Trust and Customer Value as a Strategic Business on Islamic Banking

Transcription

1. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 TRUST AND CUSTOMER VALUE AS A STRATEGIC BUSINESS ON ISLAMIC BANKING Dian Anggraece Sigit Parawansa1#, Fauziah Umar2#, Andi Reni3#, and Muhammad Toaha4# # Lecturer of Economic & Business Faculty, Department of Management, University of Hasanuddin, Indonesia 1 dianparawansa62@gmail.com 2 umar.fauziah@yahoo.com 3 andirenireni@yahoo.com 4 toahapatang@yahoo.com Abstract— Marketing concept is aiming more to concept of customers’ retention by growing loyalty attitude towards product and service offered by company. Customer value and trust of relationship marketing is the moment when companies seek to build customer loyalty and generate repeat purchase patterns. One of the activities of maintaining relations with customers is the focus of the company customers. Focus on customers is an important issue for company. Companies tend to focus on its customers to increase customer loyalty and repeat purchase, which will provide a positive impact on financial performance from the company. The pattern of interactions among service quality, trust, customer value, and word of mouth within the Islamic Banks is also within the high concern. The objective of this study is to design a measurement tool for service quality in Islamic Banks. This enables the study to gather data directly from respondents. In accordance, questionnaires were used to collect data. In overall, a total of 290 questionnaires have been distributed to customers of Bank Shariah (Islamic Commercial Banks) and Business Unit Shariah (Islamic Business Unit). The gathered data were analyzed using Structural Equation Modeling (SEM) and SPSS statistical software and AMOS. In the end, the results show that service quality, trust, and customer value have significant impacts on word of mouth at 95 percent confidence level. In addition, the results also reveal that trust and customer value have significant impacts on the relationship between service quality and word of mouth to the Islamic Banks. This shows a clear trend that the better the quality of service provided to the customers then the customer will continuously believe and trust to keep patronizing Islamic Banks. Researches while in this time are not enough for a consumer for permanent continue connection with institution service provider if only they felt satisfied. Consumer that felt satisfied not again enough, they only stop at the door and then will move when will find something that better. Therefore, in this research be would for to put into trust and customer value as key variable in relationship marketing and as mediating variable between service quality and word of mouth. Keywords— trust, customer value, SEM, and customer loyalty I. INTRODUCTION Marketing today face a new paradigm, known as relationship marketing (eg, Caceres & Paparoidamis, 2007; Donio, Massari & Passiante, 2006; Parawansa, 2017) which states that the marketing paradigm is based on long-term relationships beyond the traditional marketing mix models, including product, price, place and promotion. Discuss relationship marketing services features, and quality of certain services. Present marketing concept more directed at the concept of customer retention and increase loyalty to the products and services offered by the firm. Marketing orientation changes from a focus on what we sell into what is purchased by the customer if the considerations that companies need to maintain relationships with customers. Customer retention of relationship marketing is the moment when companies seek to build customer loyalty and generate repeat purchase patterns. One of the activities of maintaining relations with customers is the focus of the company customers (Kotler; 2003; Molinari, Abratt, & Dion, 2008; Trasorras, Weintein, & Abratt, 2009). Focus on customers is an important issue for a company (Parawansa, 2015). Companies tend to focus on its customers to increase customer loyalty and repeat purchase, which will provide a positive impact on financial performance from the company. The study of customer loyalty associated with trust and commitment as mediating is very limited (Hazra & Srivastava, 2009; Zineldin & Jonsson, 2000). This study followed a number of studies such as Garbarino and Johnson (1999); Donio 'et al., (2006); Moliner et al. (2007); Venetis and Ghauri (2004); who study trust or commitment, or collectively as the mediation of faith in the future repeat purchases or customer loyalty. In general, previous studies related to the service, satisfaction and loyalty is the quality of service (Parasuraman et al., 1988; Zeithaml et al. 1996), service quality and customer satisfaction (Cronin & Taylor, 1992), service quality, value, and satisfaction (Cronin, Brady, & Hult; 2000), customer loyalty and customer satisfaction (Bowen & Chen, 2001). Study Brodie et al., (2009) showed that the brand (brand) service is not a direct influence on customer loyalty, but its influence is mediated through customer value. Woodruff (1997) suggests the value to customers is a major source of competitive advantage. Volume VII, Issue XI, November/2020 PAGE NO:19
2. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 II. OVERVIEW OF THE LITERATURE 2.1 Islamic Banking Islamic Banking in the world beginning in 1963 in Egypt by the name of Ghamr Mith. Pioneers leader, Ahmad El Najjar, took the form of a savings bank based on profit sharing (distribution of gains) in the town Mit Ghambr. But, because of the political turmoil of that time, operational Mith Ghambr only lasted until the year 1967, and could have stood nine banks with the same concept in Egypt. Islamic Development Bank (IDB) in 1974, sponsored by the countries who joined the Islamic Conference Organizations. Islamic banking system is becoming increasingly assuming profit in the world. Until now 180 Islamic banks and financial Institutions operate in Asia, Africa, Europe, and the United States (USA) with over 8,000 branches (branches) with estimates of U.S. $ 1.70 billion (Naser, Jamal & Al-Khatib: 1999: 135 ). Currently, more than 300 Islamic financial institutions operating in the world ranging from China until the United States (USA) and more than 75 countries. Total assets of Islamic banks in the world expected of U.S. $ 300 billion with annual growth rate of more than 15 percent last time (Chong & Liu, 2009 in Weill, 2009: 3). Now is the development of Islamic banking worldwide is 20 percent compared with conventional banking. The largest Islamic financial institutions located in Bahrain, Kuwait, Saudi Arabia and Iran. Western banks through Islamic units in England, Germany, Switzerland, Luxembourg, etc. also practice Islamic banking. Islamic banking will be increased to 10 percent from 2.5 percent in Pakistan, 13-20 per cent in Malaysia, 3 percent to 10 percent in Indonesia and 60 percent in countries Gulf Cooperation Council (GCC). Islamic banks have greater market power than conventional banks. They can benefit from the customer to demand a more inelastic, which was founded on religious principles. Many countries with Islamic banks have a continuing presence of several Islamic banks and conventional banks. In fact, many of the concepts, techniques, and Islamic financial instruments that would be taken by the capitalists and entrepreneurs in Europe. 2.2 Customer Perception of Service Quality. The importance of the services sector has led many researchers to seek an understanding of the meaning of service, how to evaluate quality, and how to improve service delivery. Services was conceptualized as a process is defined by four characteristics. First, most services are intangible - that service is the performance of the objects. Second, production and acceptance of the many services are inseparable. Third, the service, especially the public use of labor are heterogeneous; the essence of quality and service can vary from company, from customer to customer, and from day to day. Finally, the service is perishable, which means your product can not be saved. Perceived service quality has been defined by several researchers, but one of the most accepted definitions explains perceived quality as the difference between expectations and performance (Parasuraman et al., 1988). Quality can also be seen as an overall assessment of the unique benefits of a product (Zeithaml, Berry, & Parasuraman, 1988, 1996). Perceived value is defined as the ratio of perceived benefits relative to perceived sacrifice. 2.3 Service Quality. Research on service quality and customer satisfaction has been done many, like Cronin et al. (2000), Caruana et al., (2000), Keiningham et al., (2007); Molinari et al., (2008); Trasorras et al., (2009). Cronin et al. (2000), including service quality, value, customer satisfaction and behavioral intentions in their study conducted in several service industries. The results show that the quality of service, the service and satisfaction are all directly related to the behavioral intentions. Caruana (2002) developed an influential model of how service quality to loyalty, mediated by customer satisfaction. The findings confirm the hypothesis that the relationship model of service quality affect service loyalty via customer satisfaction. The concept of satisfaction and service quality, meaning frequently identified by several researchers. However, this is actually two different concepts: the quality of services specifically focused on the dimensions of service. Evaluation of service quality is the focus that reflects the customers' perception of five specific dimensions of service, ie reliability, responsiveness, assurance, empathy, and tangibles. In contrast, satisfaction is influenced by perceptions of service quality, product quality, price, situation factors, and personal factors. 