Building Customer Loyalty in Regional Banking: The Mediating Role of Trust in Linking Corporate Social Responsibility, Product Differentiation, and Customer Satisfaction

Abstract

This study investigates how corporate social responsibility (CSR), product differentiation, and customer satisfaction build customer loyalty through customer trust in regional banking. A quantitative survey was conducted among 135 active Bank Sultra customers in Southeast Sulawesi, Indonesia, selected using purposive sampling. Data were collected through a five-point Likert-scale questionnaire and analyzed using partial least squares structural equation modeling (PLS-SEM). The results show that CSR (β = 0.375, p < 0.001), product differentiation (β = 0.360, p < 0.001), and customer satisfaction (β = 0.396, p < 0.001) significantly strengthen trust. Product differentiation (β = 0.182, p = 0.026), customer satisfaction (β = 0.198, p = 0.021), and trust (β = 0.395, p < 0.001) significantly increase loyalty, whereas the direct CSR-loyalty relationship is not significant (β = 0.067, p = 0.441). Trust fully mediates the CSR-loyalty relationship and partially mediates the effects of product differentiation and satisfaction on loyalty. The findings extend relationship marketing by showing that social responsibility creates loyalty only when customers translate responsible banking practices into trust, while differentiated offerings and satisfactory experiences generate both direct and trust-based loyalty. The study offers practical guidance for regional banks seeking to combine socially responsible initiatives, localized product innovation, service experience, and transparent relationship-building to strengthen long-term customer retention.