the effect of service quality and customer value on

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INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS

COPY RIGHT © 2014 Institute of Interdisciplinary Business Research 181

SEPTEMBER 2014

VOL 6, NO 5

THE EFFECT OFSERVICE QUALITY AND CUSTOMER VALUE ON CUSTOMER’S

LOYALTY

(STUDY AT USER OF PT. POS INDONESIA MALANG)

Dr. Suharto S.M., MPd., MM. Department of Management, Faculty of Economics State University of Malang,

Indonesia

ABSTRACT

This study aimed to describe the effect of the service quality variable and customer value on the

customer’s loyalty and influence of service quality and the customer value on customer loyalty mediated

by customer’s trust.This study uses a positivist(quantitative) approachas a service user population of PT.

Pos Indonesia Malang with total sample of 170; the sampling technique used is proportionate random

sampling. Analysis was done by using descriptive and inferential analysis with analysis tool of Structural

Equation Modeling(SEM). The results showed that the service quality and customer value effect on

customer loyalty and customer’s trustis able to mediate the effect of service quality and the customer

value on customer loyalty.

Keywords: Service Quality Perception, Customer’s value,Customer’s Trust, Customer’s Loyalty

1. INTRODUCTION

Competitors of PT. Pos Indonesia, both inside and outside the country race to each other to meet

or even exceed the desires and expectations of the customer by issuing a more varied range of services and

better quality. Domestic competitors faced by PT. Pos Indonesia is not only limited to a specialized

company engaged in the type of business service delivery, but also travel agencies that are interested in

expanding their business. For a travel agency, this is not a problem because the new business can be

performed hand in hand with its core business without adding significant change to the operational

infrastructure. Many public service users felt that sending goods delivery, letters, documents or other

forms of shipment through a travel agency is more practical, safe and fast.

One more challenge for PT. Pos Indonesia, in addition to similar services from similar companies

that focuses on the business delivery and travel agency, another formidable challenge comes from similar

companies, especially foreign companies that have been operating in Indonesia such as DHL (Dalsey

Hillblom and Lynn) delivery service company, Federal Express and USPS(United States PostelService).

PT. Pos Indonesia Malang, wouldface thes ame problem, asa phenomenon faced by the postal industry

world wide, because itis part of the Indonesian post office.

PT Pos Indonesia recognizes the importance of retaining customers as a priority, as suggested by

Engeletal. (1995) that maintaining customer should be prioritized because keeping customers is easier

than to find new customers and losing customers becomes a threat to business continuity. It used to be the

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main goal of marketers is to achieve customer satisfaction, but the goal as it has shifted, now more

important than the satisfaction is customer loyalty. By having a customer base that has a high loyalty

means gaining certainty in future earnings. Loyal customers are expected to remain doing transactions in

the future (Hurriyati, R.: 2005).

One of the important strategiesto maintain customer loyalty is to provid equality and service

excellence. Service quality is often conceptualized as a comparison of performance expectations with

actual perceptions of services (Zeithaml etal. 1996). Quality services should start from the needs of

customers and end on customer perceptions (Kotler, 1997). This means that the image quality is not good

from a perspective or perception of the service provider, but rather a perspective on customer perception.

Bloemer, Ruyter and Peeters(1998), Gould, J andWilliams(1999), said the impact of service

quality on customer loyalty. Devaraj, S., etal., (2001) concluded that customer loyalty is not only

influenced by brand image, but also by the services provided. The different results shown by Oloughlin,

Christina and Germa Coenders O.(2002) that the quality of service does not affect loyalty.

In addition to service quality, customer value is able contribute to customer loyalty. The success

of getting customers and making customers aware of and recognize the value of customers is a challenge

for professional marketers (Groth andDye, 1999). Customer value is determined by consumers because

consumers in general will compare the sacrifice incurred with what you got(Kotler 1997). Sacrifice

incurred by the consumer can be money, time and effort to get the goodsfrom the service provider.