2.4 Customer Satisfaction In general, there are two differences in customer satisfaction: transaction-perspective, and cumulative (Boulding et al., 1993). Transaction-perspective of customer satisfaction is viewed as post-choice evaluative assessment of a specific purchase occasion. Some researchers have added a study on its predecessors and as a result of the type of customer satisfaction at the individual level (Zeithaml et al., 1988). In contrast, cumulative customer satisfaction is based on the evaluation of the total purchase and consumption experience with a product or service over time (Fornell et al., 1996), which is a more fundamental indicator of the firm past, present, and future performance come (Wang et al., 2004). Customer satisfaction is an important concept in the era of modern marketing, which emphasizes the satisfaction of the customer service to get a final decision in the form of profits. Volume VII, Issue XI, November/2020 PAGE NO:20
3. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 In other words, customer satisfaction is required to meet customer needs, business and public sectors. Satisfaction is a comparison between the performance and perceived (Hunt, 1977; Kotler, 2003). Emphasized that the customers happy is to get the final form of profit. Customer satisfaction is very necessary to the needs of consumers, businesses and the public. According to this concept and empirical studies emerged the performance model and disconfirmation model. 2.5 Trust. Together with the commitment, other key variables for the suppliers in order to maintain long-term relationship is the trust of customers (Morgan & Hunt, 1994). This is needed so that customers feel the trust in the supplier, because this is the basic element of the promises of the links provided and maintained (Bitner, 1995; Berry, 1995). Implies that the trust of customers in good faith from a supplier is not known by the customer, that the promises made will not make the uncertainty for the buyer, and that communication between the parties expect an honest, open and frequent. Urban et al., 2000 (in Hazra & Srivastava, 2009) states that customer trust is the basic element of developing strong customer relationships and continuity of the market. Trust has been defined as public expectations of the individual which means trustworthy (Rotter, 1967; in the Morgan & Hunt, 1994). In general, that the trust of customers, there are two main dimensions: honesty (belief that the supplier will maintain the word and that it has the ability to do so), and welfare or the confidence that the supplier is more important in customer loyalty (Garbarino & Johnson, 1999; Singh & Sirdeshmukh, 2000). The meaning of the trust of our customers to build real affective for two-dimensional basis of strong emotional component. In this study, trust conceptualized as a component of the business relationships that determine the level where the members (parties) feel the sense of integrity of the agreement offered by others in the organization. Trust of customers and the impact of knowledge from customers about the objects, attributes, and benefits. Objects can be a product, person, firm, etc., where a gain trust. Finally, Morgan and Hunt (1999) define the trust as a key benefit of relationship marketing. The higher trust between buyers and sellers, the greater the opportunity to continue relationships in the long term and continuous. From the above definitions and to note that the creation of trust against the company include the meaning that the customer has high expectations for the company is confident that ultimately will affect consumer behavior to maintain the long-term relationship with the company. 