10.1108@ijoem 10 2017 0414

International Journal of Emerging Markets
A study of factors affecting word of mouth (WOM) towards Islamic banking (IB) in
Jordan
Bushra K. Mahadin, Mamoun N. Akroush,
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Factors
A study of factors affecting word affecting
of mouth (WOM) towards Islamic WOM towards
IB in Jordan
banking (IB) in Jordan
Bushra K. Mahadin
Department of Marketing, American University of Madaba, Madaba, Jordan, and
Received 22 October 2017
Mamoun N. Akroush Revised 18 February 2018
21 April 2018
Graduate School of Business Administration, German Jordanian University, 13 July 2018
Amman, Jordan Accepted 19 July 2018
Abstract
Purpose – The purpose of this paper is to identify factors affecting word-of-mouth (WOM) towards Islamic
Banking (IB) in Jordan through understanding the roles of service quality and perceived value.
Design/methodology/approach – A self-administered survey was hand-delivered to the targeted sample
of Islamic banks customers in Jordan. The authors delivered 400 questionnaires to customers from which 352
were deemed valid for the analysis. Exploratory and confirmatory factor analyses were performed to assess
the research constructs validity and composite reliability. Structural path analysis was also used to test the
research model and hypothesised relationships between the variables.
Findings – Service quality has a positive and significant effect on perceived value and WOM towards IB.
Convenience has a positive and significant effect on perceived value. Finally, perceived value has a positive
and significant effect on WOM towards IB. Service quality exerted the strongest effect on perceived value and
WOM. Also, 38 per cent of variation in perceived value was caused by religious motives, service quality and
convenience path, whereas 34 per cent of variation in WOM towards IB was caused by perceived value,
service quality and convenience path.
Research limitations/implications – Future research needs to investigate other factors that may affect
customers’ WOM concerning IB such as perceived bank image, trust and subjective norms. Future research
should investigate other dimensions of perceived value such as social, psychological, emotional, sacrifice
value and product values and how they affect WOM. From an international marketing standpoint,
comparative studies between Jordanian and non-Jordanian Islamic customers are potential areas of future
research for international marketing strategies and cross-cultural consumer behaviour analysis.
Practical implications – The paper identifies the determinants of WOM towards IB. Managers should
focus on executing service quality strategies customised towards IB. Convenience is a major driver of
perceived value and, then, WOM towards IB. Managers need to focus on key marketing messages that
enhance religious motives in customers’ minds and hearts; however, attracting new customers and retaining
the current ones depend on the perceived benefits in the areas of service quality, convenience and several
value aspects.
Originality/value – This study is the first of its kind to test a model of WOM determinants in IB in Jordan.
The study is thought to have made a reasonable contribution to consumer behaviour literature and,
specifically, for decision-making process through developing and testing a model of WOM determinants
towards IB. The study offers CEOs and marketing managers of Islamic banks new insights into the
determinants of WOM and how they contribute to consumers’ decision-making process and attitudes to
achieve the intended behavioural outcomes towards IB, which were not available at their hands before. These
empirical findings are crucial inputs for marketing strategy formulation and implementation.
Keywords Perceived value, Convenience, Islamic banking, Service quality, Word-of-mouth, Religious motives
Paper type Research paper
Introduction
Ever since Katz and Lazarsfeld’s “two-step communication” theory in 1955, word-of-mouth
(WOM) has become a cornerstone tool in marketing communication. WOM communication
is an interpersonal communication in which one side receives non-commercial information
regarding a brand, product or service (Arndt, 1967), or “informal communications directed International Journal of Emerging
Markets
at other consumers about the ownership, usage, or characteristics of particular goods © Emerald Publishing Limited
1746-8809
and services and/or their sellers” (Westbrook, 1987, p. 261). WOM has effects on some DOI 10.1108/IJOEM-10-2017-0414
IJOEM dimensions of purchase context, such as awareness, expectations, perceptions, attitudes,
behavioural intentions and behaviours (Reingen, 1987). This type of communication might
include product discussions, direct recommendations and/or mere mentions.
Research recognises WOM as one of the oldest and most prominent channels of
communication in the marketplace (Ennew et al., 2000). The great effect of WOM, either
positive or negative, on companies’ success increases their interest in its determinants and
encourages researchers to investigate its antecedents. Literature indicates that consumers
regard WOM as a much more reliable medium than traditional media (Cheung and Thadani,
2012). Customers generally trust each other more than marketing messages sent by sellers
(Nieto et al., 2014), which results in influencing many receivers (Lau and Ng, 2001) and
creates credibility in consumers’ minds (Brown et al., 2007; Lee and Youn, 2009). Therefore,
WOM is particularly essential for service providers (Silverman, 1997; Sweeney et al., 2008)
due to the unique characteristics of services which are perceived to be risky in principle
(Zeithaml, 1981). Services are conceptualised as experiential and difficult to evaluate in
advance. Thus, the purchase risk is amplified. In such scenarios customers rely heavily on
the advice of other users to reduce that risk (Ennew et al., 2000; Ng et al., 2011).
The Islamic Banking (IB) industry has a tremendous potential to leverage WOM in order
to reach out to customers. The forces of deregulation, globalisation and advancing
technology have greatly increased the competitive pressures in the banking sector. Ever
since the introduction of the Mit-Ghamr Islamic Saving Associations in Egypt in the early
1960s, as the first modern Shari’a-compliant financial institution, the industry has achieved
steady progress towards success, yet not catching up with conventional banks. By
mid-2014, the industry’s assets had reached ($1.9) trillion (The State Bank of Pakistan, 2013).
Furthermore, the industry’s growth since the global financial crisis in 2008 has averaged
17.5 per cent, where Islamic banks had dominated the Islamic financial industry. Their
assets accounted for 80 per cent of the industry’s total. In recent years, IB reach has spread
to Africa, Europe and North America with a specific focus on countries such as Denmark,
France, Luxembourg, Nigeria, South Africa, Switzerland and the UK. In addition to that, a
number of large European and American conventional banks are opening IB windows to
take advantage of this fast-growing sector. IB statistics indicate that this industry has
grown at an annual rate of 17 per cent from 2009 to 2013; a clear sign of strength of the
industry. IB has become so popular in countries like Iran, Sudan, Bahrain, Kuwait, Malaysia,
Qatar, Saudi Arabia, Turkey and the United Arab Emirates, which are now conducting 100
per cent Islamic operations (The State Bank of Pakistan, 2013; Ernst and Young, 2014;
Hussain et al., 2015).
The term “IB” refers to a banking activity or a system of banking that is compliant with
the basic principles of Islamic Shari’a (rules and values set by Islam). It is also known as an
interest free banking system as Shari’a forbids the acceptance of riba or interest rate when
lending money (Tara et al., 2014). In this system, a business that offers interest rates is
strictly prohibited and it is in fact considered haraam (forbidden) (Marimuthu et al., 2010;
Alam et al., 2012). The attractiveness and recognition of this banking system is not limited to
Islamic banks only; large international conventional banks are showing increasing interest
in that system as well (Mumtaz et al., 2015). Therefore, when rivalry builds up and when
banks start offering undifferentiated similar products and services, it is the customer’s
expectations and level of satisfaction that influence not only the performance of the bank
but also its competitiveness and success as well. As competition intensifies, IB should no
longer be regarded as a banking service striving to fulfil only the religious obligations of the
Muslim community, but more significantly as an innovation in the banking industry, that
ought to be, as competitive as conventional banking. The use of the expression “Islamic” in
banking and finance processes is no longer sufficient to successfully convince customers of
its merits. Many customers are dissuaded from becoming IB customers due to the fact that
they are dissatisfied with the managerial and economic practices of the Islamic banks Factors
(Tobin, 2014). Attracting customers effectively requires meeting a broader set of customer affecting
needs, while remaining on par with conventional banks in terms of embracing customer WOM towards
focus. This can be achieved through the provision of convenient access, quality services and
high value. These factors will result in the spread of valuable WOM concerning the Islamic IB in Jordan
banks’ performance in the market from a customer perspective (Ladhari, 2007;
Lymperopoulos and Chaniotakis, 2008; Lee and Lee, 2009; Ng et al., 2011; Shirsavar et al.,
2012; Harris and Khatami, 2017).
Although the literature describes the importance of WOM for various businesses in
general, research examining the antecedents of WOM within the IB context remains limited
(Gremler et al., 2001), and little is known about how WOM operates in Jordan, a country
where WOM is believed to have considerable influence and importance on consumers’