According to Mulyadi and Setiawan(1999), in a very tight competitive situation, consumers are

becoming very picky/choosy because consumers are well aware that they are the real trumpcard holder

and will be manifested in their loyalty. Manufacturers are increasingly convinced that one of the keys to

success for winning the competition lies in its ability to provide a total customer value that can satisfy the

customer through the delivery of a quality product at competitive prices.

The concept of customer valueis critical in achieving marketing successs desperately need

management attention. According to Parasuraman(1997) customer value is a preference and evaluation of

consumer to product attributes, attribute performance and customer facilities that can be used to achieve

the goals or benefits. Increased benefits are greater than the sacrifice incurred will enhance customer

value. Research on the effects of customer value on trust, to the study conducted by researchers not get the

empirical study of trust as a mediator variable between service quality on customer value. Based on the

results of research conducted by Mehdi, et al. (2011) the effect of customer value on customer trust has

significant and positive effect.

Some results of studies on the effect of customer value on customer loyalty conducted by Luarn,

Pinand Lin (2003), Lee, Richard and Murphy(2008) concluded that customer value affect customer

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loyalty. However,the results of research conducted by reassen andLindested(1997) is not the case,

customer valuehas no effect on loyalty but the only effect on customer satisfaction.

According to Luarn and Lin(2003) trust is a specific amount of confidence in the integrity

(honesty trusted party and the ability of keeping promises), benevolence (attention and motivation are

believed to act in accordance with the interests of the trust), competency (the ability to implement the

trusted party needs trust) and predictability(consistency trusted party's behavior). In a research by Bennet,

Roger&Gabriel, (2001) belief or trust is defined as the perception of the consumer that will be the

reliability of a product based on a consumer's perspective based on his experience. From the consumer

point of view, trust is a psychological variable that reflects the number of initial assumptions involving the

accumulation of credibility, integrity, and benevolence that were placed on a particular brand(Gurviez

&Korchia, 2003).

The role of trust as a mediator influences on service quality and customer value on customer

loyalty based on the results of previous empirical studies. The results of empirical studies on the effect of

service quality on trust that was conducted by Auh andSeigyoung(2005) stated that the perception of the

quality of service excellence (Perceived performance excellence) by influence consumer trust. Similarly,

the research findings Darsono(2008), that the perception of the service (perceived service quality)has

asignificant positive effect on satisfaction and trust.

Omaretal., (2009) found the same thing that the service quality affects trust.

The results of empirical studies on the effects of customer value on trust, conducted by Carver and

Scheier(1990) revealed that when the value received by the customer (customer value) is in accordance

with what they hope it will help the formation of customer trust (customer trust) to the company, where

consistency between product attributes and customer perceived value (the value received by the customer)

reduces uncertainty and helps build trust in the form of a reliable expectation of the possibility of

switching to another company.

Some results of studies on the effect of trust on customer loyalty conducted by Luarn, Pinand

Lin(2003), Omar, N.Asiah(2009) in his study concluded that trust affects loyalty.

Reseach gap which has been put forward to encourage research activities, in order to explain the

role of customer trust, as a mediator influences service quality and customer value on customer loyalty of

PT. Pos Indonesia (Persero) Malang 65100.

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2. LITERATURESTUDY

Service Quality

Service quality is the level of excellence expected by the control over the level of excellence to

meet the customer(Wyckof, inLovelock, l988). There are two main factors that affect service quality,

the expected service and perceived service (Parasuraman, etal., 1985). If services

arereceivedorperceived(perceived service) as expected, theservice qualityperceivedwill be goodand

satisfying. If thereceivedservice exceeds customer expectations, thequality of serviceperceivedisthe

idealquality. Conversely, if the received serviceis lower than expected, then the perceived quality is

poor.

Grönroos(1994) argues that the total quality of a service consists of three main components,

namely: 1) Technical Quality, which is a component associated with the output quality of service

received by the customer; 2) Functional Quality, the components associated with the delivery of a

quality service and 3) Corporate Image, the profile, reputation, public imageand the special appeal of a

company.

