MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY Nguyễn Anh Đức TESTING THE INFLUENCE OF FACTORS OF CUSTOMER RELATIONSHIP MANAGEMENT ON CUSTOMER LOYALTY AT VIETCOMBANK DONG NAI BRANCH MASTER THESIS Ho Chi Minh City, 2011 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY Nguyễn Anh Đức TESTING THE INFLUENCE OF FACTORS OF CUSTOMER RELATIONSHIP MANAGEMENT ON CUSTOMER LOYALTY AT VIETCOMBANK DONG NAI BRANCH In Banking course: 17 Ology code: 60.31.12 MASTER THESIS Supervisor: Professor, Ph.D, Nguyễn Đông Phong Ho Chi Minh City, 2011 i ACKNOWLEDGEMENT I would like to express my sincere gratitude to following people for their contribution to my thesis: My academic advisor Professor, Ph.D Nguyen Dong Phong for his help, advice and knowledge Ph.D Tran Ha Minh Quan for his guideline in study Mr Dang Huu Phuc for his assistance with the data processing All of my classmates in Banking course 17 for supporting and corporating with me during this course My colleagues at Vietcombank Dong nai for their great support in collecting data Respondents, without them, my thesis could not have been done My family and friends, for supporting and motivating me Thanks again for above all, who gave me the strength and courage to complete this thesis ii ABSTRACT The rapid development of Vietcombank Dong Nai in recent years has raised several problems, customers complain more about banking services, employees attitude and employees knowledge And as a result, some of them have left Vietcombank Dong Nai and closed their accounts and moved to another banks Therefore, in order to keep the stable development and ensure the effeciency of business, Vietcombank should soon find solutions to solve this problem In other words, Vietcombank Dong nai should build a customer base to form their loyalty This study attempts to examine the aspect of Customer Relationship Management (CRM) at Vietcombank Dong Nai Specifically, it tries to identify independent variables of CRM which may influence on customer loyalty, which is considered as an dependent variable These independent variables includes: Twoway communication, Employees Attitude, Employees knowledge and the Efficiency of banking services In order to gather data, a survey was conducted at Vietcombank Dong Nai, the sample consists of customers there with sample sizes of 205, the responsive rate is 77.90% The result of realibility testing Cronbach Alpha and factor analysis help to affirm the comformity of measurement scales with the study objectives By testing hypotheses with multiple regression analysis, this study point out that there exists a relationship between independent variables and dependent variable In addition, coefficient beta of independent variables help to determine the degree of influence of each variables to customer loyalty From these findings in data analysis, this study also offers some recommendation, that Vietcombank Dong Nai should spend more resources in order to improve employees attitude and two-way communication in order to ensure customer loyalty to the bank iii TABLE OF CONTENTS ACKNOWLEDGEMENT i ABSTRACT ii TABLE OF CONTENTS iii LIST OF FIGURES viii LIST OF TABLES x CHAPTER 1: INTRODUCTION TO THE STUDY 1.1 Introduction 1.2 Research background 1.3 Overview of Vietcombank Dong Nai 1.4 Research Problem 1.5 Research questions 1.6 Problem statement 1.6 Study scope 1.7 Research methods 1.8 Structure of the study CHAPTER 2: LITERATURE REVIEW 11 2.1 Introduction 11 2.2 Customer loyalty 11 2.2.1 Customer loyalty to bank 12 2.2.2 Measuring customer loyalty 13 iv 2.3 Customer Relationship Management 13 2.3.1 Defining Customer Relationship Management 14 2.3.2 Benefit of Customer Relationship Management 15 2.3.3 The components of CRM 17 2.3.3.1 Two-way communication 18 2.3.3.2 Employees’ Attitude 19 2.3.3.3 Employees’ knowledge 20 2.3.3.4 Efficiency of banking services 21 2.4 Relationship between CRM and customer loyalty 24 2.4.1 The influence of two-way communication on customer loyalty 25 2.4.2 The influence of employees’ attitude on