DETERMINANTS OF CUSTOMERS’ BANK SELECTION IN RELATION TO FREQUENT AND INFREQUENT BANK USERS: THE CASE OF ETHIOPIAN PRIVATE BANKING SECTOR

Abstract

Understanding customers’ banks selection criteria has been argued to be helpful to banks in formulating the appropriate marketing strategies for reaching, attracting and retaining customers. In addition, to design a suitable marketing strategy, banks need to identify the difference between frequent and infrequent bank users in their choice of banks. However, the previous studies in Ethiopia have not given enough attention to measure the differences in bank selection criteria between frequent and infrequent bank users. So, this paper investigates the determinants of bank selection by frequent and infrequent bank users in Addis Ababa. Descriptive statistical methods were used to analyze the data. A total of 406 questionnaires are distributed to customers of seven private banks and 364 questionnaires are correctly filled and returned. The findings of the study reveal that, both frequent and infrequent bank customers place more emphasis on convenience of branches’ location and its accessibility. The results of descriptive analysis also reveal that, the existence of friendly and polite staff, speed of employees to serve the customers quickly and employee’s knowledge, skill and expertise are important factors of bank selection for both frequent and infrequent users. It is recommended that, banks should give much emphasis to make bank location more convenient and accessible. In addition, banks should strive to make their employees well-trained and capable to give customers a pleasant experience