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Determinants of customer recovery in retail banking—lessons from a German banking case study

Author

Listed:
  • Felix Hübner

    (Andrássy University)

  • Tim Alexander Herberger

    (Andrássy University)

  • Michel Charifzadeh

    (Reutlingen University)

Abstract

Due to the increased willingness of retail banking customers to switch and churn their banking relationships, a question arises: Is it possible to win back lost customers, and if so, is such a possibility even desirable after all economic factors have been considered? To answer these questions, this paper examines selected determinants for the recovery of terminated customer–bank relationships from the perspective of former customers. This study therefore evaluates for the first time, empirically and systematically with reference to a German Sparkasse as a case-study setting, whether lost customers have a sufficient general willingness to return (GWR) a retail banking relationship. From our results, a correlation is shown between the GWR a banking relationship and some specific determinants: seeking variety, attractiveness of alternatives and customer satisfaction with the former business relationship. In addition, we show that a customer’s GWR varies depending on the reason for churn and is surprisingly greater when the customer defected for reasons that lie within the scope of the customer himself. Despite the case-study character, however, our results provide relevant insights for other banks and, in particular, this applies to countries with a comparable banking system.

Suggested Citation

  • Felix Hübner & Tim Alexander Herberger & Michel Charifzadeh, 2024. "Determinants of customer recovery in retail banking—lessons from a German banking case study," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 655-682, September.
    • Handle: RePEc:pal:jofsma:v:29:y:2024:i:3:d:10.1057_s41264-023-00224-w
    DOI: 10.1057/s41264-023-00224-w
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    References listed on IDEAS

    as
    1. Athanassopoulos, Antreas D., 2000. "Customer Satisfaction Cues To Support Market Segmentation and Explain Switching Behavior," Journal of Business Research, Elsevier, vol. 47(3), pages 191-207, March.
    2. Homburg, Christian & Hoyer, Wayne & Stock-Homburg, Ruth, 2007. "How to Get Lost Customers Back? Insights into Customer Relationship Revival Activities," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 35535, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    3. Christopher Helm & Tim Alexander Herberger & Nicolay Gerold, 2022. "Application of Cognitive Automation to Structuring Data, Driving Existing Business Models, and Creating Value between Legacy Industries," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 19(02), pages 1-23, April.
    4. Sea-Jin Chang & Arjen van Witteloostuijn & Lorraine Eden, 2010. "From the Editors: Common method variance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 41(2), pages 178-184, February.
    5. Doreén Pick & Jacquelyn S. Thomas & Sebastian Tillmanns & Manfred Krafft, 2016. "Customer win-back: the role of attributions and perceptions in customers’ willingness to return," Journal of the Academy of Marketing Science, Springer, vol. 44(2), pages 218-240, March.
    6. Homburg, Christian & Hoyer, Wayne & Stock, Ruth, 2007. "How to Get Lost Customers Back? A Study of Antecedents of Relationship Revival," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 60474, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    7. Homburg, Christian & Hoyer, Wayne & Stock-Homburg, Ruth, 2007. "How to get lost costumers back? Insights into customer relationship revival activities," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 29590, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    8. Gerring, John, 2004. "What Is a Case Study and What Is It Good for?," American Political Science Review, Cambridge University Press, vol. 98(2), pages 341-354, May.
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    More about this item

    Keywords

    Dissonance theory; Retail banking; Customer recovery management; General willingness to return;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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