2.6 Customer Value. Customer value is a strategic force in attracting and perpetuating customers and has become one of the most significant factors in success, especially in the service industry (Moliner et al, 2007; Trasorras et al, 2009). Driven by customer demands, fierce competition, and fast-changing technology, many companies have strived to provide superior customer value (Brodie et al, 2009; Molinari et al, 2008). Providing superior customer value is recognized as one of the most important factors for the success of any company now and in the future and has a significant impact on customer intention to repurchase (Wang et al, 2004). Although customer value is widely recognized as an important part of a service, the study of customer value is still quite limited. Preliminary studies and their impact on profits (PIMS = Profit Impact of Market Strategies) argue that value is determined by product quality, relative prices, and customer expectations. Meanwhile, Kotler (1997, in Wang et al, 2004) defines that "customer value can be understood in terms of product value, service value, employee value, and image value". 2.7 Customer Loyalty and word of mouth. Liu (2006) states that word-of-mouth is an informal conversation between consumers about a product or service, and emphasizes two significant features that differentiate word-of-mouth communication from other sources of information such as advertising. One is that Word-of-mouth is usually more convincing and reliable, and the other is that communication is more accessible via social networks. Researchers working in the field of consumer behavior have found that various motivations are effective in consumers to convey positive and negative communication about products and services (Trigg, 2011). Word-of-mouth can be defined as informal, person-to-person communication between sender and receiver that is not perceived commercially as related to a product, business or service. (Wangenheim, 2005). Lampert and Rosenberg (1975) identified word-of-mouth as speech about product information between non-commercial people during conversation. In another definition, Liu (2006) states that word-of-mouth is an informal conversation between consumers about a product or service, and emphasizes two significant features that differentiate word-of-mouth communication from other sources of information such as advertising. One is that Word-of-mouth is usually more convincing and reliable, and the other is that communication is more accessible via social networks. Researchers working in the field of consumer behavior have found that various motivations are effective in consumers to convey positive and negative communication about products and services (Trigg, 2011). In a study conducted by Goyette, Ricard, Bergeron, and Marticotte (2010) proposed several indicators to measure WOM, including: 1. WOM intensity.Intensity or volume of conversations about a product that occurs in daily conversations. Volume VII, Issue XI, November/2020 PAGE NO:21
4. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 2. Positive valence WOM. Positive assessment as an effect of consumer satisfaction as expressed in daily conversations such as providing recommendations or invitations to buy a product. 3. Negative valence WOM. Conveying negative things to others about a product caused by the inability of the product to meet consumer expectations. 4. WOM Content. The content of the conversation or discussion of a product such as type, quality, price, and so on. Impact of marketing relationships of the service industry and manufacturing industry, which is more focused on customer loyalty. Some researchers emphasize that there is a positive relationship between customer loyalty and financial performance on a firm / organization and would superior in competitive (Reichheld & Sasser, 1990 in Trasorras et al., 2009). Loyal customers will not only increase the value of the business, but customers also make a lower cost means the cost of customer retention is lower than the cost of attracting new customers (Barroso & Martı'n, 1999). Customer loyalty is a repeat purchases from customers and refer the company to other customers (Heskett et al., 1997 in Hazra & Srivastava, 2009). Customer loyalty is a long-term effects of customer satisfaction (Oliver, 1997). Several studies have found that customer loyalty is not only due to customer satisfaction, but there are other factors as a cause of, among others, quality of service (Caruana et al., 2000; Beerli et al., 2004). Research on customer satisfaction has a strong influence on intent to purchase has been much discussed; Mattila (2004); Keiningham et al. (2007), and Dimitriades (2006). Parawansa (2018) with the four phases of customer loyalty shows how loyalty can be realized. 