Characterizing and Modeling the Role of Servant Leadership Style on the Customer Lifetime Value

Abstract

Traditional theories of leadership are based on the hierarchical model in which followers at lower levels as organizational members are required to comply with the commands no longer meet the needs and expectations due to dynamic changes in the business environment and consequently a new and progressive leadership model is necessary. The servant Leadership model is a form of leadership that is focusing on the relationship between leader and follower in terms of service provision, growth, development, and empowerment. On the other hand, the move toward a customer‐centric approach to marketing coincides with the emergence of a new paradigm and increased access to customer information, which has led to an enormous current interest in customer lifetime value (CLV) in both quantitative and qualitative approaches. This research aimed to investigate the role of servant leadership on customer lifetime value in the banking sector in the form of an innovative model. For this purpose, using a descriptive‐analytical method in a framework of the case study of a governmental commercial bank and also by using structural equation modeling, appropriate statistical analysis, and fitness indices the proposed research conceptual model was analyzed and explained. The results demonstrated the positive and significant influences of key variables including servant leadership and its six identified components on the customer lifetime value mainly through a structural model in the context of the banking sector. Empirical results showed that the proposed model was highly confirmed and can effectively discover and predict the effects of servant leadership on the customer lifetime value.