The influence of customer relationships on the market value of a bank – a methodological perspective

Received wisdom is that customer relationships play a strategic role in creating the value of a company. According to Berry (1995) there are three levels of relationship: financial, social and structural. The purpose of this paper is to study the impact of relationship levels on a bank's value. The results of the study indicate that customer relationships have a positive influence on the market value of banks. The research presented in the paper also confirms that the significance of these relationships in creating a bank's value depends on the level of relationships that a bank is able to create. The analysis has indicated that relationships on the structural level have a positive (and the strongest) influence on a bank's value. This study differs from other studies in so far as it shows how the three different levels of relationship, rather than the relationships themselves, influence a bank's value.