Emotional Attachment Investigation, Customer Relationship Management, Creating Customer Loyalty in Priority Banks in Indonesia 111
Citation: Emotional Attachment Investigation, Customer Relationship Management, Creating Customer Loyalty in Priority Banks in Indonesia. American Research Journal of Business and Management. 2018; 4(1): 1-21.
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The purpose of this study is to investigate Emotional Attachments resulting from emotional touch, towards Customer Relationship Management and its implications in creating Customer Loyalty, along with a growing paradigm that service providers must meet the needs of the Customer and not the product. this is in line with the touch phenomenon which has been booming in this past era, but has not been widely used in marketing strategies especially in the service industry. Touch is not in a physical sense, but emotionally that is easy to do is only armed with will, more with the culture of the Indonesian people likes to be helpful, polite, and friendly, will accelerate in its implementation.
The design of this research is quantitative and as a unit of analysis of banking priority sectors in Indonesia by taking priority customer observation units. Primary data with non-probability-purposive sampling method, Respondents as many as 416 Bank priority customers in Indonesia with spread in eight major cities. The calculation uses five Likert scales and SPSS 21 by testing the SEM application of the LISRELl 8.80 application.
The findings in this study confirm that Emotional Attachment has influenced to Customer Loyalty, but it becomes significant after being mediated by Customer Relationship Management(CRM), the dominant factor is reflected in the dimensions of passion, i.e always polite and friendly, calling names, praising, ask the news, attention to every important moment and event. Emotional attachment plays a dominant role, because its existence eliminates their influence both of Customer Satisfaction and Customer Perceived Value influence to Customer Loyalty directly, more over direct influence Customer Satisfaction be rejected by emotional Attachment. CRM as a full mediator for both Emotional Attachment and Customer Perceived Value for influence of the Customer Loyalty,. The dominant dimension for CRM is shown by the concrete factor of Capability in the form of, quick reaction, corrective action when encountering services that are not convenience customer’s wishes. All of these policies occur in the Priority Banking sector.
The implication in this study, that the Priority Banking Manager or who is involved as the person in charge, must be concerned with Emotional Attachment and the elements of the cause of passion. Customer Relationship Management is absolutely held in Priority Banking and is always made in a systemic-structured manner so that it is able to play a role in making especially the capability of cultural capabilities in service.
Keywords: Emotional Attachment, Customer Satisfaction, Customer Perceived Value, Customer Relationship Management, Customer Loyalty, Priority Banking.
Background to the Problem/Study
Various phenomena that have emerged lately in all fields are carried out all the touch no longer rotate, pull, push slide, press, for example laptops, doors, cellphones, cameras, etc., the implications are all easier and more practical. It is not impossible in the future, enough only verbal instructions have occurred, for example cars, engines, translators, etc. maybe even in the future it will be enough to see whether we want to be fulfilled, and this again adds convenience, practical and comfortable. Likewise, what happens in the world of service industry, the tendency also continues to change with the times (Sun, 2017) . In the business world, especially in the field of marketing, the term touch should also be popularized. Touching here is not touch in a physical sense (discriminative), but rather touching emotions, which means touching on feelings in interaction (Mc. Glone, 2008). Emotional touch must also be one of the weapons in the competitive strategy, why? Because the marketing phenomenon has changed where the seller has to focus on the needs (needs) of the buyer and not the product (Berry, 1998) and this is in line with the basic concept of marketing that constantly attempts to minimize the gap (not to eliminate human satisfaction) seller’s offer (Kotler & Keller, 2016), which means substantively emphasizing the closeness between people, and when this raises the main problem, it must know human needs (need). Emotional Attachments that result from emotional touches as human needs meet the highest position (Maslow 1943-2011)
Conditions of Competition in the Banking in Indonesia
Banking competition in Indonesia is so tight with the number of banks in March 2018 as many as 116 Bank, its contain : government banks, regional banks, foreign banks, foreign banks not to mention rural banks, and nonbank financial institutions. This cannot be avoided because it is a fertile land for the banking business, where net interest margin (NIM) is quite high, the world rank 5 population and the world’s 12th GDP so investors flock to bank business in Indonesia, not to mention the ASEAN Economic Community (MEA) is a joint market community institution in ASEAN where Indonesia is one of its members and the TPP (Trans Pacific Partnership) marketing with developed countries (Indonesia has not become a member) also overshadows the tight competition in the future and globalizing. This requires every business actor in the bank to be smart and strong in his marketing strategy. Here the presence of Emotional Touch whose outcome is in the form of Emotional Attauchment in marketing strategy is thought to be able to become one of the weapons in marketing strategies that will be a differentiator in service. The purpose of this study is to investigate emotional attachments resulting from emotional touch, towards customer relationship management and its implications in creating customer loyalty This is in line with the touch phenomenon which has been booming in this era, but has not been widely used in marketing strategies, especially in the service industry. Touch is not in a physical sense, but emotionally that is easy to do is only armed with will, more with the culture of the indonesian people likes to be helpful, polite, and friendly, will accelerate in its implementation. Thus, this strategy is appropriate and able to face intense and gripping competition.
