Bank Loyalty in Greece from a Customer’s View

Subject: Economics
Pages: 6
Words: 1680
Reading time:
7 min
Study level: Master


According to most recent statistical data, the level of bank and customer loyalty in Greece has drastically dropped over the course of the last ten years (Mikopoulos, 2008, p 24). In part, this can be ascribed to the advent of new banking institutions and the increase in competition. In the changing and globalized market, clients have the opportunity to choose from various options, because both domestic and international companies offer them new chances to receive financial benefits. This partially explains certain instability in this sphere as it takes considerable amount of time for one bank to take the palm of supremacy (Mikopoulos, 2008, p 24).

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There is another approach to this issue, many scholars believe that this volatility is due to the fact that many banks fail to address customers needs and this makes them to search for some other alternative (Dimitriades, 2006, p 783). Thus, we have tried to analyze the concept of bank loyalty and its constituent parts. Secondly, it is necessary to discuss the strategies that banks should employ in order to improve the relations with people.

Thirdly, in this part, we have discussed the clients needs and the factors which make him devoted to the organization. In particular, we have examined such attributes of banking institutions as pricing, the expertise, accuracy and politeness of the employees, time-efficiency, privacy and so forth. To a certain degree all of them affect attitudes and decisions of clients. At this point, we can advance an argument that Greek banks are more involved with their pricing policies yet they should be more involved with customer service and clients’ feedback. This change may help them to become more attractive to clients.

Main Body

In this case, the concept of loyalty can be defined as commitment to one banking organization out of many (Bloemer et al, p 277). This commitment manifests itself in the predisposition to use the firms services and recommend them to other people. It can be observed that loyalty encompasses both perception and behavior. On the other hand, this notion also implies banks dedication to serving peoples best interests and providing them with most suitable conditions.

Prior to examining these methods of attraction and retention, we should point out that very often the level of commitment can be determined by external factors, such economic or political situation in the region and bank cannot always interfere into this process (Athanassopoulos et al, 1999, p 275). However, in the vast majority of cases, the customers satisfaction and loyalty are closely interrelated.

In order to establish constant relations with customers, the management of the bank can use several techniques. As a rule, companies launch the so-called bank loyalty programs which consist of several components. The most widespread technique is to offer monetary awards to the clients, such discounts, interest rate bonuses and so forth. Certainly, this is by far the most popular way to attract people; however, there is some evidence, indicating that monetary award only is insufficient, because while purchasing any product or service people pay attention not only to its price (Hayes, 2008 p 101).

In addition to that, many scholars attach primary importance to individual preference of clients, and they suggest that there should be a wide range of rewards as each person has his own likings and disliking. In order to substantiate this statement we should refer to the article by Kathleen Khairallah, who states that each bank has to have a wide range of bonuses and flexible discount policy in order to offer the best possible award to the client (Khirallah, 2002, p 3).

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Furthermore, while developing loyalty programs, the management of the bank should get clear notion of this notion, because commitment includes not only overall satisfaction, there are two extra components such as the willingness to recommend the bank to other people and the intention to continue doing business with the company (Khirallah, 2002, p 5). Therefore, it is of the crucial importance to address all of these three aspects.

While measuring the performance, many institutions focus only on the satisfaction while disregarding other parameters and this is by far the major mistake. It should be mentioned that commitment is both attitude and actions, therefore, the task is two-dimensional, to increase clients satisfaction and make sure that they will not refuse the banks services at the earliest convenience.

The thing is that many of them continue to work with the company only because they fear the loss of profit but not because they are so much satisfied with its efficiency. Such state of affairs is very precarious especially for the bank, as many people can simply leave as soon as they find something better. Many institutions in Greece have already seen the dangers of this approach and they attempt to retain their clients. They have realized that retention techniques must not come down only to flexible pricing as this is one of the effective methods to build constant relationships with people (Dixon, 1991).

