The Mediation Effect of Customer Satisfaction on the Relationship between Service Quality and Customer Loyalty in Telecommunication Industry

Mohd Khirzan Badzli A Rahman, Siti Asiah Md Shahid, Rozita Naina Mohamed
Faculty of Business and Management, Institute of Business Excellence, Universiti Teknologi MARA

Abdul Kadir Othman, Che Hanisah Che Hamzah
Faculty of Business and Management, Universiti Teknologi MARA


Customer loyalty is crucial for companies to remain competitive in business. This statement is also applicable to telecommunication companies. One of the main determinants of customer loyalty is service quality. However, studies have found that a direct relationship between service quality and customer loyalty is not always justified. Therefore, in this study, the mediating role of customer satisfaction is included to overcome the limitation of existing studies in establishing the relationship between service quality and customer loyalty. Based on 225 responses obtained from customers of four major telecommunication companies in Malaysia, the results of the study indicate that customer satisfaction mediates the relationship between some dimensions of service quality; reliability, responsiveness and empathy, and customer loyalty. These findings signify that customers need to be satisfied before they become loyal to the company especially when it involves reliability, responsiveness and empathy. The implications of the study are further discussed in the paper.

Keywords: Customer satisfaction, Service quality, Customer loyalty, Telecommunication industry