The Role of Customer Bonding as a Customer Trust Mediator and Service Performance on SMEs Performance

Abstract

Aims: This study aims to prove customer trust and service performance that affects customer bonding and the implementation of Small and Medium Enterprises (SMEs). Study design:  Hypothesis testing. Place and Duration of Study: 210 SMEs managers in Mimika district, Papua province, Indonesia. Methodology: Structural Equation Modeling. Results: First, service performance positively affects customer bonding because friendly service increases customer bonding. Second, Customer Trust positively affects SMEs Performance because varied prices and new products will increase SME Performance. Third, Customer Trust positively affects SMEs Performance because honesty and integrity will improve SMEs Performance. Fourth, Service Performance positively affects SMEs Performance because friendly service will improve SMEs Performance. Fifth, Customer Trust positively impacts SMEs Performance through Customer Bonding because varied prices support honesty and integrity, and new products will increase SMEs Performance. Finally, service performance positively affects Customer Bonding because friendly service supported by varied prices and new products will increase SMEs Performance. Conclusion: Customer trust and service performance affect customer bonding and SMEs performance, and customer bonding directly influences SMEs performance. Customer bonding has a significant influence as a mediator between customer trust and service performance on SMEs performance in Mimika Regency, Papua.