The Effect of Trust and Brand Image on Customer Retention with Customer Loyalty as Intervening Variables to Customers of Sharia Commercial Banks

Abstract

Sharia banking is currently facing a very competitive industry era. Customer retention is one of the phenomena confronted by Islamic banks in Indonesia. Therefore, the problem in this research is how to increase customer retention in the Islamic banking sector. This study also aims to test and analyze the effect of trust and brand image on customer retention with customer loyalty as an intervening variable. A total of 100 customer respondents who have saving accounts for more than five years at Sharia Bank filled out the questionnaire in this study. The collected data were processed using the Smart PLS program with measurements of the inner and outer model tests. The test results proved that trust, brand image, and customer loyalty positively and significantly affect customer retention in Islamic commercial banks. Meanwhile, indirect testing proved that the customer loyalty variable could mediate customer trust and retention variables. However, it is unable to mediate the brand image variables on customer retention.

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“…Research (Ricadonna, Saifullah, & Prasetyoningrum, 2021) variable trust and brand image can mediate client retention through customer loyalty, according to findings. Customer retention is directly affected by brand image.…”

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“…Therefore, marketing strategies within organizations are designed to retain existing customers (Hanaysha, 2018;Ricadonna et al, 2021). Accordingly, the indisputable truth is that SMEs will not be able to attain performance unless they create barriers to customer switching while simultaneously improving customer retention mechanisms.…”

“…According to the literature, developing customer loyalty is the first factor associated with customer retention (Hanaysha, 2018;Ricadonna et al, 2021). So, the more an organization invests in developing customer loyalty, the greater the likelihood that it will be able to retain customers (Omoregie et al, 2019;Ricadonna et al, 2021). Researchers have associated customer loyalty with several benefits for the organization's performance.…”

“…According to Kashif et al (2015), Lakshman and Faiz (2021) and Ricadonna et al (2021), customer loyalty is associated with positive, optimistic word-of-mouth recommendations of products to friends, family, and relatives. Furthermore, it is strongly connected to customer commitment to repurchase products consistently, increasing the organization's chances of attaining business performance.…”

“…Therefore, marketing strategies within organizations are designed to retain existing customers (Hanaysha, 2018; Ricadonna et al. , 2021).…”