The Impact of Corporate Social Responsibility (CSR) Actions on Customer’s Loyalty: The MediatingRole of Customer Gratitude and Moderating Effect of Perceived CSR motives

Abstract

The global business environment has become very competitive such that businesses’ main objective must be to attract and maintain customers. Consequently, companies have given considerable attention to corporate social responsibility (CSR) as one essential business strategy to maintain customer loyalty as it has a profound influence on customers’ positive behaviours. However, research works investigating the effect of CSR as a multi-dimensional construct on bank customer’s loyalty in retail banking sector, especially northeast Nigeria are limited. Hence, this study tested direct effect of CSR actions on bank customer’s loyalty towards Nigerian retail banks. Also, the mediating role of bank customer gratitude on the relationship between CSR and bank customer’s loyalty in the retail banking industry of Nigeria was examined. Moreover, the moderating effect of perceived CSR motives on the effect of CSR on bank customer gratitude was tested. Cross-sectional research design was used. A total of 430 individual customers of retail banks located in some selected towns in north-eastern Nigeria were selected using convenience sampling. Structured questionnaires were used to collect data. Descriptive statistics and path analysis were used in data analysis. As a result of factor analysis, the economic aspect of CSR and the values-driven CSR motive were excluded from analysis. The results revealed a significant positive effect of three CSR actions (legal, ethical and philanthropic) on bank customer’s loyalty (CL) toward the Nigerian retail banks. Furthermore, the results showed that the three components of CSR have positive and significant relationship with bank customer gratitude (GRAT), and also, GRAT showed significant effect on CL. Besides, partial mediation of GRAT on the association between the three dimensions of CSR and CL was observed. Finally, the results demonstrated that strategic-driven CSR motive (SDM) would strengthens the positive relationship between CSR and GRAT was partially supported. This study concluded that CSR actions have a direct positive effect on CL. Moreover, GRAT mediated the dynamics between CSR actions and CL among the surveyed retail banks. Similarly, this study concluded that SDM generally moderates the relationship between CSR and GRAT. It is therefore recommended that managers of Nigerian retail banks should enthrone CSR actions in their operations with a view to establishing lasting customer loyalty. This study makes several contributions one of which is the provision of a comprehensive theoretical framework which explains a direct and an indirect effect of CSR actions on CL based on social exchange theory and moral affect theory of gratitude respectively. Similarly, the study ‘s framework explains SDM as a moderator on the relationship between CSR and GRAT based on attribution theory. Hence, this study enables a better understanding of these theories in the retail banking sector. Furthermore, regarding the managerial implications of the findings, the results suggested that by prioritizing CSR actions, managers of Nigerian retail banks can achieve certain positive customer responses, largely CL.