decisions. Recent research that has been conducted on WOM in Jordan has focussed on the
impact of WOM on the purchasing decision of the Jordanian consumer (Zamil, 2011;
Al-Sanad, 2016; Al-Nsour, 2017). Further, little is known about WOM determinants and
more research in this area is highly recommended. In this research, we seek to address this
significant gap in the literature through examining the antecedents of WOM in IB, where
WOM is conceptualised as the focal construct of our research, rather than as a driver of
other behavioural constructs. Within this framework, this paper aims at identifying the
factors that determine WOM towards IB in Jordan through exploring the roles of service
quality, perceived value and convenience in that context. Consequently, this study has also
responded to important calls from previous research in the field of IB, which recommend
investigating gaps that exist in IB. More specifically, further research is needed in the field
of WOM within the context of IB (Wang et al., 2003; Amin and Isa, 2008; Idris et al., 2011;
Abdul Rehman and Masood, 2012; Srouji et al., 2015; Dahari et al., 2015; Thaker et al., 2016).
Other researchers have also argued that Islamic banks competitiveness in the market
depends on quality of services delivered to customers (Erol and El-Bdour, 1989; Erol et al.,
1990; Haron et al., 1994; Gerrard and Barton Cunningham, 1997; Metawa and Almossawi,
1998; Al-Tamimi and Al-Amiri, 2003; Amin and Isa, 2008; Abdul Rehman, 2012; Amirzadeh
and Reza Shoorvarzy, 2013; Dahari et al., 2015; Thaker et al., 2016). More specifically,
the research of (Choudhury, 2014; Mousavi et al., 2015; Kashif et al., 2016) has advised
incorporating multiple measures of the WOM construct, other than service quality in the
conventional banking industry, and investigate how service quality influences customers’
WOM intentions in other retail industries and cultural contexts, e.g., IB in emerging
markets. For instance, Srouji et al. (2015) recommended investigating customers attitudes
towards IB; Dahari et al. (2015) focus on investigating service quality and satisfaction in
various countries using advanced statistical methods; and, more recently, Thaker et al.
(2016) recommend investigating service quality and satisfaction using larger sample sizes
and sophisticated analytical methods.
Our paper attempts to address these gaps by developing and testing a model of
determinants of WOM towards IB in Jordan. Following the introduction section, we present
a brief review about the banking industry in Jordan, and then present relevant literature
review and hypotheses. The third section discusses the methodology, statistical analysis
and hypotheses testing. The fourth section presents our findings, discussions thereof,
conclusions, and implications. Finally, limitations and future research agenda are outlined.
The banking industry in Jordan

