Effect of Quality Service and Spiritual Marketing Against Loyalty

Sharia Bank Customers

Rico Syahputra

Master of Management Science, University of North Sumatra, Jl. Prof. T.M Hanafiah, SH, Medan, Indonesia

Keywords: Quality of Service, Spiritual Marketing, Customer Loyalty

Abstract: The purpose of this study is to see the influence of service quality and spiritual marketing on the loyalty of

Islamic bank customers. The population in this study was all Islamic bank customers, while the sample

withdrawal technique used nonprobability sampling so that the sample in this study amounted to 100

respondents. The data analysis equipment in this study used SEM (Structural Equation Modelling) Analysis

with SMART PLS (Partial Least Square). Based on the results of SEM analysis, it can be explained that

Islamic bank customer loyalty is influenced by 51% of the variable quality of service and spiritual marketing,

and there is a positive and significant influence between the quality of service with customer loyalty and

spiritual marketing has a negative and insignificant effect on customer loyalty. The limitations/implications

of this study are still a small sample number and the results of this study can be an entry for Islamic banking

managers to increase customer loyalty.

1 INTRODUCTION

Indonesia is a Muslim-majority country. Of all the

provinces in Indonesia, Aceh is the province that

adheres to Islam the most. Aceh is also nicknamed the

City of Serambi Mecca, which means the courtyard

and yard of the city of Mecca. This became a symbol

that Aceh is very thick with Islamic nuances.

Islamic nuance which is thick makes Aceh have a

special regulation, namely Qanun. Qanun regulations

governing the nets of the Aceh government. Including

in taking policies such as shariah institutions. There

is Qanun Aceh No. 11 of 2018 concerning LKS and

there are still more qanuns regulating policy in Aceh.

Currently, Aceh has implemented qanun No. 11

of 2018 all its institutions have sharia. The people of

Aceh should be happy with this policy. Because the

great history of the Aceh kingdom about the

religiosity of the community is very well known. So

that it can make people more loyal to Islamic banking.

However, the fact that the November 2021 Aceh

Provincial economic report said account holders in

Aceh experienced a significant decrease from

September 2020 to have 7.1 million accounts to 5.2

million accounts in September 2021.

This decrease in the number of accounts occurs

due to the process of migration from conventional to

Shariah. And this decline is very counter to the

community itself because it has long craved

comprehensive Islamic banking in the land of

Rencong. The researchers are interested in seeing

why Acehnese people are not loyal to Islamic banks.

According to Sebayang and Situmorang, (2019)

loyalty is one of the keys to running a business in an

all-competitive environment. Thielemann et al.

(2018) state that loyalty is a repurchase, providing

positive word of mouth, and recommending a product

or service. Furthermore, Rini and Absah (2017)

researched spiritual marketing to see the loyalty of

Islamic bank customers. Loyalty is the most

important element that the entire company wants to

achieve.

Every company demands customer loyalty must

have perfect service quality. In the business of quality

services determine whether the customer will be loyal

or not. Satti et al, (2020) said that the quality of

service has a significant effect on customer loyalty.

The companies must be aware that consistent service

can lead them to acquire new customers and retain old

customers.

376

Syahputra, R.

Effect of Quality Service and Spiritual Marketing Against Loyalty Sharia Bank Customers.

DOI: 10.5220/0011823000003460

In Proceedings of the 4th International Conference on Social and Political Development (ICOSOP 2022) - Human Security and Agile Government, pages 376-382

ISBN: 978-989-758-618-7; ISSN: 2975-8300

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

2 MANUSCRIPT PREPARATION

2.1 Customer Loyalty

In its rights, all companies aim to make their

customers loyal. Bowen and Chen, (2001) say there

is a strong correlation between loyalty and profit.

Indeed, loyalty is a condition for a business to be

sustainable (Etemad-Sajadi and Rizzuto, 2013)

Because only company loyalty can survive and get

sustainable profits. According to Smith, (2020)

Customer loyalty is easily explained that the

customer's love for products or services. Companies

that do not focus on loyalty will be made a lot of

investments. Conversely, with company loyalty, it is

easier to retain old customers than to find new

customers.

