This study aims to explore the role of customer knowledge management (CKM) and satisfaction as antecedents of customer trust, and the mediating function of customer trust in the knowledge–loyalty and satisfaction–loyalty in the Saudi banking sector. This study intends to provide light on the significance of CKM and the ways in which it can support consumer trust, loyalty, and satisfaction. Data came from 600 consumers who responded to an online survey. By using regression analysis and descriptive statistics, seven hypotheses were created and tested. The findings exhibited that customer trust has a major impact on loyalty and that customer trust is positively impacted by CKM and satisfaction. Additionally, trust partially mediates the relationship between knowledge, loyalty, and satisfaction. The study contributes to the literature by examining the factors that influence customer loyalty, CKM engagement, satisfaction, and trust in the context of the Saudi banking industry. These research findings are helpful for managers and strategists in figuring out how to create customer loyalty programs that are a fit for their target market. The study is limited to the Saudi banking sector and may not be generalizable to other industries. Additionally, the study is based on self-reported data from customers, which may not accurately reflect their true opinions and behaviors.
Keywords: customer knowledge management; customer satisfaction; loyalty; trust; Saudi
The banking sector plays an essential role in the economy of Saudi Arabia. As the country aims to diversify its economy and reduce its dependence on oil, the banking sector has become increasingly important. In this context, it is crucial for banks to understand the aspects that influence customer loyalty, customer satisfaction, and customer trust ([
CKM refers to the systematic collection, analysis, and dissemination of customer information to create value for both the organization and the customer. This process helps the organization to obtain a deeper understanding of its customers, their needs, and preferences ([
The extent at which a customer is pleased with services or products offered by a business or organisation is known as "Customer satisfaction." It is a crucial factor in developing and sustaining strong customer relationships, as it directly affects customer loyalty ([
Customer loyalty refers to the extent to which a customer remains committed to an organization over time. Customer loyalty is closely related to customer satisfaction, as customers that are satisfied with a bank's services or products are more likely to remain loyal to the bank ([
It is essential for a business to successfully manage customer relationships and deliver happiness to its clients in the cutthroat business world of today ([
CKM is a management approach that seeks to build, maintain, and apply a comprehensive knowledge base about customers ([
According to [
- Improved customer satisfaction: By having a deep and accurate understanding of customer needs and preferences, organizations are better equipped to meet customer needs and deliver high-quality products and services that meet customer expectations.
- Increased customer loyalty: Customers are more likely to stay loyal to the bank/organisation when they feel that their needs are being met ([
7 ]). This can lead to increased customer retention, repeat business, and word-of-mouth referrals. - Enhanced customer insight: By having access to detailed customer data and insights, organizations are better able to identify opportunities for growth and innovation, and to respond quickly to changes in customer preferences and needs.
- Improved decision-making: CKM provides organizations with a wealth of information about customers, which can be used to inform decision-making at all levels of the organization ([
12 ]). By having access to this information, organizations are better equipped to make informed decisions about product development, marketing, and customer service.
Despite the many benefits of CKM, there are also a number of challenges that organizations face in implementing this approach effectively. These challenges include: (
Despite these challenges, the literature suggests that the benefits of CKM far outweigh the challenges, and that organizations that are able to effectively implement this approach are likely to see significant benefits in terms of customer satisfaction, customer loyalty, and business performance ([
The level of a client's happiness with the goods and services they receive from a certain business is referred to as customer satisfaction. [
There are a number of methods for measuring customer satisfaction, including:
- Surveys: Surveys are one of the most common methods for measuring customer satisfaction. Open-ended and closed-ended questions can both be used in surveys, which can be carried out in person, over the phone, or online.
- Customer feedback: Customer feedback can be collected through a variety of channels, including customer service interactions, online reviews, and social media. This feedback can provide valuable insights into customer satisfaction levels and the areas where organizations can improve ([
24 ]). - Net Promoter Score (NPS): The NPS is a metric for measuring customer loyalty that gauges both customer happiness and the likelihood that customers will refer a business to others. The NPS is determined by deducting the proportion of detractors (clients who are not inclined to refer the business) from the proportion of promoters (customers who are highly likely to recommend the organization) ([
30 ]). - Customer complaints: Customer complaints can provide valuable insights into areas where customers are dissatisfied with an organization's products and services. Tracking and responding to customer complaints can help organizations to identify and address areas for improvement ([
5 ]).
