Contrasting the drivers of customer loyalty; financing and depositor customer, single and dual customer, in Indonesian Islamic bank

2019 ◽  
Vol 11 (4) ◽  
pp. 933-959 ◽  
Author(s):  
Tika Kartika ◽  
Achmad Firdaus ◽  
Mukhamad Najib
Keyword(s):  
Customer Satisfaction ◽  
Marketing Strategy ◽  
Corporate Culture ◽  
Significant Relationship ◽  
Structural Equation ◽  
Equation Modeling ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Customer Trust

Purpose This study aims to investigate the drivers of loyalty in Indonesian Islamic banks, especially group of depositor vs financing customer and single vs dual customer. Design/methodology/approach The objectives of this study were the seven major commercial Indonesian Islamic banks using the purposive sampling technique. In total, 105 questionnaires were processed, consisting of questions regarding depositors, financing, single and dual customer. Structural equation modeling using partial least squares were the analysis methods used to test the hypothesis, while in-depth interviews were conducted with Islamic bank managers to validate the findings. Findings Image has a significant relationship with customer satisfaction, as well as trust. Similarly, customer satisfaction has a significant relationship with trust. Trust has a significant relationship with loyalty. For a financing customer, the image is very influential on customer trust. For a depositor customer, customer satisfaction is very influential on customer trust. For single customer, customer satisfaction has a stronger influence on the image, compared to dual customer. Practical implications Islamic banks need to maintain good image and service quality to create strong, reliable and long-term relationships with customers, more specifically, in terms of improvement and product innovation. A bank focuses on the micro or macro segment, as well as financing. Financing products should be referred to customers’ needs. Bank reputation can be done by strengthening branding and corporate culture in marketing strategy. Shariah compliance has the highest loading factor to trust customers. Indonesian Islamic banks need to maintain customer trust by sticking to Islamic principles and continuing to ensure that its products and services are in accordance with Islamic principles. In Indonesian Islamic banks, it is very important to keep the legal aspects in all of products and services. Deposit products and services of Islamic banks should be in line with the rules of the financial services authority and Bank of Indonesia culture. Bank efforts to strengthen reputation can be done by strengthening branding and corporate culture in marketing strategy, while increasing the attractiveness of the products by way of research and development (R&D) must endeavor to make products and services attractive in terms of both product characteristics and price. Furthermore, it is necessary to support a good marketing strategy to market their products. Social implications Research can be used more widely in determining public policy, by strengthening the marketing strategy and public education. Islamic banks can work together with local religious departments to maximize marketing strategies to educate and convince people to be active economically under Islamic sharia guidance. Islamic banks need to maintain customer trust by sticking to the principles of sharia and continuing to ensure that products and services conform to sharia principles. Islamic bank management can strengthen customer trust by having a good risk management system, so that customers feel secure with Islamic bank transactions. In addition, sharia banks as companies must demonstrate social responsibility by distributing ZIS managed from customers and implementing CSR as a form of awareness of the surrounding community. Originality/value The study revealed the factors that lead to loyalty on the financing, depositor and the single and dual customers. The study found that improvement and innovation, strategic and sustainability are new indicators used to build images of Islamic banks.

The consumers’ commitment and materialism on Islamic banking: the role of religiosity

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Junaidi Junaidi ◽  
Ready Wicaksono ◽  
Hamka Hamka
Keyword(s):  
Structural Equation ◽  
Survey Study ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Positive Effects ◽  
Islamic Bank ◽  
Muslim People ◽  
The Impact

Purpose This paper aims to investigate whether and how religiosity (e.g. extrinsic and intrinsic) influences the mediator variables (consumers’ commitment and materialism) in the Islamic bank consumers context. It also examines how the mediators should be influence consumers’ preferences. Design/methodology/approach In total, 658 Muslim people and Islamic bank consumers were recruited for a survey study and structural equation modeling was used to test the research hypotheses. Findings The empirical results indicate that religiosity (e.g. extrinsic and intrinsic) has significant and positive effects on consumers’ commitment and materialism, whereas intrinsic religiosity has no significant effect on consumers’ commitment which subsequently influences consumers’ preference. Furthermore, mediator variables (e.g. consumers’ commitment and consumers’ materialism) have partial mediators between religiosity and consumers’ preferences. Research limitations/implications The current study was limited to Indonesian Muslim people; there is a future need to study consumers’ attitudes and engagement in religious products and services (e.g. Islamic brands). It is can help practitioners, regulators and researchers to observe the dynamic behavior to elaborate on the impact of religion and Islamic products on consumers’ preference. Practical implications The bank managers and regulators should enhance the information of products and services Islamic banks and the difference principle between conventional banks. Moreover, enlighten the consumers about the principle operation of Islamic banks from the perspective of marketing and religiosity. Originality/value This study contributes to consumers’ behavior literature and, specifically, for the decision-making process through developing and testing a model of religious determinants toward Islamic bank products, as well as offers new insights into the determinants of religion and consumers’ decision process toward Islamic banking.

