Navigating experiential balance: how online banking shapes loyalty and decision-making

Purpose Customer attrition in the banking sector has emerged as a critical issue, driven by regulatory changes, digital transformation and shifting customer expectations. This research investigates the dual nature of customer experiences in online banking, introducing the concept of brand experiential balance the simultaneous presence of opposing sensations, emotions, cognitions and behaviors. The study aims to understand how positive and negative experiential balance dimensions impact satisfaction, loyalty and word-of-mouth (WOM) across different consumer segments. Design/methodology/approach A quantitative study was conducted with online banking customers, utilizing structural equation modeling (SEM-AMOS) and multi-group analyses. Consumers were segmented into three typologies – dominant positive experiential balance, dominant negative experiential balance and ambivalent experience – based on the dual valence of their brand experience. Findings The findings reveal that the positive emotional, social and cognitive dimensions of the online banking brand experience significantly enhance satisfaction, loyalty and WOM, whereas the negative intellectual dimension (need for advice) has a negative effect on satisfaction and no impact on loyalty or WOM. Furthermore, while the dominant positive experiential balance segment evaluates online banking favorably and the ambivalent experience segment shows a more neutral stance, their satisfaction has a weaker influence on loyalty and WOM than the dominant negative experiential balance segment. Practical implications The study provides recommendations to help traditional banks implement tailored relationship marketing actions for each online banking customer segment. Originality/value This study extends Brakus et al.’s (2009) brand experience theory by incorporating both positive and negative dimensions of brand experience through the integration of decision-making frameworks, including behavioral reasoning theory (BRT, Westaby, 2005) and the decisional balance model (DBM, Janis and Mann, 1977). To our knowledge, it is the first to introduce a segmentation of online banking customers based on brand experiential balance. This novel typology allows for a clear distinction between manifest and latent satisfaction, providing deeper insights into hidden drivers of customer churn. This approach enables banks to proactively address dissatisfaction and retain customers more effectively.