CAUSALITY OF RELATIONSHIPS BETWEEN THE DIMENSIONS OF CUSTOMER LOYALTY IN SERVICES MARKETS: EVIDENCE FROM BANKING

This study examines the causality of relationships between the dimensions of customer Loyalty in service industries, sheds light on the effects of customer Satisfaction on individual Loyalty dimensions and explores the mediating impact of interrelations between Loyalty dimensions on these effects. In the frames of a wider research project, also involving service quality metrics’ assessment, this study examines between variables relationships under a structural equations modelling analytical perspective. To this end, a specially designed research instrument is used for evidence collection. Data is analyzed through SPSS and LISREL. The causality of relationships between the dimensions of Customer Loyalty was found to run along the path: “word-of-mouth” “customer retention intentions” “business extension intentions”. The direct effects of customer Satisfaction on customers’ “affectionate” and “behavioural” commitment were found to vary. Between the statistically significant direct effects the strongest was that on “word-of-mouth” followed by that on “customer retention intentions”. On the other hand, the direct effect on “business extension intentions” was found statistically insignificant. The indirect effects of customer Satisfaction on “customer retention intentions” and “business extension intentions”, via “word-of-mouth” were found to be threefold and fourfold stronger respectively than the direct ones.