2.8 Research Framework. The objective of this study is to examine the conceptualization and operations, perception of service quality, customer satisfaction, trust, commitment and loyalty to the more developed understanding of customers, particularly in Islamic banking services. More specifically, this study also studied as suggested by Morgan and Hunt (1994) for a successful relationship marketing requires relationship commitment and trust. Relationship commitment and trust as a major in marketing relationships. In this study, researchers identified the satisfaction, trust, commitment and loyalty as the dependent variable (DV), consumer perceptions of service quality as the independent variable (IV). Reliability Trust Tangible Responsiveness Word of Mouth Service Quality Assurance Customer Value Emphaty 2.9 Hypotheses. Service quality and customer satisfaction is often the same, but in general, satisfaction is viewed as a broader concept while service quality assessment focuses on a particular dimension of service. Thus, the perceived service quality is one component of customer satisfaction (Zeithaml & Bitner, 2000). Several studies have been done to prove that the positive effect of service quality on customer satisfaction (Caruana et al, 2000; Hazra & Srivastava, 2009; Keiningham et al., 2007). Volume VII, Issue XI, November/2020 PAGE NO:22
5. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 H1: There is positive and significant influence on the quality of service (reliable, responsive, clear, assurance, and empathy) on the quality of banking services Good quality and consistent service will create trust in the client (Blanchard & Bowel, 2003; Kantzperger & Kunz, 2010). To maintain long term relationships and the customer is the trust of customers (Caceres & Paparoidamis, 2007; Donio et al., 2006). Trust of our customers is a basic element of the promises in maintaining and developing relationships (Bitner, 1995; Berry, 1995; Ndubisi et al., 2007). Faith in a sincere thanks and consistent service (Duncan, 2004). H2: There is a significant influence on the relationship between trust mediation between service quality and word of mouth. Further, the overall customer satisfaction is predictive of the intention of the customer (Bontis, Booker, & Serenko, 2007; Molinari et al., 2008), findings also show that there is a positive correlation between quality of service with the second repetition of the measurement tools of purchase intentions and willingness to information on people. H3: There is a significant influence on customer value of mediation customers of the relationship between service quality and word of mouth. Some researchers think that commitment is a high level of relationship bonding (Dwyer et al., 1987). Morgan and Hunt (1994) thought that the "tandem" commitment-trust is the joint that can not be divided and the main role in the efficiency, productivity and effectiveness of a relationship. Basic to maintain good relations with the charge of the promises (Dimitriades, 2006; Hennig-Thurau, 2004; Mattila, 2004; Zineldin & Jonsson, 2000). To test the influence of service quality on customer loyalty through customer satisfaction, trust and commitment to the following hypothesis is proposed: H4: There is a significant influence mediation customer value to the relationship between service quality and word of mouth. Loyal customers will promote the company. They will give you the strength of word of mouth, make a referral, and provide services or give advice. Raman (1999; in Bowen & Chen 2001) stated that serves a loyal customer is a fantastic marketing strengths, because they can move and the positive impact to the company. Furthermore, Garbarino and Johnson (1999) found that for high-level customer relationship trust and commitment are mediating variables between attitudes and intentions to come rather than just customer satisfaction (Bloemer & Schroder, 2003; Liu, Marchewka, Lu, & Yu, 2003; Slyke, Lou, Belanger, & Sridhar, 2004). H5: There is positive and significant influence on the mediation of trust and customer value to the relationship between service quality and word of mouth of Islamic banking customers. III. RESEARCH METHODS According to the research question, this study focused on the relationship between service quality and five dimensions. Second, focused on the relationship between service quality on trust, satisfaction, and commitment. Finally, the relationship between service quality on customer loyalty with the mediating of customer satisfaction, trust, commitment. Reference the data-collection methods, this study includes survey research, the study load data directly from respondents (sample) by using a questionnaire as data collection instruments. 