Customer Satisfaction as a Mediator between Service Quality and Customer Loyalty: Evidence from Islamic Banks in Indonesia

Abstract

In contemporary business environments, competition serves as a driving force compelling entities to continuously enhance their offerings to build customer trust and preference. This study aims to investigate the impact of service quality on customer satisfaction and loyalty within Bank Syariah Indonesia (BSI), focusing on the interconnection between service quality, customer satisfaction, and loyalty. Using a quantitative methodology with a causal research design, the study focuses on BSI clientele, highlighting three main variables: service quality, customer satisfaction, and loyalty. Purposive sampling enlisted 166 BSI customers from Sampang Regency. Data collection involved documentation and survey instruments, analyzed through multiple linear regression. Results indicate a positive correlation between service quality, customer satisfaction, and loyalty. Customer satisfaction acts as a mediator, linking service quality to loyalty. Despite limitations such as sample size constraints and the quantitative approach's limitations in capturing diverse customer experiences, the study underscores the importance for Islamic banking practitioners to improve service quality for enhanced customer satisfaction and loyalty. Emphasizing customer satisfaction proves crucial in strengthening loyalty, highlighting the significance of providing exceptional services.

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