customer loyalty 25 2.4.3 The influence of employees’ knowledge on customer loyalty 26 2.4.4 The influence of the efficiency of banking services on customer loyalty 26 2.5 Conclusion 27 CHAPTER 3: RESEARCH METHODOLOGY 28 3.1 Introduction 28 3.2 Business research 29 3.3 Research design 30 3.4 Research objectives 31 3.5 Generation of hypotheses 32 v 3.5.1 Hypotheses of relationship between the independent variables and the dependent variable 33 3.5.2 Hypotheses of relationship between each independent variables and the dependent variable 34 3.5.3 Hypotheses of relationship between the biographic variables and the dependent variable 34 3.6 Data collection method 35 3.7 Measurement instrument 35 3.8 Measurement scales 36 3.8.1 Items measuring Two way communication 36 3.8.2 Items measuring Employee attitude 37 3.8.3 Items measuring Employees knowledge 38 3.8.4 Items measuring Efficiency of banking services 39 3.8.5 Items measuring Customer loyalty: 41 3.9 Pilot test 41 3.10 Data analysis 42 3.10.1 Sampling 44 3.10.2 Sample size 45 3.11 Conclusion 45 CHAPTER 4: DATA ANALYSIS AND FINDINGS 46 4.1 Introduction 46 vi 4.2 Description of collected samples 46 4.2.1 Sex of respondents 47 4.2.2 Age group of respondents 47 4.2.3 Years of being customer of Vietcombank Dong Nai 48 4.2.4 Education level of respondents 49 4.3 Assessing measurement scale 49 4.3.1 Reliability of Two-way communication items 50 4.3.2 Reliability of Employees attitude items 51 4.3.3 Reliability of Employees knowledge items 51 4.3.4 Reliability of Efficiency of banking services items 52 4.3.5 Reliability of Customer loyalty items 53 4.4 Exploratory factor analysis 54 4.4.1 Analyzing independent variables 54 4.4.2 Analyzing dependent variable - Customer loyalty 59 4.5 Multiple regression analysis 60 4.5.1 Testing the conformity of research model 60 4.5.2 Detecting multicollinearity phenomenon 61 4.5.3 Testing hypotheses of relationship between the independent variables and the dependent variable 62 4.5.4 Analysis of variance test of biographic variables and customer loyalty 64 vii 4.6 The empirical model 66 4.7 Conclusion 67 CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 69 5.1 Introduction 69 5.2 Summary of study 69 5.2.1 Summary of factor analysis and testing hypotheses results 70 5.2.2 Findings and recommendations of the study 71 5.3 Study limitations 73 5.4 Areas for future research 74 5.5 Final conclusions 74 LIST OF REFERENCES 75 APPENDIX - Questionaires (Vietnamese version) 78 viii LIST OF FIGURES Figure 1.1: The outline of Chapter Figure 1.2: Vietcombank Dong Nai overview Figure 1.3: Deposit and Debt outstanding from 2007 to Nov, 2011 Figure 1.4: Export and Import turnover from 2007 to Nov,2011 Figure 1.5: Number of ATM cards from 2007 to Nov, 2011 Figure 1.6: Number of credit cards from 2007 to Nov, 2011 Figure 1.7: The business result from 2007 to Nov, 2011 Figure 1.8: Structure of the study 10 Figure 2.1: The outline of Chapter 11 Figure 2.2: The components of CRM 17 Figure 2.3: Conceptual research model 27 Figure 3.1: The outline of chapter 28 Figure 3.2: Research model 33 Figure 4.1: The outline of Chapter four 46 Figure 4.2: Sex of respondents 47 Figure 4.3: Age group of respondents 47 Figure 4.4: Years of being customer of Vietcombank Dong Nai 48 Figure 4.5: Education level of respondents 49 Figure 4.6: Empirical model 67 71 Table 5.2: Testing hypotheses results Hypotheses Confirmation H 10 : There exists a relationship between at least independent Not rejected variable (CRM components) and the dependent variable (customer loyalty) H 11 : There exists a relationship between two-way Not rejected communication and customer loyalty at Vietcombank Dong Nai H 12 : There exists a relationship between employees attitude and Not rejected customer loyalty at Vietcombank Dong Nai H 13 : There exists a relationship between employees knowledge Not rejected and customer loyalty at Vietcombank Dong Nai H 14 : There exists a relationship between efficiency of banking Not rejected services and customer