Consequences of customer loyalty to the loyalty program and to the company

Gaining customer loyalty is an important goal of marketing, and loyalty programs are intended to help in reaching it. Research on loyalty programs suggests that customers differentiate between loyalty to a company and loyalty to a loyalty program, yet little is known about the consequences of these two types of loyalty. Therefore, our study intends to make two main contributions: (1) improving our understanding of the constructs "program loyalty" and "company loyalty", (2) investigating the relative impact of the two types of loyalty on preference, intention, and purchase behavior for the case of a multi-firm loyalty program. Results indicate that company loyalty influences a customer's choice to visit a particular provider and to prefer it over competitors, but it is not a strong predictor of purchase behavior. Conversely, program loyalty is a far more important driver of purchase behavior. This implies that company loyalty primarily attracts customers to a particular provider and program loyalty ensures that once inside the store, more money is spent. © 2011 Academy of Marketing Science.

Identification and analysis of moderator variables:investigating the customer satisfaction-loyalty link

Purpose – Research on the relationship between customer satisfaction and customer loyalty has advanced to a stage that requires a more thorough examination of moderator variables. Limited research shows how moderators influence the relationship between customer satisfaction and customer loyalty in a service context; this article aims to present empirical evidence of the conditions in which the satisfaction-loyalty relationship becomes stronger or weaker. Design/methodology/approach – Using a sample of more than 700 customers of DIY retailers and multi-group structural equation modelling, the authors examine moderating effects of several firm-related variables, variables that result from firm/employee-customer interactions and individual-level variables (i.e. loyalty cards, critical incidents, customer age, gender, income, expertise). Findings – The empirical results suggest that not all of the moderators considered influence the satisfaction-loyalty link. Specifically, critical incidents and income are important moderators of the relationship between customer satisfaction and customer loyalty. Practical implications – Several of the moderator variables considered in this study are manageable variables. Originality/value – This study should prove valuable to academic researchers as well as service and retailing managers. It systematically analyses the moderating effect of firm-related and individual-level variables on the relationship between customer satisfaction and loyalty. It shows the differential effect of different types of moderator variables on the satisfaction-loyalty link.

The relative strength of affective commitment in securing loyalty in service relationships

While commitment is an important antecedent to customer retention, a broad consensus has yet to emerge on the impacts of constituent dimensions of commitment on loyalty in service relationships. This study explores the impacts of affective and continuance commitment on attitudinal and behavioral loyalty in a service context. Since affective commitment is more positive and governed by free choice, whereas continuance commitment is more the result of perceived economic and psychological benefits of being in a relationship, the results of this study suggest that emotional bonds with customers provide a more enduring source of loyalty as compared to economic incentives and switching costs.

An examination of moderator effects in the four-stage loyalty model

Oliver’s 1997 four-stage loyalty model proposes that loyalty consists of belief, affect, intention, and action. Although this loyalty model has recently been subject to empirical examination, the issue of moderator variables has been largely neglected. This article fills that void by analyzing the moderating effects of selected personal and situational characteristics, using a sample of 888 customers of a large do-it-yourself retailer. The results of multi-group causal analysis suggest that these moderators exert an influence on the development of the different stages of the loyalty sequence. Specifically, age, income, education and expertise, price orientation, critical incident recovery, and loyalty card membership are found to be important moderators of the links in the four-stage loyalty model. Limitations of the study are outlined, and implications for both research and managerial practice are discussed.

Switching barriers in the four-stage loyalty model

Oliver (1997) suggests a four-stage loyalty model proposing that loyalty consists of belief, affect, intentions, and action. Although this model has recently been subject to empirical examination, the issue of moderator variables has been largely neglected. This article fills that void by analyzing the moderating effects of switching barriers, using a sample of 589 customers of a large do-it-yourself (DIY) retailer. The results suggest that these moderators exert an influence on the development of the different stages of the loyalty sequence. Specifically, switching costs, social benefits, and attractiveness of alternatives are found to be important moderators of the links in the four-stage loyalty model.

