Increasing competition led to lesser cost of customer retention than attract new ones. Based on studies, banks and financial institutions lose about 25 percent of their customers annually. In banking system of Iran, privatization and increasing financial institutions as well as diversification of banking services and easy switching for the customer are principal concern of customer churn managers. 1% of Customer churn decreased result in a 6% increase in profit. This study aims to explain causal factors affecting banking customer churn. This paper is practical and it is descriptive-survey. Population is governmental bank customers in Semnan city which sample of 384 were selected using a stratified random sampling. Data were collected by standard questionnaire and were analyzed using Visual PLS. Results showed “weaknesses in quality of results” by a path coefficient of 0.855 which was higher than other variables effecting negative perception of bank. Also, significant and positive impact of “service failure”, “weakness in interaction” and “lack of responsibility” on “unfavorable perception of Banks’ customers” was confirmed. “Unfavorable perception” through the mediation of “customers rage” (with path coefficient of 0.713), are leading to churn of bank customers (with path coefficient of 0.819), respectively.


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