1

ABSTRACT

Building customers satisfaction, value and retention is a globally recognized reality and is the core issue of todays banking sector. The very purpose of this study is to focus on the subject of understanding and exploring the notion of building customers satisfaction, value and retention and is an attempt to quackery test the elements that put together the parts of the concept of customers satisfaction, value and retention and its impact on the organization. Todays organizations are facing their toughest competition ever. While facing such cut-throat competition, this study suggests that organizations should move from marketing philosophy to customers philosophy in order to gain competitive edge over their competitors. Only customer-centered organizations are able to build the desired level of customers satisfaction, value and retention. The study is significant as the result of the same may guide the management to review its strategies and on the part of the researcher, the dynamics of the situation will expose to him. In research methodology descriptive and exploratory methods used for information (i.e. questionnaire, experience and literature view). A part of exploratory study also explores the relationship between the variables such as in this study. Details about the population, sample size, sampling type and instrument also given in the methodology, keeping in view the organization profile. Data collected by using quota sampling method of non-probability sampling method and analyzed manually. The study also contains several findings and recommendations that should assist the concerned by aiming at the highest customers satisfaction and value by adopting more effective strategies that will certainly pave the way for their long period retention with the organization.

CHAPTER # 1
1.1

INTRODUCTION.

PURPOSE OF THE RESEARCH.

Building customers satisfaction, value and retention is a globally researched phenomena and is the core issue of todays banking sector. Customers satisfaction is feelings of pleasure resulting from comparing a products/services perceived performance in relation to his or her expectations. For customer-centered organization, customers satisfaction is both a goal and a marketing tool. The customers estimate, which offer will deliver the most value. Customers are value maximizers, within the bounds of search costs and limited knowledge, mobility and income. They form an expectation of value and act on it. Whether or not the offer lives upto the value, expectation affects both satisfaction and repurchase probability. Now the question arises that why the customers satisfaction, value and retention is so vital and important? The answer is very simple Because of its direct impact on your business base line. It leads to flourish business and gives competitive edge over the competitors. Satisfied customers will return time and time again. The loyalty of the satisfied customers will result in spread of business, additional profit, increase in market share and improved reputation. Untill and unless an organization like Habib Bank, whose market share is dropped from 17% to 13%, is prepared for guaranteed building customers satisfaction, value and retention, the organization will not put the desired policies and procedures in place and will not empower its employees. The research, therefore, will analyze the present level of customer satisfaction, value and retention in Habib Bank Limited, it will also provide some significant guideline to the organization, to review it strategies in order to meet desired level of customer satisfaction, value and retention. 1.2

ORGANIZATION PROFILE Habib Bank Limited is the oldest bank of Pakistan. Its identification and existence was established even prepartition in 1940, when its first branch was opened at Bombay (Mumbai). Then after partition it starts banking in the newly born country PAKISTAN. Today the HBL is the largest banking net work in Pakistan, which is serving the nation in each and every part of the country. Look at the comparison of financial highlights of the year 2007 and 2006 of HBL.

BALANCE SHEET
1 2 3 4 5 6 7 Total Deposits Total Assets Advances Liquid Assets Shareholders Equity & Revaluation surplus Capital Adequacy Ratio Liquid Assets %age of Deposits from Customers and Bills Payable

2007
531,298 691,992 382,173 170,901 62,272 13.57% 32.06%

2006
459,140 594,062 349,433 126,207 52,530 12.88% 27.72%

%AGE GROWTH
15.72% 16.48% 9.37% 35.41% 18.55% 5.36% 15.67%

PROFIT & LOSS. 8 9 10 11 12 13 Total net income Total Expenditure Provision for nonperforming loans and others Pre tax Profit Profit after taxation Earning per share 41,350 18,382 7,823 15,145 10,084 14.49 38,971 17,204 2,927 18,840 12,700 18.30 6.10% 6.85% 167.00% -19.61% -20.60% -20.82%

OTHERS 14 15 16 17 Home Remittances Exports/Imports No. of Branches No. of Staff 79,322 308,426 1,489 14,552 66,656 306,718 1,477 14,572 19% 0.56% 0.81% -0.14%

In addition to above, the following achievements of HBL are also worth mentioning: With one of the largest ATM networks in the country comprising of 315 HBL ATMs and assess to more than 2500, 1-Link member bank ATMs. HBL internet banking functionality is at par with the best internet banking solutions being offered by global banks. HBL Phone banking provides rounds the clock service to HBL customers.

