Impact of Service Quality and Customer Satisfaction on Customer Loyalty: A Case Study in a Private Hospital in Indonesia

Abstract

It is necessary to consider the visit rate of outpatient in order to increase hospital revenue. Accordingly, to create customer satisfaction, a hospital should be able to improve its service quality. Therefore, dimensions of service quality as determinants of customer satisfaction for establishment of patient loyalty need to consider. The previous researches have confirmed that service quality creates patient loyalty with and without mediation of customer satisfaction. There many previous researches that investigate service quality, customer satisfaction, and customer loyalty, however, they only used multiple regression analysis or SEM. So, in this research, the researcher uses a combination of multiple regression analysis and SEM. The objectives of this research are: first, to see the impact of service quality on patient satisfaction; second, to see the impact of patient satisfaction on customer loyalty; third, to see the impact of service quality on patient loyalty. The respondents of this research are non-insurance outpatients of a private hospital in Tangerang, Indonesia by using a questioner. The data analysis methods of this research were multiple regression method for dimension of service quality toward satisfaction and Structural Equation Model (SEM) analysis for variable of service quality and customer satisfaction toward loyalty. The findings of this research show that: first, there is no direct impact of each dimensions of service quality on patient satisfaction, except assurance. It shows that the respondents don’t distinguish all dimensions as a separate part where one dimension is prioritized than others; second, this research also finds that there is an impact of service quality on customer satisfaction improvement; third, there is direct impact of service quality on customer loyalty without mediation of customer satisfaction. Accordingly, it can be concluded that the customer loyalty is affected by customer satisfaction and service quality.