Corporate Social Responsibility and Customer Loyalty: Exploring the Role of Satisfaction and Corporate Image in the Banking Industry

Abstract

This study aims to determine the impact of corporate social responsibility on customerloyalty and satisfaction with the mediating effect of customer satisfaction and the moderatingeffect of corporate image in Pakistan’s banking sector. The study collected 302 responsesfrom the target population. We used a self-administered questionnaire for collecting thedata of banking customers in Pakistan by employing the convenience sampling technique.The study has used the PLS-SEM technique for statistical analysis. The results reveal thatcorporate social responsibility positively influences customer satisfaction. The results alsosuggest that CSR positively affects customer satisfaction. At the same time, CSR has aninsignificant association with customer loyalty. We also found that CS stimulates customerloyalty, and corporate image promotes CL. The results suggest that customer satisfactionmediates CSR and CL. We also found that corporate image does not moderate customerloyalty. Given the importance of CSR, we suggest that banks should allocate considerableresources for CSR activities. CSR is necessary for firms’ growth and sustainability. It also,directly and indirectly, affects the brand image, loyalty, and customer satisfaction. Due to strict regulations, banks have difficulty creating product differentiation; therefore, they relyon strategies such as CSR.

Consumer attributions for corporate social responsibility: causes and consequences

“…As a result, academics recognise perceived value as a significant factor in today's economy (Ishaq, 2012) and a source of competitive advantage (Nikhashemi et al, 2016). The researchers investigated the relationship between CPV and loyalty (Piyathasanan et al, 2015;Lam, 2016;Shi et al, 2017). Despite this, the literature on the impact of CSR on perceived value and perceived value as a mediator between CSR and consumer loyalty is lacking.…”

“…Therefore, researchers and industrialists have shown a substantial interest in CSR (Pratihari and Uzma, 2018; Pirsch et al , 2007; He and Li, 2011; Nejati and Ghasemi, 2012). In the early days, the firm’s goals and objectives focused on sales volume, revenues and market share; however, it was also directed to attain the organisation’s social contributions (Samra and Wady, 2017). CSR is simply defined as “the responsibility of the entrepreneur for his or her influences on society” (Commission of the European Communities, 2011).…”

“…Chen et al (2012) found that consumer loyalty is strongly associated with social responsibility. Besides, some research suggests a relationship between CSR and loyalty (Diallo and Lambey-Checchin, 2016; Ailawadi et al , 2014; Samra and Wady, 2017; Bediako, 2017). However, the impact of four key approaches of CSR in the light of egoistic, strategic, stakeholder and value driven aspects on customer loyalty has rarely been investigated in the extant literature.…”

The Influence of CSR Practices on Lebanese Banking Performance: The Mediating Effects of Customers’ Expectations

“…Similarly, the stakeholders' positive attitudes towards a business's social activities may support the firm's competitive advantage and attract a quality workforce [21] CSR initiatives directed towards employees, customers and society have been tested and found to be positively and significantly related to firm performance [22,23]. The study conducted by [24] indicated that secondary stakeholders, including governments, the media, communities and non-governmental organisations (NGOs), have the most significant influence on firms' strategies [25] mentioned that studies in the banking sector suggested that reporting CSR activities can influence stakeholders' perceptions of a company's performance and increase its profitability [23]. Studies examining stakeholders' perceptions and attitudes towards CSR in Lebanon are limited; only a few have attempted to study the perceptions and behaviours of stakeholders towards CSR.…”