The role of customer satisfaction in mediating the influence of service quality and perceived price on customer loyalty

This research is motivated by the phenomenon of intense competition in the building materials distribution industry in Bali Province, where CV. Bintang Indonesia Timur faces challenges in maintaining the loyalty of existing customers despite an increase in sales volume from new customers. The study aims to examine and explain the role of customer satisfaction in mediating the influence of service quality and perceived price on customer loyalty for Kalsiboard brand fiber cement board products at CV. Bintang Indonesia Timur. This research is a causal associative study using a quantitative approach. The population in this study consists of all active building material store partners who made at least five times purchase within a year, with a total sample of 177 respondents determined using the Slovin formula and proportionate stratified random sampling technique. Data were collected through questionnaires and analyzed using descriptive statistics and Partial Least Square (PLS) inferential analysis via SmartPLS software. The results show that service quality and perceived price each have a positive and significant effect on both customer loyalty and customer satisfaction. From the ECT perspective, these findings confirm that when service and pricing policies meet or exceed customer expectations, a positive confirmation is formed, which significantly enhances satisfaction and long-term loyalty. Furthermore, customer satisfaction is found to mediate the influence of service quality and perceived price on customer loyalty through complementary partial mediation. This emphasizes that in a distribution industry based on long-term relationships, loyalty is more effectively built through the psychological process of expectation confirmation that consistently creates customer satisfaction.