Customer Value

Goetsch(2000) stated that organization or company should know that customers want, whether a

product, service or the customer value. Activities to findout what matters to the customer is called

Customer Value Analysis (CVA) that the process consists of: 1) determine the attributes that are more

important toc ustomers, 2) assess the importance of these attributes, 3) assess whether the company

from the list of attributes that are prioritized,4) ask the customer to compare all the attributes of

service firms with similar attributes of competitor services, 5) perform repetitions of the process at a

given time.

Customer value is the perceived value instead of the actual value. Perception is different from

reality. Reality is seen by the customer is that they perceive (Fajrin: 2008). Therefore, in marketing,

perception is a reality. There are three components that can be used to form a perception of value,

namely brand, services, and processes (Fajrin: 2008). Same as expressed by Kartajaya(2003), the

value must be able to reflect the three elements(1) brand, (2) service, and (3) process. Further more

Mulyadi said that to realize what customer value paradigm needs to be invested: (1) integrity, which is

a person's ability to realize what has been said to be a reality, in any situation;(2) willingness to serve,

if it is believed that the focus of the company is the consumer, there is no reason that supports the

existence of an organization in realizing customer value paradigm is the willingness to serve because

the willingness to serve is commendable actions in dealing with consumers;(3) humility which is

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where the consumer can only be created if every member of the organization have the personal value

because humility is a mental attitude of a person who is able to receive and make people put

themselves in a position to receive any abnormality in touch with the consumer.

A discussion ofcustomer valueis alsoput forward by Petrick(2002). Heargues that in order to

increase customer loyalty, companies must improve the satisfaction of every customer. To improve

customer satisfaction and loyalty, the company must add value that can make them get what they pay

or more than they expected, so they can survive and lead to repeat purchases and increase the

proportion of purchases.

Customer Trust

Customers trust of a product/ service, attributes and benefits of products / services reflect the

perceptions of customers. Therefore,the trust of each customer is different (Sumarwan, 2003). Further

more, Sumarwan(2003) suggests that the strength of the confidence of customers of a product/ service

for the products/services that have certain attributes. Customers will express confidence in the various

attributes of a brand and product that is being eveluated. Customers must pay attention to the brand of

a product when evaluating the attributes possessed by each of these brands. Trust is often referred to

as object-attribute linkages, namely customer confidence about a possible link between an object with

relevant attributes.

Trust is defined by Barnes(2003) as the desire to rely on a trusted exchange partners. According

to Garbarino and Johnson (in Jasfar, 2005)sense of confidence (trust) in the marketing services is

more emphasis on the individual's attitude, which refers to the confidence of customers on the quality

and reliability of the received services.

Moorman, Deshpande and Zaltman (in Jasfar, 2005) also defines the important of confidence.

Confidence is a key in trust. Confidence as the principal in the trust which can be seen in the

definition given by other researchers such as Garbarino and Jhonson(in Jasfar, 2005) which states that

customers trust as confidence about the quality and reliability of services offered by an organization.

Morganand Hunt(1994) make the concept of trust as a state in which a person has faith in the honesty

and reliability of peer exchange. According to Morgan and Hunt(1994) there are five actions that

show a trust: (1) maintain the relationship, (2) receives the influence, (3) open communication, (4)

reduce supervision, and (5) the patience to understand opportunist. Taylor(2001) has revealed that the

relationship between two parties that exchange in this case is the user information research and the

researchers, is directly influenced by the trust of the researcher, the quality of interaction with

researchers.

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Customer Loyalty

Loyal customers are customer who have the attitude to the company to re-purchase the goods or

services and would recommend to others. According to Stone in Hurriyati(2005): "Customer loyalty can

be measured by the presence/last purchase(recency), repetition purchase(frequency) in a given period, the

amount of money they spends on each attendance(monetary), variations of the product bought from the

company(variation). Customers include loyalist would normally immune to: the promotion of the

competitors, the low sensitivity to price increases applied by the company and will most likely give you a

positive reference to the relationship.

