An Examination of the Relationship Between a Firm's Offerings and Different Customer Loyalty Segments

Purpose: Loyalty reflects the highest state in the buyer–seller relationship and occurs when repeat patronage and commitment are both high. One generally accepted model of segmenting the customers by degree of loyalty includes 4 categories of loyalty: no loyalty, latent loyalty, spurious loyalty, and loyalty. This study examines the relationship between these 4 customer segments and their evaluation of the firm's offerings.

Methodology/approach: This study uses self-reported purchase behaviors and attitude toward the seller for segmentation. Buyers report the importance of and satisfaction with 15 different offerings or processes. The mean scores for the 4 different groups are compared and tested for statistical significance.

Findings: The loyalty segments differed in the importance placed on customized products. The loyalty and spurious loyalty groups placed a higher importance on receiving customized products from the seller. The loyalty segments also differed in their levels of satisfaction, but these differences did not fully explain repeat patronage behavior. The latent loyalty group, despite their higher levels of satisfaction with standardized offerings, purchased less than the spurious loyalty group.

Originality/value/contribution: The implication for managers is that, if properly identified and managed, understanding these differences could lead to a sustainable competitive advantage. Managers can build loyalty by applying specific tactics tailored to the customer segment.     

The Relative Effects of Relationship Quality and Exchange Satisfaction on Customer Loyalty

ABSTRACT

This paper addresses two key questions on how supplier firms can better manage industrial buyers to create higher loyalty. The first involves whether to focus on relationship quality or exchange satisfaction. This dual route model towards enhancing loyalty in essence is concerned with comparing the relative strengths of the effect from relationship quality to loyalty and from exchange satisfaction to loyalty. The second point of interest pertains to whether the effects from relationship quality and exchange satisfaction to loyalty are moderated by environmental conditions such as switching barriers and viable alternatives. Using data on business customers' ratings of a major information technology provider, we find that the effect of exchange satisfaction on loyalty is significantly greater than the effect of relationship quality on loyalty. We also find that the impact of exchange satisfaction on loyalty is less sensitive and more stable across different levels of switching barriers and viable alternatives. Conversely, the effect of relationship quality on loyalty is more pronounced to such moderating variables in that the effect of relationship quality on loyalty was greater when switching barriers were low and many viable alternatives existed. Implications for marketing theory and practice are discussed.     

Personal characteristics as moderators of the relationship between customer satisfaction and loyalty—an empirical analysis

Previous empirical research on the relationship between customer satisfaction and loyalty has largely neglected the issue of moderator variables. In a consumer‐durables context the authors analyze the moderating effect of selected personal characteristics on the satisfaction–loyalty link. The empirical findings, which are based on multiple‐group causal analysis, show that the strength of the relationship between customer satisfaction and loyalty is strongly influenced by characteristics of the customer. Specifically, variety seeking, age, and income are found to be important moderators of the satisfaction–loyalty relationship. © 2001 John Wiley & Sons, Inc.     

Linking transaction-specific satisfaction and customer loyalty – The case of casino resorts

This study investigates the relationship between customer satisfaction, delight, place attachment, and loyalty in a casino context. Customer satisfaction in this study refers to customers’ transactional experience with shopping, food and beverage, and gaming within a casino resort. The study examines how each transactional, satisfying, experience affects customer delight and place attachment, which subsequently influences customer loyalty. Customer delight and place attachment are modelled as mediators between satisfaction and loyalty. The results show that each transaction-specific satisfaction is significantly related to customer delight and place attachment with the exception that a positive experience with casino gaming is not related to place attachment. Whilst place attachment has a significant influence on customer loyalty, customer delight has little effect on the loyalty indicators. The study provides a fresh perspective on the customer satisfaction-loyalty relationship. The implications of these findings are highlighted for researchers and practitioners.     

The effects of distributive,procedural, and interactional justice on customer retention: An empirical investigation in the mobile telecom industry in Tunisia

The framework offered in this study provides empirical evidence concerning the interaction between distributive, procedural and interactional perceived justice and loyalty program satisfaction on relational satisfaction in the mobile telecommunication context. Firms that rely on justice perception for strategy implementation are able to attain customer retention. This study suggests a theoretical model of customer retention that aims at investigating the role of satisfaction with loyalty program on relationship marketing. The structural equation modeling was used to test the hypothetical relationships. A self-administrated questionnaire was distributed to a total of a convenience sample of 520 customers of multiple mobile phone companies. The target population includes customers who have subscribed to a loyalty program. Results show that distributive justice moderates the relationship between satisfaction with the loyalty program and relational satisfaction. The results highlight the need to focus on distributive justice in order to nurture satisfaction and loyalty. Satisfaction with the loyalty program is a key predictor of a satisfactory relationship with the operator and customer retention.     