Customer loyalty refers to the degree to which customers are committed to a particular brand or organization. There are several different types of customer loyalty, including: (
There are several methods for measuring customer loyalty, including:
- Repeat purchase rate: It measures the proportion of customers who make repeat purchases from a particular organization. This metric can provide valuable insights into the level of customer loyalty and the likelihood of customers to remain loyal over time.
- Loyalty program participation: Participation in a loyalty program can be used as a proxy for customer loyalty, as customers who participate in loyalty programs are more likely to be engaged with the organization and to have a higher level of commitment ([
2 ]). - Customer feedback: Customer feedback can also provide valuable insights into customer loyalty. For example, customers who provide positive feedback and are highly likely to recommend the organization to others are more likely to exhibit high levels of customer loyalty.
- Customer lifetime value (CLV): CLV is a metric that measures the total value of a customer to an organization over the course of their lifetime. CLV can be used to identify customers who are highly valuable to the organization and to prioritize resources and efforts to retain these customers ([
6 ]).
Customer trust refers to the level of confidence that customers have in an organization and its ability to meet their needs and expectations. There are several factors that can impact customer trust, including:
- Brand reputation: The reputation of a brand is an important factor that can impact customer trust. Customers are more likely to trust brands that have a strong reputation for quality, reliability, and customer service ([
24 ]). - Transparency: Transparency is another important factor that can impact customer trust. Customers are more likely to trust organizations that are open and transparent about their business practices, policies, and procedures.
- Personalization: Personalization is the process of tailoring the customer experience to meet the individual needs and preferences of customers. Personalization can help to build customer trust by demonstrating the organization's commitment to understanding and meeting the needs of its customers ([
19 ]).
There are several methods for measuring customer trust, including:
- Surveys: Surveys can be used to gather customer feedback on their level of trust in an organization. For example, customers can be asked to rate their level of trust in the organization on a scale, or to provide written feedback on specific aspects of the organization that they feel impact their trust ([
5 ]). - Net Promoter Score (NPS): The possibility that customers will suggest a business to others is gauged by the customer satisfaction indicator known as NPS. It can be used as a proxy for customer trust, as customers who are highly likely to recommend the organization to others are more likely to have a high level of trust in the organization.
- Customer complaints: The number of customer complaints can also provide insights into the level of customer trust. Organizations that receive a high volume of customer complaints are more likely to have lower levels of customer trust, as customers are more likely to be dissatisfied with the organization and its products and services ([
2 ]).
A number of empirical studies have been directed to investigate the impact of CKM on customer loyalty and customer satisfaction. These studies have demonstrated that CKM can play a substantial role in improving both customer loyalty and customer satisfaction. One study conducted by [
Another study conducted by [
A positive relationship exists between customer trust and customer loyalty.
A positive relationship exists between CKM and customer trust.
A positive relationship exists between CKM and customer satisfaction.
A positive relationship exists between customer satisfaction and customer trust.
The relationship between customer knowledge management (CKM), customer satisfaction, and customer loyalty is an important one for businesses to understand ([
One study conducted by [
Another study conducted by [
Customer trust mediates the effect of CKM on loyalty.
Customer trust mediates the effect of customer satisfaction on loyalty.
Customer satisfaction mediates the effect of CKM on trust.
Two sampling methods used in this research: convenient sampling and random sampling. Convenient sampling used to select a sample of participants from the population of customers of the selected banks in the Saudi banking sector. Random sampling can then be used to select the participants from the identified banks ([
The questionnaire was divided in two parts. First, different personal and demographic variables: this section obtained the respondent's information about gender, age, income, education, and status. A second part measured includes the latent variables that are important in the current study. These variables include CKM, customer satisfaction, customer trust, and customer loyalty. This section of the study is developed based on the past literature and already-used questionnaires.
