Service loyalty : the effects of service quality and the mediating role of customer satisfaction

Abstract

Service loyalty, with its final effect on repurchasing by customers, appears to have received relatively little attention. This study starts by first delineating the concept of service loyalty and proceeds to distinguish between service quality and customer satisfaction. A mediational model that links service quality to service loyalty via customer satisfaction is proposed. Appropriate measures are identified and a postal survey is undertaken among 1,000 retail banking customers. A response rate of 20.5 per cent is obtained. Results indicate that customer satisfaction does play a mediating role in the effect of service quality on service loyalty. The effects of a number of demographic indicators on service loyalty are also reported. Implications are discussed, limitations of the study are noted and possible areas for further research are indicated.