loyalty at Vietcombank Dong Nai H 15 : There exists a relationship between biographic variable - Not rejected AGE and customer loyalty at Vietcombank Dong Nai 5.2.2 Findings and recommendations of the study Given with the analysis results and the findings extracted in chapter and with reference to the above tested hypotheses, this study concludes that the first 72 research question is fully positively answered as the hypothesis H 00 is rejected and the hypothesis H 10 is not rejected This means that there is at least one of four independent variables of CRM may have impact on customer loyalty at Vietcombank Dong Nai Table 5.3: Coefficientsa Coefficientsa Standardized Unstandardized Coefficients Model B (Constant) Std Error -.687 289 M_COM 215 056 M_ATT 207 M_KNW M_EFF Coefficients Beta t Sig -2.377 018 220 3.864 000 081 161 2.548 012 288 065 261 4.393 000 432 084 305 5.164 000 a Dependent Variable: M_LOY Next, the result of multiple regression analysis shown in repeated Table 5.3 help to answer for second and third research question As coefficients beta of independent variables are greater than zero at maximum significance 0.012, thus all of them have the relationship with customer loyalty More specifically, Efficient of banking services is the most important factor influencing customer loyalty because its beta is the greatest (0.305) this may imply that customers at Vietcombank Dong Nai appreciate highly the efficiency of banking service of Vietcombank Dong Nai bringing to them This is a clue to suggest Vietcombank Dong Nai should first concentrate on improving the efficiency of banking services With the coefficient beta is 0.261, customers at Vietcombank Dong Nai claim that employees knowledge play the second important role influencing their loyalty 73 This is the fact that this factor is one of the invisible valuable assets of Vietcombank Dong Nai which should be ever maintained and improved in order to increase customer loyalty The next factor, two-way communication with the coefficient beta is 0.220 also shows that communication between Vietcombank Dong Nai and its customers play a key role in forming loyalty of customers The third position in the group independent variables may imply that there exists shortcoming in two-way communication at Vietcombank Dong Nai, that Vietcombank Dong Nai should find out and improve this problem Although the result of multiple regression analysis shows that employees attitude factor also have relationship with customer loyalty, however, with the lowest coefficient beta (0.161), this may implies that there is something exists that customer appreciate not high in employees attitude at Vietcombank Dong Nai This suggest that Vietcombank Dong Nai should pay more concentration on improving this factor Finally, to answer the forth research question, ANOVA tests help to identify the biographical variable AGE has the relationship with customer loyalty 5.3 Study limitations As mentioned in Chapter three, a limitation of this study was in the sampling technique Samples were selected by the convenience method This is the least reliable form of non-probability sampling Respondents were bank customers who are currently in transaction at Vietcombank Dong Nai and its sub branches In addition, respondents may not have enough time to complete the questionnaires, thus they may answer uncarefully Another reason is that many of them are very familiar with the bank therefore they might overrate the questionnaires 74 5.4 Areas for future research The selected independent variables (two-way communication, employees attitude, employees knowledge and efficiency of banking services) can explain only 56.12% of the variance in dependent variable (customer loyalty) it is possible that other external variables of CRM (which have not been specified in this study) can have an influence on customer loyalty at Vietcombank Dong Nai Therefore, the CRM components and customers loyalty at Vietcombank Dong Nai need further empirical testing Future research regarding this