A Model for Measuring the Effects of Bank's Brand Credibility on Customer's Loyalty Commitment

This paper aims to investigate the effects of brand credibility on customer loyalty. First, this study explores the effects of brand perception, including loyalty commitment, continuance commitment and satisfaction on customer's behavioral intentions (word of mouth recommendations and switching propensity) and second, it examines the effects of brand credibility on loyalty commitment. A sample of 768 employees from two large banks in Iran, Mellat Bank and Parsian Bank, participated in the study. Findings show that brand credibility plays a key role in improving customer's behavioral intentions. In other words, satisfied customers advertise for the bank through the word of mouth recommendations and this in turn decreases their own switching propensity. It is also found that increase in continuance commitment reduces switching propensity. Hence, managers should pay attention to brand credibility, consider the importance of brand role in customer relationship management, and design appropriate strategies and programs in order to develop more loyal customers.