This study comprises 19 measurement items as indicators to examine 9 constructs with 5 items per construct. The items were borrowed and/or adapted from several previous studies, as shown in Table 1. Some words in the original sources were refined to the context of this study. The research instrument was piloted through personal interviews with a few customers to check the content validity of items and to test its appropriateness. Pre-testing was insightful for examining and evaluating the research instrument which led to some minor alterations in the items developed. Table 1 shows the number of items used to calculate each variable and their sources, along with the modern studies that tested these parameters. However, certain modifications were done to suit the banking sector. A five-point Likert scale was used in all the items with ranks 5 (strongly agree) to 1 (strongly disagree). A 19-item questionnaire has been used to calculate the 4 construct values. To ensure the reliability and validity of the results, the measurement instruments used in the study will be assessed for their reliability and validity. This will ensure that the results obtained from the study are accurate and credible ([
The questionnaire was translated from English to Arabic by Arabian teachers. Two bilingual Arabic/English lecturers at the King Faisal University Language Center translated the questionnaire into Arabic. We used the double-translation method to avoid confusion or misinterpretation and to ensure that the Arabic version accurately represented the English version.
The structural equation modeling (SEM) technique, using AMOS 20.0 software, was deployed for analysis, along with a two-step approach. Confirmatory factor analysis (CFA) was also performed on the basis of goodness and badness indices, and the model fit summary was followed. The various fit indices used for the assessment of the measurement model include—χ
The demographics achieved by analyzing the data of the respondents are shown in Table 2.
Four constructs were made which illustrated the relationship between observed and unobserved variables, which were tested for validity and authenticity using CFA. The results are presented in Table 3.
The model was assessed by various indices, mainly the ratio of the chi-square minimum to the degree of freedom (CMIN/df) which, if below the cut-off criterion of 3.00 ([
The statistical significance of the variables was determined by the critical ratio. Factor loadings of all items from all four constructs were found to be greater than 0.60 which suggested a notably higher convergent validity, as shown in Table 4. The average variance extracted (AVE), which reflects "the variation between the constructed structures as compared to the error which occurs due to wrong measurements", should be 0.50 to have reliability. The discriminant validity [
The SEM method and the maximum likelihood estimation method were used to analyze the research model. The strength of the model was based on the intrinsic and extrinsic variables. The results shown in Table 6 illustrate a good fit of the hypothesized model; thus, it is authentic for evaluation.
A parameter's standardization is judged on the basis of regression weights (SE) and (CR) [
The bias-corrected percentile with a 95 per cent confidence interval was analyzed to get standardized effects for testing the H5, H6, and H7 mediation. However, it should be noted that H5 uses the CKM method of loyalty, and the results are shown in Table 8. The results for H6 and H7 are shown in Table 8. The results show that trust of a customer partially affects its loyalty to the brand which, in turn, is related to customer satisfaction.
The survey was administered to 600 consumers, and each item was scored on a scale of 1 to 5, with 5 being the best. "The bank provides channels to enable ongoing two-way communication between customers and employees". The mean score for this statement is 4.235, which is near to the midpoint of the scale (4.0), and the standard deviation is 0.4244, indicating that the responses to this statement are generally close to the mean. This shows that clients have a favorable opinion of the bank's communication channels in general. "The customers are kept informed about the latest benefits and offers regarding various products and services." In terms of mean and standard deviation, this statement has a mean score of 4.257 and a standard deviation of 0.4372, which is comparable to the first statement. Customers appear to be generally happy with the bank's attempts to keep them informed. "The bank fully understands the needs of customers". This statement has a mean score of 4.195 and a standard deviation of 0.4872, which is lower than the previous two statements and implies that answers are more spread. This shows that some consumers believe the bank understands their demands completely, while others do not. The "Bank always provides statements with accurate data." In terms of mean and standard deviation, this statement has a mean score of 4.268 and a standard deviation of 0.4435, which is identical to the second statement. This indicates that clients trust the bank offers accurate data in their statements. "The bank provides services to customers according to their business policy but not according to customer expectations." This statement has a mean score of 4.382 and a standard deviation of 0.4862, which is greater than the preceding statements and suggests that the responses are pretty close to the mean. This implies that consumers usually feel the bank offers services in accordance with their business policies but not necessarily with customer expectations. "I feel secure while authorizing transactions with the bank." This statement has a mean score of 4.562 and a standard deviation of 0.4966, making it one of the statements with the highest scores.