The role of Islamic marketing ethics towards customer satisfaction

2019 ◽  
Vol 11 (4) ◽  
pp. 1001-1018 ◽  
Author(s):  
Aamir Abbas ◽  
Qasim Ali Nisar ◽  
Mahmood A. Husain Mahmood ◽  
Abderrahim Chenini ◽  
Ahsan Zubair
Keyword(s):  
Customer Satisfaction ◽  
Structural Equation ◽  
Scale Validation ◽  
Sampling Technique ◽  
Customer Relationships ◽  
Marketing Ethics ◽  
Equation Modeling ◽  
Islamic Banks ◽  
Ethical Perspective ◽  
Content Type

Purpose Islamic marketing ethics focus on the principles of equity, justice and value maximization for the welfare of society. These ethics play a vital role in elevating the standards of customer behavior. The strategy of focusing customer is now considered as important element because of rapidly changing marketing trends in Islamic banks. Therefore, the purpose of this study is to find out the important features of Islamic marketing ethics and identify their effect on customer’s satisfaction in Islamic banking. Design/methodology/approach This study is descriptive and quantitative. Data were collected from 1000 customers of Islamic banks by applying convenient sampling technique. Smart PLS was used to check the scale validation by confirmatory factor analysis. To test the hypotheses, structural equation modeling technique was used. Findings Results enlightened that Islamic marketing ethics play a significant role in enhancing the customer’s satisfaction. Islamic banks should focus on marketing mix along with Islamic and ethical perspectives to improve the customer’s satisfaction level. Practical implications This study highlighted that Islamic marketing ethics have great impact on customer satisfaction. Therefore, Islamic banks need to concentrate on the ethical perspective of Islamic marketing in order to develop long term customer relationships. Islamic banks need to revise their marketing practices, and they should align their marketing tactics with ethical Islamic boundaries. They need to design, communicate and enforce the code of Islamic ethics within organizations. Originality/value This paper fulfills an identified need to study how Islamic marketing ethics effect customer satisfaction.

scholarly journals Service quality, religiosity, customer satisfaction, customer engagement and Islamic bank’s customer loyalty

2019 ◽  
Vol 11 (6) ◽  
pp. 1691-1705 ◽  
Author(s):  
Abror Abror ◽  
Dina Patrisia ◽  
Yunita Engriani ◽  
Susi Evanita ◽  
Yasri Yasri ◽  
...  
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Customer Loyalty ◽  
Customer Engagement ◽  
Equation Modeling ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Moderating Role

Purpose The purpose of this study is to investigate the influential factors of customer loyalty to Islamic banks, namely, service quality, customer satisfaction, customer engagement and religiosity. Design/methodology/approach This study is a survey of 335 Islamic bank customers in West Sumatra, Indonesia. This research deployed purposive sampling and analyzed the data by using covariance-based structural equation modeling. Findings Service quality has a positive and significant impact on customer satisfaction. Religiosity has a significant and negative moderating impact on the service quality–customer satisfaction relationship. Service quality has no significant influence on customer loyalty. Customer satisfaction is a significant antecedent of customer engagement and loyalty. Finally, customer engagement has a significant and positive effect on customer loyalty. Research limitations/implications This study is a combination of cross-sectional and a single-country case. Accordingly, the results may not be representative of other countries. Similar studies in longitudinal data collection are conducted in other countries (e.g. ASEAN countries), which would therefore be worthwhile. Some antecedents of customer loyalty have been neglected in this study (e.g. customer value co-creation and customer commitment); hence, the future study may investigate those factors. Practical implications By considering these Islamic banks’ antecedents, the Islamic banks might enhance their customer loyalty. Also, this study has revealed the moderating role of religiosity in a loyalty relationship. Therefore, it will give insights for the Islamic bank managers in decision-making. Originality/value This study has revealed the moderating role of religiosity on the link between service quality and customer satisfaction in Islamic banks, which is, to the authors’ knowledge, neglected in the previous studies. The customers with high religiosity will have a higher standard of satisfaction and demand a better service quality than the customers with low religiosity. This study has also examined the relationships between service quality, religiosity, customer satisfaction, customer engagement and loyalty as a whole, which have been limited previously.

