Linking banking service quality to customer loyalty: two levels perspective

Abstract

The present paper analyzes customer loyalty emphasizing the two levels perspective, i.e. company and employee level in the retail banking context in North Macedonia. A survey on a sample of 786 respondents was performed and further structural equation modeling was conducted, linking service quality dimensions and customer satisfaction as crucial antecedents of customer loyalty on both levels (loyalty to bank and loyalty to employees). Loyalty to employee proved to be significantly determined by intangibles, followed by pricing as service quality dimensions, both mediated by customer satisfaction. Loyalty to bank is directly influenced by tangibles, while only indirectly affected by intangibles and pricing through customer satisfaction. At the same time, customer satisfaction is a significant predictor of both types of loyalty, additionally mediating the relationship between loyalty to employees and loyalty to bank. The present study contributes to the research corpus in this area, providing more comprehensive understanding of customer loyalty and its antecedents. The two levels perspective of customer loyalty adds further to the value of this research.