Evaluating the Impact of Service Quality on Customer Satisfaction and Loyalty in an Application Service Provider: A Structural Equation Modeling Approach

This study explores how service quality—categorized into Technical and Customer Service dimensions—affects customer satisfaction and loyalty within an Application Service Provider (ASP) environment. Technical Service refers to operational aspects such as onboarding, installation, and implementation, while Customer Service encompasses relational factors like empathy, responsiveness, reliability, and assurance. Using structural equation modeling (PLS-SEM) based on user perceptions, the study tests a conceptual model that distinguishes the roles of each dimension. Results show that Customer Service quality has a strong and significant effect on customer satisfaction and loyalty, both directly and through mediation. In contrast, Technical Service quality does not significantly impact either outcome, suggesting its value lies in foundational support rather than relationship-building. These findings highlight the importance of prioritizing user-centered support in digital services. The model contributes to service quality theory in technology-mediated environments and offers practical guidance for ASPs seeking to enhance customer experience and retention through improved service interactions.