The banking industry is one of the main pillars of the Jordanian economy. In spite of the
consequences of the Arab Spring Revolutions in (2011), the well-capitalised and highly
regulated banking sector proved resilient, maintained its expansion and growth. The
banking industry consists of 25 banks, 16 of which are Jordanian and 9 are none Jordanian
IJOEM where 4 banks of the total are Islamic (The Central Bank of Jordan, 2016). With 92 per cent of
the population in Jordan being Muslims ( Jordan.gov.jo, 2017) the opportunity to benefit from
an Islamic financial system was alluring. The inauguration of the Jordan Islamic Bank for
Finance and Investment in 1979 was the beginning of the IB industry. The share of deposits
of the Jordanian Market in Islamic banks was 17.96 per cent, 75.08 per cent in commercial
banks and 6.96 per cent in foreign commercial banks. The share of credit facilities for
Islamic banks is 23.12 per cent, for commercial banks is 71.16 per cent, and 5.28 per cent for
foreign commercial banks (Association of Banks in Jordan, 2016). This indicates that Islamic
banks are underperforming in comparison to conventional banks. Some of the reasons that
contributed to this performance of Islamic banks in Jordan are related to relatively low levels
of service quality, weak banking operations, limited efficiency and experience by the banks’
employees (Abu Dalbooh, 2014). Based on the total deposits of Islamic banks in 2016
( JD7,039.02m), the market shares of Islamic banks are: Jordan Islamic Bank (57.5 per cent),
International Islamic Arab Bank (26.6 per cent), Jordan Dubai Islamic Bank (now is known
as Safwa Islamic Bank) (11.0 per cent) and Al Rajhi Bank (0.049 per cent) (Association of
Banks in Jordan, 2016).
Literature review
Importance of WOM
Cornerstone research showed that WOM influences the possibility of adopting products,
product judgements, brand attitudes, brand choice and purchase intentions (Bone, 1995;
Arndt, 1967; Herr et al., 1991; Sundaram and Webster, 1999). Consumer evaluations such as
satisfaction, perceived quality, perceived value, trust and commitment have been studied
extensively as antecedents of WOM (De Matos and Rossi, 2008). These evaluations capture
consumers’ knowledge of and experiences with a product, service, or firm, and guide
consumers’ subsequent actions (Garbarino and Johnson, 1999).
Previous research has shown that WOM has significant impact on consumers’ attitude
and buying decisions (Day, 1971; Bone, 1995). According to (Ladhari, 2007; Lymperopoulos
and Chaniotakis, 2008; Lee and Lee 2009), WOM has also an impact on the consumers’
buying judgements and satisfaction. Theoretical frameworks such as the Theory of Planned
Behaviour (TPB) have always sought to explain social behaviour and are thought to be
appropriate for measuring customers’ intention to engage in WOM communication (Cheng
et al., 2006; Reni and Ahmad, 2016). This intention, in return, is a function of three factors: an
individual’s overall positive or negative evaluation on performing a behaviour and a result
of expectancy-value judgements concerning that behaviour (Fishbein and Ajzen, 1975) (e.g.
perceived value); a general subjective norm concerning the performance of the behaviour,
determined by a person’s normative beliefs about what others who are important to him/her
think, and the extent to which an individual wants to comply with what they think (Ajzen
and Fishbein, 1980) (e.g. religious motives or social values); and the perceived control over
the behaviour, which reflects the consumer’s perception of the presence of factors that may
facilitate or impede the performance of an act, such as the availability of time and money or
the possession of required skills and the person’s self-confidence in the ability to perform the
act (Ajzen, 1991; Taylor and Todd, 1995) (e.g. convenience). Understanding of what
stimulates WOM provides fertile grounds for researching other aspects of the WOM
phenomenon. Its motives help in explaining what kind of WOM customers give (De Angelis
et al., 2012; Berger and Milkman, 2012; Berger and Iyengar, 2013; Berger, 2014), and in what
situations. Other studies have attempted to capture what influences customers intentions in
the adoption of banking operations in the digital sphere with an emphasis on the technology
acceptance model (AlKailani, 2016). Within the context of internet banking in Jordan,
Alkilani’s study extended the TAM model by adding external factors, namely, bank
credibility, perceived risk and perceived trust. However, our study is different since it
investigates what spurs WOM in the domain of traditional banking operation in the Islamic Factors
context with a clear focus on the roles of service quality, religious motives, convenience and affecting
perceived value. WOM towards
The banking industry has received considerable attention from researchers in terms of
WOM. Ng et al. (2011) argue that functional quality (which refers to how the service is IB in Jordan
actually provided) drives WOM behaviour. Many studies have been conducted in emerging
markets such as Iran, India and Indonesia in this regard. In Iran, WOM is an important
element of the Iranian banks competitive advantage, in addition to factors such as corporate
image, relationship marketing, perceived value, perceived risk, satisfaction and loyalty
which are found to be the major determinants of positive WOM (Shirsavar et al., 2012). In the
same vein, Ghalandari (2013) pointed that perceived service quality has a positive influence
on customer perceived value and customer satisfaction, and customer perceived value has a
positive influence on customer satisfaction and customer’s WOM communication. Further,
customer satisfaction has a positive influence on customer’s WOM communication and
perceived value has high effect on WOM communication. Mousavi et al. (2015) stipulated
that new services and cost of delivered services have a positive significant effect on the
customer’s WOM advertising in the Iranian banking sector. Harris and Khatami (2017)
found that satisfaction, commitment, loyalty, trust, perceived value and quality to be
significant antecedents of WOM. As for the financial services sector in India, Dillon (2013)
argued that the majority of clients regraded WOM an effective means of communication for
attracting new customers and retaining existing ones. These findings supported similar
results that were reported earlier by Reichheld and Sasser (1990), Ennew et al. (2000),
Gremler et al. (2001). Choudhury (2014) revealed that four dimensions of service quality,
specifically, attitude, competence, tangibles and convenience are important influencers of
WOM in retail banking.
IB selection factors
Literature on IB shows that cost and benefits of products offer (customer value), service
delivery (fast, efficient and quality), confidentiality, size and reputation of the bank,
convenience (location and parking space), friends and families influences (reference group’s
WOM) and friendliness of personnel are important factors that affect customers’ choices
(Erol and El-Bdour, 1989; Erol et al., 1990; Haron et al., 1994; Gerrard and Barton
Cunningham, 1997; Metawa and Almossawi, 1998; Ahmad and Haron, 2002). Furthermore,
religious beliefs are found to be an important selection criterion in IB (Erol et al., 1990; Haron
et al., 1994; Metawa and Almossawi, 1998; Naser et al., 1999; Okumuş, 2015). Yet, despite the
argument that Islamic banks are true manifestations of Islamic dealings that the clients
themselves respect and believe in, Islamic bank customers are suffering from levels of
service quality and perceived value. Previous studies found that religious motivation is not
the solitary criterion for the selection of IB or its services (Erol and El-Bdour, 1989; Erol et al.,
1990; Haron et al., 1994; Gerrard and Barton Cunningham, 1997; Taib et al., 2008; I’sa Abd
Jalil et al., 2010; Awan and Shahzad Bukhari, 2011; Ullah, 2014). Various researchers argue
that fast and efficient service delivery is one of the most important factors for the bank
customers, either for Muslims or non-Muslims, in preferring an Islamic bank. Wang et al.
(2003) stated that delivering quality service to customers is essential for success and
survival in today’s competitive banking environment (both Islamic and commercial). Dusuki
and Abdullah (2007) concluded that Islamic bankers can no longer rely on the Islamicity of
their products only but they need to focus on the quality of the services provided to ensure
customer satisfaction. Many other researchers have also argued that Islamic banks
competitiveness in the market depends on quality of services delivered to customers
(Erol and El-Bdour, 1989; Erol et al., 1990; Haron et al., 1994; Gerrard and Barton
Cunningham, 1997; Metawa and Almossawi, 1998; Al-Tamimi and Al-Amiri, 2003;
IJOEM Amin and Isa, 2008; Abdul Rehman, 2012; Amirzadeh and Reza Shoorvarzy, 2013; Dahari
et al., 2015; Thaker et al., 2016). Rashid and Hassan (2009) found that corporal efficiency
(faster transaction and document processing, efficient managers and knowledge of
customers) and the provision of core banking are valued the most by bank customers in
Bangladesh, while compliance with Shari’a and Islam is only a priority for older
respondents. Amin et al. (2011) instituted that three determinants influence the intention to
use Islamic personal financing services which are: attitude, social influence and pricing of
these services. Religious obligation and government support were found to be irrelevant.
These findings have also supported those of Taib et al. (2008) in Malaysia. I’sa Abd Jalil et al.
(2010) argued that the advantage and goodness of the product, income, advice from a third
party and lifestyle are important determinants when dealing with Islamic home financing.
Idris et al. (2011) instituted that religious values appear to be the most important factor that
influences consumers preferring an Islamic bank in Malaysia. Other important factors
include ATM services, financial security, cost and benefit, and attractiveness of the bank.
On the same vein in Malaysia, Ahmad et al. (2011) concluded that young customers view
brand, ease of use and the quality of the customer interaction as the most important
selection factors.
In Pakistan, Awan and Shahzad Bukhari (2011) found that customers value product
features and quality of service as major factors for selecting an Islamic bank, while religious
beliefs were given little importance as an influential factor in their selection criteria.
In Lahore, Shari’a abidance is the most important factor for consumers when selecting
Islamic home financing complemented by speed and efficiency of services, reputation, and
terms and conditions of product flexibility (Hamid and Masood, 2011). Subhani et al. (2012)
found that high profit, low service charges, religious motives, and quality of service were the
most valued factors for the selection of an Islamic bank in Karachi. In Peshawar, religious
support and quality of service are the most influential drivers of clients’ attitudes towards
IB (Khan, 2012). On the same note, religious motives, convenience, customer service quality
and knowledgeable personnel are major determinants for full-fledged Islamic banks in
Pakistan (Abdul Rehman and Masood, 2012). Alam et al. (2012) conducted that perceived
behavioural control, attitude and religiosity have significant and positive effects on
intention to undertake Islamic home financing. This finding contradicts with earlier
research by Marimuthu et al. (2010) indicating that cost-benefits, service delivery,
convenience, and friends/relatives have a more significant effect on the acceptance of IB
than ethnic background and religion. Ramdhony (2013) debated that Muslims in Mauritius
take into account third party influences (WOM) and attraction when selecting an Islamic
bank. In Jordan, Ramadan (2013) stated that clients prefer friendly personnel, Islamic
reputation and product price over anything else when choosing an Islamic bank. More
recent studies in Pakistan investigated the selection criterion of IB for clients in Lahore
indicate that clients choose Islamic banks because they deal with low-cost products and
services, and deliver better and wide range of products as compare to conventional banks
(Ullah, 2014). Tara et al. (2014) found that awareness regarding the financial teaching of
Islam, reputation, networking and religion are the most significant factors when adopting IB
in Pakistan; meanwhile, Bisharat (2014) concluded that the rate of return is a strong
influencer on the general behaviour of customers towards Islamic banks. In addition to that
customers of Islamic banks are motivated by profit rate on deposits more than anything in
Pakistan (Akhtar et al., 2017).
In Jordan, Tobin (2014) argued that Muslim customers consider a number of elements
that are less Islamic and more economical such as the availability of ATM services when
choosing their Islamic bank. Abdi (2015) instituted that religiosity, knowledge, services and
reputation are the most important variables that would explain the choice towards Islamic
banks in Northern states/Malaysia. Srouji et al. (2015) concluded that religious motives of
customers are influential for selecting an Islamic bank in Jordan, whereas bank convenience, Factors
reputation and images are significant for both types of banks. On a related note, in affecting
Istanbul-Turkey, Okumuş (2015) stipulated that customers’ motivation towards dealing WOM towards
with an Islamic bank is “religious beliefs” rather than “high return/profitability” from
financial products. The influence of religiosity has also been found to have an impact on IB in Jordan
consumer attitudes towards IB in Egypt (Abou-Youssef et al., 2015). Similarly, Obeid and
Kaabachi (2016) demonstrated that religious commitment, the amount of information held
by consumers about Islamic finance, the relative advantage of IB and its compatibility with
consumer values, lifestyle and banking habits are predictors of its adoption in Tunisia. Ltifi
et al. (2016) confirmed that compliance with Sharia law, quality of service offered by the
financial institutions and trust are the most important determinants of dealing with an
Islamic bank.
As for Indonesia, Reni, and Ahmad (2016) investigated the constructs of Theory of
Reasoned Action and TPB (attitude, subjective norm, religion, knowledge, pricing and
government support) on customer behavioural intention and IB selection. The result showed
that all the previous factors have a statistically significant effect on intention to select
Islamic bank. Setiawan and Panduwangi (2017) specified that assurance is the most
important factor when deciding to use Islamic bank services in Indonesia, other factors like
the quality of service, physical evidence, the reliability of service officers and the application
of Sharia principles in their operations are found significant too. In addition to that, Islam
and Rahman (2017) revealed that customers are willing to go for IB if informed properly
about IB operations and offered better customer experience. In Ghana, consumer attitude,
readiness to comply with Shari’a law, knowledge, perceived innovativeness and perceived
benefits are critical determinants of bank customers’ intention to adopt IB in both Muslim
and non-Muslim sub-groups (Mbawuni and Nimako, 2017), while service encounter failures
account for retail bank switching (Narteh, 2013). Additionally both genders perceive the
quality of financial advice, provision of information and service delivery are significant
areas that need improvement in Ghana’s Banks (Owusu-Frimpong, 2008).
Model
In view of relevant literature of IB, the majority of research has almost focussed on classic
aspects such as marketing mix elements, service quality, the role of Shari’a and Islamic
law in selecting a bank, and replicating traditional issues in consumer behaviour in the IB
context. Few empirical studies investigated the determinants of WOM in IB with focus on
emerging markets, e.g., Jordan. Currently, many Islamic banks are competing head-on
against their conventional peers. This entails that attracting Shari’a compliant customers
is no longer sufficient to maintain Islamic banks’ rivalry in the market. Accordingly, the
provision of competitive products, high perceived value, quality service and convenience
assumes high priority (Garbois and Gourp, 2012). This research argues that customers of
Islamic banks are fully aware of Islamic law and teachings regarding banking
transactions (prohibition of Riba), but there is a lack of understanding amongst Islamic
banks related to what drive consumers to recommend their banks to others. Accordingly,
there is a need to investigate the factors that affect or drive customers’ WOM towards IB
to other customers. Based on the discussed literature, this research attempts to fill this gap
by developing and testing a model of WOM determinants in IB in Jordan. We posit that
customers remain with their banks if they perceive high value upon which they are willing
to recommend their banks to others. We also argue that customers’ perceived value and
WOM are a function of service quality, religious motives and convenience. Hence, Figure 1
presents the conceptual model.
Based on relevant literature review, our model, shown in Figure 1, shows that service
quality, religious motives and convenience act as independent variables in their relationship
IJOEM Service
Quality
Religious Perceived Word-of-

Motives Value Mouth
Figure 1.
The proposed
research model Convenience
with perceived value, as a dependent variable. Further, service quality and convenience act
as independent variables affecting WOM, as a dependent variable. Finally, perceived value,
as an independent variable, affects WOM as a dependent variable. The relationships
between the model variables are hypothesised and tested simultaneously using structural
equation modelling to understand the drivers of WOM collectively.
Variables in the WOM model