This implies that clients are at ease while approving transactions with the bank. "I prefer this bank each time I make any financial transaction." This statement has a mean score of 4.462 and a standard deviation of 0.4989, which is identical to the preceding statement. This shows that clients favor this bank for its financial transactions in general. "The bank maintains the RBI norms fully." This statement has a mean score of 4.462 and a standard deviation of 0.4989, which is identical to the preceding statement. This shows that clients favor this bank for its financial transactions in general. "I consider this bank as my preferred one." This statement has a mean score of 4.463 and a standard deviation of 0.4991, which is identical to the mean and standard deviation of the preceding two statements. This indicates that customers regard this bank to be their favored one. "I trust the know-how of this bank." This statement has a mean score of 4.300 and a standard deviation of 0.4586, which is lower than the previous three but still near to the mean. This indicates that clients typically trust this bank's expertise. "When the bank suggests that I buy a new product it is because it is best for my situation." This statement has a 4.320 average rating and a standard deviation of 0.4669. This indicates that the majority of consumers feel the bank recommends new products that are best suited to their needs. "The bank treats me in an honest way in every transaction." This statement has a mean rating of 4.523 and a standard deviation of 0.4999. This suggests that a substantial proportion of consumers believe the bank is honest in all transactions. "I have intention to recommend the bank to others." This statement's average rating is 4.153, with a standard deviation of 0.4621. This shows that while some consumers are inclined to promote the bank to others, there may be a subset of customers who are not. "I have no intention to switch over to other bank." This statement has a 4.120 average rating and a standard deviation of 0.5060. This shows that some customers are considering moving to another bank, but a sizable minority of consumers have no plans to do so. "I like to use the services provided by the bank." This statement has an average rating of 4.328 and a standard deviation of 0.5517. This shows that a modest number of clients are satisfied with the bank's services. "I will prefer new services if offered by the bank." This statement has a mean rating of 4.343 and a standard deviation of 0.5562.
Customers are more willing to consider new services offered by the bank as a result of this. "I prefer this bank over other banks." This statement has a mean rating of 4.355 and a standard deviation of 0.5593. This implies that a sizable proportion of clients prefer this bank above others. "I will do more business with my bank in the next few years." This statement has a mean rating of 4.277 and a standard deviation of 0.6640. This shows that while some customers are likely to do more business with the bank in the subsequent years, there may be a part of customers who are not. "Complaints are welcomed and individual attention is given to every customer complaint." This statement has a mean rating of 4.297 and a standard deviation of 0.7277. This indicates that clients have a favorable impression of the bank's handling of customer complaints. "The bank maintains personal relationship with the customer." This statement has a mean rating of 4.377 and a standard deviation of 0.7455. This suggests that a sizable proportion of clients feel the bank has a personal relationship with them. "Periodic feedback review is sought after raising complaint." This statement has a mean rating of 4.337 and a standard deviation of 0.5482. This shows that clients feel the bank solicits input after receiving complaints. "I am satisfied with the overall interaction with the staff." This statement has a mean rating of 4.338 and a standard deviation of 0.5487. This shows that a reasonable number of consumers are pleased with their entire engagement with bank personnel.
The structural model demonstrates CKM and customer satisfaction as chief determinants of customer trust. Trust is a prerequisite for generational customer loyalty and CKM positively impacts customer satisfaction. The study revealed that CKM and customer satisfaction better explicate variance in customer trust (R
Furthermore, the research concludes that there is a strong link between customer trust and customer loyalty and is further reinforced by the earlier findings of [
This study infers that the impact of CKM is more on customer trust than on customer satisfaction. Furthermore, mediation analysis highlighted customer trust as the precursor to customer loyalty ([
For managers in the Saudi banking industry, the study's conclusions will have significant ramifications. Managers will be better prepared to plan and implement customer-centric strategies that increase customer satisfaction and loyalty by comprehending the influence of CKM on these two metrics, as well as the mediating function of customer trust.
