How important is CRM toward customer’s loyalty to conventional and Islamic bank marketing strategy?

Abstract

Purpose This paper aims to test the effect of customer relationship management (CRM) strategy on customer loyalty of bank customers. Design/methodology/approach The questionnaire derived from previous studies along with relevant literature was completed by 100 customers of conventional banks and 100 customers of Islamic banks. Structural equation modeling assessed the impact on customer loyalty on three key constructs of CRM programs (continuity marketing, one to one marketing and partnering). Findings Two out of three variables, which is continuity marketing and partnering, have significant effects on both banks. Continuity marketing is the dominant variable at conventional banks. Partnering is the dominant variable at Islamic banks. Research limitations/implications The effects of CRM programs on customer loyalty observed in this study required further research. The data used in this study were only gathered from the banking industry in Indonesia, and so more research studies are needed to support the conclusion. Practical implications It is reasonable to conclude that customer loyalty can be built, strengthened and retained by CRM programs, aimed at increasing security and building trust in each transaction, improving partnership, optimize another bank’s service product like internet banking and SMS banking and communicating with customers in a timely manner. Originality/value Advanced and specific knowledge relevant to CRM in banking service industries.