Interactive marketing and relationship quality in Islamic banking: A Parepare case study

Purpose − This research aims to analyze the effects of interactive marketing and relationship quality on customer satisfaction and loyalty in Islamic banking. Methodology − A quantitative research approach was employed, and data was collected through a survey questionnaire administered to customers of Islamic banks in Parepare. The data analysis method used in this study is Partial Least Squares-Structural Equation Modeling (PLS-SEM). Findings − The study findings indicate that, indirectly, interactive marketing and relationship quality do not have a direct significant influence on customer loyalty in Islamic banks. However, it is observed that interactive marketing and relationship quality can affect customer loyalty through satisfaction. These findings suggest that the process of maintaining and enhancing customer loyalty in Islamic banks requires careful attention to multiple factors and stages


Introduction
explain that one type of marketing companies can employ to achieve customer loyalty is interactive marketing, which involves creating communication between employees and customers. Interactive marketing aims to deliver on the promises made by the company to customers through external marketing communication. In implementing interactive marketing communication, employees are responsible for delivering messages and providing the best services to customers. Research findings by Aslam et al. (2015) and Raza & Rehman (2012) suggest that interactive marketing conducted by companies has a positive and significant impact on customer loyalty.
In addition to interactive marketing, companies must also pay attention to the relationship quality between the company and its customers. A good relationship quality indicates customer satisfaction with the products and the company's performance. Relationship quality can be developed through customer experiences after interacting with and purchasing products from the company. According to Farooq and Moon (2020) and Yoong et al. (2017), the values inherent in relationship quality can enhance customer loyalty toward products and services offered by a company.
These marketing activities apply to companies that offer tangible products and servicebased companies such as banking. This is because banking heavily relies on financial services provided to customers. According to Kasmir (2008), banks are financial institutions whose main activities involve gathering funds from the public and redistributing them back to the public while providing other banking services. This definition indicates that banking plays a significant role in the economy as it facilitates the distribution of money among the public. Additionally, banks depend on customer satisfaction and loyalty because, according to Liu et al. (2011), retaining existing customers is less costly than acquiring new ones. Therefore, the analysis of customer satisfaction and loyalty remains crucial.
Parepare is one of the cities located in the South Sulawesi Province. Parepare has the potential to become an economic support in the Eastern Indonesia Region (KTI) due to its four ports: Nusantara, Cappa Ujung, Lontange, and Cempae (Mappong, 2020). This potential has led to the establishment of several Islamic banks in Parepare, such as BSI (Bank Syariah Indonesia), Muamalat, and others. Moreover, Parepare is known for its religious community, which is expected to facilitate the rapid development of Islamic banking in Parepare.
This research provides additional analysis of customer satisfaction and loyalty by examining the influence of interactive marketing and relationship quality within one research framework. According to the author's assessment, a limited number of studies discuss interactive marketing, relationship quality, satisfaction, and loyalty within a single research framework in Islamic banking. Previous studies analyzing banking, such as Al-leak (2014); Aslam et al. (2015); Farooq and Moon (2020); Rahman and Ramli (2016); and Stan et al. (2013), did not specifically focus on Islamic banking in their research framework. It was also challenging to find studies that discuss interactive marketing and relationship quality within one research framework. Other studies, such as those conducted by Al-alak (2014), Doaei et al. (2011), Pi andHuang (2011), Raza and Rehman (2012), and Santouridis and Veraki (2017), utilized different marketing models like relationship marketing and promotion on relationship quality. Based on these considerations, this research aims to analyze the effects of interactive marketing and relationship quality on customer satisfaction and loyalty in Islamic banking in Parepare.

Literature Review Customer Loyalty
Loyalty refers to the extent to which a customer exhibits repeated purchasing behavior towards a service provider, possesses a disposition or positive attitude towards the service provider, and considers using their services when the need arises Gremler and Brown (1996). According to the definition provided by Gremler and Brown (1996), a loyal customer is someone who makes repeated purchases and maintains a positive attitude towards the service provider. In this context, it pertains to the customer's loyalty to the financial institution, namely the bank. Generally, loyalty is associated with faithfulness, compliance, willingness to accept things as they are, and resistance to easily shifting to other alternatives. In the marketing concept, loyalty is closely related to customers or customer loyalty, representing the customer's loyalty to the quality of a bank's products.

