Factors Influencing Customer Loyalty in Banks: The Mediating Effect of Customer Trust
DOI:
https://doi.org/10.61506/01.00218Keywords:
Service quality, Customer satisfaction, Brand reputation, Corporate social responsibility, Customer trust, Customer loyalty, Banking sectorAbstract
This study adds to the body of existing knowledge by examining the relationship between service quality (SQ), customer satisfaction (CS), brand reputation (BR), corporate social responsibility (CSR), and the mediating effect of customer trust (CT). This study's primary goal is to identify the individual and intuitive effects of service quality, customer satisfaction, brand reputation, and corporate social responsibility (CSR) on customer loyalty (CL). Additionally, the research investigates the significance of consumer trust as a mediator. The research collected responses from a diverse sample of 300 banking customers. A structured questionnaire was employed as the primary instrument for data collection. The questionnaire was made available to the bank customers in Lahore through online channels. The Statistical Package for the Social Sciences (SPSS), Smart Partial Least Squares (PLS) and MS Excel was used for data analysis. A robust analysis was also performed by using MS Excel. The results show that CSR did not considerably meaningfully affect CL, even while SQ, CS, and BR had strong positive impacts on customer loyalty. This result calls for further research into the particular facets of CSR that might affect CL in the banking industry. The findings of the research may be specific to the context of the banking industry in Lahore and might not be directly generalizable to other regions or industries. The outcomes of this research offer practical implications for banking institutions seeking to enhance customer loyalty. Understanding the drivers of loyalty can guide strategic decisions related to SQ, CS, and BR.
References
Abd-El-Salam, E. M., Shawky, A. Y., & El-Nahas, T. (2013). The impact of corporate image and reputation on service quality, customer satisfaction and customer loyalty: testing the mediating role. Case analysis in an international service company. The Business & Management Review, 3(2), 177-196..
Ahmed Muneeb Mehta & Maham Tariq (2020). How brand image and perceived service quality affect customer loyalty through customer satisfaction. Academy of Marketing Studies Journal, 24, 1.
Al-Jammal, M., & Al-Hawamdeh, N. A. (2021). The mediating effect of customer satisfaction in relationship with service quality, corporate social responsibility, perceived quality and brand loyalty. Journal of Retailing and Consumer Services, 61, 102507
Alnaser, F., Ghani, M & Rahi, S. (2018). Service quality in Islamic banks: The role of PAKSERV model, customer satisfaction and customer loyalty. Accounting, 4(2), 63-72.
Anderson, E. W., & Sullivan, M. W. (1993). The antecedents and consequences of customer satisfaction for firms. Marketing Science, 12(2), 125-143
Anderson, E. W., Fornell, C., & Lehmann, D. R. (1994). Customer Satisfaction, Market Share, and Profitability: Findings from Sweden. Journal of Marketing, 58(3), 53-66
Andreassen, T. W., & Lindestad, B. (1998). The Effect of Corporate Image in the Formation of Customer Loyalty. Journal of Service Research, 1(1), 82-92.
Aramburu, I. A., & Pescador, I. G. (2019). The effects of corporate social responsibility on customer loyalty: The mediating effect of reputation in cooperative banks versus commercial banks in the Basque country. Journal of business ethics, 154, 701-719.
Arokiasamy, A. R. A. (2013). The impact of customer satisfaction on customer loyalty and intentions to switch in the banking sector in Malaysia. The journal of commerce, 5(1), 14.
Ashraf, S., Ilyas, R., Imtiaz, M., & Tahir, H. M. (2017). Impact of CSR on customer loyalty: putting customer trust, customer identification, customer satisfaction and customer commitment into equation-a study on the banking sector of Pakistan. International Journal of Multidisciplinary and Current Research, 5(5), 1362-1372.
Ati, A., Majid, M. S. A., Azis, N., & Hamid, A. (2020). Mediating the effects of customer satisfaction and bank reputation on the relationship between services quality and loyalty of islamic banking customers. Malaysian Journal of Consumer and Family Economics, 25, 28-61.
Banahene, S. B., Mensah, A. A., & Asamoah, A. (2018). The impact of customer satisfaction on loyalty in the Ghana banking sector: the effect of trust mediation.
Bontis, N., Booker, L.D. and Serenko, A. (2007). The mediating effect of organizational reputation on customer loyalty and service recommendation in the banking industry. Management Decision, 45, 1426-1445.
Carroll, B. A., & Shabana, K. M. (2010). The role of corporate social responsibility in consumer behavior: A meta-analysis. Journal of Business Ethics, 105(1), 85-105.
Chiguvi, D., & Guruwo, P. T. (2017). Impact of customer satisfaction on customer loyalty in the banking sector. International Journal of Scientific Engineering and Research (IJSER), 5(2), 55-63.
Darmawan, D. (2018). The effect of service quality, customer satisfaction and corporate image on customer loyalty in the banking sector in Indonesia. Journal of Business and Management. 19, 46-51.
