The role of customer-linking, brand position and new service development on customer loyalty in internet banking

Abstract

There is a consensus among researcher that businesses should not only consider gaining new customers, but to include building long-term relationships with existing customers. Literature posits that building and sustaining loyal customers create positive returns for a firm and this is important in service industries. However, despite the growing interest among researchers to measure customer loyalty, there are inconclusive theoretical studies measuring customer loyalty. Previous studies investigated how customers’ emotions, senses, perceptions, reputations and personal values affect their loyalty towards a firm. The main weakness of previous studies is that they neglected the organizational aspects of firm that influenced customers’ satisfaction and loyalty as a non-financial performance. In this regard, an organization capability and ability plays a vital role in producing satisfied and loyal customers particularly in service sector. Using Resource-Based View theory, this study attempted to fill the gap in existing literature by investigating the relationship between the outcomes of marketing capabilities of an organization and customer’s satisfaction and loyalty. Marketing capabilities in this study includes customer-linking, brand and innovation. In addition, this study investigated the moderating effects of Internet perceived risk and website knowledge towards satisfaction and loyalty in electronic banking. These variables were empirically tested on customers of Iranian banking industry who have experienced Internet-banking services. Using a survey questionnaire, data were collected and analyzed by Partial Least Square software. The result showed that there are significant relationship between customer-linking, brand position and new service development with customer loyalty. In addition, the findings supported moderating role of Internet perceived risk and website knowledge on the relationship between brand position and customer loyalty. Nonetheless, contrary to previous studies, this study found Internet perceived risk and website knowledge of customers has no significant effect on customer loyalty. In addition, the result shows that government banks performed better than private banks. In summary, the result indicated that the variance of customer loyalty could be explained according to the outcomes of organizational capabilities.