Basically,there are two main perspectives concerning brand loyalty: brand loyalty as a

behavior(behavioral perspective) and brand loyalty as an attitude perspective(Tjiptono, 2000). In other

words, brand loyalty can be seen from the brand what the customer purchased and how you are feeling or

attitude of customers towards a particular brand. (1) Behavioural Perspective on the perspective that brand

loyalty is defined as repeat purchase of a brand consistently by customers. In practice, rarely founda loyal

customer 100% on the brand. Therefore, there are three kinds of behavioral brand loyalty measure is

widely used: (a) the proportion of purchases that loyalty is measured by a certain percentage, the number

of purchases of brands most often purchased divided by total purchases. So, if the frequency of brand

purchase is most often purchased 8 times out of 10 times the total purchase, the brand loyalty is 80%. (b)

The order/sequence of purchase is another measure of loyalty is consistency with regard to the purchase

order and customer frequency switching or changing suppliers.(c) The probability that the proportion of

the purchase and the purchase order combined to calculate the probability of a purchase is based on over a

long time(long-termhistory)is calculated. Then, at any point in time, the proportion is adjusted in order to

reflect the most recent purchase. Every time a customer buys a certain specific brand, these purchases

increase the statistical probability of purchasing the brand relevant againat the next opportunity. (2)

Perspective attitude that the problems encountered in the behavioral perspective is that which can be

explained only on the facts related to the purchase of the same brand, but can not explain whether the

customer actually prefers a particular brand over other brands.

Baloglu(2002) suggested that loyalty includes two important components, namely; loyalty as a

behavior and loyalty as an attitude. The combination of both components resulted in four situations the

possibility of loyalty, namely spurious loyalty, true loyalty, low latent loyalty and loyalty. The

combination of attitude and behavior in four possible situations produce loyalty, spurious loyalty that is

loyal attitudeis a combination of low and loyal behavior of high and low loyalty loyal attitude is a

combination of low and high loyal behavior; and latent loyalty is a combination of a low attitude loyal and

disloyal behavior are low.

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Research Hypothesis

Based on the results of empirical studies, the hypothesis of this study can be formulated as

follows:

H1. Quality service has significant and positive effect on customer loyalty

H2. The value ofthe customer has positive and significant effecton customer

loyalty

H3. Customer trust mediates the effect of service quality on customer loyalty

H4. Customer trust mediates the effect of customer value on customer loyalty.

3. RESEARCH METHODS

This study is an explanatory research that is a research that intends to describe the pattern of

relations or influence between two or more variables. The pattern of relationships is revealed in the

relationshipis causal, namely the influence of service quality and customer value on customer trust and

customer loyalty. The population in this study is the consumer who is a service user of PT. Pos

Indonesia(Persero) Malang that uses the postal service. Data collection was done by using questionnaires

designed in the form of close-ended question. Data analysis was done byusing Structural Equation

Modeling(SEM).

StructuralModelTesting: Hypothesis TestingResearch

Once the model is eligible, then that needs to be done next is to test regression weight/loading

factor. This test is performed the same as the t-test on regression weight/loading factor/coefficient

models). Ferdinand(2002) explainedthat tcount is identical with CR( Critical Ratio) that were tested with

probability p, where if p<0.05 indicates a significant effect and if p>0.05 indicates has not have any

significant.

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Mediation Test

Mediation variableisa variable that mediates the relationship of explanatory variables on the

dependent variables. The study involved two mediating variables, namely customer value and customer

satisfaction. To determine whether a variableis able to act as a mediating variable that will be tested.

Mediation testis used to determine whether the mediating variable is full (complete mediation) or partial

mediation. Testing mediation in this study is as follow:

(a) (b)

(c)

(d)

Figure 1: Mediation Test of X effect on Y2 mediated by Y1

Specification:

1. (a), (b) and(c) are the result ofthe path coefficients and overall model

2. (d) is the result of the path coefficients of the overall model without mediating variables.