In this study, the framework and model for analysis and study were developed by developing an article that had been carried out by previous research (Cheema and Sadia, 2017) by adding one variable Emotional Attachment as an independent variable and enriched with references from various sources from the corresponding article, as described as follows
Emotional Attachment (EA)
Touch Emotion, when viewed from the law of cause and effect, is the cause of Emotional attachment or is the result of an interaction (Phillips and Baumgartner, 2002), so that by referring to a causal relationship, emotional attachment will not occur without a trigger or cause, namely Touch Emotions, and because there are not many articles that can be used as references, then approaching through Emotional Attachments illustrates the strength of bond customers with brands so that it is an important construction. It can also mean a construct that reflects a mental state or feeling that is connected to or attached to sharp objects that block the flow. Berry (2000). Phillips and Baumgartner, (2002) define as a result of long-term relationships between service providers and customers and occur during service experience. From the description above, Emotional Attachment is an interpersonal relationship between humans and humans that creates emotional bonds (not emotional outbursts) which are characterized by: a sense of love, affection, call a name, exciting / surprise and customizing and unforgettable attention in the long term. It is reflected in reflecting Affection, Connection and Passion (levy, Shalom Hino, Hyiel 2016)
Customer Satisfaction (CS)
As the conditions of the world become more competitive day by day, to survive in today’s competitive business world, it must pay more attention to customer satisfaction. Customer satisfaction is customer satisfaction with regard to previous transaction experience with certain service companies (Anderson & Srinivasan, 2003) Customer satisfaction is the ability to meet customer expectations (Oliver, 1980). Is the key to achieving goals in the context of service, it ranges between meeting customer needs and requests. Lam SY, Shankar V, Erramilli MK, Murthy B (2004) as evaluating customer subjective situations that produce positive emotional responses. (Kondou 1999). The result of the comparison between value and service costs and the consequences on the customer. Churchill and Surprenant (2015) It can also be defined as a “consumer fulfillment response, to what extent the level of fulfillment is pleasant or unpleasant” (Oliver Richard, 1997) and also known as the key to achieving goals in the service environment, developing around meeting and exceeding customer needs and requests (Lam SY, Shankar V , ErramilliMK, Murthy B 2004) includes evaluating product quality before sales compared to expectations before buying. (Kotler, 1991). Customer satisfaction is what targets the gap between expected service standards and truly feels service standards, and the emotional response generated based on this gap (Tzeng 2009). In conclusion in this study Customer satisfaction can be defined as the subjective perception of the customer / customer that is motivated by an emotional situation / feeling after receiving the product or service from the service provider, whether it is pleasant or unpleasant. This condition is reflected from the angle (dimension) of Customer Feeling and Customer Expected (Amoah, Redder & Van Eyk 2016)
Customer Perceive Value (CPV)
Some researchers define Customer Perceive Value as a very important thing and determine the intensity of consumer loyalty (Prasuraman 1997) The concept of value is the concept that is most widely used and misused in social sciences in general and in the marketing / management literature in particular (Khalifa, 2004). Percieved value felt by customers in the form of perception of the experience gained when interacting with service providers. (Gumussoy & Koseoglu 2016) explains that customers want to spend less on high quality goods or services.If customers get high-quality services with little payment, the perception value of customers will also increase. This perception is processed in the process of interaction between customers and service providers. Percieved Value can be seen as a tradeoff between products that can be presented to customers and how much customers need to spend to get the product or service. (Zeithelm, 1988). How service value can create a good perception for customers, can be seen from how customers feel the impact of the service or product that is served by the seller or service provider
If customers get high-quality services with little payment, the perception value of customers will also increase. This perception is processed in the process of interaction between customers and service providers. Percieved Value can be seen as a tradeoff between products that can be presented to customers and how much customers need to spend to get the product or service. (Zeithelm, 1988). How service value can create a good perception for customers, can be seen from how customers feel the impact of services or products that are offered by the seller or service provider. Values obtained by customers derived from customer perceptions and judgments are not related to the price paid by Kotler (1991). Based on the above definition, it is concluded that perceived value or Percieved Value is an assessment of the customer after interacting with a good monetary or product or service provider. as well as non-monetary .. In this study taken from the articles in line as the dimensions that reflect are Functional, Social and Emotional value.
