The mediating role of brand trust in the formation of brand loyalty within the South African retail banking sector

Abstract

South Africa’s banking industry is a key strategic economic sector experiencing significant transformational changes that have been influenced by technological advancements, the influx of new entrants in the industry that traditionally had high barriers to entry, and rising expectations from service providers to deliver satisfying experiences to consumers. It is against this background that this study sought to investigate brand loyalty development within the South African retail banking industry by focussing on the effects that satisfaction, brand relationship quality (BRQ), customer advocacy, and brand trust have on brand loyalty. The premise of this study rests on the theoretical foundations of the social exchange theory and interpersonal relationship theory, both of which have been identified to explain brand loyalty. The study replicated the service loyalty measurement scale adapted by El-Manstrly and Harrison (2013) from Oliver (1997) four loyalty phases. A quantitative methodology using a convenience sampling approach in the form of online surveys was employed for the study with a total of 351 responses. To validate the measurement and structural equation modelling (SEM), Confirmatory Factor Analysis (CFA) was used. Five out of the eight hypotheses were supported by the data, indicating the direct positive relationships between satisfaction, customer advocacy, brand trust, and brand loyalty. The results indicate that brand trust does not mediate the relationships between BRQ and brand loyalty and customer advocacy and brand loyalty. This study provides marketing professionals in the retail banking sector of South Africa with insights into key drivers of brand loyalty development within retail banking.