Finding customer loyalty is not easy. Loyalty is

the most important thing for the company in the

current era of business competition Situmorang,

(2019). Furthermore, Rini and Absah (2017) stated

that customer loyalty is the attitude of customers who

repeatedly use products or services. To be able to

make customers make repeated purchases, the

customer must instill a positive perception of the

service. According to (Shuaibu Badeggi and Muda,

2021) the positive perception of customers is shown

by recommendations, feeling satisfied, and increasing

loyalty. Then loyalty becomes important to be able to

compete in the banking industry (Tariq et al, 2019).

Service quality affects customer satisfaction

indirectly on loyalty Palazzo, et al. (2021).

Companies that are perceived positively by

customers, in general, can go through

recommendations and increase satisfaction and

loyalty (Shuaibu Badeggi and Muda, 2021). In

addition Makudza, (2020) loyal customers also

collaborate with service providers in suggesting

products. More deeply, loyalty is also conceotualized

in shared experiences Närvänen et al, (2020).

This study will be in adopsi from theory (Etemad-

Sajadi and Rizzuto, 2013) then there are 3 measured

from loyalty.

1. Reusing

2. Talking Positive Things to Others

3. Recommend to friends and family

2.2 Service Quality

The theory that is often used to measure the quality of

service is using Parasuraman et al (1988) service

quality, namely differences in perception and

customer expectations on the quality received. the

quality of service between the perception of service

users of global excellence adrift with the services of

Guillén Perales et al, (2020). The quality of service of

a company can be a reflection of how the performance

is led. So that it can be seen for customers if the

quality is felt good, it will be perceived well and if the

customer does not get a good quality of service then

the perception is low.

The increased quality of service can make the

company acquire new customers and increase the

loyalty of old customers (Satti et al, 2020). Consistent

service quality provides more benefits for the

company due to the increase in loyal customers. And

if the quality of service is poorly provided by the

service provider, ultimately causes customers to be

dissatisfied (Tariq et al, 2019). Customers who are

disappointed in the quality of service provided will

have a bad impact on the company in the future.

Service quality is an invisible aspect and is

considered a multi-dimensional aspect Zia, (2020).

Then the different dimensions of service quality play

a role in generating customer emotions that affect

customer engagement and customer advocacy

Arguello, et al. (2019).

To reach customers who are involved and even

protect the company, it must be with good service

quality.

Dimensions used the theory adopted from

(Parasuraman et al, 1988) where there are 5

dimensions of service quality

1. Tangible

2. Reliability

3. Responsiveness

4. Assurance

5. Empathy

2.3 Spiritual Marketing

Spiritual marketing is a business whose transactions

have the pleasure of Allah, and sincerely make it

hindarsah et al (2021). The concept of spiritual

marketing is more about following Islamic religious

values so that blessings are sought rather than

transactional. In spiritual marketing, a customer

considers what is the purchase decision so that it has

an important meaning after the death of Rini and

Absah (2017).

Spiritual marketing saves basic worship qualities

such as honesty, morals, and ethics in business that

can make customers trust Rini and Absah (2017).

Customer trust is a high price where the company

must really apply the concept of Islam in its business,

so that spiritual marketing runs well. Furthermore,

Hindarsah et al (2021) although companies use very

advanced technology and competent people,

Effect of Quality Service and Spiritual Marketing Against Loyalty Sharia Bank Customers

377

companies must have the spiritual value of expressing

universal love.

According to Rini and Absah, (2017) spiritual

marketing is formed from:

1. Based on Islamic sharia

2. Avoiding the usury system

3. Honesty

Figure 1: Conceptual Frameworks

2.4 Research Hypothesis

H1: Service Quality has a positive and significant

effect on Customer Loyalty at Sharia Bank

H2: Spiritual Marketing has a positive and

significant effect on Customer Loyalty at Sharia Bank

3 RESEARCH METHODS

This type of research is basic research with an

associative research approach. That is to explain the

influence of endogenous variables on exogenous

variables. Using quantitative methods, data research

using research instruments, data analysis is statistical

with the scheme of testing Sugiyono's hypothesis,

(2021). The population in this study was customers

who saved at Islamic banks in Langsa City. The city

of Langsa was chosen because the eastern Aceh area

is the most developed (Nurlina et al. 2019). This

study uses nonprobability sampling techniques,

sampling methods using quota sampling using google

form through Whatapp. The number of samples in

this study was 100 respondents processed using

SmartPLS.The copyright form is located on the

authors’ reserved area.

