________________________________________________________________________________________________________________

7. Before the problem were identified with the banks were you a loyal customer of AIB:

a. Yes

b. No

Please explain __________________________________________________________________________________________________________________________________

8. Do you think the government bailout of the banks was a good idea:

a. Yes

b. No

Please explain

____________________________________________________________________________________________________________________________________

9. Do you think the banks should have been left to sort it out themselves:

a. Yes

b. No

Please explain

______________________________________________________________________________________________________________________________________

10. Do you think the AIB would have been able to sort it out without the government help:

a. Yes

b. No

Please explain

______________________________________________________________________________________________________________________________________

11. Do you think AIB’s reputation has been damaged due to the issues with the banking sector and the need for government assistance:

a. Yes

b. No

Please explain

________________________________________________________________________________________________________________________________

12. Do you think the need for government support has affected the loyalty of AIBs customer:

a. Yes

b. No

Please explain

______________________________________________________________________________________________________________________________________

13. Has the need for financial aid affected your loyalty to AIB:

a. Yes

b. No

Please explain how _________________________________________________________________________________________________________________________________________________________________________________________________________

14. How can AIB restore customer confidence and loyalty?

15. If you had the opportunity to switch banks would you:

a. Yes

b. No

16. If your answer to question 15 was yes which bank would you go to:

a. Bank of Ireland

b. Ulster Bank

c. Permanent TSB

d. Anglo- Irish Bank

e. Other

Please specify _________________________________________________

17. If you chose a bank in 16 above could you explain why you chose that bank:

Sunday, August 7, 2011

3.2. Research question