For the purpose of this research, service quality is the firms’ ability to deliver services in
accordance with customer’s level of expectation (Parasuraman et al., 1985). Customers’
perceptions of service quality are their assessment of the overall excellence or superiority of
the service (Zeithaml, 1988). Factors like providing quick and efficient service, employees’
readiness and competence to handle clients’ requests, employees’ helpfulness, courtesy and
training, the variety of banking services provided and finally trust, confidentiality and
privacy are all considered as indicators of service quality. As for perceived value, it is the
perception created by customers about their interaction with service providers (Woodruff,
1997). The judgement made by them according to their sense of control over the
management, utilisation and conversion of their time and effort in achieving their goals
associated with access to and use of the service (Thuy, 2011). Perceived value is measured
by the perception of the service price fairness, the performance of the services against the
money paid and the client satisfaction level with the banking service provided and the profit
margins. Convenience is the ability to reduce consumers non-monetary costs (i.e. time,
energy and effort) when purchasing or using goods and services (Chang and Polonsky,
2012). The location of the bank branch, the network of ATMs and bank branches, the
external design and appearance of the bank, and the availability of a parking area and ease
of accessibility are all considered under the convenience umbrella. The bank’s adherence to
the Islamic principles of finance is portrayed in the clients’ religious motives. Many
customers select IB services on the basis of religious grounds. Customers might prefer IB
system as it involves free interest services, and complies with Shari’a principles (Erol et al.,
1990; Haron et al., 1994; Metawa and Almossawi, 1998; Naser et al., 1999; Bisharat, 2014;
Okumuş, 2015). Finally, WOM communication, which is an interpersonal communication
where one side receives non-commercial information regarding a brand, product or service
(Arndt, 1967). Clients’ engagement in exchanging opinions (positive or negative) about the
bank’s services, and recommending it to friends, family and relatives are the measurement
items of this variable for the sake of this research.
Hypotheses development
Service quality refers to firms’ ability to deliver services in accordance with customer’s level
of expectation (Parasuraman et al., 1985), while perceived value is a perception created by
customers about their interaction with service providers (Woodruff, 1997). Researchers have Factors
examined the structural relationship between service quality, customer satisfaction, affecting
perceived value and repurchase intention (e.g. Chang and Wildt, 1994; Woodruff, 1997). WOM towards
According to FandosRoig et al. (2009) perceived value consists of two elements, i.e. benefits
and sacrifices associated with a certain transaction. Therefore, value is a consumer IB in Jordan
perception about the final worth of a service or product with respect to its benefits and costs.
The proposed relationship between perceived value and satisfaction is well documented in
the literature (e.g. Hellier et al., 2003; Yang and Peterson, 2004; Lai et al., 2009). Also, several
empirical studies have indicated a positive direct relationship between service quality and
perceived value (e.g. Zeithaml, 1988; Cronin, 1990; Raza et al., 2012; Ghalandari, 2013;
Rasheed and Abadi, 2014; Najafzadeh and Shiri, 2015; García-Fernández et al., 2017). In the
IB arena, research indicates that there is a significant link between service quality
and customer satisfaction in IB (e.g. Othman and Owen, 2001; Amin and Isa, 2008;
Abdul Rehman, 2012; Kashif et al., 2016) as well as in the banking service industry in
general (Arasli, Mehtap-Smadi and Turan Katircioglu, 2005; Arasli, Turan Katircioglu and
Mehtap-Smadi, 2005; Karatepe et al., 2005). Hence, the service quality-satisfaction link is well
established, and satisfaction is reflected in providing certain levels of service quality to
customers. As a result, Islamic banks should aspire to sustain their relationship with
customers through the provision of high-value product/service in a distinctive manner in
order to create competitive advantage, hence enhancing their viability on the long term.
Therefore, in light of the previous discussion, we can hypothesise that:
H1. Service quality has a positive significant effect on perceived value.
In the retail banking industry, there is a huge possibility for leveraging WOM to reach out to
customers (Choudhury, 2014). The importance of WOM concept for the service sector has
been well established (Parasuraman et al., 1991) which originated from the idea that service
quality is hard to evaluate and, therefore, WOM has become an influential factor from
consumers’ perspectives (Maru File et al., 1992). Empirical studies have demonstrated that
service quality is a relevant predictor of WOM (Singh, 1988; Zeithaml et al., 1996; Bloemer
et al., 1999; Harrison-Walker, 2001; De Matos and Rossi, 2008; Ng et al., 2011; Harris and
Khatami, 2017). These studies demonstrated that the higher the perceived quality leads to
the higher WOM activity of the customers. Therefore, the relationship between satisfaction
with service quality and the desire to make recommendations for the service provider
becomes clear, bearing in mind that service quality is an antecedent of consumer
satisfaction (Lymperopoulos and Chaniotakis, 2008; Shabbir et al., 2010; Li, 2013;
Choudhury, 2014; Mousavi et al., 2015). Based on this discussion, we can hypothesise that:
H2. Service quality has a positive significant effect on WOM towards IB.
TPB postulates that subjective norms affect behavioural intention (Ajzen and Fishbein,
1980; Fishbein and Ajzen, 1975). It is the individual’s perception about a particular
behaviour, which is influenced by the judgement of significant others and by the persons’
motivation to comply with their expectations (May, 2005; Gopi and Ramayah, 2007). Kotler
(2003) argued that religion is the element of culture that shapes people’s behaviour. Those
who believe in a certain religion hold values that influence their actions and decisions.
Therefore, it is obvious that religion often influences customers’ behaviour and decisions
when purchasing a product or service. Kotler’s argument explains why Muslims who are
sensitive about interest-based transactions deal with an Islamic bank only. In the arena of
Islamic finance, subjective norms have a direct impact on the intention (Amin et al., 2011).
Muhamad et al. (2009) argued that religion and religiosity explain the fundamental motive of
consumers when opting for the services provided by Islamic banks. This is consistent with
other research that asserted religion is a primary motivation in the use of IB products and
IJOEM services (Metawa and Almossawi, 1998; Bley and Kuehn, 2004; Othman and Owen, 2001;
Osman et al., 2009; Tara et al., 2014; Abdi, 2015; Srouji et al., 2015; Okumuş, 2015;
Abou-Youssef et al., 2015; Obeid and Kaabachi, 2016; Reni and Ahmad, 2016). However,
many researchers argue that religion is not the most significant factor when selecting an
Islamic bank from a customer’s perspective (Erol and El-Bdour, 1989; Erol et al., 1990; Haron
et al., 1994; Gerrard and Barton Cunningham, 1997, Taib et al., 2008; I’sa Abd Jalil et al., 2010;
Awan and Shahzad Bukhari, 2011; Ullah, 2014). From the perspective of committed
Muslims, the main concern that guides their decision in choosing financial services is
whether they are Shari’a compliant, even though they have to pay higher prices. This will
directly influence their perception of the perceived value of the Islamic banks. Hence, we can
hypothesise that:
H3. Religious motives have a positive significant effect on perceived value.