The study is limited to the Saudi banking sector and may not be generalizable to other industries. Additionally, the study is based on self-reported data from customers, which may not accurately reflect their true opinions and behaviors. Further research is needed to validate the findings of this study and explore the impact of CKM on customer satisfaction and customer loyalty in other industries and regions.
Graph: Figure 1 Research structural model.
Table 1 Variables, number of items, and recent validation sources.
Variable No. of Items Items Source Recent Validation Customer Knowledge Management (CKM) 5 Customer satisfaction 4 Customer trust 5 Customer loyalty 5
Table 2 Demographic profile of respondents.
Demographic Group Demographic Category Count Percentage Gender Male 219 45.0 Female 269 55.0 Age Below 22 years 82 16.8 22–39 years 152 31.1 40–59 years 254 52.1 Marital Status Married 263 53.9 Single 150 30.7 Other 75 15.4 Education level School 0 0.0 Graduates 285 58.4 Post-graduates and above 203 41.6 Monthly Income Less than 5000 SAR 0 0.0 5001 to 10,000 SAR 261 53.5 10,001 to 15,000 SAR 126 25.8 More than 15,001 SAR 101 20.7
Table 3 Measurement model (CFA).
Factor and Items Factor Loading Critical Ratio α AVE Construct Reliability 0.87 0.64 0.88 CKM 1 0.802 10.872 CKM 2 0.778 10.538 CKM 3 0.832 11.248 CKM 4 0.742 10.085 CKM 5 0.791 Fixed 0.86 0.57 0.85 CT 1 0.628 Fixed CT 2 0.659 9.401 CT 3 0.781 10.487 CT 4 0.846 11.331 CT 5 0.812 10.853 0.89 0.60 0.88 CS 1 0.784 Fixed CS 2 0.760 10.990 CS 3 0.758 11.103 CS 4 0.720 10.560 CL 1 0.781 11.945 0.91 0.77 0.91 CL 2 0.836 13.846 CL 3 0.910 16.151 CL 4 0.852 14.634 CL 5 0.845 Fixed
Table 4 Confirmatory factor analysis (CFA) of all measurement models.
CFA Model Items CMIN/df TLI NFI GFI AGFI CFI 5 1.621 0.998 0.997 0.997 0.984 0.999 5 1.345 0.999 0.999 0.999 0.961 0.999 4 1.433 0.998 0.998 0.998 0.979 0.999 5 1.090 0.998 0.998 0.997 0.991 0.999
Table 5 Test of discriminant validity.
Construct CL CKM CT CS 0.272 0.201 0.201 0.179 0.194 0.268
Table 6 Goodness of fit of the hypothesized model.
Measures Fit Indices Value Accepted Absolute Level RMSEA 0.037 Less than 0.08 GFI 0.935 0.90 and above 0.000 Incremental Level AGFI 0.901 ≤0.90 CFI 0.987 ≤0.90 TLI 0.990 ≤0.90 Parsimonious Level CMIN/df 1.238 ≥2.0 R² 0.708 High is better
Table 7 Structural model results.
Hypothesis Estimate SE. C.R. P Results 0.461 0.051 8.590 *** Asserted 0.220 0.029 7.311 *** Asserted 0.360 0.036 9.801 *** Asserted 0.219 0.049 4.498 *** Asserted
Table 8 Mediating results for the hypothesized model.
Relations Direct Effect Indirect Effect Total Effect Estimate Estimate Estimate 0.271 ** 0.182 ** 0.453 ** 0.486 ** 0.091 * 0.577 ** 0.297 ** 0.173 ** 0.470 **
This study received full ethical approval from King Faisal University.
Informed consent was obtained from all subjects involved in the study.
The data associated with this study are not publicly available, as per the agreement with research participants when they gave informed consent.
The author declares no conflict of interest.
By Abbas N. Albarq
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