Customer Relationship Management (CRM)
Previous researchers have defined CRM, from a philosophical point of view, customer loyalty as a key to business profitability and long-term competitiveness (Siddiqi, 2011) is also a means to develop innovative capabilities and provide long-lasting competitive advantage by acquiring customer information. (Lin, et al. 2010) CRM develops relationships to marketing and broadly accepts the idea that building and maintaining customer relationships is at the core of the marketing concept (Reinartz et al. 2004) or derived from a combination of three aspects: customer orientation, relationship marketing and base data marketing (Yim et al. 2005). In this paper CRM is a business strategy to increase the value of services that are organized specifically, structured and systemically in order to manage, develop and optimize and explore the potential of customers / customers, to maintain a sustainable relationship. In the form of multi-dimensional construction consisting of four broad components : complaint resolution, customer knowledge, customer empowerment, and customer orientation. who created Word of Mouth positive. The measurement of Customer Relationship Management variables in this study uses the Customer Relationship Management dimensions proposed by Swift (2001), Parvatiyar and Shet (2001) and Kracklauer, Milis and Seifert (2004, namely customer understanding, CRM level processing, CRM Readyness and CRM capability. because it fits in line with the flow of thought in this study
Customer Loyalty (CL)
This variable has become a major topic in the literature that addresses service decades ago because it is a consequence of agreement on positive emotional activity, cognition, compassion, and customer satisfaction (Fraering & Minor, 2013). Customer loyalty can be associated with fortitude and a sense of virtual connection to customer satisfaction. Customer commitment to customer repurchase behavior is an indication of their loyalty. (Hapsari, Clemes, & Dean, 2017). Marketing expenses eventually decline along with increasing loyal customers, but also help to get more customers and to increase market share. (Sabah et al., 2017). Therefore, marketing analysts promote the concept of customer loyalty and its importance to achieve profitability goals (Barbara & Mark, 2001), (Wilson A, Zeithaml VA, Bitner MJ, Gremler DD, 2012). Some definitions of other authors that: Customer loyalty is an effective way to evaluate the progress of the company. Most marketing procedures for companies rely on getting customer loyalty through the process of developing, maintaining and improving relationships with potential customers. (Dick AS, Basu K 1994) Also customer loyalty is seen as an actual repurchase action and actual recommendation action (Sancharan, 2011; Lai and Chen, 2010; Clemes et al., 2008; Zeithaml et al., 1996; Fornell, 1992 ) Another opinion says customer loyalty is covering repurchase and intention recommendations (Sumaedi et al., 2012a; Lai and Chen, 2010; Clemes et al., 2008; Zeithaml et al., 1996; Fornell, 1992) and also as “mindset customers who have a good attitude towards the company, are committed to reusing services, and recommend this service to others “(Pearson 1996), cited in Akbar and Parvez’s, 2009) which is the end” Continuous commitment to buy back or rejuvenate offering consonant products selected in the future, regardless of situational impacts and marketing efforts that have the potential to produce switching behavior “Oliver (1997)
As a summary used in this study that Customer Loyalty is a deep commitment to buy back or become a regular customer of a product / service that is consistently preferred in the future, where the commitment causes repeated purchases of the same banking services, even having willingness to recommend service providers to others Word of Mod is positive with dimensions that reflect consumer willingness to consider buying and buying intention in the furture
As for the focus in this study is Priority Banking Sector at Commercial Banks. Because Priority banking is a banking service unit with special characteristics, both customers and services with characteristics of exclusivity and privileges that are not obtained by conventional bank customers, and more personally than conventional banking services.
