The Impact of Corporate Social Responsibility on Customer Loyalty: Exploring the Mediating Effect of Service Quality

Corporate social responsibility plays a critical role in enhancing a company's reputation, building customer trust, improving employee satisfaction, and contributing to sustainable development, all of which drive long-term business success. Customer loyalty is equally crucial, as it fosters repeat business, strengthens brand reputation, reduces marketing costs, and ensures long-term profitability and sustainable growth for a company. Service quality enhances customer loyalty by providing a superior and consistent experience, which builds trust, satisfaction, and emotional connection, encouraging customers to return and recommend the brand. This study explores the mediating role of service quality in the relationship between corporate social responsibility and customer loyalty within Nepalese commercial banks. A structured questionnaire was used to gather data from 397 customers across various branches, employing a convenience sampling approach. The data were analyzed using Process Macro 4, with a 95% confidence interval and 5,000 bootstrap samples. The results indicate that service quality fully mediates the impact of CSR on customer loyalty, highlighting its critical role in fostering stronger customer relationships in the banking sector. This study demonstrates that enhancing service quality can help foster customer loyalty across various demographic groups. Furthermore, it emphasizes the importance of implementing CSR initiatives that focus on improving service quality to develop greater customer loyalty towards the organization.