The Influence of Service Quality, Company Image, Customer Trust, and Brand Reputation on Customer Satisfaction and Customer Loyalty at Bank Central Asia Tbk in Surabaya

Gaby Adhi Ariani¹, Basuki Rachmat², Trisa Indrawati³

^1,2,3 Faculty of Bussiness and Economics, Hayam Wuruk Perbanas University, Surabaya

ABSTRACT: A bank is a business entity whose primary activity is to collect funds from the public in the form of deposits and distribute them as loans or other forms of credit to maintain economic stability and improve the welfare of society. The purpose of this research is to examine several factors that contribute to customer loyalty. This study can be classified as descriptive research, utilizing questionnaires as the primary data source through Google Forms. The subjects of this research are 200 customers of Bank Central Asia in Surabaya. This study can be classified as descriptive research, utilizing questionnaires as the primary data source through Google Forms. The subjects of this research are 200 customers of Bank Central Asia in Surabaya. The conclusion of this research is that service quality, company image, customer trust and brand reputation significantly influence customer satisfaction and customer loyalty. Each element is interconnected and must be managed in an integrated manner to achieve optimal outcomes.

KEYWORDS: Service Quality, Company Image, Customer Trust, Brand Reputation, Customer Satisfaction and Customer Loyalty

INTRODUCTION

A bank is a financial institution whose business activities involve collecting funds from the public and redistributing those funds back to the public, as well as providing other banking services. Darmawan (2018) explains that a bank’s profits are entirely derived from its customers, indicating that banking institutions will focus on how to attract more customers to increase their market share. Banks that provide services to customers can increase their customer base by offering higher-service quality to ensure customer satisfaction, which ultimately leads to customer loyalty. To establish a positive corporate image, a company can assist customers in recognizing its unique strengths through the most effective approaches, whether by highlighting its products, services, or other aspects that support its distinctiveness. In particular, delivering high-service quality and fostering relationships that make customers feel valued and personally appreciated can significantly enhance the Company’s image. This, in turn, contributes to increased customer loyalty.

Bank Central Asia (BCA) Tbk is the largest private bank in Indonesia. This is evident from the numerous awards BCA receives annually. One notable recognition is BCA being named the best bank in Asia and Indonesia, an award presented at the Finance Asia Country Awards for Achievement 2019 in Hong Kong. Based on the awards that BCA has consistently earned and maintained over the years, this study focuses on BCA as the object of analysis. The better the image, service quality, and complaint handling provided by a bank, the more it enhances customer trust. This, in turn, positively impacts the bank, as increased customer trust naturally leads to greater customer loyalty. Loyal customers are more likely to continue conducting transactions with the bank without excessive concern. The better the image, service quality, and complaint handling provided by a bank, the more it enhances customer trust. This automatically has a positive impact on the bank, as increased customer trust fosters greater customer loyalty, encouraging customers to continue conducting transactions with the bank without excessive concern.

LITERATURE REVIEW

Customer satisfaction can provide several benefits, including fostering a harmonious relationship between the company and its customers, encouraging repeat purchases that lead to customer loyalty, and generating positive word-of-mouth recommendations that benefit the company. According to Arianto (2018:83), service quality can be defined as focusing on meeting needs and requirements, as well as timeliness in fulfilling customer expectations. Service quality applies to all types of services provided by a company while clients are engaged with the organization. According to several studies, service quality is defined as the actions or efforts of an individual or organization aimed at providing satisfaction to customers or employees. Image or reputation is closely tied to the perception of a brand or company. Image refers to customers’ perceptions of the quality associated with a brand or company. Subagja & Susanto (2019) state that the influence of service quality on customer loyalty is significant; the customer satisfaction variable was found to have a positive but not significant effect; the corporate image variable does not show any influence on customer loyalty; the service quality, customer satisfaction, and corporate image variables have a significant and good level of relationship with customer loyalty.

Corporate image is defined as the perception of an organization as reflected in the memory of its customers. Image serves as a representation of customers’ evaluations, whether they are potential customers or dissatisfied ones. It also includes the perceptions of other groups associated with the company, such as suppliers, agents, and investors. Trust is an essential aspect of any commitment or promise, and commitment can only be realized when it holds meaningful value at a given time. Morgan and Hunt, as cited in Dharmmesta, argue that trust exists when one party has confidence in the reliability and integrity of the other party involved in an exchange. The understanding of customer trust according to Sumarwan in Sangadji & Sopiah (2013, p. 201) states that ‘trust is the strength that a product has certain attributes. Trust is often referred to as object-attribute linkage, which is the customer’s belief about the possibility of a relationship between an object and its relevant attributes. According to Manurung, H., and Wijaya, L.D. (2020), companies that provide high-service quality have a positive impact on customers, ultimately leading to customer loyalty. Service quality encourages customers to build a close relationship with the bank, enabling the bank to better understand their expectations and needs. Ultimately, customer satisfaction fosters loyalty to the bank.

A strong brand reputation shapes customers’ perceptions of a product, encouraging repeat purchases. When customers find the outcomes meet their expectations, they tend to share their positive experiences with others. This word-of-mouth communication can further influence perceptions of the brand’s reputation. This is supported by research from Fatimah Zuhra and Safnina Sukma (2018) in their study titled “The Impact of Brand Reputation on Customer Loyalty Mediated by Customer Satisfaction at Bank Mandiri Syariah KCP Bireuen.” Their findings indicate that brand reputation has a direct influence on customer loyalty. Customer loyalty, according to Oliver (2020), is defined as a deeply held commitment to repurchase or continue supporting a preferred product or service in the future, despite situational influences and marketing efforts that have the potential to cause customers to switch.