Adapun yang menjadi fokus dalam penelitian ini adalah Priority Banking Sector pada Bank Umum. Karena Priority banking merupakan unit layanan perbankan dengan karakteristik khusus, baik nasabah maupun layanannya dengan ciri khas eksklusifitas dan keistimewaan yang tidak didapatkan oleh nasabah bank konvensional, dan secara lebih pribadi daripada layanan perbankan konvensional. Priority Banking is a bank service to customers with a high level of income or considerable assets. (D. Singh, Singh, & Sandhu, 2017). Priority banking is an analysis unit, because twenty percent of customers contribute eighty present profits according to pareto (pareto low) 20/80) so that this is also enough to describe and interpret the conditions
Conceptual Frame Work
The hypothesis is determined from the relationship between variables that have been determined above, then built with reference to previous research research. So far no conflicting hypothesis has been found, so there is no need for H0. The following research hypothesis: Functional benefits and superior symbolic benefits will build a stronger emotional attachment to customers to achieve customer satisfaction and loyalty. (Teng So, 2016). The symbolic and superior benefits of services must be managed properly to achieve these goals, the tools of which are Customer Relationship Management programs. attachments are also mentioned affecting the relationship between the bank and its customers. (Levy & Hino, 2016) It was alleged that the emotional attachment aspect obtained from the superior functional benefits must be managed in order to influence customer loyalty strongly. Customer satisfaction, perceived value and emotional attachment are key in building CRM. (Javed & Cheema, 2017). In the study it was described that emotional attachment has a strong influence on CRM. Customer satisfaction will increase the level of customer loyalty. Formulation of the hypothesis:
H1: Emotional attachment influence to CRM
The results showed a strong positive relationship between customer satisfaction and organizational performance. From the literature, customer satisfaction is considered a key motivator for customers to be loyal to products and services. Through the mediating role of customer relationship management (CRM) there are more opportunities to build and maintain elements of trust and commitment in customers (Javed & Cheema, 2017), The formulation of the hypothesis as follows:
H2 : Customer satisfaction influence to CRM
The results showed a strong positive relationship between customer perceptions of organizational values and performance. The customer’s perceived value is considered as a key motivator for customers to be loyal to products and services. Through the mediating role of customer relationship management (CRM) there are many opportunities to build and maintain elements of trust and commitment in customers or customer loyalty (Javed & Cheema, 2017). The hypotheses built are:
H3: Customer perceived value influence to CRM
Customer satisfaction and value perceived by customers is a key motivator for customers to build and maintain the element of trust, which is managed by customer relationship management. (CRM). (Javed & Cheema, 2017). Emotional touch in each customer interaction will produce different outputs, functional and symbolic benefits that build emotional attachment to customers will affect customer satisfaction and loyalty. (teng So, 2016). The hypothesis is formulated as follows
H4: Emotional attachment, customer satisfaction, and customer perceived value influence simultaneous to CRM
The high level of customer engagement in a product / service causes a high level of customer loyalty (Hapsari et al., 2017). The customer attachment can detail the value of the customer to lead to customer loyalty. Functional benefits and superior symbolic benefits will build a stronger emotional attachment to customers to achieve customer satisfaction and loyalty. (Teng So, 2016). because the research has not been taken as a separate variable, but it is alleged that it can influence customer loyalty strongly, so the hypothesis is formulated as follows.
H5: Emotional attachment influences to customer loyalty
To increase customer confidence and commitment to the company, the company must introduce the quality of CRM to employees, so that employees can play a role in increasing the level of customer engagement. (Javed & Cheema, 2017). with this statement, taken as a separate variable, so the hypothesis is built as follows:
H6: Customer satisfaction influences to customer loyalty
Service value perceived by customers, which is influenced by functional, social and emotional values, will shape customer behavior. that customer Perceived value has a strong influence on customer loyalty (Roig, 2006; Hapsari, 2017), (Javed & Cheema, 2017) hypothesis as follows:
H7:N: The perceived value of customers influences to customer loyalty
The results showed a positive relationship between customer relationship management and customer loyalty. To get and maintain total loyalty from customers, companies must recognize the nature, needs and desires of customers. (J. Singh & Saini, 2016). Commitment, communication and service quality in the company’s CRM program, significantly influence the level of customer loyalty. (Yulianto & Mawardi, 2015). Kelvin and Yen (2002) explain that there has been a shift in the relationship marketing literature from focusing on the benefits of longterm relationships for companies for the benefits that are gained to customers. Customer value is more service oriented because customers have several alternative choices. As a result, it becomes clear that companies must fundamentally change the way they do marketing, which is a fundamental change of market management, to manage certain customers (Bose, 2002). The success of a company in CRM implementation is largely on the quality of interaction with customers as different individual segments and the extent to which the company can effectively utilize the relationship to meet the dynamic needs of the customer. CRM makes it possible to promote more effective understanding of sending messages about the value of customer propositions. Based on the description above formulated the research hypothesis as follows:
H8: CRM Influence customer loyalty
Customer satisfaction and value are perceived by customers as key motivators for customers to build and maintain the element of trust, which is managed by customer relationship management. (CRM). (Javed & Cheema, 2017). Emotional touch in each customer interaction will produce different outputs, functional and symbolic benefits that build emotional attachment to customers will affect customer satisfaction and loyalty. (Teng So, 2016). To get and maintain total loyalty from customers, companies must recognize the nature, needs and desires of customers. (J. Singh & Saini, 2016). Then the hypothesis is built in this study as follows:
H9: Emotional attachment, customer satisfaction, customer perceived value, and CRM influence simultaneously on customer loyalty
Following this table presentation is the operational variable used in this study: