The Moderating Effects of Customer Satisfaction on the Relationship between Service Quality and Customer Loyalty: Evidence from the Banking Sector of Egypt

Purpose: The purpose of this study is to examine the moderating significant role of Customer Satisfaction (CS) in the relationship between Service Quality (SQ) and Customer Loyalty (CL). Research Design/Methodology: To assess positive SQ, refer to (SQ Questionnaire, Cronin & Taylor, 1992), CS (CS Questionnaire, Athanassopoulos, et al, 2001) and CL (CL Questionnaire, Parasuraman, 1996). The data of the study was collected from 310 employees at commercial banks in Egypt. Out of the 382 questionnaires that were distributed to employees at commercial banks in Egypt, 310 usable questionnaires were returned, a response rate of 81%. Multiple Regression Analysis (MRA) was used to confirm the research hypotheses. Findings: This research findings show that CS is an important mediator between SQ and CL at commercial banks in Egypt. CS significantly influenced SQ and CL. The finding reveals that SQ affects CL through CS. Practical implications: Learning the relationships between SQ, CS and CL, retailers can effectively allocate their resources and develop a rational plan to improve their SQ under specific business circumstances. In addition, by the referring of loyal customers, the commercial banks can attract more customers. Managers are advised to satisfy and better manage their relationships through quality product and service offerings to their customers as a competitive policy in the marketplace. The commercial banks are required to offer services that meet or surpass consumers’ expectation. The study also reveals interesting implications in SQ, CS and CL, useful to both academics and practitioners. Managers will find this research helpful in better understanding these variables and their roles on their companies’ performance. Originality/value: This research dealt with SQ in terms of its concept and dimensions, in addition to dealing with the significant role of CS in the relationship between SQ and CL at commercial banks in Egypt