Service personal values and customer loyalty : A study of banking services in a transitional economy

Purpose – This paper aims to employ the concept of service personal values to predict customer satisfaction and loyalty towards banking services. It also aims to validate the three components of service personal values when being conceptualized as a high‐order construct. Design/methodology/approach – A structural equation model was developed and tested using data surveyed from retail banking customers in Vietnam. Confirmatory factor analysis was used to refine the measurement scales. Path analysis was used to test the model. Findings – With customer satisfaction as a partial mediating construct, the results show that service personal values can explain a significant part of customer satisfaction and a substantial part of customer loyalty. Data also validate the three components of service personal values namely, value to a peaceful life, value to social recognition and value to social integration. Research limitations/implications – Involvement level in the purchase process, switching barriers and/or corporate image should be added as moderating variables in further research. Impacts of each component of service personal values on satisfaction and loyalty are another research direction. Practical implications – Service providers should understand personal values of customers that may be different by culture and social demographic characteristics. Providing a service that enhances customer personal values is a key to success because it helps customers to be happy, to be recognized, and to improve their relationship with others. Originality/value – Employing the concept of service personal values, this study departs from the prevailing use of service attributes, service quality or service value to predict satisfaction and loyalty. Moreover, it is among very few studies conducted in a transitional economy.