Spillover effects of service failures in coalition loyalty programs:the buffering effect of special treatment benefits

Coalition loyalty programs are on the rise, yet few studies investigate the impact of service failures in such programs. Using data from a retail context, the authors show that a program partner deemed responsible for a service failure suffers negative customer responses. However, customers' perceptions of the benefits of the coalition loyalty program buffer these consequences. Perhaps most importantly, when customers perceive the program's special treatment benefits as low, direct and indirect spillover effects occur, such that a service failure by one program partner has a negative effect on customer loyalty toward the program itself. © 2013 New York University.

The impact of service characteristics on the switching costs-customer loyalty link

This research investigates the interrelationship between service characteristics and switching costs and makes two contributions to the service retailing literature: (1) As a means of better understanding the effectiveness of switching costs, the study suggests a two-dimensional typology of switching costs, including internal and external switching costs and (2) it reveals that the effect of these switching costs on customer loyalty is contingent upon four service characteristics (the IHIP characteristics of service). We carried out a meta-analytic review of the literature on the switching costs-customer loyalty link and created a hierarchical linear model using a sample of 1,694 customers from 51 service industries. Results reveal that external switching costs have a stronger average effect on customer loyalty than do internal switching costs. Moreover, we find that IHIP characteristics moderate the links between switching costs and customer loyalty. Thus, the link between external switching costs and customer loyalty is weaker in industries higher in the four service characteristics (as compared to industries lower in these characteristics), while the opposite moderating effect of service characteristics for the internal switching costs-loyalty link is noted. © 2014 New York University.

Frontline employees’ innovative service behavior as key to customer loyalty:insights into FLEs’ resource gain spiral

Many service firms require frontline service employees (FLEs) to follow routines and standardized operating procedures during the service encounter, to deliver consistently high service standards. However, to create superior, pleasurable experiences for customers, featuring both helpful services and novel approaches to meeting their needs, firms in various sectors also have begun to encourage FLEs to engage in more innovative service behaviors. This study therefore investigates a new and complementary route to customer loyalty, beyond the conventional service-profit chain, that moves through FLEs' innovative service behavior. Drawing on conservation of resources (COR) theory, this study introduces a resource gain spiral at the service encounter, which runs from FLEs' emotional job engagement to innovative service behavior, and then leads to customer delight and finally customer loyalty. In accordance with COR theory, the proposed model also includes factors that might hinder (customer aggression, underemployment) or foster (colleague support, supervisor support) FLEs' resource gain spiral. A multilevel analysis of a large-scale, dyadic data set that contains responses from both FLEs and customers in multiple industries strongly supports the proposed resource gain spiral as a complementary route to customer loyalty. The positive emotional job engagement-innovative service behavior relationship is undermined by customer aggression and underemployment, as hypothesized. Surprisingly though, and contrary to the hypotheses, colleague and supervisor support do not seem to foster FLEs' resource gain spiral. Instead, colleague support weakens the engagement-innovative service behavior relationship, and supervisor support does not affect it. These results indicate that if FLEs can solicit resources from other sources, they may not need to invest as many of their individual resources. In particular, colleague support even appears to serve as a substitute for FLEs' individual resource investments in the resource gain spiral.

The 1899 Orange Free State football team tour of Europe:'race', imperial loyalty and sporting contest

In September 1899 an association football team from Bloemfontein in the Orange Free State, South Africa, arrived in the United Kingdom. The team comprised 16 black South Africans who played under the auspices of the whites-only Orange Free State Football Association and was the first ever South African football team to tour abroad. In a four-month tour the team played 49 matches against opposition in England, France, Ireland, Scotland and Wales. A small but growing body of work focuses on black sport and football in particular and the 1899 tour is referred to in passing in a few publications, although none have attempted to uncover details of the team or the matches that were played in Europe. This article attempts to do this by drawing on a range of sources in South Africa and the United Kingdom and argues the case for the significance of this team for football history in general and South African sports history in particular.

