Impact of CSR Reputation and Customer Loyalty

Abstract

Intense competition has in many markets decreased the prospects for differentiation in terms of technology and product/service quality. For this reason, CSR becomes an important attribute that can enhance a company's image. To win customers' loyalty in today's markets, companies have to focus on building and sustaining customer loyalty. Nowadays, organizations looking forward to achieving a sustainable competitive improvement based on focusing on a customer-oriented concept which will lead to customer satisfaction, trust and finally to customer loyalty. In this regard, CSR has become a valuable tool. This research, therefore, aims to investigate the direct effect of CSR on customer loyalty by observing the intervening influence of Perceived service quality and trust. In this research, it is proved CSR aspects namely business practice CSR which is related to primary stakeholders, such as customers and employees, and philanthropic CSR, which is related to secondary stakeholders, such as the community has a positive and significant effect on the customer loyalty. Moreover, perceived service quality and trust also serve as an intervener between CSR and Loyalty. Data collected from account holders of three main banks in Kenya. Structural equation modeling is examined by using PLS software. The findings of this study would help scholars in developing more CSR based loyalty models. These findings can also aid the service industry such as commercial banks in Kenya to better incorporate CSR initiatives in their strategic planning process