Salesperson ethics behavior as antecedent of Islamic banking customer loyalty

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tony Wijaya ◽  
Moh Nasuka ◽  
Anas Hidayat
Keyword(s):  
Customer Loyalty ◽  
Structural Equation ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Consumer Loyalty ◽  
Islamic Ethics ◽  
Content Type ◽  
New Findings ◽  
Customer Trust

Purpose The development of the banking industry is encouraging increasingly fierce competition. In the face of banking competition, Islamic banks need to build customer loyalty by paying attention to ethical aspects. Ethics has an essential role in forming and preserve relationships between companies and customers in the long term. The measurement model of salesperson ethical behavior in this study was built using the Islamic-based marketing concept. This study aims to test empirical models of Islamic ethics-based salesperson behavior in increasing customer loyalty of Islamic banks through the aspect of customer trust. Design/methodology/approach Research data were obtained from 165 Islamic bank customers in the Central Java, Indonesia, using the purposive sampling method. Data analysis in this study uses structural equation modeling. Findings The study shows that the Islamic ethics-based salesperson behavior has a positive effect on customer trust in a salesperson, customers’ trust in Islamic banks and customer loyalty. Customer trust in a salesperson has positively and significantly influenced customer trust in Islamic banks and customer loyalty. Customer trust in Islamic banks has a positive and significant effect on customer loyalty. Practical implications This study’s results are expected to be used to reference maintenance salesperson in Islamic banking to behave based on Islamic principles. Islamic marketing principles need to be applied through salespersons behaving realistically (al-Waqi’iyyah) and humanistic concepts (insaniyyah). The application of Islamic ethics can limit and avoid deviant behavior from salespeople that is detrimental to consumers and organizations. The behavior of salespeople based on Islamic ethics will build consumer trust in both organizations and salesperson so that it has implications for consumer loyalty. Originality/value This paper provides new findings to understand Islamic banking consumer loyalty that focuses on Islamic ethical salesperson behavior point of view. This paper also presents a new measurement of research variables from an Islamic perspective in examining the role of Islamic ethics-based salesperson behavior toward banking customer loyalty. This study takes the object of research in Islamic banking that has different characteristics from conventional financial institutions.

scholarly journals Islamic Banking Service Innovation in Customer Co-Creation: Its Impact on Customer Trust, Satisfaction, and Loyalty

2021 ◽  
Vol 56 (2) ◽  
pp. 65-82
Author(s):  
Nur Asnawi ◽  
Nina Dwi Setyaningsih
Keyword(s):  
Customer Satisfaction ◽  
Customer Loyalty ◽  
Structural Equation ◽  
Equation Modeling ◽  
Islamic Bank ◽  
Banking Service ◽  
Study Results ◽  
Bank Managers ◽  
Customer Trust ◽  
The Impact

This study examines the impact of co-creation on customer trust, satisfaction, and loyalty in the context of Islamic banks, the relationship between co-creation and customer satisfaction and loyalty mediated by trust and customer satisfaction. 379 Islamic bank customers data were analyzed using variance-based structural equation modeling to test the nine hypotheses proposed. The study results found that customer co-creation positively influences customer trust and satisfaction, which further implicates loyalty. However, surprisingly co-creation does not affect Islamic bank customer loyalty. Islamic bank managers in Indonesia need to involve customers to participate in value co-creation. Because Islamic bank's customer loyalty relationship with co-creation is mediated in full by trust and satisfaction, this research is the first empirical investigation that tests customer co-creation in an integrated manner and its implications on trust, satisfaction, and customer loyalty in the Islamic bank industry.

scholarly journals Islamic bank trust: the roles of religiosity, perceived value and satisfaction

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abror Abror ◽  
Dina Patrisia ◽  
Yunita Engriani ◽  
Idris Idris ◽  
Shabbir Dastgir
Keyword(s):  
Customer Satisfaction ◽  
Perceived Value ◽  
Customer Engagement ◽  
Equation Modeling ◽  
Survey Method ◽  
Content Type ◽  
Islamic Bank ◽  
West Sumatra ◽  
Customer Trust ◽  
The Relationship