Antecedents and outcomes of union loyalty:a constructive replication and an extension

Primary data obtained from unionized employees in Singapore were used to examine P. A. Bamberger, A. N. Kluger, and R. Suchard's (1999) integrative model of the antecedents and outcomes of union commitment. Structural equation modeling results revealed support for their integrative model. Specifically, the results revealed the influence of job satisfaction on union loyalty to be indirect through organizational commitment. However, the union-related antecedents (union socialization and union instrumentality) were both directly and indirectly related to union loyalty through pro-union attitudes. In addition, union loyalty was related to the individually and organizationally directed union citizenship behavior dimensions. Limitations of the study and implications of the findings are discussed.

Enjoyment of the shopping experience:impact on customers’ repatronage intentions and gender influence

In this paper the authors investigate enjoyment of the shopping experience, its influence on consumers’ intention to repatronise a regional shopping centre and the effect of gender differences on shopping enjoyment. Four dimensions of shopping enjoyment are proposed and a 16-item measure is developed to assess 536 consumer perceptions of the shopping experience across five counties in the United Kingdom. Findings indicate that shopping experience enjoyment has a significant positive influence upon customers’ repatronage intentions. Furthermore, men are found to have a stronger relationship of enjoyment with repatronage than women. The implications of these results are discussed, together with managerial implications, study limitations, and future research directions.

Service encounter conceptualisation:employees' service behaviours and customers' service quality perceptions

The enhancement of service quality is an area of optimal managerial relevance that has, to date, received minimal attention in the literature. Because customers' service quality evaluations are based almost entirely upon the behaviours of frontline employees, organisations rely heavily upon these employees to improve overall service quality provision. However, much of the literature looking at service quality enhancement lacks detail when examining the impact of employee service-related behaviours on customers' service quality perceptions. As a result, this paper comprehensively conceptualises those front-line employee behaviours which are the most likely to enhance customers' service quality perceptions. This conceptualisation is grounded in an extensive review of the services marketing literature, pooling together previously disparate research strands. Formal hypotheses are presented. Implications and future research directions are also discussed.

Outcomes of service encounter quality in a business-to-business context

Service encounter quality is an area of growing interest to researchers and managers alike, yet little is known about the effects of face-to-face service encounter quality within a business-to-business setting. In this paper, a psychometrically sound measure of such service encounter quality is proposed, and consequences of this construct are empirically assessed. Both a literature review and a dyadic in-depth interview approach were used to develop a conceptual framework and a pool of items to capture service encounter quality. A mail survey of customers was undertaken, and a response rate of 36% was obtained. Data analysis was conducted via confirmatory factor analysis and structural equation modeling. Findings reveal a four-factor structure of service encounter quality, encompassing professionalism, civility, friendliness and competence dimensions. Service encounter quality was found to be directly related to customer satisfaction and service quality perceptions, and indirectly to loyalty. The importance of these findings for practitioners and for future research on service encounter quality is discussed.

Two sides to attitudinal commitment:the effect of calculative and loyalty commitment on enforcement mechanism in distribution channels

Previous conceptualizations of attitudinal commitment are extended by considering two very different components of a manufacturer’s attachment to an independent channel intermediary. Relying on commitment theory, a model is developed that describes how attitudinal commitment may reside in either the instrumental or the social strain of a manufacturer’s relationship with its distributor. For each strain, the developmental role played by key facets of the channel setting—relative dependence, pledges, and trust—are shown. Furthermore, the nature of the attachment bond is posited to motivate very different governance mechanisms as the distribution agreement is enforced by either social or contractual means. Empirical support for the model demonstrates that an expanded view of attitudinal commitment is important in understanding the complex nature of attachment in channel relationships.

The strategic role of relational capabilities in the business-to-business service profit chain

This paper extends the original service profit chain by examining the role of relational capabilities with employees, customers and strategic partners on process and performance outcomes in a business-to-business context. More specifically, we demonstrate how satisfied and loyal employees are better in developing relationships with customers and strategic partners. These relationships enable firms to be more responsive towards customers and become more innovative, which increase customer satisfaction and loyalty and, ultimately, financial performance. Our results provide support for the development of relational capabilities in a business-to-business environment by extending the service profit chain (SPC) model. However, we find that while the development of strong customer relationships contributes to an improved service responsiveness of the firm, strategic partners do not.