Customer Satisfaction
Customer satisfaction refers to the perception of customers that their expectations have been met, optimal results have been obtained for each customer, and banking services have been provided considering the customer's and their family's capabilities, attention to their family, and attention to customer needs, resulting in the best possible alignment between satisfaction and outcomes. According to Tjiptono (2008), customer satisfaction is the evaluation by buyers where the chosen alternative provides at least the same outcomes as the customer's expectations. Dissatisfaction arises when the results obtained need to meet customer expectations. For customers, what the company produces is less important. Customers think about what they will buy to satisfy their needs, and based on this value consideration, they will determine what form of business needs to be developed.
Marketing activities carried out by banks are considered to have a significant impact on customer loyalty through customer satisfaction. Research conducted by Hsieh (2018) concluded that the implementation of interactive marketing strategies has a significant influence on customer satisfaction. Furthermore, studies conducted by Dharmayanti (2006), Palilati (2007), and Raza et al. (2020) found that satisfaction has a positive and significant effect on loyalty. Bolton et al. (2000) stated that the higher the level of customer satisfaction with a company, the higher the level of loyalty. To measure customer satisfaction, this study adopts the four dimensions Segoro (2013) used in his research, namely price, functional, technical, and emotional.

Interactive Marketing
Interactive marketing is the line of communication that connects employees and customers. Employees need to understand the bank's products and services to participate in marketing programs and effectively explain when external parties or customers want to know about the banking products and services. Additionally, interactive marketing is a form of marketing communication that extends from employees to customers. This type of marketing communication aims to prove and fulfill the promises made by the company to customers through external marketing communication. In this interactive marketing communication, employees are responsible for delivering messages and providing the best service to customers. This study adopts three dimensions of interactive marketing measurement used by Lin and Wang (2011) in their research: service personnel, physical facilities, and service processes.
Research conducted by Lin and Wang (2011) and Dushyenthan (2012) found that interactive marketing between companies and customers has a positive and significant impact on customer satisfaction. Furthermore, studies conducted by Rahmayani (2017) found that interactive marketing methods have a positive and significant influence on customer loyalty. This proves that conventional marketing alone is not enough. It should also be combined with interactive marketing to create a harmonious relationship between the organization, employees, and customers.

Relationship Quality
Relationship quality is a concept that describes the quality of the relationship created between two parties through continuous interactions. It results from customers' evaluations of their interactions with a service provider (Crosby et al., 1990). The relationship between relationship quality and customer loyalty has been supported by several previous studies, such as Bojei and Alwie (2010), Farooq and Moon (2020), and Yoong et al. (2017), which found that dimensions of relationship quality have a positive and significant impact on customer loyalty. Different dimensions of relationship quality have been proposed in various studies. Hon & Grunig (1999) identified six dimensions of relationship quality: trust, mutual control, satisfaction, commitment, exchange relationship, and communal relationship. Other studies identified three dimensions of relationship quality: trust, commitment, and satisfaction (Caceres & Paparoidamis, 2007;Hennig-Thurau et al., 2002;Ulaga & Eggert, 2006). Furthermore, Myhal et al. (2008) emphasized that relationship quality consists of six dimensions: trust, commitment, satisfaction, minimal opportunism, conflict, and communication.
Many studies have suggested that the dimensions of relationship quality are trust, satisfaction, and commitment (Caceres & Paparoidamis, 2007;Catherine Myhal et al., 2008;Hon & Grunig, 1999). Therefore, this study focuses on three dimensions of relationship quality: trust, satisfaction, and commitment, as the basis for constructing the relationship quality questionnaire items.

Hypotheses
Based on the above discussion, the research framework can be made as shown in Figure 1.

Interactive marketing toward relationship quality
Interactive marketing is a type of marketing communication that aims to deliver on the promises made by a company to its customers. In this interactive marketing communication, employees are responsible for conveying messages and providing the best services to customers. If Islamic banking can effectively implement interactive marketing, it can enhance the relationship quality between Islamic banks and customers. This is consistent with Ou et al. (2011) that companies implementing consumer-focused marketing programs can build strong customer relationships. H1: Interactive marketing has a positive and significant effect on relationship quality.

Interactive marketing toward customer satisfaction
Studies conducted by Dushyenthan (2012) and Lin and Wang (2011) found that interactive marketing between companies and customers has a positive and significant influence on increasing customer satisfaction. This means that if Islamic banking can deliver messages and provide the best services to customers, it can enhance customer satisfaction. H2: Interactive marketing has a positive and significant effect on customer satisfaction.

Relationship quality toward customer satisfaction
Relationship quality is a concept that describes the quality of the relationship established between two parties through continuous interactions. If these interactions are well-established and constantly improving, they can also enhance customer satisfaction. This hypothesis is consistent

Interactive marketing toward customer loyalty
Research conducted by Rahmayani (2017) found that interactive marketing methods have a positive and significant influence on customer loyalty. This demonstrates that conventional marketing alone is insufficient; it must be combined with interactive marketing to create a harmonious relationship between the organization, employees, and customers. H4: Interactive marketing has a positive and significant effect on customer loyalty.