PurposeThis study aims to examine the relationship between trust and its antecedents, i.e. customer satisfaction, perceived value and religiosity. The moderating roles of religiosity on the relationships between perceived value, satisfaction and trust also have been investigated in this study.Design/methodology/approachThis research has carried out in West Sumatra Indonesia. The respondents of this study are Islamic bank customers from five areas in West Sumatra Indonesia. Data have been collected through Survey method. After some preliminary analyses, we employed 390 useable responses in the analysis. Covariance Based Structural Equation Modeling (CB-SEM) was employed to analyze the data.FindingsThis study found that religiosity has significant impacts on perceived value, customer satisfaction and trust. Perceived value and customer satisfaction are also significant antecedents of trust. Moreover, it found the significant moderating impact of religiosity on the link between perceived value and trust, and also on the link between customer satisfaction and trust.Research limitations/implicationsThis cross-sectional study has been conducted in a single country. Accordingly, this study may have a limitation in result generalization. Moreover, this study only focused on three antecedents of trust, including religiosity, satisfaction and perceived value. Therefore, for future research, we suggest conducting a longitudinal study in some Muslim countries such as Malaysia, Brunei Darussalam and Middle East countries. We also suggest employing other antecedents of customer trust, such as customer engagement and customer sociocultural.Practical implicationsBased on the research findings, the managers of Islamic banks will have input on how to improve their customers' trust by giving more attention to customer religiosity, perceived value and satisfaction. They can develop programs to increase customer perceived value and satisfaction such as a reward program to increase customer trust.Originality/valueA more comprehensive model of the relationship between religiosity, perceived value, satisfaction and trust has been addressed in this study. This study also highlighted the significant moderating role of religiosity on the link between perceived value, satisfaction and trust which are neglected previously have also been highlighted in this study.

Exploring the mechanism of consumer responses to CSR activities of Islamic banks

2016 ◽  
Vol 34 (6) ◽  
pp. 940-962 ◽  
Author(s):  
Rania B. Mostafa ◽  
Farid ElSahn
Keyword(s):  
Social Identity Theory ◽  
Structural Equation ◽  
Equation Modeling ◽  
Future Research ◽  
Islamic Banks ◽  
Islamic Ethics ◽  
Content Type ◽  
Mediating Role ◽  
Islamic Bank ◽  
The Relationship

Purpose Drawing on social identity theory, the purpose of this paper is to propose and test a conceptual framework of the mechanism of customer response toward corporate social responsibility (CSR) initiatives of Islamic banks. Design/methodology/approach A survey was completed by 203 customers of Islamic banks in Bahrain. Structural equation modeling, was used to test the hypotheses. Findings Islamic ethics fit partially mediates the relationship between CSR initiatives and consumer-bank identification (CBI) which in turn contributes positively to customer advocacy. These findings emphasize the importance of CSR practices compliance with Islamic ethics principles for customers to identify with and advocate Islamic bank. Research limitations/implications Understanding the mechanism of customers’ responses toward CSR initiatives of Islamic banks provides insights into the complexities of Islamic bank customers’ perceptions of CSR initiatives. The successful introduction of a mediating variable, namely, Islamic ethics fit suggests future research opportunities. Originality/value Much of the value of the present work is because of the findings regarding the relationship between CSR and customer responses. The originality of this study lies in being the first research examining the mediating role of Islamic ethics fit to the relationship between CSR initiatives and CBI which in turn enhances Islamic banks’ advocacy.

Halal company identity and halal restaurant loyalty: the role of customer satisfaction, customer trust and customer-company identification

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ali Mursid ◽  
Cedric Hsi-Jui Wu
Keyword(s):  
Customer Satisfaction ◽  
Social Identity Theory ◽  
Convergent Validity ◽  
Structural Equation ◽  
Equation Modeling ◽  
Content Type ◽  
Confirmatory Factor ◽  
Company Identification ◽  
Customer Trust

Purpose This study aims to examine the effect of halal company identity includes halal identity similarity, halal identity distinctiveness and halal identity prestige on customer satisfaction and customer trust. Furthermore, it verifies the influence of customer satisfaction and customer trust on customer-company identification. Finally, it explores the effect of customer-company identification on halal restaurant loyalty. Design/methodology/approach This study selected a sample of halal restaurants in the area of Semarang City, Indonesia, using a purposive sampling method with a total of 520 respondents. The data analysis uses confirmatory factor analysis to identify discriminant and convergent validity and then structural equation modeling is used to validate the hypotheses. Findings The result showed that all aspects of halal company identity, namely, halal identity similarity, halal identity distinctiveness and halal identity prestige, significantly affect customer satisfaction. Halal identity similarity and halal identity distinctiveness insignificantly affect customer trust; however, halal identity prestige successfully affects customer trust. Both customer satisfaction and customer trust positively impact customer-company identification and, in turn, customer-company identification impacts halal restaurant loyalty. Originality/value This study contributes to the theory of halal tourism based on social identity theory and the theory of relationship quality in achieving customer loyalty of halal restaurants.

