The Impact of Co-Production on Customer Loyalty in Banking Services: A Case of Saman Bank

Abstract

This study investigates the effect of co-production on customer loyalty (attitudinal and behavioral separately) and factors which may boost co-production in an Iranian bank. To investigate co-production in banking services, the proposed model of Auh et al. (2007) was applied. Given the fact that many banks try to get the status of their main customers, co-production was examined due to its potential to create value for customers and make them more loyal, therefore, it encourages them to extend business with those banks. The results of their search have been achieved thorough 415 bank customers, and structural equation modeling (SEM) method was used to analyze the data. The results indicate that co-production positively influences attitudinal loyalty (p<0.01) while not behavioral loyalty, and the higher degree of communication (p<0.05), client expertise, affective commitment, and interactional justice (p<0.01) increase the level of co-production. Among these factors, affective commitment has the greatest effect on co-production. Finally, the results suggest that bank managers should consider co-production as a means to make customers more loyal in the current competitive market.