Previous research investigated convenience as a motive to make a purchase decision, and
found it as one of the most important factors to consumers (Chen et al., 2011; Khazaei et al.,
2014; García-Fernández et al., 2017). Customers seek service providers’ offerings that are
convenient in terms of search, access, purchase and use (Seiders et al., 2000). Literature has
also revealed that convenience is an important service attribute that influences consumers’
evaluation of service encounters with Islamic banks (Seiders et al., 2000; Abduh et al., 2012;
Subhani et al., 2012; Ramadan, 2013; Ramdhony, 2013; Kaura et al., 2014). Therefore, we can
hypothesise that:
H4. Convenience has a positive significant effect on perceived value.
Customers are interested in ways to conduct their transactions in a fast and efficient manner
due to time and financial constraints. Convenience has been associated with elements such
as customer satisfaction, intention and loyalty. It has also been reflected in TPB as the
perceived behavioural control which explains a consumer’s perception of the presence of
factors that may facilitate or impede the performance of an act, such as the availability of
time and money or the possession of required skills (Ajzen, 1991). If customers believe that
they have little control over performing a particular type of behaviour because of the lack of
requisite resources, their intentions to perform the behaviour (engagement in WOM) might
be lower even if they held favourable attitude and/or subjective norms concerning the
behaviour (Cheng et al., 2006). Lyon and Powers (2004) suggest that the outcome variables of
intention to return to the service provider and WOM communication are two of the
indicators most used for measuring behavioural intentions. Rowley (2005) noted that
convenience has an impact on brand reputation and preference, while Seiders et al. (2005)
have indicated that convenience is an essential predictor of purchase repetition. Moreover,
research stipulates that convenience has a positive effect on WOM communication and
other behavioural responses of customers that lead to the creation of positive WOM
communication via customers (Athanassopoulos et al., 2001; Blodgett and Li, 2007;
Fernandes and dos Santos, 2007; Dai et al., 2008; Ishaq, 2011; Khazaei et al., 2014;
Choudhury, 2014). Improving all types of convenience should enhance consumers’ positive
behavioural intentions, as the types of convenience facilitate consumption of services
(Chang and Polonsky, 2012). Accordingly, we can hypothesise that:
H5. Convenience has a positive significant effect on WOM towards IB.
Perceived value is a viable construct to predict buying behaviour (Parasuraman and Grewal,
2000; Anderson and Srinivasan, 2003; Chen and Dubinsky, 2003). It is identified as one of the
most important factors for the success of an organisation due to its substantial influence on
customer commitment, which in turn positively impacts WOM referrals and repurchases
intentions (Mosavi and Ghaedi, 2012). Within the domain of services marketing, WOM is
utilised as an effective marketing tool by firms to increase their share of customers, and is Factors
essential to reduce the risks perceived by customers (Zeithaml, 1981; Silverman, 1997; affecting
Ennew et al., 2000; Sweeney et al., 2008; Ng et al., 2011). WOM spurs from an evaluation of WOM towards
how the acquired service or product performs.
According to TPB, attitude is an important variable that predicts the behavioural IB in Jordan
intention (Fishbein and Ajzen, 1975). Customers’ attitude is seen as an overall effect towards
an act, and it reflects the overall evaluation of the goodness or badness to perform the act
after assessing the outcome of behavioural beliefs. Further, when customers perceive they
have received higher value from an organisation they are motivated to support the
organisation through exhibiting behaviours, such as WOM, which reciprocate the value
which have been provided and demonstrate their attachment (Dick and Basu, 1994;
McKee et al., 2006; Lee et al., 2007; Hansen et al., 2008). Previous empirical research found
that perceived value has positively affected WOM (de Matos and Rossi, 2008; Hansen et al.,
2008; Brodie et al., 2009; Mosavi and Ghaedi, 2012; Yasvari et al., 2012; Abdolvand and
Norouzi, 2012; Mousavi et al., 2015; Harris and Khatami, 2017). Accordingly based on
previous research, we can hypothesise that:
H6. Perceived value has a positive significant effect on WOM towards IB.
Research methodology
Research sample
This research aims to examine the determinants of WOM towards IB in Jordan. There are
four Islamic banks operating in Jordan: Jordan Islamic Bank (74 branches), International
Islamic Arab Bank (41 branches), Jordan Dubai Islamic Bank (now is known as Safwa
Islamic Bank) (25 branches) and Al Rajhi Bank (7 branches) (Association of Banks in Jordan,
2016). The research population consisted of Islamic Banks customers who have active retail
bank accounts in the four banks. The sampling frame is Islamic retail banks customers who
have active accounts in banks’ branches in Amman, Capital of Jordan. The investigated
Islamic banks accounts are current, saving, and personal loans accounts which are the most
commonly used bank accounts upon which customers have frequent transactions with their
banks (Association of Banks in Jordan, 2016). The authors of this paper have made several
attempts to gain access to customers’ databases for sampling purposes. Access was not
granted to the researchers due to confidentiality of customers’ accounts details and
competitive reasons. Therefore, a two-stage non-probability sampling strategy was
employed which is convenience and quota using the mall interception data collection
method. Further, convenience sampling is an acceptable sampling method to adopt in IB
(Marimuthu et al., 2010; Idris et al., 2011; Alam et al., 2012; Srouji et al., 2015) and is sufficient
for multivariate data analysis purposes (Hair et al., 1998). The next stage is identifying
quotas based on the number of branches owned by each bank to execute the quota sampling
method (Association of Banks in Jordan, 2016). Using banks branches for selecting Islamic
respondents has been supported by previous research (Naser et al., 1999; Wang et al., 2003;
Dusuki and Abdullah, 2007; Amin and Isa, 2008; Ramadan, 2013; Okumuş, 2015; Kashif
et al., 2016). Therefore, the four banks branches located in Amman were used to execute the
sampling process since: Islamic banks enjoy heavy presence in Amman; Amman represents
the highest population intensity in Jordan; banks branches location (convenience) is one of
the study variables; and number of bank branches reflects a bank’s size in retail banking
and number of customers.
Using the mall interception method, five research assistants executed the field visits to
the four banks branches and obtained permission from their administration to administer
the survey in the customer area where each customer should have completed a transaction/s
at the branch. Then, any customer who had a bank transaction at the branch and agreed to
IJOEM participate in the survey was asked to complete the survey questions. According to our pilot
work, the survey questions needed 4–5 min from each customer’s time to answer and return
back to the research assistant at the branch. Finally, 400 participants were approached
and agreed to participate in the survey. Hand-delivered surveys were distributed and
administered by five well-trained research assistants to 400 Islamic retail banks customers
in Amman. The unit of analysis was “the Islamic Retail Bank Customer” who has experience
with IB.
Analysis of the respondents profile shows that 59.9 per cent are males and 40.1 per cent
are females. More than 85 per cent of the respondents are young and aged between 18 and
50 years old (23.6 per cent are 18–29 years; 33.0 per cent are 30–39 years; 31.3 per cent
are 40–49 years; 12.2 per cent are more than 50 years) and well educated (16.5 per cent hold
⩽ high school; 18.5 per cent hold two years college; 44.9 per cent hold bachelor degree;
20.2 per cent hold graduate degrees). Also, the majority of Islamic bank customers general
annual income are between JD4,000 and JD12,000 s per year (24.4 per cent generate income
⩽ JD4,000; 40.6 per cent generate income JD4,001–8,000; 16.5 per cent generate income
JD8,001–JD12,000; 8.8 per cent generate income JD12,001–JD18,000; 6.3 per cent generate
income JD18,001–JD22,000; and 3.4 per cent generate income WJD22,000 yearly). With
regards to nature of customers’ jobs, 46.9 per cent work in the private sector, 50.3 per cent
work in the public sector and 2.8 per cent are retired.
Measurement items
The constructs in our model were developed from available literature on perceived service
quality, religious motives, convenience, perceived value and WOM towards IB, which
provided rich, valid and reliable measures, as shown in Table I. All of the research
constructs were measured using a multiple-item measurement scale to capture the richness
of each construct. Service quality was measured using a 11-item scale (Subhani et al., 2012;
Ramadan, 2013; Ramdhony, 2013; Okumuş, 2015). Convenience was measured using a
six-item scale (Subhani et al., 2012; Ramdhony, 2013; Ramadan, 2013). WOM was measured
using a four-item scale (Subhani et al., 2012; Khan, 2012; Ramdhony, 2013). Perceived value
was measured using a four-item scale (Subhani et al., 2012; Khan, 2012; Ramdhony, 2013).
Religious motives were measured by a three-item scale (Dusuki and Abdullah, 2007; Idris
et al., 2011; Subhani et al., 2012; Ramdhony, 2013; Bisharat, 2014). All the research constructs
were measured on four-point Likert-type scales ranging from 4 “Strongly Agree” to
1 “Strongly Disagree”. A small section was also included in the questionnaire to study the
profile of respondents.
Questionnaire design, administration and data collection

To test the research model and hypotheses, a self-administered survey was developed and
hand-delivered to the participants. The questionnaire was designed via an iterative process
that has been adapted from previous empirical research to generate its measurements and
items (Akroush et al., 2016). Although English is widely spoken in Jordan, the questionnaire
was originally constructed in English and then translated into Arabic based on the
translation guidelines provided by Malhotra (2010) and Akroush et al. (2016). Then, two
bilingual PhD holders in business who are familiar with IB translated our questionnaire
from English to Arabic. Then, back translation was employed until the final version was
produced in Arabic. Finally, the English and Arabic versions were piloted before starting
the primary data collection process (Akroush et al., 2016). Next, the survey instrument was
piloted using six personal interviews with a judgemental sample of Islamic retail banking
customers in Amman to reveal their ability to understand it and to test its appropriateness
for the research purposes. Also, two academics from reputable Jordanian universities
examined the questionnaire for face and content validity purposes (Akroush et al., 2016).
Constructs, items and measurements EFA loadings CFA loadings
Factors
affecting
Service quality: eigenvalue ¼ 12.67; CR ¼ 0.90; AVE ¼ 0.77
My bank provides banking services quickly and proficiently 0.80 0.87
WOM towards
My bank provides banking services quality that gives me IB in Jordan
value for the money I pay 0.82 0.87
My bank employees are always ready to handle my requests
and needs 0.85 0.89
My bank has a wide range and variety of IB services 0.81 0.87
My bank employees have courtesy and competence when
dealing with me 0.75 0.80
My bank employees are competent and able to explain IB

