Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges [1]. Marketing orientation is shifting away from creating exchanges (sales) to creating value (satisfaction) and relationship (co-creating value). It is undeniable that having loyal customers is preferable to having many customers but the purchase rate cannot be ascertained. Therefore, it is important to be able to retain customers who have used the products and services.

Repurchase intention is the extent to which customers are willing to purchase the same product or service from the same provider and it is a vital indicator of future purchases and anticipated business performance [2-4]. The MFI depends upon repurchase by their bottom pyramid customers, as the incremental loans amount are small and the transaction cost associated with validating and initiating new clients is comparatively high. 

Similar to the Grameen Guideline above, Bank Daya Sharia also implements a specific business model that has a funnel market characteristic that it can only be started from an early stage. It cannot be accommodated that the customer immediately gets financing in the middle or even upper stages and gets big financing limit, except that the customer was previously a customer of Bank Daya Sharia. Average dropout rate of Bank Daya Sharia is quite high (39%) so that knowing the variables that impact on the dropout rate and repurchase intention of the customers is important. 

To follow up this problem, research is carried out to identify what factors influence repurchase intention of customers to go to the next cycle of financing, analyze its magnitude, and set them on priority scale so that Bank’s management is able to reduce dropout rate of customers of Tepat Financing.

This research model was adopted from several previous studies. The first journal as the main reference is entitled “Serving the Poor: Captive Market CSR and Repurchase Intention” in 2015 which was published by The Internal Journal of Bank Marketing. The second journal is entitled “Switching Barriers in the Four-Stage Loyalty Model” in 2007 which was published by Advances in Consumer Research.  By  observing  those  two  sources  this  research has adapted several changes and combinations then finally created this research's conceptual model shown in the figure below.

Micro-Venture’s Performance

Financing from Bank Daya Sharia is disbursed via a small group at neighborhood level. It is called center or in Bahasa as Sentra. Each center consists of approximately 5-15 members. There is no collateral in this financing. The Bank guarantee is only the customer’s face itself. As long as customers continue to meet the field officer, they are eligible to be Bank Daya Sharia’s customers. [5]                . 

On the first cycle everyone is eligible to have a maximum 1.5 mio IDR to initiate their ventures. Continued financing to support continuation or further growth of the micro-venture is usually available only when the venture proves successful and gains the approval of the majority of the center’s members. In the absence of any standardized formal record of micro-ventures’ business history, the mechanism involves social approval.

In contrast, failure of a proposed venture is more likely to burden micro-entrepreneurs with additional debt burden and reduce interest in continued borrowing. Therefore, this study proposes the following hypothesis.

H1: In the context of repurchase intention, micro-venture’s performance has a positive influence.

Customer Satisfaction

The definition of satisfaction contained in various literatures is quite diverse. Kotler [6] defined customer satisfaction as a person's liking or disliking a product after he compares the product's performance with his expectations. Wilkie [7] defined customer satisfaction as a positive emotional response to the evaluation of the experience of using a product or service. Engel [8] defined customer satisfaction as an evaluation after purchase where the selected product is at least equal to or exceeds customer expectations, while dissatisfaction arises when the outcome does not meet expectations. From the various definitions above, it can be concluded that basically the notion of customer satisfaction includes the difference between expectations and perceived achievements or results. 

Customer satisfaction will basically affect customer repurchase intention. The higher the customer satisfaction will impact on the higher their repurchase intention. but it will stop at some point [9].

In the case of poor buyers, it has been shown that they pay more than affluent buyers for ordinary goods and services due to exploitation [10]. It suggests that although dissatisfied, constraints often push vulnerable borrowers to repeat borrowings and debt overburden. In emerging markets characterized by poor regulatory monitoring, stronger constraints, it is plausible that poor and captive borrowers may choose to ignore their dissatisfaction and prefer to appreciate relatively vital and low-cost access to funds via microfinance service providers. Therefore, this study proposes the following hypothesis.

H2: In the context of repurchase intention, customer   satisfaction   has     a    positive   influence.

Perceived CSR

By deploying CSR, the company can lead profit. This could be achieved through an improved brand image involving CSR-driven product or market development [11]. One highly desirable effect is increased customer repurchase [12]. Lichtenstein et al. found consumers to be more emotionally attached and more loyal toward companies that engaged in CSR activities. However, studies have also revealed that CSR initiatives do not always generate positive effects. Hence the findings relating to the effects of CSR on customer responses so far are overall inconclusive.

In the context of Bank Daya Sharia, CSR is not only concerned with the environment and society in general, it is even integrated as a product service, namely the Daya program. It is already become unique value proposition (UVP) of Bank Daya Sharia. Therefore, this study proposes the following hypothesis [14-29]

H3: In the context of repurchase intention, perceived CSR has a positive influence.

Switching Cost

Another factor that influences customer to continue consume the same product or service is the size of the switching barrier [13]. The barriers to moving consist of; financial costs, transaction costs, discounts for loyal customers (loyal customer discounts), social costs, and emotional costs. The greater the barriers to switching will make customers loyal, but their loyalty contains an element of compulsion. Therefore, this study proposes the following hypothesis.[30-37]

H4: In the context of repurchase intention, switching cost has a positive influence.

