Brand Trust as Mediation Variable of Customer Relationship

Management Influence on Student Loyalty

Dewi Murtiningsih

Universitas Budi Luhur

Keywords: Customer Relationship Management, Brand Trust, Student Loyalty

Abstract: The purpose of this research is to find out the influence of customer relationship management on student

loyalty, customer relationship management on brand trust, brand trust on student loyalty, the role of brand

trust in mediating the influence of customer relationship management on student loyalty. This research is an

explanatory research. The total sample used in this research is 110. The sampling technique used is

purposive sampling. The questionnaire is used as a tool to collect data. The research tool used is Smart PLS.

From the test result using Smart PLS, it can be concluded that customer relationship management

significantly influences student loyalty, customer relationship management significantly influences brand

trust, brand trust significantly influences student loyalty, and brand trust partially mediates the influence of

customer relationship management on student loyalty.

1. INTRODUCTION

The internet growth of Web 2.0 becomes an

effective platform for customer interaction,

especially in an online environment. It has created

various new media channel such as social media that

allows easy interaction between company and other

customers (Evans et al., 2010:4; Verhoef et al.,

2010).

The reasons why customer relationship

management (CRM) can build customer loyalty are:

first, there is a change in the paradigm from a

product-driven company to a customer-driven

company. Second, every customer has different

needs; therefore, the company must be more

attentive toward all complaints. Third, the customer

is everything, because if there is no customer, thus

there is no business. Fourth, the cost to gain a

customer is bigger than the cost to maintain the

existing customer. And fifth, in Customer

Relationship Management (CRM) there is database

that becomes main weapon of service in providing

information (Sinaga, 2006). By applying this CRM

strategy, a company can maintain a relationship with

the existing consumer optimally that it will fulfill the

consumer expectation well. Ko et al., (2008)

consider the special benefits of CRM as the increase

in profits, decrease of marketing costs, and increase

of repeated purchases. There are many ways that can

be done by the company to achieve the loyalty. One

of the effective ways to achieve loyalty is through

trust. Trust is a customer’s awareness of the

expectations of a brand's performance based on the

experience and confidence embodied in the form of

an attitude. By creating trust, it will generate loyalty.

The researcher’s reason in conducting this

research is because there is still a research gap from

the previous research. It is inconsistency of research

result of the research conducted by Ersi (2014).

They state that CRM does not influence loyalty.

Furthermore, the research conducted by Shihab and

Sukendar (2009), also Bastian (2014) state that

brand trust does not influence consumer loyalty.

Therefore the researcher is interested to conduct

research entitled brand trust as the mediation

variable of the influence of customer relationship

management on student loyalty, and choosing the

students of Budi Luhur University as the research

object.

Murtiningsih, D.

Brand Trust as Mediation Variable of Customer Relationship Management Inﬂuence on Student Loyalty.

DOI: 10.5220/0008929500710075

In Proceedings of the 1st International Conference on IT, Communication and Technology for Better Life (ICT4BL 2019), pages 71-75

ISBN: 978-989-758-429-9

2. LITERATURE REVIEW

Customer Relationship Management (CRM)

According to Buttler in Tjiptono (2004:48)

Customer Relationship Marketing (CRM) is the

business core that integrates internal process and

function, and also external network to create and

deliver value for targeted customers in order to gain

profit. CRM is supported by high quality customer

data and facilitated by information technology.

Buttle (2004:59) states that there are four conditions

that support the strategy development and

application of customer relationship management.

Those conditions are leader and culture, data and

information technology, human resources, and

process. If we put attention on the word CRM, first

we will notice that relationship is about people to

people. Second, the process is oriented to customer

satisfaction and loyalty. Third, what technology is

needed which will be used later on. For example,

computer or SMS that can focus on the customer and

easy to use.

Brand Trust

Consumer who trusts certain company will have

expectation that the company makes decision based

on consumer interest (Nguyen et al., 2013). Trust is

a very important factor in a competitive business

environment nowadays. Trust is something that

cannot be seen, but it becomes consumer’s

consideration to buy a product or service with faith

that what was promised will be kept (Dunn, 2004).

According to Morgan & Hunt (1994) brand trust will

determine consumer’s loyalty on certain brand, and

trust potentially creates high value relationships.

According to Griffin (2005), loyal customers are

those who are satisfied with products or services

who are enthusiast to introduce it to whoever they

know. Lau and Lee (1999:341) state that trust

involves an expectation of other group and can

create positive result, although other possibility can

create negative result.

Loyalty

Zikmund, et al., (2003:69) states that: “The term

customer loyalty refers to a customer’s commitment

or attachment to a brand, store, manufacturer,

service provider, or other entity based on favorable

attitudes and behavioral responses Customer is said

to be loyal when his/her purchase behavior is not

decided randomly (non-random) on several units. A

loyal customer have an absolute tendency on what to

buy and from whom the purchase is made. Loyalty

can be considered as condition which is related to

time span in doing purchase that does not need more

than twice to consider it. For a decision, it can be

interpreted as purchase decision which can be done

by more than one person (Griffin, 2002:4).

According to Griffin, (2005:4), loyalty concept is

more behavioral than attitude, and a person who is

loyal will show purchase behavior which can be

interpreted as a regular purchase pattern in a long

period of time that is done by decision-maker units.

3. METHODOLOGY

This research is an explanatory research. The

population of the research is all students of Budi

Luhur University from five faculties, which are

Information Technology, Communication, Economy

and Business, Social and Political Science, and

Engineering Faculty. Sample determination

technique used is purposive sampling, while the

determination of the sample number is using

proportional random sampling. The number of

sampling is 110. A questionnaire is used as a tool to

collect respondents’ data. To measure each item of

the surveys, we used a Likert scale of 5 points. Data

collection technique uses a questionnaire that has

been tested for validity and reliability. The data

analysis technique used to answer the hypothesis is

Smart PLS.

