The Influence of Service Quality on Customer Loyalty Is Mediated by Customer Satisfaction in Islamic Bank

Providing quality service is one of the strategies to achieve business success in the service sector, especially in getting customer satisfaction and loyalty. This study focuses on knowing the empirical model and analyzing the effect of service quality on customer loyalty mediated by customer satisfaction. The type of research used in this research is explanatory research. The sample consisted of 150 customers from the Palembang branch of Islamic Banks selected by a simple random sampling technique. The research instrument is in the form of a questionnaire that has been tested for the level of validity and reliability using CFA analysis. This study uses a complex causality model tested with the PLS-SEM technique. The study’s results resulted in a fit structural model which showed that service quality had a significant direct effect on customer loyalty. Service quality has a substantial immediate impact on customer satisfaction. Furthermore, information obtained shows that customer satisfaction partially mediates the impact of service quality on customer loyalty.