services and policies 0.77 0.77
I trust my bank administration 0.78 0.81
My bank keeps confidentiality and privacy about my
transactions 0.83 0.87
My bank has e-banking services and easy to use 0.82 0.88
My bank employees are always willing to help customers 0.79 0.85
My bank has well-trained employees who have the
knowledge to answer customers’ queries 0.78 0.85
Convenience: eigenvalue ¼ 3.18; CR ¼ 0.83; AVE ¼ 0.76
I deal with my bank since it is close to where I live 0.88 0.88
I deal with my bank since it is close to where I work 0.90 0.90
I deal with my bank due to its wide spread of ATM network 0.86 0.88
I deal with my bank due its wide spread of branches network 0.87 0.89
I deal with my bank because of its external appearance
and design 0.55 Deleted
I deal with my bank due access and availability of
parking area 0.76 0.73
Word-of-mouth: eigenvalue ¼ 2.26; CR ¼ 0.78; AVE ¼ 0.80
I would recommend IB to friends 0.85 0.92
I would recommend IB to family and relatives 0.87 0.95
I would recommend IB to others based on mass media
promotional campaigns 0.83 0.79
I would recommend IB based on bank reputation 0.70 0.74
Perceived value: eigenvalue ¼ 1.85; CR ¼ 0.80; AVE ¼ 0.78
The IB services are a good level of performance for the
money I pay 0.80 0.92
I am satisfied with the IB services I receive from my bank 0.82 0.92
The prices of IB services are fair for the performance I
receive since my bank takes into account the provisions of
Islamic law when pricing banking services 0.83 0.81
The IB is a great value; low Murabaha rates (profit margin
on loans) on loans 0.80 0.82
Religious motives: eigenvalue ¼ 1.76; CR ¼ 0.75; AVE ¼ 0.86
My bank provides Shari’a compliant banking services 0.88 0.87
I use IB since my bank does not deal with the conventional
interest in order to be compliant with the principles of
Islamic law 0.93 0.93
I think that IB system is the best since it is consistent with
the principles of Islamic law 0.88 0.84 Table I.
Exploratory and
confirmatory factor
(continued ) analyses resultsa
IJOEM CFA model goodness of fit indices
Model goodness of fit indices Model desired Baseline CFA Alternative
level model fit CFA model fit
indices indices
χ2 χ , p ⩾ 0.05
2
χ ¼ 1,446,
2
χ2 ¼ 1,194,
p ¼ 0.000 p ¼ 0.000
Normed fit index NFI ⩾ 0.90 0.85 0.91
Non-normed fit index NNFI ⩾ 0.90 0.87 0.92
Comparative fit index CFI ⩾ 0.90 0.89 0.93
Goodness-of-fit index GFI ⩾ 0.90 0.78 0.90
Adjusted goodness-of-fit index AGFI ⩾ 0.80 0.74 0.84
Standardized root mean-square residual SRMR ⩽ 0.08 0.06 0.04
Root mean square error of approximation RMSEAo 0.10 0.09 0.08

Notes: aThe results of EFA and CFA analyses and results are crucial for the research variables
unidimensionality, scales purification, convergent validity and composite reliability. The EFA and CFA
results indicate that the variables are statistically and methodologically sound to conduct SEM to test the
Table I. research model and the hypothesised relationships
Based on the guidelines recommended by Malhotra (2010) and Akroush et al. (2016), the pilot
study was insightful upon which a number of amendments were carried out on the first
draft of the questionnaire where every aspect (e.g. time needed to answer the survey
questions, content, wording, design and layout) of the questionnaire was piloted. Based on
our sampling strategy, the survey was delivered to 400 Islamic banks consumers where the
research objectives were explained to them. Using the survey approach for data collection is
consistent with previous studies that have investigated IB within the consumer behaviour
research context (Gerrard and Barton Cunningham, 1997; Metawa and Almossawi, 1998;
Dusuki and Abdullah, 2007; Amin et al., 2011; Marimuthu et al., 2010; Alam et al., 2012;
Srouji et al., 2015; Kashif et al., 2016). The participants were asked the extent to which they
agree or disagree with the items of the determinants of WOM towards IB. The respondents
were asked to fill the survey using the face-to-face interview where a research assistant was
available for any questions. The delivered surveys were 400 from which 352 were gathered
and valid for the analysis; the response rate was 88 per cent. The response rate is high due to
the fact that the personal delivery method is one of the best data collection methods that
usually yield high response rate (Malhotra, 2010).
Constructs validity and composite reliability (CR)

Reliability and validity of the used measures in our study are vital procedures to appraise the
characteristics of measurements, and these tools comprise a measurement of accuracy and
applicability (Hair et al., 1998; Field, 2000). The main aim for conducting reliability and validity
of the measures is to twofold: to reveal our constructs unidimensionality; and to reduce
measurement errors which make the most of the model testing in the hypotheses (Hair et al.,
1998). Face, content, convergent and discriminant validity are used to assess the research
instrument validity. Face validity is evidenced through the pilot work of the research
instrument with six customers as well as two academic marketing experts in IB from reputable
business schools in Jordan who checked the relevance and appropriateness of the questionnaire
to achieve the research objectives (Akroush et al., 2016). Content validity is evidenced by
explaining the methodology used to develop the research questionnaire (Churchill, 2001), which
included: examining the previous empirical and theoretical work of factors affecting
consumers’ WOM towards IB; and conducting the pilot study before starting the fieldwork.
With regard to construct validity, exploratory factor analysis (EFA) and confirmatory factor
analysis (CFA) are used to assess construct validity (Hair et al., 1998; Akroush et al., 2016).
Thus, EFA is performed to test the unidimensionality of each construct to test the degree to Factors
which the items are tapping the same concept (Akroush et al., 2016). It has been recommended affecting
that CFA, derived from Structural Equation Modelling (SEM), is a more rigorous test of WOM towards
unidimensionality (Garver and Mentzer, 1999, p. 40). To assess the EFA, four commonly used
assumptions are followed (Hair et al., 1998; Field, 2000): sampling adequacy (Kaiser-Meyer-Olkin IB in Jordan
measure greater than 0.5); the minimum eigenvalue for each factor is to be 1; considering the
sample size, factor loading of 0.40 for each item is considered as the threshold for retaining items
to ensure greater confidence and eliminate items with low correlations; and varimax rotation is
used since it is a good general approach that simplifies the interpretations of factors (Field, 2000,
p. 449). Consistent with previous research in IB varimax rotation is used in this study to reveal
the unidimensionality of the research constructs. According to the statistical theory, the research
constructs are not expected to be correlated but, in reality, and in the social sciences research it is
very difficult to find constructs or variables uncorrelated (e.g. zero correlation). Previous
research used varimax rotation and there is some co-linearity but it is not high among the
research constructs providing evidence that this assumption is not violated (Hair et al., 1998).
Further, CR and average variance extracted (AVE), shown in Table II, support using varimax
rotation indicating that the research constructs are distinct from theoretical and statistical
perspectives. To assess the CFA, goodness of measurement model fit using SEM are followed
(Chau, 1997, p. 318): χ2 ( p ⩾ 0.05); goodness-of-fit index (GFI ⩾ 0.90); adjusted goodness-of-fit
index (AGFI ⩾ 0.80); normed fit index (NFI ⩾ 0.90); non-normed fit index (NNFI ⩾ 0.90);
comparative fit index (CFI ⩾ 0.90); standardised root mean-square residual (SRMR ⩽ 0.08); and
root mean square error of approximation (RMSEA o 0.10) (Garver and Mentzer, 1999).
Using Statistical Package for Social Sciences, all the research items were subjected to EFA
to reveal the unidimensionality of the research constructs (Akroush et al., 2016), which are
shown in Table I. For all the research constructs, an index of Kaiser’s measure of sampling
adequacy (overall MSA ¼ 0.93) and Bartlett’s test of Sphericity χ2 ( p ⩽ 0.000) suggested that
factor analysis is appropriate for analysing the data. The results of EFA indicate that the
research items loaded on five distinct factors which provide general empirical support to the
research constructs literature. Based on the eigenvalue greater than 1, a five-factor model was
derived that explains 77.6 per cent of the total variance. The results of the EFA analysis
revealed five dimensions of service quality, convenience, WOM, perceived value and religious
motives within the context of IB.
To confirm and validate the findings that emerged from using EFA (Akroush et al.,
2016), the five-factor model is evaluated by CFA using EQS 6.1 software. As shown in
Table I, measures of goodness-of-fit are met. As shown in Table I, one item (bank branch
appearance and design) is deleted during the CFA analysis due to weak factor loading less
than the cut-off point, 0.60. From a theoretical standpoint, it seems that IB customers are not
Constructs Mean SD 1 2 3 4 5
1. Service Quality 2.65 0.76 0.77

