Customer Experience and Customer Loyalty in Retail Multichannel Banking: A Mediation Analysis

Abstract

Purpose - This paper examines whether customer experience has an influence on customer loyalty in a multichannel banking environment. Design/methodology/approach - The study used a sample of 466 bank customers in Durban, South Africa. Data from the survey of the bank customers was analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM), and a theoretical model was created and empirically tested. Findings - The study findings indicate that the relationship between customer experience and customer loyalty is mediated by service quality and customer satisfaction. The theoretical model developed indicates that customer loyalty can be achieved by improving customer experiences, enhancing service quality and improving customer satisfaction. Research limitations/implications - The implication is that banks must exploit ways of improving customer experience as well as leveraging on customer satisfaction and service quality to enhance loyalty. Originality/value: The success of service companies depends on their ability to build a loyal customer base, which can be achieved by delivering customer experiences that blend the different channels.