Testing approach

1. If in(a) and(b) are significant while(c) is not significant, it can be said as a mediation to be a

complete mediation.

2. If in(a) and(b) are significantly while(c) is significant, where the value of the coefficient(c) is

smaller(down) of(d), it can be said to be a partial mediation.

3. If in(a) and(b) are significant while(c) is significant, where the coefficients of(c) is similar to(d) it

is not as a mediating variable.

4. If any of(a) or(b) is not significant, it is not as a mediating variable

Independent X

Dependent

(Y2)

Independent X

Mediation (Y1)

Dependent (Y2)

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4. RESEARCH FINDING

The Research Analysis of Goodness of Fit SEM

The result of Goodness of Fit Overall test based on Table1, it can be seen that not all of the

criteria showed good models. Although the value of GFI and AGFI are still below the cut-off value, but

the value is not so far from the cut-off value. According to Arbuckle and Wothke(1999), the best criteria

are used as an indication of goodness of the model is the value CMIN/DF is less than 2, and RMSEA were

below 0:08. In this study, the value CMIN/DF and RMSEA have met the cut-off value, therefore the

model can be categorized suitable and feasible for use, therefore, it can be done interpretation in order to

discuss further.

.12

Kualitas layanan

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Customer value

Kepercayaan Loyalitas

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MEASURES OF FIT

RMSEA=.038

GFI=.893

AGFI=.857

CFI=.964

TLI=.957

Khi kuadrat=215.766

Khi Kuadrat/DF=1.240

p_value=.017

.92

1

.19

.11

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.07

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-.09

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Figure 2. Path Diagram of SEM Analysis Result

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Tabel 1 The Result ofGoodness Of Fit Overall Model Test

Criteria Cut-of value Model Result Note

Khi quadrate Kecil 215.766 Model is not good

p-value 0.05 0.017

CMIN/DF ≤ 2.00 1.240 Good Model

GFI 0.90 0.893 Marginal Model

AGFI 0.90 0.857 Marginal Model

TLI 0.95 0.957 Good Model

CFI 0.95 0.964 Good Model

RMSEA ≤ 0.08 0.038 Good Model

Source: Processed Data

The results of Goodness of Fit Overall test based on Figure 2 and Table 1 above, it is known that

not all of the criteria showed good models. Although the value of GFI andAGFIare stillbelow thecut-

offvalue, butthe value isnot sofarfromthe cut-off value. According to Arbuckle and Wothke(1999), the

best criteria are used as an indication of goodness of the modelis the value CMIN/DF is less than 2, and

RMSEA were below 0:08. In this study, the value CMIN/DFand RMSEA have met the cut-off value,

therefore the model can be categorized suitable and feasible for use, so it canbe done in order to discuss

further interpretation.

HypothesisTesting Results

As a basis fortesting the hypothesis used Critical ratio (Cr) from the regression output Weight. Where the

hypothesis will be accepted if the p value< of significance of 5%, the null hypothesis was rejected. The

results of the analysis set out in Table 2.

Table 2: Results of Regression Analysis Weight

Correlation Path

Coeficient

C.R. p-value Not

Service quality Trust 0.393 2.621 0.009 Sig

Customer value Trust 0.351 2.678 0.007 Sig

Service quality Loyalty 0.237 2.693 0.007 Sig

Customer value Loyalty 0.795 5.703 0.000 Sig

Trust Loyalty 0.314 2.495 0.013 Sig

Source: Processed Primary Data

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Quality service has significantand positive effect on customer loyalty

Based on Table 2, the results ofhypotheses testing about the influence of service quality on

customer loyalty generates path coefficient of 0.237 and p value of 0.007. These results indicate that the

quality of service and a significant positive effect on customer loyalty.

The customer value has positive and significant effecton customer loyalty

Based on Table2, the results of testing hypotheses about the effects of customer value on customer

loyalty generates path coefficient of 0.795 and p value of 0.000. The results show that customer value has

a positive and significant effect on customer loyalty.