Didit Darmawan (2017). The Effect of Service Quality, Customer Satisfaction and Corporate Image on Customer Loyalty in the banking sector in Indonesia. IOSR Journal of Business and Management (IOSR-JBM), 19, 46-51.
Fombrun, C. J., & Rindova, V. P. (2003). Corporate reputation and competitive performance. Academy of Management Journal, 46(6), 697-714.
Hazra, S. G., & Srivastava, K. B. (2009). Impact of Service Quality on Customer Loyalty, Commitment and Trust in the Indian Banking Sector. IUP Journal of Marketing Management, 8.
Hussain, A. (2014). Banking Privatization and Profitability in Pakistan: A Time Series Analysis. Journal of Business and Economic Options, 1(1), 30-37.
Khan, M. M., & Fasih, M. (2014). Impact of service quality on customer satisfaction and customer loyalty: Evidence from banking sector. Pakistan Journal of Commerce and Social Sciences (PJCSS), 8(2), 331-354.
Khawaja, L., Ali, A & Mostapha, N. (2021). The mediating effect of customer satisfaction in relationship with service quality, corporate social responsibility, perceived quality and brand loyalty. Management Science Letters, 11(3), 763-772.
Leninkumar, V. (2017). The relationship between customer satisfaction and customer trust on customer loyalty. International Journal of Academic Research in Business and Social Sciences, 7(4), 450-465.
Muflih, M. (2021). The link between corporate social responsibility and customer loyalty: Empirical evidence from the Islamic banking industry. Journal of Retailing and Consumer Services, 61, 102558.
NGO, Vu Minh a Huan Huu NGUYEN (2016). The relationship between service quality, customer satisfaction and customer loyalty: An investigation in Vietnamese retail banking sector. Journal of Competitiveness, 8, 103-116
Oliver, R. L. (1999). Customer satisfaction: What we know, what we need to know. Journal of Consumer Marketing, 16(7), 675-694
Onyancha, G. K. (2013). The impact of bank brand image on customer satisfaction and loyalty: A case of Kenya commercial bank. European Journal of Business and Management, 5(21), 35-39.
Osakwe, C. N., & Yusuf, T. O. (2021). CSR: A roadmap towards customer loyalty. Total Quality Management & Business Excellence, 32(13-14), 1424-1440.
Özkan, P., Süer, S., Keser, İ. K., & Kocakoç, İ. D. (2020). The effect of service quality and customer satisfaction on customer loyalty: The mediation of perceived value of services, corporate image, and corporate reputation. International Journal of Bank Marketing, 38(2), 384-405
Peloza, J., & Ployhart, R. E. (2003). The customer relationship life cycle: Building loyalty through knowledge management. Journal of Business and Industrial Marketing, 18(1), 29-42.
Ramachandran, A., Chidambaram, V. (2012). A review of customer satisfaction towards service quality of banking sector. Periodica Polytechnica Social and Management Sciences, 20(2), 71–79.
Raza, A., Rather, R. A., Iqbal, M. K., & Bhutta, U. S. (2020). An assessment of corporate social responsibility on customer company identification and loyalty in banking industry: a PLS-SEM analysis. Management Research Review, 43(11), 1337-1370.
RizwanUllah Khan, Yashar Salamzadeh, Qaisar Iqbal & Shaohua Yang (2022). The Impact of Customer Relationship Management and Company Reputation on Customer Loyalty: The Mediating Role of Customer Satisfaction, Journal of Relationship Marketing, 21, 1-26.
Ruiz, B., & Garcia, J. A. (2021). Analyzing the relationship between CSR and reputation in the banking sector. Journal of Retailing and Consumer Services, 61, 102552.
Samraz Hafeez & Bakhtiar Muhammad (2012). The Impact of Service Quality, Customer Satisfaction and Loyalty Programs on Customer’s Loyalty: Evidence from Banking Sector of Pakistan. International Journal of Business and Social Science, 3, 16.
Sitorus, T., & Yustisia, M. (2018). The influence of service quality and customer trust toward customer loyalty: the role of customer satisfaction. International Journal for Quality Research, 12(3), 639.
Sivesan, S. (2012). Impact of relationship marketing on customer loyalty on banking sectors. South Asian Journal of Marketing & Management Research, 2(3), 179-181.
Yousef, M. F., & Awad, A. A. (2019). The mediating effect of customers' trust between the association of corporate social responsibility and customers' loyalty. International Journal of Business and Management, 14(12), 260-277
Zameer, H., Tara, A., Kausar, U. and Mohsin, A. (2015). Impact of service quality, corporate image and customer satisfaction towards customers’ perceived value in the banking sector in Pakistan. International Journal of Bank Marketing, 33, 442-456.
Zeithaml, V. A., & Bitner, M. J. (1996). Perceived service quality scale (SERVQUAL). A conceptual model and measurement instrument. International Journal of Retail & Distribution Management, 24(3), 4-18.
