Linking service quality, trust and customer retention: examining the mediating effect of customer satisfaction in relational service contexts

Customer retention has become a critical concern in Indonesia’s banking industry, where intensifying competition requires banks to move beyond transactional approaches toward more relationship-oriented strategies. This study examines the factors influencing customer retention in the banking industry from a relational perspective. It focuses on the roles of service quality, trust and relationship marketing, with customer satisfaction acting as a mediator in the Indonesian context. A cross-sectional quantitative design was employed, involving 418 banking customers selected through purposive sampling. A structured questionnaire was the primary method of data collection, and the data were analyzed using PLS-SEM to assess both direct and indirect relationships among the variables. The results of the study revealed that service quality, trust and relationship marketing significantly influence customer retention. In addition, customer satisfaction mediates the relationships between service quality, trust, relationship marketing and customer retention. The findings emphasize the importance of service quality in building trust, supporting relationship marketing efforts and sustaining customer retention over time.