Relationship between brand loyalty and customer satisfaction in the banking

Abstract

Customer satisfaction and brand loyalty are widely recognized as critical determinants of organizational success in service-driven industries. This study explores the relationship between these two constructs in the banking and telecom sectors, where customer retention, trust, and competitive positioning are central challenges. In banking, satisfaction has been shown to translate directly into loyalty, largely because of the trust-based and long-term nature of financial relationships. Customers who are satisfied with the quality of services, transparency, and security are more likely to remain loyal, thereby reducing churn and strengthening brand equity. In contrast, the telecom sector demonstrates a more complex link between satisfaction and loyalty, as customers often switch providers despite being satisfied, primarily due to aggressive pricing strategies, service bundling, and technological innovations offered by competitors. Through a comparative lens, this study highlights that while satisfaction is a necessary precursor to loyalty in both industries, the degree of influence is sector-specific. The findings provide valuable insights for managers seeking to enhance customer relationship management, as well as for academics examining the nuanced dynamics of satisfaction–loyalty linkages across different service contexts.