Antecedents of Customer Satisfaction and Customer Loyalty for Emerging Devices in the Initial Market of Korea: An Equity Framework

This study investigates the relevant predictors of customer satisfaction and customer loyalty, and explores the group difference by innovativeness or device type, based on equity theory for emerging devices in the initial market of Korea. The results from an online survey of users of emerging devices and structural equation modeling indicate that utilitarian benefit, hedonic benefit, nonmonetary cost, and alternative attractiveness are significant predictors of customer satisfaction, which in turn affects customer loyalty. Hedonic benefit has a stronger relationship with customer satisfaction for more innovative users and nonmonetary cost has a stronger relationship with customer satisfaction for less innovative users. Nonmonetary cost has a negative relationship with customer satisfaction for netbooks; an additional exploratory analysis produced no such evidence for smartphones. These findings suggest managerial implications for customer loyalty regarding emerging devices.     

Cultural influences on B2B service quality-satisfaction-loyalty

The link between service quality, customer satisfaction, and customer loyalty has drawn the attention of both academic researchers and practitioners. They are also focusing on the effect of cultural differences on customer attitudes and behaviour in the global service industry. This paper examines the relationships between service quality, customer satisfaction, and loyalty as well as the moderating effect of cultural differences on the above relationships in the industrial business-to-business (B2B) service sector. The paper presents an empirical study using datasets collected from 7652 industrial customers across 55 countries and uses structural equation modeling (SEM) to test the hypotheses. The application of Net Promoter Score (NPS) as a customer loyalty metric based on customer experience management (CEM) is studied in relation to customer satisfaction. The study results demonstrate the positive relationship of service quality, satisfaction, and loyalty. In terms of the effect of cultural differences, the study finds that cultural dimensions of uncertainty avoidance negatively moderate the relationship between service quality and satisfaction, while individualism positively moderates the relationship between service quality and satisfaction. However, cultural differences do not impact on the relationship between satisfaction and loyalty.     

Does the length of a customer–provider relationship really matter?

This study examines both a moderator and a mediator of perceived service quality and payment equity as they relate to customer loyalty in the banking industry. Through the moderating factor, the length of the customer–bank relationship, this study builds a conceptual framework for distinguishing between transactional- and relationship-oriented customers and provides an empirical analysis by using structural equation modelling. The empirical findings of this study, the result of the examination of 610 banking customers, showed that different lengths of the customer–bank relationship form loyalty from different variables and from a different path. For transactional-oriented customers, loyalty was built through the achievement of overall customer satisfaction; whereas for relationship-oriented customers, loyalty was built through the establishment of trust. Suggestions and limitations based on the finding are also discussed.     

Corporate image,loyalty, and commitment in the consumer travel industry

Abstract

This article examines the impact and interrelationship of corporate image, satisfaction, and commitment on customer loyalty in the travel industry. A corporate image–commitment–loyalty model was developed and tested. Partial least squares (PLS) was used to test the direct and indirect linkages between the four variables, and an alternative model was proposed. The tourism and travel industry is highly price sensitive and competitive with low levels of customer loyalty. Customer loyalty is a valuable asset in highly competitive markets, and understanding factors affecting customer loyalty is important to travel agencies who are seeking ways to maintain a strong customer base. The results of a mail survey conducted in New Zealand indicate that corporate image has a positive significant influence on customer commitment and customer satisfaction. Affective commitment is the focal point in the relationship and contributed most in predicting customer loyalty. The influence of customer satisfaction, on the other hand, contributed a much smaller effect. The key implications for travel agencies are build strong emotional bonds with customers and improve corporate image through trust and service delivery.     

The importance of customer satisfaction in explaining brand and dealer loyalty

The positive influence of customer satisfaction on brand and dealer loyalty is often taken for granted. In this study we attempted to prove whether this relationship really exists. In order to do so we examined the case of an automobile‐dealer network. Three different types of customer satisfaction were distinguished: (a) satisfaction with the car; (b) satisfaction with the sales service and (c) satisfaction with the after‐sales service. It was expected that all three types of satisfaction would have an influence on brand loyalty as well as on dealer loyalty. More specifically, it was expected that satisfaction with the car would be the major determinant of brand loyalty and that satisfaction with the service (both sales‐ and after‐sales service) would be the major determinant of dealer loyalty. Furthermore, a study of the literature revealed that dealer loyalty might also significantly affect brand loyalty.

