MF 34,3 186 Managerial Finance Vol. 34 No. 3, 2008 pp. 186-197 # Emerald Group Publishing Limited 0307-4358 DOI 10.1108/03074350810848063 Customer switching behaviour in Greek banking services using survival analysis Maria Mavri and George Ioannou Management Sciences Laboratory, Department of Management Science & Technology, Athens University of Economics & Business, Athens, Greece Abstract Purpose – This paper aims to examine customer switching behaviour in Greek banking services. More specifically it aims to investigate predictors of churn behaviour as part of customer relationship management (CRM). Design/methodology/approach – The enhancement of existing relationships is of pivotal importance to banks, since attracting new customers is known to be more expensive. The paper discusses survival analysis based on data collected from customers of a leading financial services company. It examines a number of variables, which represent characteristics of the customers and of the offered services and products. By using life tables, it estimates the contribution of each separate factor in customers’ switching behaviour in different periods of time. Findings – A hazard proportional model is built to determine the risk of churn behaviour, which is the end-result of all the examined factors. Practical implications – Bank’s management team could use the findings of our study, in order to determine specific attributes in designing financial services and products, which would add in customers’ satisfaction. Originality/value – The approach and results have significant implications for enlarging the duration of the relationship among customer and bank. Keywords Banking, Customer relations, Consumer behaviour, Greece Paper type Research paper Introduction Nowadays, understanding and reacting to changes of customer behaviour is an inevitable aspect of surviving in a competitive and mature market (Lariviere and Poel, 2004). Banks are facing the increased competition due to two different reasons: (1) the entrance of financial and insurance firms in the traditional banking market, and (2) the wide range of offered products and services to public. As a consequence, the banking industry strives to succeed by putting the topic of rapid and changing customers’ needs to their agenda (Krishnan et al., 1999). The economic value of customer retention is widely recognized in the literature: . Successful customer retention lowers the need for seeking new and potentially risky customers and allows organizations to focus more accurately on the needs of their existing customers by building relationships (Dawes and Swailes, 1999). . Long-term customers buy more and, if satisfied may provide new referrals through positive word-of-mouth for the company. . Long-term customers become less costly to serve due to the bank’s greater knowledge of the existing customer and to decrease serving costs. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0307-4358.htm