Increasing Customer Loyalty Through Service Quality and Perceived Value with Customer Satisfaction as a Mediation Variable

Abstract

In this dynamic market retaining customers is a strategic priority. Customer loyalty is recognized as an invaluable asset that ensures long-term business sustainability. Loyal customers tend to make repeat purchases, recommend services to others, and have lower price sensitivity. Therefore, a deep understanding of the factors that influence customer loyalty is imperative for companies. One of the most widely studied determinants of customer loyalty is service quality. In the service industry, where products tend to be intangible, service quality is a crucial aspect that shapes customer perceptions and experiences. Positive perceptions of service quality can significantly increase customer satisfaction, which in turn drives loyalty. On the other hand, poor service quality can lead to dissatisfaction and customers switching to competitors. Besides service quality, perceived value also plays a crucial role. Perceived value is a customer's holistic assessment of the benefits received compared to the costs incurred, both financial and non-financial.(Fakhrizadeh et al., 2024)In internet services, perceived value encompasses not only connection speed and stability, but also aspects such as competitive pricing, ease of use, and responsive technical support. When customers perceive high value from the service they receive, they tend to be more satisfied and loyal. The relationship between service quality, perceived value, and customer loyalty is often mediated by customer satisfaction. Customer satisfaction is an affective or cognitive response to the experience of using a product or service, arising from the comparison between expectations and perceived performance. High-quality service and superior value are believed to directly influence satisfaction, which then fosters loyalty. Thus, customer satisfaction is not only the ultimate goal but also a critical mediating variable in the customer value chain. These issues are particularly relevant in the internet service provider industry, given the fundamental importance of internet service to everyday life. Customers need stable, fast, and reliable connections to support work, education, entertainment, and communication. Even the slightest disruption can cause frustration and negatively impact their perception of service quality and the value they receive. West Kalimantan, with its unique geographic and demographic characteristics, offers an interesting research context.