In the empirical part of the study, customers (n = 416) of different automobile‐dealers of the same brand were asked to fill in a mailed questionnaire. The three different types of customer satisfaction and the intention to buy the same brand of car again, as well as the intention to buy from the same dealer again were measured. The customers were also asked why they would buy the same brand (again) or from the same dealer. In general, the analyses of the results revealed that: customer satisfaction with the car, as well as dealer loyalty are major determinants of brand loyalty; customer satisfaction with the sales service as well as with the after‐sales service are major determinants of dealer loyalty and dealer loyalty is an intervening variable in the relation between satisfaction and brand loyalty. Furthermore, it was found that the strength of the relationship between different types of satisfaction and loyalty indicators differs markedly between various market segments (private/business use of car and new/used car buyers). Several marketing implications are presented. A distinction may be made between the implications for the manufacturer of the physical product and the automobile dealer rendering the service.     

Consumer loyalty in sport spectatorship services: The relationships with consumer satisfaction and team identification

This research aimed to investigate the possible relationships between the concepts of consumer loyalty (attitudinal and behavioral), satisfaction, and team identification in the context of sport spectatorship. Specifically, several models were tested to investigate (1) the direct influence of team identification, consumer behavioral loyalty, and consumer satisfaction on consumer attitudinal loyalty, and (2) the mediating or moderating role of team identification in the relationship between consumer satisfaction, behavioral loyalty, and attitudinal loyalty. Results from a sample of 395 spectators of French ice hockey first division clubs revealed that consumer transaction–specific satisfaction was found to be the stronger predictor for consumer attitudinal loyalty alongside team identification and the average number of home games attended per year. A second indirect route is possible because team identification was also found to play a mediating role between consumer transaction–specific satisfaction, home and away games attended per year, and some dimensions of consumer attitudinal loyalty. Finally, team identification was also found to moderate the impact of consumer satisfaction and the number of away games attended on different facets of attitudinal loyalty. Marketing and theoretical implications are discussed. © 2011 Wiley Periodicals, Inc.     

The Moderating Effects of Involvement on the Relationships Between Satisfaction,Trust and Commitment in e-Banking

Most prior research into customer loyalty emphasizes the effects of the dimensions of online satisfaction and trust. However, research into how customer involvement moderates this relationship model – in the online environment – has been less than conclusive. On the basis of a satisfaction–trust–commitment model, and given that involvement is a significant precondition to customer loyalty, this paper explores the interaction effects of customer involvement on the evaluation of e-banking services.Empirical results were collected from an online survey in electronic financial forums, Usenet and mailing lists. Partial Least Squares (PLS) was used to estimate the parameters of the interaction effects model.The results support most of the hypotheses and, in particular, confirm the moderating role of customer involvement. The influence of online satisfaction on commitment was significantly stronger for highly involved users; conversely, the effect of satisfaction on trust was weaker. However, customer trust had a stronger effect on commitment for customers with high purchase involvement, and a weaker effect for highly ego-involved customers. The interaction role of customer involvement thus offers a more complete view of the satisfaction–trust–commitment model, providing an initial test of the efficacy of using involvement to understand online decisions. Implications for online marketing management and future research in this area are discussed.     

Revisiting the Satisfaction–Loyalty Relationship: Empirical Generalizations and Directions for Future Research

This extensive literature review highlights the state of the art regarding the relationship between customer satisfaction and loyalty, both attitudinal and behavioral. In particular, it brings to light several issues that should be carefully considered in analyzing the efficacy of customer satisfaction in explaining and predicting customer loyalty. In fact, for many years companies all around the world have heavily invested in customer satisfaction in the hope of increasing loyalty, and hence, consequently, profitability. But after having gone through a detailed analysis, it is clear that this link it is not as strong as it is believed to be and customer satisfaction is not enough to explain loyalty. In fact, the major findings of this review are captured in the form of a few empirical generalizations. We generalize that, while there is a positive relationship between customer satisfaction and loyalty, the variance explained by just satisfaction is rather small. Models that encompass other relevant variables as moderators, mediators, antecedent variables, or all three are better predictors of loyalty than just customer satisfaction. Further, the satisfaction–loyalty relationship has the potential to change over time. Similar weaker findings are uncovered and the study offers specific guidelines on who, when, and how much to satisfy. Finally, suggestions for future research to explore this domain are offered.     

