THE ROLE OF STRATEGIC INNOVATION, EMPLOYEE COMPETENCE AND LEADERSHIP SUPPORT ON CUSTOMERS’ LOYALTY

Abstract

The study examined impact of strategic innovation, employee competence, and leadership support on customer loyalty in banking sector of Lahore, Pakistan. A quantitative survey was conducted with 300 customers from various commercial and retail banks across the city. Strategic innovation measured the banks’ ability to introduce new products, digital services and process improvements; employee competence captured skills, knowledge, and professionalism and leadership support assessed managers’ guidance, encouragement and decision-making support for employees. The customer loyalty was assessed over repurchase intentions, willingness to recommend and long-term commitment to the bank. The findings show that strategic innovation has the strongest positive effect on customer loyalty, followed by the competence and leadership support. This study provides actionable insights for banking managers showing that fostering innovation alongside competent employees & supportive leadership boosts long-term customer relationships. It contributes to literature by offering an empirically tested model of the drivers of customer loyalty in the banking sector of emerging urban markets.