2. Convenience 2.44 0.82 0.19 0.76
3. Word-of-mouth 2.60 0.84 0.31 0.11 0.80
4. Perceived value 2.69 0.84 0.33 0.18 0.18 0.78
5. Religious motives 3.44 0.67 0.11 0.01 0.03 0.05 0.86
Notes: aFor the purpose of discriminant validity, the average variance extracted (AVE) for each variable is
calculated and reported. Also, the squared Pearson correlations were calculated between each pair of
variables and then the shared variances among the variables and AVEs were compared to examine Table II.
discriminant validity. As shown in Table II, since all the squared variables correlations and shared variance Shared variance
between each pair of variables are less than the variables AVEs, there is empirical support for the among the research
discriminant validity among the research variables constructsa
IJOEM highly interested in the appearance and design of a branch building and focus on other
areas of branch such as location and convenience. One of the study objectives is to retain the
items that have high loadings to maintain face validity since the modification indices
suggest that some items have more in common with each other than the specified model
allows. Therefore, consistent with the extant literature, offending items are sequentially
deleted until the standardized loadings and the fit indices reveal that no improvement could
be attained through item deletion (Akroush et al., 2016). In addition, following guidelines are
outlined by Voss et al. (2003), as shown in Table I, a series of shortened versions of the scale
is compared using χ2 difference test, AGFI, and model Akaike Information Criterion (AIC).
Based on the guidelines outlined by Voss et al. (2003), the item deletion process stops if the
deletion process compromises the construct validity, and when one or two possible results
occur: the χ2 difference test shows no difference; the AGFI does not increase; and model AIC
does not improve. One item from convenience, bank branch appearance and design is
deleted during the CFA analysis which is from the convenience factor due to weak factor
loadings and high error and model fit indices. The deletion of this item seems to be
reasonable since deleting it results in a better CFA model and fit indices, Table I.
Convergent validity is examined by using the Bentler NFI (Bentler, 1990). All of the
constructs have NFI values above 0.90 (Akroush et al., 2016). Furthermore, as shown in
Table I, indication of the measures’ convergent validity is provided by the fact that all factor
loadings are significant and that the scales exhibit high levels of internal consistency
(Fornell and Larcker, 1981; Gerbing and Anderson, 1988). Also, as shown in Table I, the
values of CR and AVE for each construct are all above the threshold suggested by Bagozzi
(1980): 0.70 and 0.50, respectively. In our research, the discriminant validity is established by
first, the absence of significant cross-loadings that are not represented by the measurement
model (i.e. congeneric measures). The absence of significant cross-loading is also an
evidence of constructs unidimensionality (Gerbing and Anderson, 1988); and second, to
establish the evidence for the discriminant validity among the constructs, we compared the
shared variance among the constructs with AVE from each construct. The discriminant
validity is established between two constructs if the AVE of each one is higher than the
shared variance (Akroush et al., 2016). Comparing the shared variance and AVE values
showed in Tables I and II, where the diagonal values are the AVEs, our results indicate a
support for the discriminant validity among the latent variables in our model.
Structural model and hypotheses testing

Structural path analysis was used to test our proposed model, as shown in Figure 2. The
analysis began by creating direct paths from service quality to perceived value and WOM
as well as running a direct path from branch location to perceived value and WOM. Also, a
direct path was created from religious motives to perceived value and a path was created
from the later to WOM towards IB. Table III shows the structural path model goodness of fit
measures and the structural paths results. As shown in Table III, the goodness-of-fit
measures indicate that the model has an excellent fit to the data.
The structural findings indicate that all the research hypotheses are supported H1–H6
except H3 and H5. Service quality has a positive and significant effect on perceived value
( β ¼ 0.47, t ¼ 9.58) and WOM ( β ¼ 0.44, t ¼ 7.92) towards IB, respectively, providing
support for hypotheses H1 and H2. Religious motives have a positive ( β ¼ 0.04, t ¼ 0.86) but
non-significant effect on perceived value, then, rejecting hypothesis H3. Convenience has a
positive and significant effect on perceived value ( β ¼ 0.22, t ¼ 4.58) and has a positive but
non-significant effect ( β ¼ 0.09, t ¼ 1.77) on WOM towards IB, providing support for
hypothesis H4 and, then, rejecting hypothesis H5, respectively. Finally, perceived value has
a positive and significant effect ( β ¼ 0.14, t ¼ 2.59) on WOM towards IB, providing support
for hypothesis H6.
Service Factors
Quality
affecting
WOM towards
0.47* 0.44* IB in Jordan
Religious Perceived Word-of-

0.04 0.14*
Motives Value Mouth
0.22* 0.09
Conven-
ience Figure 2.
The empirical model
Note: *Standardised coefficients is significant at p<0.05
Sub- Variables in the paths model β* t-value**

