Enhancing Customer Loyalty of Banks through Corporate Social Responsibility: A Conceptual Framework

International Journal of Research and Innovation in Social Science (IJRISS) | Volume III, Issue VII, July 2019 | ISSN 2454–6186

Enhancing Customer Loyalty of Banks through Corporate Social Responsibility: A Conceptual Framework

Konalingam Kajenthiran¹ and Nilakshi W K Galahitiyawe²

¹Lecturer, Department of Marketing, Faculty of Management Studies and Commerce, University of Jaffna.
²Senior Lecturer, Department of Decision Sciences, Faculty of Management Studies and Commerce, University of Sri Jayewardenepura

Abstract:-Corporate social responsible engagements are the one of the increasing popular marketing strategy to create customer loyalty particularly in the retail banking industry. Hence, in this study researchers present a conceptual framework which aims to enhance the customer loyalty through Corporate Social Responsibility (CSR) in the context of retail banking industry in Sri Lanka. Further the research model presents the mediating effect of customer satisfaction in between CSR and customer loyalty. The proposed model is an extension of the study conducted by Ellen, Webb, and Mohr (2006). The model comprises Corporate Social Responsibility (CSR) as an upstream variable, Customer Loyalty (CUL) as a downstream variable, and Customer Satisfaction (CUS) as a mediating variable. Relationships between these constructs are discussed, together withresearch hypothesis. Further, this study is much needed to empirically test to get the new cues on the subject of CSR of the Sri Lankan Consumers’ perspective. Researchimplications of the conceptual model are presented, as directions for future research,which would be of use to researchers and practitioners in the societal marketing field.

Keywords: Corporate Social Responsibility, Customer Satisfaction, Customer Loyalty, Consumer Attribution Theory, Retail Banking

I. INTRODUCTION

Loyal customers are the contributors of greatest value to companies, so in turn, companies try to retain their customers with much effort. Because it has been proved that, it is cheaper to retain existing customers than attract new ones (Stanisavljević, 2017). In this supportive view, creating and maintaining customer loyalty helps companies to develop long-term, mutually beneficial relationships with customers (Pan, Sheng, & Xie, 2012). Besides the loyal customers exhibit attachment and commitment toward the company and are not attracted to competitors offerings (So, King, Sparks, & Wang, 2013). Moreover, loyal customers are willing to pay more, express higher buying intentions and resist switching (Evanschitzky et al., 2012). In this sense, it is imperative for firms to have loyal customers (Kandampully, Zhang, & Bilgihan, 2015) and this customer loyalty entice them to achieve long-term competitive advantages (Aksoy, 2013).

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