Relationship Marketing and Customer Loyalty: Customer Satisfaction as a Mediator in Ethiopian Banks.

Ahmed Mohammed Yimer; Fikadu Zewdu Misganew

Relationship Marketing and Customer Loyalty: Customer Satisfaction as a Mediator in Ethiopian Banks.

Ahmed Mohammed Yimer, Fikadu Zewdu Misganew

Abstract

This study examined the effect of relationship marketing variables, trust, commitment, conflict handling, communication, and competence, on customer loyalty, while also exploring the mediating role of customer satisfaction. Utilizing an explanatory research design, the research employs a quantitative approach through a structured survey distributed to 399 commercial bank customers, with 327 questionnaires filled valid for analysis. Structural equation modeling was applied to evaluate the direct effects of relationship marketing on customer loyalty and the mediating influence of customer satisfaction. Path analyses were conducted with AMOS, employing bootstrapping techniques to assess mediation effects. Results indicated that trust, conflict handling, and communication significantly influence customer loyalty, while commitment shows no significant effect. Trust, commitment, and competence positively affect customer satisfaction; however, conflict handling and communication do not. Notably, customer satisfaction is positively correlated with customer loyalty, with bootstrapping analysis revealing that customer satisfaction partially mediates the relationship between relationship marketing and loyalty, excluding communication. The findings suggested that bank service providers should prioritize relationship marketing strategies and customer satisfaction to enhance loyalty. By devoting to attracting new customers and retaining existing ones, banks can foster stronger customer relationships and achieve sustained loyalty. This study provides critical insights for banks in developing economies, demonstrating how targeted relationship marketing strategies could foster loyalty in competitive markets.

DOI: https://doi.org/10.54663/2182-9306.2025.v.13.n.25.63-94

Keywords

Trust, Commitment, conflict handling, communication, competence Customer satisfaction, Customer loyalty

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