Customer trust mediates the effect ofservice qualityon customer loyalty

The results of the analysis ofthe role ofcustomer trust as a mediating influence of service quality

on customer loyalty to note the significance of the results of the effect ofservice quality on customer trust

and confidence of customer’s has significant effect on customer loyalty. The results of these tests in detail

can be seen inTable 3

Table3 Results Customer Trust Mediating the Effect of Service Quality on CustomerLoyalty

Correlation among variable Path

Coefficient

P value Note

Service quality → Customer’s trust 0.393 0.009 Sig

Customer’s Trust → Customer’s Loyalty 0.314 0.013 Sig

Service quality → Customer’s Loyalty 0.237 0.007 Sig

Source: Processed Primary data

The results of service quality effect on customer loyalty without the mediating variable of

customer’s trust seen in Table4.

Table 4The results of the effect of service quality on customer loyalty without the mediating variable of

customer’s trust

Correlation among variables Path

Coefficient

P value Note

Service Quality → Customer’s Loyalty 0.520 0.000 Sig

Source: Processed Primary data

Based on Table3, resulting that the service quality significantly influence customers' trust with a p

value of 0.009 and the trust customers have a significant effect on customer loyalty with a p valueof 0.013.

These results indicate that customer trust is able to mediate the effect of service quality on customer

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loyalty.

Based on the test results of mediation, indicates that the variable quality of service significantly affect

customer confidence with coefficient value of 0.393(a) and customer trust significantly affect customer

loyalty with a coefficient value of 0.314(b). Mean while, the path coefficient of the service quality

variable that is controlled by the customer's trust can significantly affect the value of customer loyalty

with a coefficient of 0.237(c). Furthermore,(c) has a smaller coefficient(down) from the influence of

service quality on customer loyalty without the mediating variable trust of customers, with a coefficient of

0.520(d). Thus, it can be said that the trustof customers acts as a partial mediation(partial mediation) from

the indirect effects of the influence of service quality on customer loyalty(Figure 3).

0.393(a) 0.314(b)

0.237(c)

0.520(d)

Figure 3.Test Results of customer trust mediation as an influence mediating of service quality on on

customer loyalty

Customer trust mediates the effect on customer loyalty customer niilai

The results of the analysis of the role of customer trust as a mediating influence on customer loyalty

customer value need to know the results of the significance of the effect of customer value on customer

trust and confidence of customers significant effect on customer loyalty. The results of these tests in detail

can be seen in Table 5.

Service Quality

Customer Trust

Customer Loyalty

Service Quality

Customer’s Loyalty

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Table 5. Results of Customer Trust Mediating Effect of Customer Loyalty on Customer Value

The Effect among Variable Path

Coefficient

P value Note

Customer’s value → Customer’s trust 0.351 0.007 Sig

Customer’s Trust → Customer’s Loyalty 0.314 0.013 Sig

Customer’s value → Customer’s Loyalty 0.795 0.000 Sig


The results effect of the service quality on customer loyalty without the mediating variable of

customer confidence seen in Table6

Table 6.Results Effect of customer value on Customer Loyalty without Customer trust Mediation

The Effect among Variable Path

Coefficient

P value Note

Customer’s value → Customer’s Loyalty 0.964 0.000 Sig


Mediation test shows that customer value variable significantly affect on customers' trust, the

value of the coefficient of 0.351(a) and customer trust significantly affect customer loyalty with

coefficient 0.314(b). Mean while, the coefficient of the variable track customer value controlled by the

customer's trust can significantly affect customer loyalty with coefficient 0.795(c). Customer value on

customer loyalty without the mediating variable trust of customers, with a coefficient of 0.964(d), can be

said that the customers trust acts as a partial mediation (partial mediation) effect of indirect effects

between customer value on customer loyalty(Figure 4).