Islamic banking and customer satisfaction in Pakistan: evidence from internal and external customers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Syed Tehseen Jawaid ◽  
Aamir Hussain Siddiqui ◽  
Rabia Kanwal ◽  
Hareem Fatima
Keyword(s):  
Customer Satisfaction ◽  
Service Quality ◽  
Quality Indicators ◽  
Equation Modeling ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Islamic Bank ◽  
Internal Customers ◽  
External Customer

Purpose This study aims to find the determinants of internal and external customer satisfaction of Islamic banks of Pakistan through service quality indicators that are assurance, reliance, empathy, tangibility, responsiveness. Compliance has also been added as a determinant of customer satisfaction. In this study, customers are divided into two groups, internal customers are those who are an employee in the Islamic bank and also an account holder. While external customers are account holders only in Islamic banks of Pakistan. Design/methodology/approach In this study, a quantitative research approach is used for analyzing the behavior of internal and external customers of Islamic banks in Pakistan. The instrument which is used to analyze the study’s data, is a structured five-point Likert-scale questionnaire. The structural model was analyzed with the help of the partial least squares structural equation modeling approach. Findings This study concluded that internal customers of Islamic banking are well aware and have full information and their level of satisfaction is positive toward the bank’s services. While external customers feel satisfied while using the Islamic banking services in Pakistan. Service quality indicators are positively and significantly related to customer satisfaction in the external customer model. On the other hand, some of the indicators are not showing a significant impact on the internal customer multi-group analysis shows a difference of coefficients are insignificant between internal and external customers. Practical implications This study helps policymakers, to understand the behavior of internal and external customers of Islamic banking in Pakistan for creating favorable policies for an interest-free banking service. Originality/value This research study provides an analysis of the customer satisfaction of Islamic banks in Pakistan by dividing Islamic bank customers into two groups (internal and external customers). The purpose for dividing Islamic bank customers into two groups is that this study wants to highlight that external customer’s perception is the same as internal customers or not? Before this study, it is difficult to find single research on this topic, whereas only one study is find-out on the factors that affect internet banking adoption among internal and external customers.

Effect of benefits and risks on customer's psychological ownership in the service industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
In-Tae Lee ◽  
Jinyong Choi ◽  
Sangyoo Kim
Keyword(s):  
Customer Satisfaction ◽  
Perceived Risk ◽  
Structural Equation ◽  
Service Industry ◽  
Psychological Ownership ◽  
Equation Modeling ◽  
Perceived Benefits ◽  
Content Type ◽  
Customer Trust ◽  
Hedonic Benefits

PurposeThe authors investigate the antecedents of psychological ownership from the customers' perspective by applying employee psychological ownership (EPO) to human resource management.Design/methodology/approachThe authors conducted questionnaires on utilitarian benefits, hedonic benefits, perceived risk, customer satisfaction, customer trust and customers' psychological ownership (CPO) on 205 people. They verified their hypotheses using structural equation modeling analysis.FindingsThe authors found that customer trust positively influences CPO, but customer satisfaction does not. Instead, customer satisfaction indirectly affects CPO through the mediating effects of customer trust. They also found that utilitarian and hedonic benefits positively influence customer satisfaction and confidence, but perceived risk negatively influences it.Research limitations/implicationsThis study contributes to the service marketing literature by empirically confirming that customers have psychological ownership, such as employees, and by incorporating benefits, risk, trust and CPO into a comprehensive framework.Practical implicationsMarketers should formulate service strategies that strengthen customers' perceptions of utilitarian and hedonic benefits and avoid customers' perceived risk, which is expected to exert a significant CPO-enhancing effect.Originality/valueIn the service context, customers are perceived as partial employees. The authors empirically explored the role of perceived benefits and risks in enhancing CPO via customer satisfaction and trust by applying EPO concepts. Strengthening perceived benefits and avoiding perceived risk were verified as critical drivers of CPO in the service context. The results of this study confirm that customer trust is required for customers to feel CPO.

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