The Role of Perceived Service Quality in Enhancing Customer Retention: The Moderating Effect of Customer Trust

Abstract

This study aims to examine the role of perceived service quality in enhancing customer retention, with customer trust serving as a moderating variable. In an increasingly competitive business environment, a firm’s ability to retain customers has become a crucial determinant of long-term performance sustainability. Perceived service quality is defined as customers’ subjective evaluation of service excellence relative to their expectations. Meanwhile, customer trust reflects customers’ confidence in the reliability, integrity, and competence of service providers. This research employs a quantitative approach using a survey method targeting customers who have utilized the service over a specific period. Data were collected through structured questionnaires and analyzed using moderated regression analysis to test the relationships among variables. The findings indicate that perceived service quality has a positive and significant effect on customer retention. Furthermore, customer trust is proven to act as a moderating variable that strengthens the influence of perceived service quality on customer retention. This suggests that higher levels of customer trust amplify the impact of perceived service quality in encouraging customers to remain loyal. These results imply that organizations should not only consistently improve service quality but also actively build and maintain customer trust through transparency, reliability, and long-term commitment. This study contributes both theoretically and practically by enriching the empirical literature on customer behavior in the service sector and providing managerial insights for developing effective relationship marketing strategies aimed at sustaining customer retention.