ABSTRACT
This study examined the relationship between service quality, customer satisfaction, and customer loyalty among customers of Hugger Tailoring ’76, a micro, small, and medium enterprise (MSME) in Kalibo, Aklan, Philippines. Using a descriptive-correlational design, data were collected from 100 respondents through a validated survey instrument based on SERVQUAL and customer loyalty scales. Results showed that respondents were predominantly male, aged 36–45, with monthly incomes of PHP 20,000 or less, and had been availing of services for 1–3 years. Perceived service quality was high, particularly in responsiveness and assurance, while tangibles received relatively lower ratings. Customer satisfaction and customer loyalty were likewise found to be high. Correlation analysis revealed significant positive relationships among service quality, satisfaction, and loyalty. Customer satisfaction fully mediated the relationship between service quality and loyalty, with tangibles and responsiveness identified as key predictors of cognitive and action loyalty. Differences were observed across gender and income in selected service quality dimensions. The findings underscore the importance of service quality in strengthening customer loyalty and long-term sustainability among MSMEs. Enhancing physical facilities, communication strategies, and staff competencies is essential for improving customer experience and sustaining competitiveness in a small-scale tailoring enterprise.
Keywords: service quality, customer satisfaction, customer loyalty, MSMEs, tailoring services, Philippines
INTRODUCTION
Service delivery has become a fundamental driver of success in service-oriented industries, including tailoring. In an increasingly competitive market, maintaining high service quality is crucial for shaping customer experiences and strengthening long-term relationships with clients. According to Rashid, Haq, and Saeed (2023), industries that relied on craftsmanship, precision, and personalization, such as tailoring, depend heavily on quality-of-service delivery to satisfy diverse customer expectations. Similarly, Homburg, Jozić, and Kuehnl (2017) explained that, unlike fast-fashion retailers that emphasize mass production and operational efficiency, tailoring businesses rely on trust, reliability, and personalized interactions to build lasting customer relationships.
Service quality has long been recognized as a key determinant of customer satisfaction. Customer satisfaction refers to the extent to which a business’s service performance meets or exceeds customer expectations, representing the customer’s overall evaluation of their service experience (Anwar & Louis, 2017). According to Oliver (1997) and Kotler and Keller (2016), satisfaction occured when customers perceive that the service provided aligns with or exceeds their expectations. In tailoring services, satisfaction is influenced not only by the technical quality of the finished garments but also by the overall service experience, including responsiveness, reliability, empathy, and communication during the service process (Parasuraman & Zeithaml, 2018).
In comparison, customer loyalty represents a customer’s strong commitment to continue patronizing a particular service provider. Anderson and Srinivasan (2003) and Homburg, Koschate, and Hoyer (2005) explained that loyalty can manifest in attitudinal and behavioral forms. Customers loyal to a business are more likely to engage in repeat patronage, recommend the service to others, and develop a strong sense of trust and preference for the provider. Kumar and Shah (2015) further emphasized that businesses that consistently deliver high service quality are more likely to create strong emotional connections with customers, which subsequently strengthens loyalty and long-term relationships.
Previous studies have highlighted the important role of customer satisfaction in explaining the influence of service quality on customer loyalty. Caruana (2002) and Lam et al. (2004) found that satisfaction often serves as a mediating variable that links service quality to customer loyalty. This suggests that when customers perceive high levels of service quality, they are more likely to feel satisfied, which, in turn, encourages them to remain loyal to the service provider.
In the Philippines, tailoring businesses continue to maintain relevance despite the widespread availability of ready-to-wear clothing. Small tailoring enterprises provide customized garments, alterations, and repair services to customers who value personalized clothing. Hugger Tailoring ’76, located in Kalibo, Aklan, is one such business that serves customers seeking quality tailoring services. However, small tailoring enterprises often face challenges such as limited manpower, increasing competition from ready-to-wear retailers, and rising customer expectations for improved service quality and personalized service experiences.
Despite the recognized importance of service quality, satisfaction, and customer loyalty in service industries, many existing studies focus primarily on large-scale sectors such as banking, hospitality, and retail industries. There is limited empirical research examining how service quality influences customer loyalty through customer satisfaction within the context of small tailoring businesses in the Philippines.
Therefore, this study aimed to examine the relationship between service quality and customer loyalty and to determine the mediating role of customer satisfaction in this relationship among customers of Hugger Tailoring ’76. The findings of this study were expected to provide valuable insights that could help tailor businesses to improve their service delivery, enhance customer satisfaction, and foster stronger customer loyalty.
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