Research model in this study depicted on the Figure 1 below.

Figure 1. Research Model

This study uses quantitative methods. It utilizes a questionnaire using a 6-point Likert scale. Clarity of questionnaire will be validated by having a focus discussion group with the Business Support unit of Bank Daya Sharia. After that, there will be a direct visit to customers to ensure their understanding.

The questionnaire uses an online survey Typeform which is distributed to customers through Bank Daya Sharia field officers after the routine center meetings are held. The customer fills out an independent survey from the link shared by the officer. Minimum of 200 respondents is required for test marketing studies to determine the number of samples in this study with convenience sampling technique chosen. 

To test the relationship between repurchase intention on micro-venture’s performance, satisfaction with the service level, perceived CSR activities of MFI, and switching cost, this study will test the model using Partial Least Square (PLS) - Structural Equation Model (SEM).

The questionnaire was collected from 1-10 December 2021. A total of 205 respondents managed to collect online responses. After that we validated with the data input as customer profile that was customer name and sentra meeting name as the key references with the customer data from core banking system. We managed that only 190 data were valid. 15 respondents or 7.3% categorized as unsatisfactory data due to not able to fulfill data requirements that are active customer and active financing. Based on the table above, the R square value in this study was 0.404 or 40.4%. This means that this study was categorized as moderate.

The following are the results of the path coefficient test in this study.

Based on the table above, customer satisfaction on repurchase intention has the most significant effect followed by switching cost on repurchase intention. Meanwhile, perceived CSR on repurchase intention and venture’s performance on repurchase intention does not significantly affect.

As the result of this study's Q square value has a value of 0.373 or greater than 0. This means that this study has a good observation value. As the result of the study, the SRMR value in this study was 0.083 or less than 0.01. That is, the model in this study is considered suitable. Meanwhile, the NFI value is 0.741 or 74.1%. This means that this research has a percentage of 74.1% fit.

The research objective is to identify what factors influence repurchase intention of customers to go to the next cycle of financing, analyze its magnitude, and set them on priority scale so that Bank’s management is able to reduce dropout rate of customers of Tepat Financing.

From the respondent’s data obtained and then processed with the PLS-SEM method, it is found that the factor of customer satisfaction has the biggest influence on the repurchase intention then followed by the factor of switching cost. The venture’s performance and the perceived CSR cannot be shown to have an influence on the repurchase intention of customers.

In the context of customer satisfaction, at the tactical level Bank Daya Sharia needs to establish serious metrics to measure customer satisfaction index. At the moment, there is a simple survey conducted by Branch Manager (BM). Yet, the surveys need to be enriched or moreover Bank can create another survey that is specific to address customer satisfaction level. At the strategic level, Bank Daya Sharia can exercise on the concept of new wave marketing on Marketing 4.0. For now, The Bank already have a baseline for Communization, Confirming, Clarification, Codification, and Communal Activation. The Bank can take steps further strategically to assess Co-creation, Currency, Commercialization, Character, Caring, and Collaboration. On the switching cost perspective, if we compare with the similar business model of a bank or financial institution, Bank Daya Sharia actually has an advantage by using the concept financing cycle. Because it is offered as non-collateral, customers need to follow the financing cycle to get bigger facilities. If they switch to another bank which has a similar business model, they will need to rebuild the financing portfolio from scratch. But this does not mean without threat from competitors. If they can have another solution to mitigate credit risk without following the financing cycle, credit facility as switching cost become a low barrier. Therefore, customers can switch to another financing/loan company.

Table 1: Path coefficient results in this study

Table 2: T-statistic result in this study

Table 3. Hypothesis analysis

Social connection, both among fellow members and to officers also, is also seen as a switching cost that benefits the Bank. It should be noted that customers are well connected with the officers, so it becomes a concern for Human Capital to ensure that employee’s turnover is also low.

Meanwhile as part of big investment on the CSR, Bank Daya Sharia needs to overlook how financing customers perceive the CSR values that is Daya program. Ideally, as well as stated in many literature, CSR-driven product programs will become unique value propositions that differentiate Bank Daya Sharia with other competitors. But in this study, it presents that perceived CSR does not affect the customers repurchase intention. Perceived CSR as the lowest factor that influences repurchase intention.

Similar to the customer satisfaction perspective, The Bank needs to establish a matrix to determine perceived CSR. The Bank must think critically to develop Daya programs that resonate benefit for customers which finally influence their repurchase intention and eliminate other programs that might be seen beneficial on the headquarter perspective but less significant for customers.

On the last perspective about micro-venture’s performance, based on the study the result does not affect customer’s repurchase intention. From this point of view, management can see that micro-venture are resilient even in a pandemic era. This is also proven by Bank Daya Sharia financial performance which still records positive performance during 2020-2021 compared with other banks or any other industries. 

Despite the result, there is a challenge when doing sampling methods with convenience sampling remotely due to limitation of time and cost. The recommendation is to have sampling method probability sampling with stratified sampling.

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