Investigating the application of the relationship marketing strategies in Islamic banks and its impact on customer loyalty

ABSTRACT The study examined relationship marketing strategies and their effects on customer loyalty in Islamic banks. The population was the Bank Mellat customers as representatives of state-owned Islamic banks in West Azerbaijan and Bank Day customers as representatives of private Islamic banks in West Azerbaijan. Given the emergence of private banks beside state-owned banks and the increasing intensity of competition between banks, relationship-marketing strategies can be a suitable and useful approach for customer loyalty of Islamic banks. The study designed a relationship marketing model based on Iranian culture for use in Islamic banks in Iran. After testing the hypotheses, it was found that in Islamic state-owned banks in West Azerbaijan, trust, commitment, information, communication value, and conflict management strategies have a positive and significant effect on customer loyalty, respectively, with priority from high to low. Moreover, in private banks trust, commitment, communication value and information strategies have a positive and significant effect on customer loyalty, respectively, from high to low priority, and conflict management strategy does not have a positive and significant effect on customer loyalty in Islamic private banks in West Azerbaijan. Furthermore, in comparing the performance of banks regarding the implementation of these strategies considering the coefficient of significance at a confidence level of 0.95 in the variables trust, commitment, information, and loyalty, the state-owned bank has performed better than the private bank. In value of communications, the private bank has performed better than the state-owned bank. JEL classification: M31, M21, C12, G21

Islamic banks, strategy, relationship marketing, customer loyalty long-term and cost