Other breakthrough initiatives that are in the pipeline which will position the HBL to thrive and to maintain its competitive advantage are: Mobile and Biometric ATMs. SMS banking. HBL internet banking for corporate. 1.3 NATURE AND SCOPE OF PROBLEM.

As mentioned earlier, the HBL is the largest banking network in the country with 1449 (domestic) branches, with one of the largest ATM networks, the internet banking and HBL phone banking and other various products and services. A bank with 14552 staff members. Then what is the reason of declining of HBL market share from 17% to 13%. The answer is very simple This is due to customer dissatisfaction. This research report/study has sought answers to the following questions in order to determine the effectiveness of the strategies deployed by the management of HBL. What are the core issues of customers dissatisfaction? How building customers satisfaction, value and retention will be achieved? The impact of the customers dissatisfaction on the substantial growth of the organization. What remedial measures to be taken to arrest the declining trend of the market share of HBL?

1.4

SIGNIFICANCE OF THE TOPIC. In todays competitive market place it is hard to differentiate the product and service offering from competitive market. The technology available to both you and your competitors has made it easier to duplicate each others product and service. High satisfaction or delight creates an emotional bond with the organization, not just a rationale preference. In order to grow their profits and sales, the financial institutions will have to spend considerable time and resources in search of new customers. Customer acquisition requires substantial skills in: Lead generation. Lead qualification Lead account conversion.

Then it is not enough to be skilled in attracting new customers, the institution must keep them. The key to customer retention is customer satifaction. A highly satisfied customer becomes your ambassador. Reason for selection of this particular topic. Since I belong to HBL, being a habibian, the perplexity enforced me for doing study/research on this topic, which may be helpful in building customers satisfaction, value and retention in HBL. Importance for the organization. This topic is considered to be significant as the outcome of this research may help the organizational management to review its business strategies in order to ensure the customers satisfaction, value and retention for a definite longer period of time and to regain its lost market share.

Importance for the researcher.

Simultaneously, the topic is considered to be significant on the part of the researcher itself as it will to lay forth to view for the researcher to the moving forces of the situation and enable the researcher to be well versed with the process of research.

Importance for the related communities.

Lastly, the topic is considered to be significant even for the related communities as it will to make them know the process of adopted strategy formulation, evaluation and implementation criteria to assess the results of the strategy and its effectiveness and above all for the new researcher to explore/discover the other dimensions of the topic.
1.5

CONTEXT OF THE RESEARCH.

Todays organizations are facing their toughest competition ever. In this cutthroat competition only those organizations can outperform the competition which can move from marketing philosophy to customers philosophy, because marketing is only one factor in attracting and keeping customers, whereas other factors are more vital and significant.

In a country like Pakistan, the concept of customers satisfaction, value and retention is just on its evolutionary stage. We will have to cover a long distance to create a customer-centered philosophy in our organizations, particularly, in financial organization because only customer-centered organizations are adept at building customers satisfaction, value and retention. Then in the context of the religion, the most precious creature on the earth is human being. Service of humanity is the acme concept in all teachings, theories, philosophies and religions. These human beings are people and people are customers. We must understand that these customers are business and business is customer. 1.6 WHERE AND WHY.