4. RESULT

The structural model of this result can be seen in

Picture 1 below:

ICT4BL 2019 - International Conference on IT, Communication and Technology for Better Life

Picture 1 Result of PLS Algorithm Bootstrap Output Model Structural

Source: Data Processed Year 2019

To measure the significance of the prediction model

in structural model test, it can be seen from t-statistic

value between independent variable and dependent

variable in Path Coefficient table in PLS output

below:

Table 1 Direct Influence

Path Coefficients (t-Value) Direct

Path

Estimate

S.E.

C.R.

(>1.96)

(<0.05)

Remarks

<---

CRM

0.685

0.117

5.866

0.000

Significant

<---

CRM

0.325

0.138

2.346

0.019

Significant

<---

0.391

0.183

2.142

0.032

Significant

Source: Data Processed year 2019

In PLS test, statistically every hypothesized

relation is conducted using simulation. In this case,

bootstrap is conducted on the samples. Test using

bootstrap is done to minimize abnormality of

research data. Below is the bootstrapping test result

of PLS analysis:

Customer Relationship Management

Influences Student Loyalty

The test result of hypothesis 1 shows that the

relation of customer relationship management

variable with student loyalty indicates path

coefficient value 0.000 with CR value 5.866. This

value is bigger than t table (1.960). This result

concludes that customer relationship management

has positive and significant relation with student

loyalty, which means it is in line with hypothesis 1

that states customer relationship management

influences student loyalty. This research is in line

with the research conducted by Guenzi and Pelloni

(2004), Supar and Suasana (2017) which state

customer relationship management influences

loyalty.

Customer Relationship Management

Influences Brand Trust

The test result of hypothesis 2 shows that the

relation of customer relationship management

variable and brand trust indicates path coefficient

value 0.009 with CR value 2.346. This value is

Brand Trust as Mediation Variable of Customer Relationship Management Inﬂuence on Student Loyalty

bigger than t table (1.960). The result concludes that

customer relationship management has positive and

significant relation with brand trust, which means it

is in line with hypothesis 2 that states customer

relationship management influences brand trust.

Thus, hypothesis 2 is accepted. This research is in

line with the statement of Chan (2003) in Tjiptono’s

(2012) which reads CRM is a communication

organized in form of mutually beneficial relationship

between customer and company or partnership to

create trust of the consumers. This research supports

the research conducted by Semuel (2012) which

shows that CRM positively influences trust.

Brand Trust Influences Student Loyalty

The test result of hypothesis 3 shows that the

relation of brand trust variable on loyalty indicates

path coefficient value 0.032 with CR value 2.142.

This value is bigger than t table (1.960). The result

concludes that brand trust has positive and

significant relation with student loyalty, which

means it is in line with hypothesis 3 that states brand

trust influences student loyalty. Thus, hypothesis 3 is

accepted. This research is in line with the research

conducted by Fadjar (2008) which state that product

trust significantly influences customer loyalty in

using certain brand, and by Bambang and Heryanto

(2017) which state brand trust influences customer

loyalty.

The Role of Brand Trust in Mediating the

Influence of Customer Relationship

Management on Brand Trust

The research result also shows that brand trust

becomes mediation variable of customer relationship

management influence on customer loyalty. Table

1.2 below shows indirect influence:

Table 2 Indirect Influence (Sobel Test)

Path

Sobel Test

(> 1.96)

P (< 0.05)

Remarks

CRM --> BT --> LS

0.685

0.117

0.391

0.183

2.007

0.045

Significant

Source: Data Processed on 2019

Based on Table 1.2 above, it can be seen that brand

trust mediates the influence of customer relationship

management on student loyalty. It is shown by

Pvalue 0.045 and sobel test value 2.007 (this value is

above T table value 1.99), which is significant.

Meanwhile, to find out the role of brand trust

variable as mediation variable, it can be

seen from the significant direct influence of

customer relationship management on student

loyalty. It is proven by the Pvalue 0.000. This result

proves that brand trust plays a role as partial

mediation variable because customer relationship

management directly influences loyalty, while the

indirect influence of brand trust variable in

mediating the influence of customer relationship

management on student loyalty is significant.

In this test, the role brand trust variable as

mediation variable of the influence of customer

relationship management on student loyalty can be

seen. It means hypothesis 4 is accepted. From the

hypothesis test result using sobel test, it can be seen

that brand trust plays a role as mediation variable,

and that this research result is in line with the

research conducted by Caruana (2002), Iskandar

(2015) and Iriandi (2015).

5. CONCLUSION

Based on the previous analysis and discussion, it can

be concluded that : The first hypothesis test result

shows that there is a direct and positive relationship

between customer relationship management and

student loyalty; the second hypothesis test result

shows that there is a direct and positive relationship

between customer relationship management and

brand trust; the third hypothesis test result shows

that there is a direct and positive relationship

between brand trust and student loyalty; the fourth

hypothesis test result indicates the role of brand trust

in mediates the influence of customer relationship

management on loyalty.

Suggestions for further researches are: to do

similar research on different population such as

service company, trading and manufacturing sector,

or other financial institution other than a banking

institution, instead of service institution (university)

as conducted on this research. The analysis tool used

in this research is SEM-PLS. Therefore it is

suggested to process data using other analysis tools

such as SEM_AMOS, SPSS, and others for further

research.

ICT4BL 2019 - International Conference on IT, Communication and Technology for Better Life

ACKNOWLEDGEMENT

We would like to thank the research institution that

has supported so that the research activities can be

carried out properly.

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Brand Trust as Mediation Variable of Customer Relationship Management Inﬂuence on Student Loyalty