hypotheses
H1 Service quality → Perceived value 0.47 9.58*
H2 Service quality → Word-of-mouth 0.44 7.92*
H3 Religious motives → Perceived value 0.04 0.86
H4 Convenience → Perceived value 0.22 4.58*
H5 Convenience → Word-of-mouth 0.09 1.77
H6 Perceived value → Word-of-mouth 0.14 2.59
Model χ 2
NFI ⩾ 0.90 NNFI ⩾ 0.90 CFI ⩾ 0.90 GFI ⩾ 0.90 AGFI ⩾ 0.80 SRMR ⩽ 0.08 RMSEA o0.10
goodness of fit p ⩾ 0.05
indices: desired
level
Model indices Perfect fit to the data where NFI is 1:00
results
Notes: aThe SEM analysis indicates that the SEM model is valid and has excellent fit to the data since all the SEM model Table III.
testing fit indices are met. Also, the SEM results present the various paths included in the research model which are Summary of
hypothesised based on relevant literature. Therefore, the SEM results are valid for testing the research hypotheses and structural path
achieving its objectives. *Standardised β coefficients; **p o0.05 model resultsa
The structural findings indicate that service quality exerted the strongest effect on
perceived value ( β ¼ 0.47, t ¼ 9.58) and WOM ( β ¼ 0.44, t ¼ 7.92), respectively. Finally, the
structural results show that R2 result of 0.38 indicates that 38 per cent of variation in
perceived value was caused by religious motives→service quality→convenience path. Also,
R2 result of 0.34 indicates that 34 per cent of variation in WOM towards IB was caused by
perceived value→service quality→convenience path. Also, confidence intervals for each R2
(to examine whether the two R2 overlap) to test if there is a significant difference between
38 per cent of variation of perceived value and 34 per cent of variation of WOM. The results
indicate that confidence intervals for perceived value are between 2.35 and 2.50, and for
WOM are between 2.52 and 2.71. Since there is no overlap between the two values, that
means the two values are statistically different from each other. Consequently, there is a
significant difference between 38 per cent of variation and 34 per cent.
Results discussion
Spurred on by an experienced and active banking sector as well as a majority Muslim client
base eager to reconcile their needs for competitive financial services with religious demands,
IJOEM the phenomena of IB are thriving in Jordan, the Arab world and the Middle East. Despite
this surge, however, Islamic banks in Jordan face similar challenges to those of conventional
banks. In addition to increasingly fragmented competition and slow-growth economy,
Islamic banks are confronted with pressure to compete in an environment that is
characterised by clients, who are not only aware of this competition, but are also demanding
of quality professional Islamic financial services. This in turn has meant that banks are
continuously seeking not only to attain customer satisfaction, but retain it and eager for
clients to share their positive experiences with other clients via different mediums. In this
light, this study aims at determining the pertinent factors that influence WOM towards IB,
and evaluating the role/s that service quality, religious motives, convenience and perceived
value play in that context.
Our results indicate that a positive and significant effect of service quality on customer
perceived value. Factors such as staff readiness, knowledge, attentiveness and proficiency,
the variety of services offered, confidentiality of the bank, availability of e-banking services
and ease of use are the most valued by IB customers. These results are consistent with the
findings of (Zeithaml, 1988; Cronin, 1990; Raza et al., 2012; Ghalandari, 2013; Rasheed and
Abadi, 2014; Najafzadeh, and Shiri, 2015). Furthermore, service quality is also found to have
a positive and significant effect on WOM. This reveals customers’ willingness to share
positive experiences and recommend IB to family, friends and relatives, which indicates that
intangible elements of service quality like experience, courtesy, confidence of employees and
availability of a wide range of services are positively associated with WOM supporting the
findings of previous research of (Lymperopoulos and Chaniotakis, 2008; Shabbir et al., 2010;
Li, 2013; Choudhury, 2014; Mousavi et al., 2015; Ltifi et al., 2016).
The findings also point that religious motives have a positive but non-significant effect
on perceived value for IB customers. Contrary to previous studies (Idris et al., 2011; Ahmad
et al., 2011; Hamid and Masood, 2011; Abdul Rehman and Masood, 2012; Tara et al., 2014;
Okumuş, 2015), this shows that being consistent and compliant with the Shari’a law is not
the deciding factor when customers make the decision to deal with an Islamic bank. Islamic
banks services are evaluated in relation to a set of values that are not purely “Islamic”.
These values include service effectiveness, level of quality provided and economic value,
which corroborate the findings of other studies, where religious motives is a non-significant
determinant towards IB (Dusuki and Abdullah, 2007; Taib et al., 2008; Amin et al., 2011;
Ahmad et al., 2011; Subhani et al., 2012; Ramadan, 2013; Ullah, 2014; Tobin, 2014).
Convenience is found to have a positive and significant effect on perceived value, which
indicates that customers seek functional value when they shop for IB (FandosRoig et al.,
2009). Clients highly value bank proximity to home and workplace, availability of a vast
branch network and ATM machines and the provision of a parking area. As for
convenience’s effect on WOM towards IB, it is found to be positive but non-significant,
which contradicts with previous studies such as (Athanassopoulos et al., 2001; Ishaq, 2011;
Taghizadeh et al., 2013) who found that convenience, physical evidence and product
innovation positively impact behavioural responses in creating positive WOM
communication through the customers. A potential explanation for this result is that
customers might be willing to convey WOM messages through perceived value rather than
convenience which is positively and significantly linked to perceived value.
The effect of perceived value on WOM towards IB is found to be positive and significant.
The performance of the banking services against the prices paid for those services,
Murabaha rates and the consideration of Shari’a principles when setting the costs of the
services are among the most important factors to IB clients, and would seem to reflect the
findings in previous research (Taib et al., 2008; Amin et al., 2011; Subhani et al., 2012;
Bisharat, 2014). Marketing literature indicates that perceived value is a clear determinant of
customer satisfaction (Eggert and Ulaga, 2002; Wang et al., 2004; Gounaris et al., 2007).
Customer’s satisfaction is directly proportional and reflective to the level of delivered service Factors
quality and its cost. Earlier, Tam (2004) stated that the relationships between customer affecting
satisfaction, service quality and perceived value are a source of competitive advantage. WOM towards
The integration of these variables provides a better explanation and prediction of post-
purchase behaviour which manifests itself in the development of premium loyalty that results IB in Jordan
in repurchase intention, positive WOM and cross-buying (Gounaris et al., 2007). In conclusion,
Islamic banks can no longer depend on marketing strategy for attracting devoted and
religious customers who are merely concerned with the Islamicity of their services. Islamic
banks priority should instead be focussed on enhancing their service quality levels to increase
market competitiveness (Amin and Isa, 2008; Kashif et al., 2016). Consequently, it could
be argued that Islamic banks are at a critical intersection; the growth they have achieved on
the basis of conforming to religious demands is currently slowing down, and their customers
are becoming more selective and sensitive to market offerings. The potential for Islamic banks
in the region is monumental but there are many challenges they need to overcome. The
researchers of this study, and based on data provided by this survey, believe that Islamic
banks may be missing a big opportunity within the Muslim population due to an idea existing
among the current and potential customers that Islamic banks are not true to Shari’a values,
and the service quality arena should be improved. As an essential values-based industry,
Islamic banks must address this issue if they are to continue to thrive. Consequently, it is vital
that Islamic banks should adopt a “customer-centric” mindset, otherwise they risk losing out
on gaining new customers. As the industry matures, it will need to make the shift from its
Shari’a-values aspect to becoming more competitive with other banks, both Islamic and
conventional, from a customer service perspective.
Implications
There are a number of major implications for Islamic banks that arise from the results of
this study. The empirical findings of this study indicate that WOM towards IB is a function
of service quality, perceived value, and convenience. Theoretically, this implies that
improving how the service is delivered has an impact on WOM behaviour. The service
quality in Islamic banks is lower than in conventional banks as perceived by many
customers (Ltifi et al., 2016). Customers attach great importance to the various attributes of
service quality such as the availability of service variations, the skills and proficiency of
employees in contact with clients, the confidentiality of the transaction and the speed of the
financial transactions. Islamic banks can achieve differentiation by offering high-quality
services, resulting in increasing the banks’ profits, securing customer satisfaction,
improving customer loyalty, increasing market share and/or encourage customers to engage
in positive WOM communication.
Additionally, although customers’ religious motives towards IB are crucial for WOM, it
is not guaranteed that they would engage in WOM or not switch to other banks based on
those believes only. In other words, positive WOM depends on perceived quality and value
of banking services delivered to customers, and convenience of a bank’s distribution
network. Customers are willing to recommend IB to others and express positive attitudes if
they receive higher quality of service, better branch/network convenience and higher
perceived value. Therefore, Islamic banks need to improve the relationship between the
bank and its customers, by building awareness on IB principles and operations, and focus
on strategic choice in providing products and services which are more innovative, in order
to gain competitive advantage. IB should provide financial counselling to attract customers
to use more IB products and services. There is a potential target market for which IB should
be concerned. Today, high competitiveness requires that IB should focus on attracting,
developing, and retaining customer satisfaction, and improve the customers’ in-branch and
out-branch experience. Such strategies can include meeting customers’ desired-service
IJOEM levels, preventing service problems from occurring, dealing effectively with dissatisfied
customers, solving service problems efficiently when they occur and confronting customer
complaints positively.
As for practical implications, the positive relationship between customers’ perceived
value and WOM initiation suggests the importance of improving customers’ perceptions of
the value which they have received, this can be achieved via the use of customer
testimonials offering affordable transaction rates, and devising loyalty schemes. Managers
should also realise that convenience is also a major driver of perceived value. Consumers’
behaviour and expectations are shifting in ways that are forcing banks to both redefine their
priorities and transform their distribution models. Islamic banks should take a convenience
approach to customer centricity, by focussing on providing accessible, easy and fast
experience. All channels, branch, call center, online, mobile and ATM, foster pathways for
customers to carry out research, choose services, make inquiries and resolve problems.
To succeed with this approach, Islamic banks need to choose good accessible locations for
their branches, create a widely spread ATM network, provide parking areas and modernise
the customer experience by moving its services online. Finally, this research guides
managers on how to identify the paths required for building customers’ perceived values
and encouraging positive WOM towards IB. Our evidence indicates that 38 per cent of
variation in perceived value was caused by religious motives, service quality and
convenience, whereas 34 per cent of variation in WOM towards IB was caused by perceived
value, service quality and convenience. The two paths are statistically different which entail
that managers of Islamic banks should take into consideration that perceived service quality
and convenience, combined with religious motives, are major drivers of IB perceived value.
Meanwhile, perceived value, service quality and convenience are major drivers of IB WOM.
Limitations and future research

As with any research design and methodology, limitations exist and are outlined for future
research. From a theoretical standpoint, our study examined four determinants of WOM
towards IB in Jordan. Future research needs to investigate other factors that may affect
customers’ WOM towards IB such as perceived bank image, trust, and subjective norms.
Also, perceived value is measured as a unidimensional construct in our study; meanwhile,
literature indicates that perceived value is a multi-dimensional construct. However, future
research could investigate other dimensions of perceived value such as social, psychological,
emotional, sacrifice value and product values and how they affect WOM. Religious motives
have positively but non-significantly affected perceived value within the IB context. Future
research may employ qualitative research to investigate why religious motives have not
affected perceived value in IB in Jordan.
Marketing and consumer behaviour aspects should be at the heart of IB to shape
customers’ consumption behaviour. Therefore, examining consumers’ satisfaction, loyalty,
retention and future purchase intentions are rich areas of future research within the IB
context. Moreover, from an international marketing standpoint, comparative studies
between Jordanian and non-Jordanian Islamic banks and customers are potential areas of
future research for formulating international marketing strategies and a better
understanding of cross-cultural consumer behaviour analysis. From a methodological
standpoint, while the unit of analysis in this paper is the “the retail Islamic bank customer”,
future research can conduct comparative analysis between corporate Islamic bank
customers’ and bank managers’ perceptions with regard to determinants of WOM. Such
comparative analysis would enable decision makers to identify “gaps” in the perceptions
between managers and customers towards Islamic banks. Further, this study investigates
an integrated model of WOM determinants through testing the direct relationships between
the research constructs. Future research should investigate if satisfaction acts as a mediator
on the relationship between perceived value and WOM. Other mediators and/or moderators Factors
may be investigated to understand other potential factors affecting customers’ attitudinal affecting
and behavioural relationships tested in our model. Qualitative and qualitative research WOM towards
methodology and design are also applicable since understanding consumers’ behaviour in
IB is still in its early stages in Jordan. IB in Jordan
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Chaniotakis, I.E. and Lymperopoulos, C. (2009), “Service quality effect on satisfaction and word of
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Corresponding author
Mamoun N. Akroush can be contacted at: mamoun.akroush@gju.edu.jo
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where WOM is believed to have considerable influence and importance on consumers’

The banking industry in Jordan

Religious Perceived Word-of-

Variables in the WOM model

H3. Religious motives have a positive significant effect on perceived value.

Questionnaire design, administration and data collection

My bank employees are competent and able to explain IB

Root mean square error of approximation RMSEAo 0.10 0.09 0.08

Constructs validity and composite reliability (CR)

1. Service Quality 2.65 0.76 0.77

Structural model and hypotheses testing

Religious Perceived Word-of-

Sub- Variables in the paths model β* t-value**

Limitations and future research

countries: the case of Brazil”, Journal of Consumer Satisfaction, Dissatisfaction and

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