4 RESULTS

4.1 Demographic Analysis

Respondents gave answers about their personal data

of gender, age, education marital status, and

occupation. Table 1 is presented the demographics of

respondents to this study. And an evaluation of the

measurement model is carried out to confirm validity

and reliability.

Table 1: Respondent Demographics

Group Item No. %

Gende

Woman 54 54

Man 46 46

Age

(

ear) 20-30 44 44

31-40 31 31

41-50 18 18

>51 7 7

Status Marr

59 59

Unmarrie

41 41

Education SMA 10 10

D3 11 11

S1 61 61

S2 17 17

S3 1 1

Wor

Farme

3 3

Studen

12 12

Self

emplo

8 8

State

Office

29 29

Private

Emplo

ees 20 20

And others 28 28

Respondents who participated in this study were

Women as many as 54 respondents and men 46

respondents. For the age of most respondents are in

the age range of 20-30 years 44 respondents, the age

of 31-40 years as many as 31 respondents and

respondents slightly in the ring age 50 years and

above. For the status of married respondents as many

as 59 and 41 respondents are not married. In addition,

there were 10 high school respondents, 11 D3

respondents, 17 respondents, S3 1 respondents, and

the highest respondents were at the undergraduate

education level as many as 61 respondents. The type

of work as many as 3 farmer respondents, 12 student

respondents, 8 self-employed respondents, 29

respondents of civil servants, 20 respondents of

private employees, and 28 respondents chose and

others.

Service

Quality

Spiritual

Marketing

Customer

Loyalty

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378

Figure 2: Path Analysis

4.2 Measurement Model

It is important to test the validity and reliability of

research because researchers want the data to be

usable. To get it, researchers use convergent validity

and discriminant validity. For the validity of finding

the loading factor is greater than 0.70 and the AVE is

greater than 0.5 and for discriminant validity

researchers use Cronbach @ and the composite

reliability value the number must be greater than 0.70

to be reliable (Fornell and Larcker, 1981). In research,

all instruments have been tested and are very reliable

in value. Table 2 is the loading factor value of all

instruments already above 0.70. In table 3 criteria

Fornell Larcker the value of the variable against the

variable is higher than other variables. Table 4 shows

the reliability of constructs and the value of

convergent validity in already reliable research.

Table 2: Loading Factor

SQ CL SM

CL1 0.859

CL2 0.888

CL3 0.880

SQ1 0.798

SQ10 0.729

SQ13 0.726

SQ14 0.757

SQ16 0.747

SQ18 0.810

SQ2 0.778

SQ8 0.826

SM1 0.812

SM2 0.904

SM3 0.789

In Table 2 all indicators have an outer loading

value above 0.70 meaning that all of the above

indicators are by the requirements for testing.

Table 3: Fornell-Larcker Criterion

SQ CL SM

SQ 0,772

CL 0,719 0,876

SM 0,722 0,510 0,837

Table 3 tests variables against their variables and

other variables. In theory, Fornell Larcker is

considered reliable that the value of a variable against

the variable is higher than the value of the variable

against other variables.

Table 4: Cross Loadings

Service

Quality

Customer

Loyalty

Spiritual

marketin

CL1 0,587 0,859 0,455

CL2 0,661 0,888 0,434

CL3 0,638 0,880 0,453

SQ1 0,798 0,517 0,552

SQ10 0,729 0,507 0,514

SQ13 0,726 0,448 0,496

SQ14 0,757 0,587 0,563

SQ16 0,747 0,600 0,546

SQ18 0,810 0,597 0,621

SQ2 0,778 0,583 0,546

SQ8 0,826 0,571 0,608

SM1 0,532 0,402 0,812

SM2 0,654 0,491 0,904

SM3 0,628 0,376 0,789

Table 4 examines the cross-loading value of

discriminant validity, so the value of the CL variable

to CL must be higher than the CL to other variables.