3.1 Data Collection 3.1.1 Population and Sample The population in this study were all customers of the Sharia Banks and Sharia Business Unit in South Sulawesi, Indonesia. Total customers Syaria Bank is across Indonesia to 2010 was 6.5 million, and in South Sulawesi by 208,000 customers. As is the customer is an individual who uses a product sharia commercial banks in the form of saving deposits of the Bank's Sharia and Sharia Business Unit. The office of the second customer, the transaction easier, and information about innovative products more readily available syaria bank. Determination of sample (respondents) using stratified random sampling technique proporsionate (Sekaran & Bougie, 2006; Hair et al., 2010). In this technique, respondents selected based on their ratio of total sharia bank customers. Each sample is the ratio of the bank between the population and total number of customers multiplied by the sample size of this research, namely 320 (Krejcie & Morgan; 1970). The principle of the selection of this design is that each element of the population have the same opportunity to choose from. A total of 320 questionnaires were collected and after removing incomplete questionnaires, 290 (90,62%) questionnaires were used for data analysis. Volume VII, Issue XI, November/2020 PAGE NO:23
6. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 3.1.2 Instrument and measurement scales. The main instruments in this study is a list of structured questions or questionnaires given to the customer. The scale measures used in this study were adapted from existing measures using five-point Likert scale with “strongly disagree” and “strongly agree” anchoring the scales. Service quality was measured on a 22 items scale measure adapted from Parasuraman et al., (1988, 1991). Trust was measured using 8 items scale measure adapted from Garbarino & Johnson (1999) study. Satisfaction was measured using a 4 items scale adapted from Hennig-Thurau (2004) and 1 item adapted from Pedersen & Nysveen (2004). Commitment was measured using a 3 item scale measure adapted from Garbarino & Johnson (1999). Finally, customer loyalty was measured using a 8 item scale measure adapted from Pedersen & Nysveen (2004). For measurement scales please refer to Table 1. TABLE 1: MEASUREMENT SCALES No Construct Origin Question Items 1 Service Quality Parasuraman et al., 1988; 1991 22 2 Trust Garbarino & Johnson, 1999 5 3 Customer value Hennig-Thurau, 2004; 4 Pedersen & Nysveen, 2004 1 Pedersen & Nysveen, 2004 8 4 Customer Loyalty (Word of Mouth) 3.1.3 Data Analysis Techniques. Data analysis techniques used from this study is the Structural Equation Model (SEM). Multivariate technique combining aspects of multiple regression analysis of factors that the research enables her to simultaneously examine a series of interrelated dependence relationships among the measured variables and latent constructs as well as between several latent constructs. Statistical SEM is family of models that seek to explain the relationships among multiple variables (Hair et al., 2010). IV. RESULTS The SEM analysis was conducted by constructing a measurement model and structural model. The measurement model analyzes relationships among a set of observed variables and predetermined number of latent variables. Reliability was tested using construct reliability and item reliability. Having ensured that the scale is reliable, the next step was to check construct validity. Then the measurement model was evaluated and finalized before the structural model was evaluated. The data were analyzed using the statistical software SPSS 22 and analyzed using AMOS. As shown in Table 2, the reliability coefficients of the measures have acceptable Cronbach alphas ranging between 0.764 and 0.924. As such, no variables were dropped from the model. No 1 2 3 4 5 6 7 8 TABLE 2: RELIABILITY OF THE MEASURES Variable(s) No of item Cronbach Alpha Word of Mouth 8 0.924 Trust 5 0.867 Customer value 5 0.898 Responsiveness 4 0.801 Reliability 5 0.831 Tangible 4 0.764 Assurance 4 0.863 Empathy 5 0.855 The multivariate normality assumption was not violated; therefore, the maximum likelihood method of estimation was used (Hair et al., 2010; Byrne, 2001). The goodness-of-fit measures were used to assess the overall model fit. As shown in Table 3, the overall fit indices for the proposed/base model were acceptable, with Chi-square (X²): 211.214, DF: 217,Ratio (X²/df ): 0.973 ≤ 3.00 (Arbuckle, 2006; Bagozzi & Yi,1988), AGFI: 0.928 ≥ 0.80 (Chau & Hu, 2001), NFI: 0.954 ≥ 0.90 (Bagozzi & Yi, 1988), CFI: 1.00 ≥ 0.90 (Bagozzi & Yi, 1988), GFI: 0.944 ≥ 0.90 (Hair et al., 2010) RMSEA: 0.000 ≤ 0.05 (Hair et al., 2010). Volume VII, Issue XI, November/2020 PAGE NO:24
7. IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO : 2394-8442 TABLE 3: SUMMARY OF MODEL FIT INDICES FOR CFA MODEL Model CFA Chi square (X²) df X²/df AGFI 211.214 217 0.973 0,928 0.954 1.00 0.944 0.000 ≤3 ≥ 0.80 ≥ 0.90 ≥ 0.90 ≥ 0.90 ≤ 0.05 Recommended criteria NFI CFI GFI RMSEA In this study, a test for multivariate outliers is conducted using the techniques described by Tabachnick and Fidell (2007). The Mahalanobis distance succeeded in identifying the 46 multivariate outliers from data set. Test results is all dimensions influential significant service quality (0.73) on the service quality. The mediating effect is confirmed of trust on the relationship between service quality and word of mouth. Trust on Islamic Bank is significant on deduction of charity (zakat) (0.72) suitable guarantees and principles shari’a (0.81) significant effect on the trust and significant word of mouth to the Islamic Bank (0.60). The mediating effect of customer satisfaction is confirmed on the relationship between service quality and customer loyalty. The friendliness of customer desires, etiquette, honesty of employees and good service for customers. Custoemr value has a significant effect as mediator (SMC=0.590=59%). This case shows that the mediating effect of commitment on the relationship between service quality and customer loyalty is confirmed. When customers feel a strong emotional bond to the Islamic Bank, no sense of family as part of Islamic Banks; paying attention to the successes and provide a positive input on the survival of Islamic Bank so committed to always use customer Islamic Bank. Significant effect on word of mouth = 0.81 = 81%; when banks apply consistently the principles of shari’a in the services; service quality is also good a good product innovation; Service Islamic Bank better than non- Islamic banks and regular customers commitment in Islamic bank. In general, all items (dimensions of service quality) significant effect on service quality, the better the service quality provided to the customer then the customer will get stronger to be trusted, responsiveness, assurance, and empathy to Islamic banking. Significant effect on the service quality of trust (0.97) and customer loyalty (0.60); with good service from Islamic banks will provide a strong belief of the customer to choose the Islamic bank and will result in loyal customers. Service quality significant effect on satisfaction (0.85) but not significant (0.16) of the customer loyalty; improved service quality received from the Islamic bank, then customers will be more satisfied customers still prefer to Islamic bank services. The mediating effect of trust is significant (0.72) on the relationship between service quality and customer loyalty (0.81) on Islamic banks in South Sulawesi of Indonesia, the better the quality of service provided to customers, then customers are increasingly trust to keep with Islamic banking. Service quality significant effect on customer value (0.77) and not significant (0.16) in the word of mouth. The stronger the emotional bond and sense of family clients, note the success of Islamic banks, and the positive input from customers, then customers will be more committed to choosing Islamic banks . Intermediation trust, and effect significant customer value (0.85, 0.72 and 0.59) of the relationship between service quality and customer loyalty (0.81) on Islamic banks the better the quality, services provided to the customer so increasing customer trust, customer value, and remain committed to selecting Islamic bank and will make a loyal customer. REFERENCES Arbuckle, J.L. (2006). AMOS 7.0 User's Guide.Amos Development Corporation. Small Waters Corporation, Chicago, IL. Bagozzi, R.P. & Yi, Y. (1988). On the evaluation of structural equation model, Journal of Academy of Marketing Science, 16 (1), 74 – 94. Beerli, A., Martin, J. D., & Quintana, A. (2004). A model of customer loyalty in the retail banking market. European Journal of Marketing, 38 (1/2), 253-275. Berry, L.L. (1995). Relationship marketing of service - growing interest, emerging perspectives. Journal of the Academy of Marketing Science, 23 (4), Autumn, 236-45. Bitner, M.J. (1995). Building service relationships: it’s all about promises. Journal of the Academy of Marketing Science, 23 (4), 246-51. Bloemer, J. & Schroder, G. O. (2003). Antecedents and consequences of affective commitment. Australasian Marketing Journal, 11 (3), 33-43. Bontis, N. & Booker, L. D. & Serenko (2007). The mediating effect of organizational reputation on customer loyalty and service recommendation in the banking industry, Management Decision, 45 (9), 1426-1445. Volume VII, Issue XI, November/2020 PAGE NO:25
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