Impact of Customer Trust on Loyalty

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Impact of Customer Trust on Customer Loyalty and
Customer Retention
A large number of researchers have research on the importance of Customer Trust, Customer Loyalty and Customer Retention, however they generally discuss about their effect on other variables in developed countries. Slight evidence is obtainable on Customer Trust, Customer Loyalty and Customer Retention from under developed countries like Pakistan. This study analyzes the Effect of Customer Trust on Customer Loyalty and Customer Retention in banking sector. The outcome of the study refer that the Customer Trust and Customer Loyalty have a positive association and the Customer Trust and Customer Retention also have a positive association in Pakistani context. Keywords: Customer Trust, Customer Loyalty and Customer Retention INTRODUCTION

The topic which we have chosen is to find the “Impact of customer trust on customer loyalty and customer retention in Pakistan” AREA
The area we have selected is Rawalpindi in which there are different private banks which are performing its work. RESEARCH QUESTION
* To Impact of customer trust on customer loyalty?
* To impact of customer trust on customer retention?
* What is the relationship between customer trust, customer loyalty and customer retention?

* To understand the concept of customer trust.
* To understand the importance of customer loyalty and customer retention. SIGNIFICANCE OF STUDY
The 21st century business is customer oriented and our research will be beneficial for those businesses that are only in to profit making and losing their customers because of loyalty factor. Ultimately the relation between trust, loyalty and retention will be more clarify which will results in long term business success. THEORIES SUPPORTING

The commitment-trust theory of relationship Marketing (Robert M. Morgan & Shelby D. Hunt) July, 1994 LITERATURE REVIEW
Trust is the name of confidence and belief which customer attach with some organization and consider that what he or she aspect that should be delivered (Deutschi, 1958). Morgan and Hunt (1994) stated that trust exists only when one party has confidence in an exchange partner’s reliability and integrity. Actually trust is a relation who attaches the customer with the company. Trust is a very complex construct and it is multidimensional (Gefen 2000; Hoy & Tarter, 2004; Smith & Birney, 2005; McKnight et al., 2002; Mayer et al., 1995). It is “the trait of trusting; of believing in the honesty and reliability of others” (Word Reference, 2005). Trust is also referred to the willingness to rely (Doney, Cannon, & Mullen, 1998; Van & Sniezek, 2005) and has a positive attitude toward others (Whitener et al., 1998). One of the most frequently used definitions of trust is the following, “Trust is a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intention or behavior of another under conditions of risk and interdependence” (Rousseau, 1998). Customer trust is a mean to buy a product or service and that customer trust have a straight relationship with the customer loyalty. When the customer have trust on services and products of a company then that thing lead it towards the loyalty. Furthermore trust has direct connection with loyalty (Ribbink, Liljander & Streukens, 2004.) There are several determinants that determine customer loyalty but the role of trust is crucial that determines customer loyalty. When a customer trusts a service provider, he or she will expect to increase satisfaction and loyalty towards the vendor (Kassim & Abdullah, 2008). H1: Customer trust is positively associated with customer loyalty and customer retention. CUSTOMER LOYALTY

Customer loyalty has been defined early that .It is normally the willingness of customer to maintain their relations with a particular firm or service/product. (Kim...
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