Mediating effects of customer satisfaction and word-of-mouth intention on the relationship between customer experience and loyalty: evidence from the banking sector in Zimbabwe.

Abstract

There is a scarcity of studies that have addressed the mediating effect of customer satisfaction and word-of-mouth intention on the relationship between customer experience and loyalty in the banking sector in Zimbabwe. This study was conducted to address this knowledge gap. The primary objective of the study was to examine the mediating effect of customer satisfaction and word-of-mouth intention on the relationship between customer experience and loyalty. The specific objectives of the study were: (i) to determine the effect of customer experience on customer satisfaction, (ii) to determine the effect of customer experience on word-of-mouth intention, (iii) to ascertain the effect of customer experience on customer loyalty, (iv) to determine the effect of customer satisfaction on word-of-mouth intention, (v) to ascertain the effect of customer satisfaction on customer loyalty, (vi) to measure the effect of word-of-mouth intention on customer loyalty, (vii) to test the mediating effect of customer satisfaction on the relationship between customer experience and loyalty and (viii) to test the mediating effect of word-of-mouth intention on the relationship between customer experience and loyalty. A positivist research philosophy was adopted. A cross-sectional survey design was used to collect data. Bank customers were randomly selected by intercepting them as they left the banking halls in Harare. Data were collected from 650 bank customers using a structured interviewer-administered questionnaire with Likert-type questions. Reliability was assessed using Cronbach’s alpha (α). Data were validated through exploratory factor analysis, convergent validity and discriminant validity. Data were analysed using descriptive statistics which include mean and standard deviation, frequencies and percentages. Structural equation modelling was applied to test research hypotheses. Results indicate that customer experience positively influences customer satisfaction, word-of-mouth intention and loyalty. Results also show that customer satisfaction and word-of-mouth intention partially mediate the relationship between customer experience and loyalty. Results imply that customer satisfaction and word-of-mouth intention play an important part in the relationship between customer experience and loyalty. These results contribute to the current body of knowledge by introducing customer satisfaction and word-of-mouth intention as mediators of the effect of customer experience on customer loyalty. Banks are therefore recommended to focus on continuous improvement on customer experiences to satisfy customers. Thus, banks should ensure that their services are unique, unforgettable and memorable such that customers are satisfied and share positive word-of-mouth about services offered by banks. Banks are also advised to consider customer experience, customer satisfaction and word-of-mouth intention v as tools that can be used to increase customer loyalty. It is recommended that future studies be carried out across other cities in Zimbabwe and other countrie