Beyond Satisfaction: Commitment and Perceived Customer Lifetime Value in Iranian Banking

Abstract

We investigate how Iranian banks transform brand experience and service quality into perceived customer lifetime value through customer satisfaction and commitment. We surveyed customers of major public and private banks in Iran and tested the proposed relationships using partial least squares structural equation modeling. We first examined a serial mediation model linking brand experience and service quality to customer satisfaction, customer commitment, and perceived customer lifetime value. We then evaluated an extended model that allowed brand experience and service quality to strengthen commitment directly. Our findings show that both brand experience and service quality improve customer satisfaction. This favorable evaluation then strengthens customer commitment, which emerges as the most important driver of perceived customer lifetime value. Brand experience also plays a stronger upstream role than service quality. The extended model provides a clearer explanation of how commitment develops by showing that customers can become committed not only because they feel satisfied, but also because they connect with the bank’s brand and trust the quality of its service. These results show that satisfaction alone cannot create durable customer value. Iranian banks build stronger relationships when they turn positive customer experiences into genuine commitment. The study highlights commitment as the central mechanism that converts brand experience and service quality into continued usage, first-choice preference, loyalty, and advocacy. It also offers bank managers a practical framework for managing customer experience, service delivery, satisfaction, and commitment as one integrated process for building long-term customer value.