topic can be extended to other Vietcombank branches in some specific areas in order to identify and compare the result to each others 5.5 Final conclusions Bank managers and bank employees should be aware of the fact that factors such as two-way communication, employees knowledge, employees attitude and the efficiency of banking services could influence on customer loyalty Therefore, a selection of the variables tested in the study, could and should be implemented by Vietcombank Dong Nai in ways to positively influence their CRM and ensure client loyalty to the bank Finally, this will contribute to the bank’s success, which will ensure the stability and prosperity for Vietcombank Dong Nai 75 LIST OF REFERENCES Vietnamese: Hoàng Trọng – Chu Nguyễn Mộng Ngọc (2008), Phân tích liệu nghiên cứu với SPSS, Tập 2, NXB Hồng Đức –TP.HCM Hoàng Trọng – Chu Nguyễn Mộng Ngọc (2008), Thống kê ứng dụng kinh tế xã hội, NXB Thống kê English: Alam M, Khokhar R (2006), Impact of Internet on Customer Loyalty in Swedish Banks, J Econ Psychol., 16: 311-29 Baran RJ, Galka RJ, Strunk DP (2008), Principles of customer relationship management, Mason: Thomson South-Western Buttle, F (2004), Customer Relationship Management: Concepts and Tools, Oxford: Butterworth-Heinemann Bryan Foss & Merlin Stone (2002), CRM in Financial Services, Kogan Page US Christopher, M., Payne, A & Ballantyne, D (1993), Relationship Marketing: Bringing quality, customer service and marketing together Oxford: Butterworth-Heinemann Christopher, M., Payne, A & Ballantyne, D (2002), Relationship Marketing: Creating Stakeholder Value, Oxford: Butterworth-Heinemann Darrell K Rigby, Frederick Reichheld and Chris Dawson (2003), Winning customer loyalty is the key to a winning CRM strategy, Ivey Business Journal 76 Don Edward Schultz 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Relationship Management Strategies in Financial Services, Business Insight 18 Shaughnessy, J.J., Zechmeister, E & Zechmeister, J (2006), Research Methods in Psychology 51–52, New York: McGraw Hill 77 19 Tynan, C.; McKechnie, S.(2009)., "Hedonic Meaning through Christmas Consumption: A Review and Model", Journal of Customer Behaviour, Vol.8(3), pp 237-255 20 Paul Szwarc (2005), Researching customer satisfaction & loyalty - How to find out what people really think, London & Sterling, VA: Kogan Page 21 Wilmshurst, J & Mackay, A (2002), The Fundamentals and Practice of Marketing 4th edition, Oxford: Butterworth-Heinemann 22 Worcester, R.M (1997), Managing the image of your bank: the glue that binds, International Journal of Bank Marketing, Vol 15 No 5, pp 146-52 23 Yavas, U and Shemwell, D.J (1996), Bank image: exposition and illustration of correspondence analysis, International Journal of Bank Marketing, Vol 14 No 1, pp 15-21 24 Yi, Y., Jeon, H., (2003), Effects of Loyalty Programs on Value Perception, Program Loyalty, and Brand Loyalty, Journal of the Academy of Marketing Science, 31 (3), 229-240 78 APPENDIX - Questionaires (Vietnamese version) TRƯỜNG ĐẠI HỌC KINH TẾ TP HCM CHI NHÁNH ĐỒNG NAI Bảng khảo sát KHOA ĐÀO TẠO SAU ĐẠI HỌC Nghiên cứu yếu tố công tác quản trị quan hệ khách hàng ảnh hưởng đến lòng trung thành khách hàng Vietcombank Đồng Nai Kính thưa Quý khách hàng, Chúng chân thành cảm ơn Quý khách hàng quan tâm sử dụng dịch vụ, sản phẩm Ngân hàng Vietcombank Đồng Nai thời gian qua Với mong muốn phục vụ khách hàng tốt hơn, mong Quý khách dành chút thời gian q báu để góp ý cho thông qua Bảng khảo sát Dựa kết khảo sát, chúng tơi xác định lĩnh vực cần cải thiện để phục vụ Quý khách tốt Tất thông tin khảo sát bảo mật nghiêm ngặt khơng chia sẻ hay sử dụng mục đích khác ngồi mục đích nêu Bảng khảo sát Chân thành cảm ơn Nguyễn Anh Đức Vietcombank Đồng Nai, 09-2011 PHẦN A: ĐÁNH GIÁ CÁC YẾU TỐ TRONG CÔNG TÁC QUẢN TRỊ QUAN HỆ KHÁCH HÀNG VÀ ĐO LƯỜNG LÒNG TRUNG THÀNH CỦA KHÁCH HÀNG TẠI VIETCOMBANK ĐỒNG NAI Hướng dẫn: Quý khách vui lòng cho biết mức độ đồng ý hay không đồng ý với phát biểu liên quan đến yếu tố công tác quản trị quan hệ khách hàng đo lường