Relationship quality toward customer loyalty
Relationship quality is the result of consumers' evaluation of the interactions they have had with service providers (Crosby et al., 1990). Islamic banking that continually improves its service to customers is perceived to enhance customer loyalty. According to the research of Farooq and Moon (2020), Pi and Huang (2011), Rahman and Ramli (2016), Raza and Rehman (2012), Segoro (2013), and Yoong et al. (2017), relationship quality has a significant influence on increasing customer loyalty. H5: Relationship quality has a positive and significant effect on customer loyalty.

Customer satisfaction towards customer loyalty
Customer satisfaction is the perception of customers that their expectations have been fulfilled, optimal outcomes have been achieved for each customer, and banking services have taken into account the customers' capabilities. According to Dharmayanti (2006) and Palilati (2007), satisfaction has a positive and significant influence on loyalty. Bolton et al. (2000) state that the higher the level of customer satisfaction with a company, the higher the level of loyalty. H6: Customer satisfaction has a positive and significant effect on customer loyalty.

Research Methods
This study utilizes a causal research design to establish a cause-and-effect relationship. The approach employed in this research is quantitative. The research hypotheses will be tested using Partial Least Squares-Structural Equation Modeling (PLS-SEM) technique with the assistance of SmartPLS software. PLS-SEM is an analysis technique used to simultaneously test and estimate the coefficient of the model's relationships between variables. One of the advantages of using PLS-SEM is its suitability for small sample sizes and its lack of reliance on the assumption of normal distribution (Gye-Soo, 2016; Sarstedt et al., 2014). Experts have different opinions on determining the minimum sample size for SEM analysis. Hair et al. (2010) suggest that the minimum sample size ranges between 100 and 150. Bentler and Chou (1987) recommend a sample size of at least five times the estimated parameters. Byrne (2016) suggests a minimum sample size of 100 is acceptable for SEM estimation. The minimum sample size requirement in PLS-SEM analysis is smaller than in traditional SEM analysis, ranging from 30 to 100 samples (Chin, 2000). Based on these considerations, a sample size of 100 respondents has been deemed sufficient for this study.
The sampling technique employed in this research is purposive sampling. The criteria used in the purposive sampling method are being domiciled in Parepare and having been a customer of Bank Syariah for a minimum of 1 year. The research instrument consists of a questionnaire measured using a rating scale. The measurement of variables in this study utilizes measurement indicators that have been used in previous research. Table 1 describes the dimensions of measurement for the research variables.

Results and Discussion
The Characteristics of Respondents The characteristics of the respondents are divided into four categories: age, gender, education, and type of Islamic bank.  Table 2 presents the characteristics of the respondents. The characteristics of the study participants were examined to gain insights into their demographic and educational backgrounds and their association with Islamic banks. Most respondents fell within the age range of 17-25 (61%), followed by 26-32 (32%), indicating a relatively young sample. In terms of gender distribution, 37% were male, and 63% were female. In terms of education, the participants represented a diverse range of backgrounds. The most significant proportion had completed high school (49%), 40% held a bachelor's degree, and 11% pursued postgraduate studies. Regarding the Islamic banks the participants chose, the majority (80%) reported their association with BSI, demonstrating a strong preference for this institution. A small percentage (1%) indicated their association with Mega Syariah, while 19% were affiliated with Muamalat.

Prediction Model and Model Parameter Estimation
The results of the model prediction using the PLS-SEM algorithm can be seen in Figure 2.  Figure 2 will be explained in the following discussion.

Evaluation of the Measurement Model
The measurement model evaluation was conducted by examining (a) internal consistency reliability using composite reliability statistic, (b) indicator reliability using indicator's outer loadings, (c) convergent validity using the average variance extracted (AVE) statistic, and (d) discriminant validity using cross-loadings.   Table 3 displays the composite reliability values for each variable, all greater than 0.70. These results indicate that all variables exhibit sufficiently high consistency values. The variables used exhibit good reliability, as evident from the Cronbach's Alpha, composite reliability, and Average Variance Extracted (AVE) values above 0.60. Table 4 indicates that there is one indicator, L4, with an outer loading value lower than 0.60. This indicates that it is unable to represent the variable used effectively. Additionally, a comparison between the composite reliability and AVE values in the main model and the adjusted model was conducted. The results of this comparison are presented in Table 5. Based on Table 5, the comparison results indicate that the adjusted model has improved composite reliability and AVE values. Therefore, the adjusted model will be used for further analysis in this study.