0,351 (a) 0,314(b)

0,795(c)

0,964 (d)

Figure 4: Result of trust mediation test as a mediating influence of customer value on customer loyalty

Customer’s Value

Customer’s Trust


Customer’s value


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5. DISCUSSION

The effect ofservice qualityon customer loyalty

Quality service has significant and positive effect on customer loyalty, meaning that the more

positive user perceptions of PT. Pos Indonesia Malang services on the quality ofservice, the

customers are more loyal to the postal service. Service quality affects the customer loyalty of PT. Pos

Indonesia Malang, customer loyalty will increase if the quality of service according to the customer's

wishes. The results of the study confirm the opinion of Engel(1994) that efforts should be prioritized

retaining customers, because customer retentionis more difficult than finding new customers. To be

able to retain customers, PT. Pos Indonesia Malang should improve the quality of its services. It is

also proposed by Aaker(1997) that there are five points to maintain and strengthen loyalty: treating

customers with viable; establish a close relationship with the customer; measuring or managing

customer satisfaction; giving and creates extra costs and transition. The results of this study reinforce

previous empirical studies conducted by Croninand Taylor(1992) the existence of a positive

relationship between service quality(service quality) and consumer satisfaction with the tendency

repurchase(loyalty). Bloemer, Ruyter and Peeters(1998) results of study is the image, quality of

service (service quality) and the satisfaction of an impact on customer loyalty. Gould, J and

Williams(1999) concluded the value of the customer (customer value) and quality of service(service

quality) have a significant effect on customer loyalty and service quality (service quality) effect on the

value of the customer (customer value). Devaraj, S., etal. (2001) concluded that in the automotive

industry, customer loyalty is not only influenced by brand image, but also by the services provided by

dealers selling the brand. Caruana(2002) found evidence that the quality of service have a significant

influence on customer loyalty both directly and indirectly mediated by customer satisfaction.

The effect of customer value on customer loyalty

The results of the analysis showed that the effect of customer value on customer loyalty,

meaning the more positive user perceptions of PT. Pos Indonesia Malang to the value received, the

more loyal they are. Customer value will directly affect customer loyalty. Customer loyalty increases

when actually receive the benefits of the services or products of PT. Pos Indonesia Malang. To

maintain customer loyalty, PT. Pos Indonesia Malang should be able to generate value for the

customer. The values obtained customers include, the first value of the products that can provide the

benefits desired by the customer. Secondly, the value of the service that the customer was satisfied

with the service provided ranging from customer service and teller fast and skilled in handling all

customer transactions required. The third value is the customer's personal value. Customers are

satisfied with the attitude of the employees who are always friendly and attentive when providing

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services to customers. Thus,customers feel the sacrifice of time, cost and power comparable to the

value of the benefits obtained after the transaction at PT. Pos Indonesia Malang. The fourth customer

value is the value of the image, where PT. Pos Indonesia Malang as a delivery service company has a

good image and a reliable delivery service. Perception of service users as mentioned above reinforced

with several statements made by the respondent in filling an open question as follows: although to day

many shipping services, but I considered that PT. Pos is the best delivery service company in this

country, more reliable, more experience, better fleet and others.Goetsch and Davis(2000) states that an

organization or company should know what customers want, whether the product or the value of

customer service. Activities to find outwhat is important to maintain a customer will create customer

loyalty. In addition to technology support that has been done in order to increase customer value loyal

customers then have to add the service to the liver. The results of this study reinforce previous

empirical studies conducted by Auh, Seigyoung(2005) that the perception of service quality is

excellent (Perceived performance excellence) by influence consumer trust. Similarly, the research

findings Darsono(2008) that the perception of the service(perceived service quality)has a significant

positive effect on satisfaction and trust. Omaretal., (2009) found the same thing that the service quality

affect trust.