An integrative approach to relationship marketing,customer value,and customer outcomes in the retail banking industry: a customer-based perspective from Turkey

Given how important it is to provide superior value to customers and to maintain customer loyalty for a sustainable competitive advantage, the aim of this paper is to examine the relationships among relationship marketing components of – trust, competency, commitment, communication, and conflict handling, – relationship investment, relationship quality, perceived customer value, satisfaction and loyalty in an integrated framework in the Turkish retail banking industry. Unlike previous studies, this research extends the literature by analysing affective as well as cognitive dimensions in the same model with a holistic view by simultaneously examining the direct and indirect effects of the related concepts. The distinctive nature of this study is its evaluation of customer satisfaction and loyalty from the perspective of actual consumers. The research model was tested using data collected from 685 retail banking customers by applying structural equation modelling. The findings show that relationship marketing induces loyalty through relationship quality, customer value, and satisfaction, which are mainly provided by trust, communication, and relationship investment. Furthermore, relationship investment and relationship quality are the most important factors in the development of customer value, satisfaction, and loyalty. The emotional value dimension, which captures the affective aspects of perceived value, has the strongest effect on both satisfaction and loyalty.     

Empirical study of destination loyalty and its antecedent: the perspective of place attachment

Due to the increasing competition in the leisure and tourism market, loyalty-related studies and researches have been gaining attention. This empirical research explores the formation of destination loyalty from the interaction of visitors with hot-spring resorts (place attachment) and examines the relationship between such a loyalty and its antecedents. Based on an attitude framework, this study conceptualizes place dependence, place identity, and behavioural intention as the tripartite framework of destination loyalty. Using the covariance structure analysis, empirical results indicated that the service quality–satisfaction–loyalty model is supported and tourist satisfaction completely mediates the effect of service quality on place dependence, place identity, and behavioural intention.     

Relationship marketing in A B2C context: The moderating role of personality traits

More and more, retailers are investing in relationship building as a strategy for enhancing customer retention in the business-to-customer (B2C) context. However, some marketing scholars have expressed concern over the usefulness of relationship marketing under certain conditions. As such, this study investigates the moderating role of personality traits on the relationship between satisfaction-driven relationship quality and behavioral loyalty. Based on a sample of 158 retail shoppers, we find that customers’ overall satisfaction with the retailer leads to quality customer–firm relationships and ultimately, behavioral loyalty to the retailer. We also found that the impact of relationship quality on behavioral loyalty depends on the consumer's personality traits, i.e., consumer innovativeness, variety seeking, and relationship proneness. These findings extend the extant relationship literature by showing that the value of relationship marketing is not universal, thereby refining our understanding of the relationship between customer behavior and relationship marketing. Implications for academics and managers are discussed.     

The Influence of Environmental Management Systems on Financial Performance: A Moderated-Mediation Analysis

This study utilizes hierarchical regression analysis to explore how environmental management systems (EMSs) influence financial performance through customer satisfaction and customer loyalty, and the moderating effects of switching cost. The originality of the present research is to unpack the “black box” through which a firm can profit from EMSs. The empirical results indicate that EMSs have positive and significant impacts on customer satisfaction, customer loyalty, and financial performance. In addition, switching cost negatively and significantly moderates the relationship between EMSs and customer satisfaction, but does not significantly moderates the relationship between EMSs and customer loyalty. The results also demonstrate that customer satisfaction and customer loyalty partially mediate the relationship between EMSs and financial performance. Our findings highlight that customer satisfaction, customer loyalty, and switching cost play important roles for a firm to profit from EMSs.     

Internet banking loyalty: evaluating the role of trust,satisfaction, perceived risk and frequency of use

This paper analyses the role of satisfaction, trust, frequency of use and perceived risk as antecedents of consumer loyalty to banking websites. While the literature usually focuses on the direct effects of these variables, special attention is paid here to evaluate their moderating effects on the relationship between satisfaction and loyalty. The results from a sample of 254 Spanish users of Internet banking services show that while satisfaction correlates positively with loyalty, the effect is significantly less intense with high levels of perceived risk. The results are similar for trust, which correlates more positively with high levels of perceived risk, but also when Internet banking is used less frequently. Managerial implications from these results are provided.     

An empirical study of the relationship between shopping environment,customer perceived value,satisfaction, and loyalty in the UAE malls context

This study aims to investigate through structural equation modelling (SEM) the relationships between the shopping environment, customer perceived value, customer satisfaction, and customer loyalty in regard to malls in the United Arab Emirates (UAE). The main results of this study show that the mall environment is an antecedent of the customer perceived value of malls (MALLVAL) and customer satisfaction. MALLVAL has a significant positive effect on both customer satisfaction and customer loyalty to malls. In addition, MALLVAL and customer satisfaction mediate the relationship between the mall environment and customer loyalty. Finally, customer satisfaction mediates the relationship between MALLVAL and customer loyalty to malls. Some theoretical and managerial implications of these findings are discussed.