III. METHOD

This research is a type of quantitative research to examine the effect of service quality, corporate image, customer trust, and brand reputation on customer satisfaction and customer loyalty at PT. Bank Central Asia in Surabaya. The type of survey used in this study is an online questionnaire distributed to 200 respondent via Google Forms. The questionnaire includes statements regarding service quality, corporate image, customer trust, and brand reputation, all of which relate to customer satisfaction and customer loyalty at Bank Central Asia. The primary data obtained is analyzed using WarPLS 7.0, a statistical software designed for such purposes. This statistical testing approach is employed to analyze the relationships and influences among variables. In addition, this study incorporates a causal research design. This design is used to explore potential cause-and-effect relationships among variables. By utilizing this approach, it can predict relationships between variables and classify them into independent, intervening, and dependent categories. This method provides a clear framework for understanding how different variables interact and influence each other.

RESULTS

The analysis technique used for this research instrument is divided into two parts: validity testing and reliability testing. Validity testing aims to assess whether the questionnaire data is valid. A questionnaire is considered valid if the questions or statements within it are able to accurately explain the concept being measured through the questionnaire. The validity tests in this study include convergent validity and discriminant validity assessments. It can be concluded from Table 1 that the square root of the Average Variance Extracted (AVE) values for each variable are 0.861, 0.799, 0.752, 0.853, 0.812, and 0.790, all of which meet the criteria of AVE > 0.5, thus indicating that the data is valid.

A variable is considered reliable and dependable if the composite reliability value is >0.7 and the Cronbach’s alpha value is >0.6 for confirmatory assessments. However, for exploratory assessments, composite reliability and Cronbach’s alpha values between 0.6 and 0.7 are still acceptable. Based on Table 2, it is evident that the Cronbach’s alpha values for all variables exceed 0.60, with the following values: (X1) 0.967, (X2) 0.936, (X3) 0.889, (X4) 0.957, (Y1) 0.920, and (Y2) 0.933. Furthermore, the Composite Reliability (CR) values for all variables are greater than 0.70, as follows: (X1) 0.974, (X2) 0.952, (X3) 0.924, (X4) 0.967, (Y1) 0.945, and (Y2) 0.949. These results indicate that all constructs for each variable demonstrate good reliability and meet the criteria for reliability testing, allowing for the continuation of the analysis.  The statistical testing tool used in this research hypothesis testing employs the Structural Equation Modelling (SEM) measurement tool based on Partial Least Square (PLS) due to the presence of intervening variable and moderating variable models used in this research, which will be easier to resolve using PLS.

Table 1. Output Convergent Validity Test

Table 2. Output Reability Test

Table 3. Inner Model

Table 4. Summary of Direct Influence Hypothesis Testing

Based on Table 3, it is known that the r-squared value for Customer Satisfaction (Y1) is 0.567, which suggests that Service Quality, Company Image, Customer Trust, and Brand Reputation, as independent variables, have a strong influence on Customer Satisfaction and can predict 56.7% of Customer Satisfaction.

In contrast, Customer Loyalty has an r-squared value of 0.065, indicating that the influence of Service Quality, Company Image, Customer Trust, Brand Reputation, and Customer Satisfaction accounts for only 6.5% of Customer Loyalty. However, when viewed from the perspective of Q-squared, it can be concluded that in this model, Customer Satisfaction has a Q-squared value of 0.950, and Customer Loyalty has a Q-squared value of 0.983, both of which are greater than 0 and approaching 1. This indicates a high relevance between the independent and dependent variables. Thus, it can also be concluded that while a high relevance between an independent variable and a dependent variable suggests a strong relationship, it does not necessarily imply that the independent variable has a significant influence on the dependent variable. Based on further research findings on Table. 4, service quality and customer trust does not have a significant effect on customer satisfaction, as indicated by the significance value of > 0.05, which is 0.08. Therefore, the null hypothesis (Ho) is rejected. This suggests that customer trust and the quality of service provided by an employee, whether good or poor, impacts customer satisfaction, but this impact depends on the company. Company image and brand reputation have a significant effect on customer satisfaction, as indicated by the significance value of < 0.05.

Figure 1: SEE IN PDF FILE

Therefore, the null hypothesis (Ho) is accepted. Service quality, company image, customer trust, brand reputation and customer satisfaction have a significant effect on customer loyalty, as indicated by the significance value of < 0.05. Therefore, the null hypothesis (Ho) is accepted.

CONCLUSION AND RECOMMENDATIONS

The conclusion of this research is the variables of company image and brand reputation have a significant direct effect on customer satisfaction. However, the variables of service quality and customer trust do not have a significant direct effect on customer satisfaction. Similarly, the variables of service quality, company image, customer trust, brand reputation, and customer satisfaction have a significant direct effect on customer loyalty.

Managing service quality, company image, customer trust, brand reputation, customer satisfaction, and customer loyalty involves various interrelated managerial responsibilities. Each of these aspects contributes to the long-term success of the company and requires integrated attention. Company managers or branch heads must adopt a holistic approach to managing service quality, company image, customer trust, brand reputation, customer satisfaction, and customer loyalty. Each element influences one another and must be managed in an integrated manner to achieve optimal results. The effective management of these elements not only enhances customer satisfaction and loyalty but also strengthens the company’s position in the market and supports long-term success.

ACKNOWLEDGMENTS

The authors thank the Administration and the Research and others for financial support and their colleague’s moral support.

VII. DISCLOSURE

The author reports no conflicts of interest in this work.

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