Data collected for this project by quota sampling method of non-probability sampling method using questionnaires and personal interviews, is edited, classified, and analyzed manually. The following financial reports, web sites and journal also consulted for the study as an additional resource. 1.7 Financial reports of HBL. Financial reports of other banks. Web-site of HBL. Web-sites of other Banks. Journal of the Institute of Bankers in Pakistan. THE RESEARCH OBJECTIVES AND AIMS. To analyze the existing level of customers satisfaction in HBL. To propose how building of customers satisfaction, value and retention in HBL can be achieved for a longer period of time. Monitoring of CSFs(Critical Success Factors) through its selected KPIs (Key Performance Indicators). Growth of business (Market share) and regaining of ACME status by the organization (HBL). NOTE: Detailed discussion will be made in research project regarding the above four factors.

CHAPER # 2 2.1

RESEARCH QUESTION/HYPOTHESIS.

HOW TO BUILD CUSTOMERS SATISFACTION, VALUE AND RETENTION? Are required parameters are adopted for building customers satisfaction, value and retention in HBL? Are required parameters are not adopted for building customers satisfaction, value and retention in HBL?

If the reply is not then what are the reasons, causes, shortcomings and obstacles which stood in the way of achievements of required goals/targets.

CHAPTER # 3

RESEARCH METHODOLOGY.

The researcher used the descriptive and exploratory methods to obtain the information using the questionnaire, experience and literature review as the source of information. The researcher believed that the descriptive method is appropriate for this investigation, because it goes beyond gathering and tabulating of the data. It also involves the elements of interpretation of meaning and significance of what is described. On the other hand exploratory research method along with descriptive method is adopted because it is designed to provide a back ground, to familiarize, and to explore the subject. A part of exploratory study also explores the relationship between the variables such as in this study, without knowing why they are studied. On this basis, the researcher was able to assess and describe the prevailing situation and condition of Customer Satisfaction as could learn from the opinion of the respondents through the survey with the subjects.
3.1

POPULATION The customers of whole Habib Bank Limited comprising of 1449 (domestic) branches to be taken as population.

3.2

SAMPLE SIZE. For this research, data collected from customers, selected at random. The sample selected for study was n=103, out of total population (N) of bank customers.

3.3

SAMPLING TYPE AND INSTRUMENT.

Getting data from whole population was limitation in the research design. The Researcher used non-probability sampling because researcher wanted the selected customers, whose response rate would be helpful in research. However, overall research design was kept before while selecting the sample. The response rate of selected customers representative of overall response rate to some extent/proportion. However, no previous research studies were conducted by an employee in HBL to analyze the level of customers satisfaction, value and retention.

CHAPTER # 4

DATA ANALYSIS.

As the data in this case is not of the statistical type rather it pertains to building of customers satisfaction, value and retention, therefore, the data is analyzed manually.

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CHAPTER # 5

REFERENCE.

Customer satisfaction is worthless customer loyalty is priceless by Jeffrey Gitomer Austin, TX: Bard Press, 1998. Marketing management, the millennium edition by Philip Kotler. Consumer behaviour by Solomon. What is customers satisfaction from Wikipedia Encyclopedia. The business improvement network: WWE.bin.co.uk. Marketing research by Dr. Malhotra. Financial reports of HBL. Financial reports of other banks. Web-site of HBL. Web-sites of other Banks. Journal of the Institute of Bankers in Pakistan.

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CHAPTER # 6

CONCLUSIONS.

FINDINGS & RECOMMENDATIONS. An organization like HBL which is boosted of having the largest banking net work in the country, the largest ATM networks, largest number of branches, equipped with internet banking, phone banking, soon will be equipped with mobile and biometric ATMs, SMS banking, HBL internet banking for corporate. A staff of 14552 engaged in running the facilitated HBL banking network. Then in the presence of all these blessings, the focus must be aiming at the highest customer satisfaction because customers who are just satisfied still find it easy to switch, when a better offer comes along. Those customers who are highly satisfied are much less ready to switch. High satisfaction or delight creates an emotional bond with the organization. The result is high customer loyalty. In addition to building customer satisfaction, value and retention, the organizations also need to monitor their competitors performance in these areas. The role of HR (Human Resources) is worth mentioning in the process of building customer satisfaction, value and retention. A skilled, motivated, committed dedicated, loyal and empowered HR (Human Resources) is certainly the need of time.