lòng trung thành Vietcombank Đồng Nai Nếu Q khách hồn tồn khơng đồng ý với phát biểu, khoanh tròn số Nếu Quý khách khơng có ý kiến phát biểu đó, vui lòng khoanh tròn số Khoanh tròn số Q khách hồn tồn đồng ý với phát biểu Khơng có câu trả lời sai đúng, vui lòng khoanh tròn số trả lời phản ánh gần với quan điểm Quý khách Cảm ơn hợp tác Quý khách Phát biểu Stt Vietcombank Đồng Nai gửi kê tài khoản cho định kỳ hàng tháng Hồn tồn khơng đồng ý Khơng đồng ý Khơng có ý kiến 5 5 5 Đồng ý Hoàn toàn đồng ý Vietcombank Đồng Nai thường xuyên cập nhật thông tin sản phẩm hay dịch vụ ngân hàng thông qua phương tiện truyền thông tivi, báo chí, internet Cấp quản lý Vietcombank Đồng nai sẵn sàng gặp cần thiết Nhân viên Vietcombank Đồng Nai có kỹ giao tiếp tốt Tôi thường xuyên mời tham dự hội nghị khách hàng Vietcombank Đồng Nai Vietcombank Đồng Nai thường xuyên cho biết Phát biểu Stt Hồn tồn khơng đồng ý Khơng đồng ý Khơng có ý kiến 5 5 5 5 Đồng ý Hoàn toàn đồng ý sản phẩm hay dịch vụ Nhân viên Vietcombank Đồng Nai thể quan tâm đến khách hàng giao dịch Tôi cảm thấy nhân viên Vietcombank Đồng Nai hài lịng với cơng việc họ Tơi cảm thấy nhân viên Vietcombank Đồng Nai đối xử tốt với Nhân viên Vietcombank Đồng Nai thể trách 10 nhiệm cao công việc Nhân viên Vietcombank Đồng Nai ln thể thái 11 độ tích cực giải công việc cho Nhân viên Vietcombank Đồng Nai thể 12 vui vẻ công việc Tôi cảm thấy nhân viên Vietcombank Đồng Nai gắn 13 bó với cơng việc họ Nhân viên Vietcombank Đồng Nai cho tơi biết 14 đầy đủ thông tin sản phẩm dịch vụ ngân hàng Nhân viên Vietcombank Đồng Nai có kiến thức bao 15 quát sản phẩm dịch vụ ngân hàng Phát biểu Stt Hồn tồn khơng đồng ý Khơng đồng ý Khơng có ý kiến 5 5 5 5 5 Đồng ý Hồn tồn đồng ý Nhân viên Vietcombank Đồng Nai cho biết 16 đầy đủ quy định thủ tục ngân hàng Nhân viên ngân hàng tư vấn cho tơi sử dụng 17 sản phẩm hay dịch vụ ngân hàng Nhân viên Vietcombank Đồng Nai biết rõ thủ tục 18 sản phẩm dịch vụ ngân hàng Các sản phẩm dịch vụ Vietcombank Đồng Nai 19 20 cung cấp cho tơi có hiệu Vietcombank Đồng Nai tạo giá trị cho Tôi tin Vietcombank Đồng Nai bảo mật 21 thông tin giao dịch ngân hàng Vietcombank Đồng Nai áp dụng biện pháp 22 nghiêm ngặt để bảo đảm tính an tồn tài sản tơi ngân hàng Vietcombank Đồng nai thiết lập tiêu chuẩn 23 đạo đức nghề nghiệp sản phẩm dịch vụ cung cấp Tôi nghĩ sản phẩm dịch vụ Vietcombank 24 25 Đồng Nai đa dạng Tôi khơng quan tâm tới biểu phí giao dịch Phát biểu Stt Hồn tồn khơng đồng ý Khơng đồng ý Khơng có ý kiến Đồng ý Hoàn toàn đồng ý Vietcombank Đồng Nai, ví dụ phí chuyển tiền Các dịch vụ hay sản phẩm tiên tiến Internet 26 banking, SMS banking Vietcombank Đồng Nai tiện lợi 27 Tôi thường xuyên sử dụng dịch vụ Vietcombank Đồng Nai 28 Tôi giới thiệu bạn bè, người thân sử dụng dịch vụ Vietcombank Đồng Nai 29 Tôi tiếp tục sử dụng dịch vụ sản phẩm Vietcombank Đồng Nai thời gian tới PHẦN B: THƠNG TIN CHUNG Vui lịng trả lời câu hỏi sau cách điền vào chỗ trống hay đánh dấu (x) vào ô tương ứng: Giới tính Nam Nữ 2 Độ tuổi: Từ 18 - 24 tuổi Từ 25 - 34 tuổi Từ 35 - 44 tuổi Từ 45 – 54 tuổi Trên 55 tuổi Quý khách giao dịch với Vietcombank Đồng Nai ……………….năm Vui lịng cho biết trình độ học vấn: Phổ thông Trung cấp Cao đẳng Đại học Sau đại học Khác Họ tên (*) : Số điện thoại (*): Email (*): (* Thông tin tuỳ chọn) Một lần xin chân thành cảm ơn Quý khách dành thời gian quý báu cho bảng khảo sát Chúng mong muốn phục vụ Quý khách với chất lượng ngày tốt CẢM ƠN SỰ HỢP TÁC CỦA QUÝ KHÁCH ...MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY Nguyễn Anh Đức TESTING THE INFLUENCE OF FACTORS OF CUSTOMER RELATIONSHIP MANAGEMENT ON CUSTOMER LOYALTY AT VIETCOMBANK DONG NAI. .. mutual relationships between the factors of CRM influencing customer loyalty at Vietcombank Dong Nai? • Second research question: How these factors of CRM influence on customer loyalty at Vietcombank. .. and customer loyalty at Vietcombank Dong Nai H 14 : There exists a relationship between efficiency of banking services and customer loyalty in Vietcombank Dong Nai 3.5.3 Hypotheses of relationship