Structural Model Evaluation
The results of hypothesis testing can be seen in Table 6.

Discussions
These findings provide important insights into the characteristics of the study participants, shedding light on their age groups, gender distribution, educational backgrounds, and preferences for specific Islamic banks. Understanding these characteristics contributes to a comprehensive understanding of the sample and enhances the reliability and generalizability of the study's findings. The hypothesis testing results indicate that interactive marketing alone does not have a significant direct influence on customer loyalty in the context of Islamic banking. However, it plays a vital role in shaping customer loyalty indirectly through its positive and significant effects on relationship quality and satisfaction. These findings suggest that the interactive marketing activities conducted by Islamic banks in Kota Parepare require a sustained effort to maintain and enhance customer loyalty. These findings are consistent with the study conducted by Liu et al. (2011), which emphasizes the challenges faced by companies in the service sector in maintaining customer loyalty and highlights the importance of enhancing relationship quality to ensure long-term customer loyalty. Based on prior research conducted by Pi and Huang (2011) and Raza and Rehman, 2012), this study discovered that interactive marketing has a noteworthy, beneficial impact on both the quality of relationships and overall satisfaction. This influence is observed directly as well as indirectly. Interactive marketing plays a significant role in enhancing relationship quality and satisfaction due to its objective of substantiating and fulfilling the commitments made by the company to its customers through external marketing communication. Through this form of interactive marketing communication, employees are entrusted with delivering messages and providing exceptional service to customers. These findings underscore the insufficiency of relying solely on traditional marketing approaches and emphasize the need to supplement them with interactive marketing to cultivate a harmonious relationship among the organization, its employees, and its customers. The results align with the findings of Dushyenthan (2012) and Lin and Wang (2011), who additionally demonstrate that interactive marketing activities between companies and customers positively and significantly impact customer satisfaction.
While relationship quality was found to have no significant direct influence on customer loyalty, it exerts a positive and significant influence through customer satisfaction. These findings suggest that relationship quality can be strengthened if Islamic banks in Kota Parepare focus on improving customer relationships through continuous interactions. These findings align with previous studies conducted by Bojei and Alwie (2010), Farooq and Moon (2020), and Yoong et al. (2017), which highlight the positive and significant influence of relationship quality dimensions on customer loyalty.
Additionally, the findings of this study demonstrate that relationship quality exerts a positive and significant influence on customer satisfaction. Moreover, customer satisfaction has a positive and significant impact on customer loyalty. This implies that establishing a strong relationship quality between Islamic bank customers in Parepare can enhance customer satisfaction and loyalty. It is crucial for Islamic banks to consistently maintain relationships with their customers. These findings align with the research conducted by Bolton et al. (2000), which underscores that higher levels of customer satisfaction with a company result in higher levels of loyalty. Aslam et al. (2015) also elaborate that satisfied customers of banking services are more inclined to recommend the bank to their friends and family, further strengthening the relationship between satisfaction and loyalty.
In summary, the results of this study highlight the crucial role of interactive marketing in indirectly influencing customer loyalty through its positive effects on relationship quality and satisfaction. The findings underscore the need for Islamic banks in Kota Parepare to adopt longterm strategies that enhance relationship quality and customer satisfaction to foster customer loyalty. By combining interactive marketing with conventional marketing approaches, banks can establish stronger customer relationships, leading to increased satisfaction and, ultimately, higher customer loyalty.

Conclusion
This study aimed to analyze the influence of interactive marketing and relationship quality on customer satisfaction and loyalty in Islamic banks in Kota Parepare. The research findings conclude that indirectly, interactive marketing and relationship quality do not have a significant influence on customer loyalty in Islamic banks in Kota Parepare. However, interactive marketing and relationship quality can influence customer loyalty if satisfaction is considered an intermediary factor. These results indicate that efforts to maintain and enhance customer loyalty in Islamic banks require a long process and must go through various stages.
This study has several limitations. Firstly, it has a relatively small sample size and was only conducted within the scope of Kota Parepare. Additionally, the marketing variables focus on interactive marketing alone without considering a comprehensive, integrated marketing approach. Therefore, this study recommends that future research analyze customer satisfaction and loyalty in Islamic banks on a broader scale and incorporate a more comprehensive marketing approach.
Overall, the implications of this research emphasize the significance of integrating interactive marketing strategies, fostering relationship quality, and prioritizing customer satisfaction in the context of Islamic banks. These factors are essential for maintaining and strengthening customer loyalty, ultimately contributing to Islamic banks' long-term success and competitiveness in Kota Parepare.