The Influence of Corporate Social Responsibility on Customer Loyalty – Evidence from Commercial Banks in Pakistan

Abstract

Purpose This study aims to examine how perceptions of corporate social responsibility (CSR) enhance customer loyalty in the banking industry. Also, contribute to knowledge on the impact of corporate social responsibility (CSR) activities in the banking industry. In addition, it investigates the mediating effects of customer satisfaction, corporate image, corporate reputation, service quality between CSR activities and customer loyalty. Design/methodology/approach A self-administered survey was conducted on customers in Pakistan Based on the data collected from 250 customers, the analysis used the structural equation modelling (SEM) approach. The validity and reliability of the measurements were confirmed before the hypotheses of the study have been tested. Findings The study finds that CSR is positively influencing customer loyalty, and customer satisfaction, image, and quality also intervened in their relationships. In particular, a new finding of the study highlights the importance of the mediating role played by image and quality in enhancing the effect of CSR on satisfaction. The research findings provide useful insights into how banks should develop a CSR strategy that would enhance customer loyalty. Practical implications the findings of this research can assist practitioners in effectively conceptualizing CSR image from a customers’ point of view and designing their company’s CSR and communication strategies to boost positive customer responses and strong long-term relationships Originality/value the current study provides further insights into the complex relationship between CSR and customer responses and the impact that different CSR activities may have on customers KEYWORDS corporate social responsibility, image, loyalty, quality, satisfaction