Customer Retention and Related Factors Analysis in Financial Services Company
DOI:
https://doi.org/10.21512/bbr.v12i2.6546Keywords:
customer retention, loan to value, days past due, monthly income, customer mileage, financial services companyAbstract
High competition requires companies to maintain their consumers, so they do not turn to competitors. Besides
that, the high acquisition cost to get new customer makes many companies shift their focus to customer retention.
It also happens in the financial services industry in Indonesia. Their product is relatively homogeneous with tight
regulations, price war from competitors, and the high credit risk to acquire new customers. It makes finance
companies concentrate on consumer retention. The research aimed to identify the factors that most influence
consumer retention in the financial services company. Cluster random sampling technique was applied to get
the sample of the population. Secondary data from one branch of a finance company in a particular geographical
cluster (2.858 customers) were used. The selection of branches or geographical clusters was selected randomly.
Data analysis was conducted based on several determinant factors that affected consumer retention, such as the
amount of loan to value, days past due that consumers had, monthly income, and the mileage from the customer
domicile to the company offices. Pearson correlation analysis was used to analyze these determinant factors.
Based on several factors, mileage and loan to value have a highly significant relationship with customer retention.
Meanwhile, the other variables do not have a significant effect on customer retention.
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