Speaking about the situation in Greece, we have to acknowledge that such institutions as Piraeus Bank, Alpha Banc etc provide predominantly financial awards, while trying to attract investors. Nonetheless, they tend to overlook such qualities as speed, flexibility, availability of banks services, its reputation and public image (Mikopoulos, 2008, p 25). Any company, which specializes in this sphere, has to concentrate on continuous improvement.

According to Timothy Keiningham, there are some myths about customer loyalty, for instance, the belief “Once a loyal customer, always a loyal customer” (Keiningham et al, 2005, p 91). In his opinion, this is one of the major errors, the management can make, because the situation in this field is always competitive and can possibly expect other banks will not offer similar or even improved rewards to the clients.

Thus, we may argue that while tailoring loyalty programs, the banks have to address both quantitative and qualitative aspects of they services. As it has been noted above, they may give various monetary awards to returned customers, and secondly, they need to constantly enhance the companys efficiency. Overall, we can single out such parts of the loyalty programs as: pricing, accessibility of the services, reliability, and time-efficiency (Khirallah, 2002, p 6). These are the most important qualities, which make the bank attractive to the customers.

Perhaps, it would more prudent for us to discuss the decisions made by a people, while the select banking institutions. Certainly, at first, he or she has to be aware of its existence. This person can find this information either through commercials or by word of mouth. The client can form his judgment on someone elses feedback either positive and negative. The results of many studies show that people are more likely to trust the second type of advertising (Szwarc, 2005, p 2007).

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We may say that for would-be customers, this is one of the most decisive points. Of course, while deciding on a particular organization, people do not forget about the price of its products. Nonetheless, all of them correlate pricing with quality. There are many researches, dedicated to customers preferences. There is no consensus among scholars concerning this question but many surveys indicate that reasonable prices is not the most important factor that influences decision making, many scholars emphasize for instance, experience, public image (Bloemer et al, 1998, p 281).

Furthermore, according to the study, conducted by Bloemer and Ruyter, clients assess bank efficiency according to such criteria as accuracy and expertise of employees, secondly, the time they have to wait in the office, attention and kindness of banks workers, their proactive actions etc (Bloemer et al, 1998, p 282). This sociological survey substantiates the hypothesis that people are more involved with the quality of the services. Certainly, we cannot suggest there is no other scenario as many people with low income level have to be content with poor treatment as they have no other option but they are almost bound to switch to another bank if their financial position gets better.

We can observe a very interesting paradox: Greek banking institutions try to attract new clients by offering them only financial benefits but they forget that quality of their operations is no less significant and in turn this makes client to move from one bank to another in search of better customer service. This partially accounts for the low level of bank loyalty in this country, probably; these companies should adopt new policies and become more customer-oriented.


To conclude, such concept as bank loyalty is two dimensional on the one hand, we should speak about banks commitment to the clients’ needs and on the other, this notion includes clients attitude and behavior towards the organization. Judging from the situation, which has recently emerged in Greece, we may argue that many banks set stress only on financial bonuses; they attempt to attract only people only by making offering them more discounts and profitable loans.

Nonetheless, they do not give due attention to such issues as time-efficiency, and accessibility of their products and customer service. In part, this is the reason why so many clients tend to switch from one institution to another. While mapping out bank loyalty programs, the management has to take into account not only monetary awards but also the effectiveness and speed of operations. Apart from that, many findings suggest that customers tend to listen to the feedbacks of other people rather than to commercials or advertisements.

The management of Greek banks has to understand that loyalty consists not only of behavior and actions as clients also play a very important role in advertising and very often they create reputation for the firm, and it is necessary to encourage such behavior. The clients need to have the following things in order to be loyal to the bank: reliability, accessibility, and most optimal price quality ratio. Without them, there is practically no likelihood that he or she will stay with the firm. The expertise of employees is also one of the factors, influencing the perceptions of customers, and very often these characteristic is the cornerstone of the banks success.


Athanassopoulos A, Labroukos N (1999). Corporate customer behaviour towards financial services: empirical results from the emerging market of Greece. International Journal of Bank Marketing; Volume: 17 Issue: 6, pp 274-285.

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