Customer lifetime value analysis in the banking industry with an emphasis on brand equity

Document Type : Research Paper

Authors

1 Department of Management , Tabriz Branch, Islamic Azad University, Tabriz, Iran

2 Department of Management, Bonab Branch, Islamic Azad University, Bonab, Iran

10.22075/ijnaa.2021.5169

Abstract

Due to the competitiveness of the banking industry and the importance of profitability, access to
customer information is essential for establishing effective relationships that serve the interests of
both parties. Establishing long-term customer relationships and building brand equity are pivotal
in modern banking, and thus improving relationship quality plays a key role in development of new
services and customer lifetime value (CLV) measurement. The purpose of the present research is
to provide a new model for CLV measurement in the banking industry with an emphasis on brand
equity. This study is descriptive and a question naire is used to collect data. The population consists
of all the customers of Refah Bank of Iran (with an average annual resources of at least 500m rials),
of whom 382 are randomly selected as the sample. Data are analyzed using de-scriptive statistics in
SPSS and partial least squares structural equation modeling (PLS-SEM) in SmartPLS. The results
indicate the strong fit of the overall model (GOF = 0.782) and show the significant positive effect of
brand equity on CLV.

Keywords