The data above has met the criteria so that the value

of the variable is higher than the other variables.

Effect of Quality Service and Spiritual Marketing Against Loyalty Sharia Bank Customers

379

Table 5: Construct Reliability and Validity

Cronbach's

Alpha

CR AVE

SQ 0,903 0,922 0,596

CL 0,848 0,908 0,767

SM 0,785 0,875 0,700

Table 5 Construct reliability and validity with

Cronbach's alpha and composite reliability values

above 0.70 it is reliable and AVE above 0.50.

4.3 Evaluation of Structural Model

After testing the evaluation of the measurement

model, the next step is to evaluate the structural

model so that it is known that the results of this study

are accepted or rejected. We can see this in table 6, 7,

8, and 9.

Table 6: R Square

R Square

Adjusted

CL 0,518 0,508

Table 6 the results of this study can be r squarely

by 0.518 means that 51% of the influence of customer

loyalty influenced by the quality of service and

spiritual marketing. And there is 49% of loyalty

influenced by other variables that were not studied in

this study.

Table 7: Path Coefficients and T Statistic

Original

Sample (O)

Statistics

Values

SQ ->

0,734 7,068 0,000

SM ->

-0,020 0,164 0,870

Table 7 explains that the path coefficients of the

original sample value find that service quality has a

positive effect and there is a strong relationship

between service quality and customer loyalty. And

for the t statistic obtained a significant relationship

with the p values of 0.000. Spiritual marketing has a

negative effect on customer loyalty with the original

sample value of -0.020, meaning that there is no

influence of spiritual marketing on customer loyalty.

Furthermore, for the t statistic, the value is lower than

the t table so it is not significant with a p-value of

0.870 which means it is higher than 0.05.

Table 8: Construct Cross validated Redundancy

SSO SSE Q² (=1-SSE/SSO)

SQ 800,000 800,000

CL 300,000 186,846 0,377

SM 300,000 300,000

Table 8 explains that the predictive relevance

value is how good the observation value is. A value

above 0 means the predictive relevance is good and if

the value is below 0 then the predictive relevance is

not good Ghozali, (2021). So the results obtained

from this study were 0.377, meaning that obove 0 the

observations produced were good.

Table 9: Model Fit

Saturated

Model

Estimated

Model

SRMR 0,068 0,068

d_ULS 0,488 0,488

d_G 0,304 0,304

Chi-Square 172,254 172,254

NFI 0,802 0,802

Table 9 explains that how well the model carried

out in this study can be seen at the NFI 0.802,

meaning that this model is 80% fit.

5 DISCUSSIONS

The results of path coefficients in this study found

that the quality of service has a positive and

significant effect on the loyalty of Islamic bank

customers. This is in line with Satti et al research,

(2020) which found that the influence is positive and

significant in the hospitality industry. In this study,

the quality of service had a positive effect of 0.734

and the statistics were 7,068 greater than t table 1.96

meaning significant to customer loyalty and H1

received. Furthermore, spiritual marketing has a

negative and insignificant effect on customer loyalty.

This research is not in line with research conducted

by Rini and Absah (2017) which found that spiritual

marketing has a positive and significant attitude

towards the loyalty of Islamic bank customers in

Medan City. This is due to the different demographics

and policies of his government. It can be seen that

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Aceh it has used the concept of sharia as a whole in

the banking sector, so that when there is a migration

from conventional to Shariah customers are not ready

to accept the changes that occur. This is also a

comparison when using conventional banks and

Islamic banks customers began to feel the difference

obtained so in this study H2 was rejected. The results

of this study also answered why the phenomenon of

decreasing the number of accounts in Aceh,

especially Langsa City, has dropped significantly.

6 CONCLUSIONS

Service quality has a positive and significant effect on

customer loyalty of Islamic bank. And spiritual

marketing has a negative and insignificant effect on

customer loyalty. Finally, these findings can be input

for managers of Islamic banks in Aceh, especially in

Langsa City, how customer loyalty really depends on

the quality of service provided. And managers must

better understand the different characteristics of each

province so that it can become a new mindset to win

the current competition.

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