ABSTRACT:- The purpose of this research is to formulate a policy to solve the problem concerning product quality to increase customer loyalty of IndiHome at PT Telkom Regional 1 Sumatera, with customer satisfaction as an intervening variable. This research aims to analyze the direct and indirect effects of product quality on customer satisfaction and customer loyalty of IndiHome.The type of research used is survey research type with simple sampling method. Sample requirement in this study is sample is an IndiHome service user in Medan. Sample size in this study was 396 customers. This study uses the Path Analysis. In this case, path analysis will analyze the magnitude of the direct and indirect effects of variables as to the resulting variables.

The direct effect of product quality on customer loyalty is smaller than the indirect influence of product quality on customer loyalty through customer satisfaction, and it can be stated that customer satisfaction is useful as an intervening variable between product quality and customer loyalty. The most influential variables of customer loyalty are product performance variables.

Keywords: Performance, Features, Reliability, Conformance, Durability, Serviceability, Perceived Quality, Satisfaction, Loyalty, Customers