Customer trust mediates the effect of service quality on customer loyalty

Customer trust acts as a partial mediation from the indirect effects of the influence of service

quality on customer loyalty. This result can be explained that the customers will have a high level of

loyalty when the quality of services provided by PT. Pos Indonesia Malang is able to provide its

customers with high trust. The fact that PT. Pos Indonesiais engaged in services, it is an important

factor that should be considered is the confidence of service users, where they use the postal service

because they believe that the goods or remittances they sent through the postal service will arrive

safely at their destination on time. Alongwith the competitive constraints faced by PT. Pos Indonesia,

it should make changes to their business activities. One of them is PT. Pos Indonesia should provide

new products that is Exspress Postal services. Shipping services which can really guarantee the

shipment can be received at the destination quickly and accurately, not less competitive with services

offered by the private sector. In addition, PT. Pos Indonesia Malang has a condition that adequate

facilities and infrastructure, such as the presence of a representative office building, cleanliness and

comfort of roomservice.

Similar to the physical evidence, the existence of procedures of service for customers who are not

convoluted, as the employees that are extremely friendly attitude, able to create a strong family

relationships and empathy when communicating, employees listen more when customers speaking, so that

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employees can explore more in a variety of desires and consumer complaints, the employee can then offer

a solution.The results of this study reinforce previous empirical studies conducted by Auh,

Seigyoung(2005) that the perception of service quality is excellent (Perceived performance excellence)by

influence consumer trust. Darsono(2008) that the perception of the service (perceived service quality) has

a significant positive effect on satisfaction and trust. Omaretal., (2009) found the same thing that the

service quality affect trust. Luarn, Pinand Lin(2003) Omar, N.Asiah(2009) in his study concluded that

trust affects loyalty.

Customer trust mediates the effect of customer value on customer loyalty.

Based on the results of inferential statistical analysis, it generated that customers trust acts as a

partial mediation effect of indirect effects between customer value on customer loyalty. This result can be

explained that the customers will have a high level of loyalty when quality or customer benefits felt in

higher product with the sacrifices they feel when paying the price of the product, meaning that beliefs,

attitudes and behaviors will be associated with the concept of product attributes. Customers usually have

confidence in the attributes of a product.

Customer confidence or knowledge regarding customer confidence that a product has a variety of

attributes and benefits of the various attributes. The results of this study reinforce previous empirical

studies conducted by Carver and Scheier(1990) that if the value received by the customer is in accordance

with what they hope it will help the formation of customer trust to the company, where consistency

between product attributes and customer perceived value (the value received by the customer) reduces

uncertainty and helps build trust in the form of a reliable expectation of the possibility of switching to

another company. Similarly, a study conducted by Changsu Kim, etal., (2008) that customer perceived

value affect customer trust in the company. Luarn, Pinand Lin (2003), Omar, N.Asiah(2009) in his study

concluded that trust affects loyalty.

6. CONCLUSION

Service quality and customer value contributes on customer loyalty. These findings could be

interpreted that to increase customer confidence, which in turn can increase customer loyalty, the

management of PT. Pos Indonesia Malang need to pay attention on the services quality provided which

include the appearance of physical facilities and office buildings to provide adequate parking facilities and

provide a sense of security, a comfortable waiting room and have a better office environment compared

with similar services such asTIKI office and DHL, Pejastip and others.The ability of employees to provide

services promised immediately, timely and accurately assessment is also the basis for the consumer. In

addition, quality service excellence backed by the professionalism of employees, which is always caring

and responsive to all the needs of consumers, be polite and trustworthy to maintain the confidentiality of

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all packages belonging to the consumer and strive to create and maintain family relationships with

consumers. PT. Pos Indonesia Malang is so large and dispersed networks must be able to be a point of

differentiation for the company, because otherwise it will reduce the value available to consumers.

Michael Porter stated that"Competitive strategy is about different". Different does not mean random

differences, but the differences are really able to provide"a unique mix of value". Future research is

recommended to add other variables in addition to service quality, customer value, and trust that affect the

service user’s loyalty, because loyalty can also be influenced by the distance of the availability of services,

and can also increase the level of consumer knowledge variableasa moderator variable to determine

influence of service quality on trust, service quality on customer value which can further complement this

research findings.

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