Examining the interrelationships between the four stages of customer loylaty: a mixed method approach

El-Manstrly, Dahlia (2010) Examining the interrelationships between the four stages of customer loylaty: a mixed method approach. PhD thesis, University of Glasgow.

Abstract

Customer loyalty has received enormous attention from both academics and practitioners alike. There is growing evidence that keeping existing customers costs less than attracting new ones. Furthermore, loyal customers are expected to pay more, spend more and act as advocates for a particular service organisation. However, despite the universal agreement on the benefits of customer loyalty, no consensus has been yet reached on how or why this phenomena occurs. This lack of clarity in conceptualising and in turn operationalising, the concept has lead to an incomplete understanding of the phenomena and an inability to answer the question why satisfied customers switch. Therefore, research is needed to shed more light upon service loyalty development. This study will assist service managers and marketeers in focusing on effective marketing strategies for building and sustaining service loyalty to maximise the return on their investment. Particularly in this time of recession, service managers need to take greater care with regards to decision making and expenditure.

To achieve the aim of this study, an embedded three-sequential mixed method research design was adopted. First, in-depth interviews were used to understand UK service loyalty in the retail service industry and to justify the inclusion or exclusion of loyalty variables. Second, two factorial experiments were conducted to test the cause and effect of the links between cognitive and affective loyalty and between affective and conative loyalty. Then the moderating effect of switching costs on these two links was examined. Third, two surveys were distributed to a random sample of retail customers to test the full conceptual model and to assess the generalisability of the results across high versus low-employee contact, customisation and personalisation service types. Multigroup analysis was also used to test the moderating effect of customer (e.g. age, gender and education) and market characteristics (e.g. switching costs) on the links between the loyalty stages.
The main findings of the study are: first, service loyalty develops in a sequential manner; cognitive loyalty → trust → affective loyalty → commitment → conative loyalty → action loyalty. Second, trust partially mediates the links between cognitive and affective loyalty. Third, unexpectedly, a significant mediating effect of calculative commitment on the link between affective and conative loyalty is found only when the moderating effect of education is examined. Fourth, the links between loyalty stages are equally strong between high and low service customers as well as between younger and older customers. Fifth, education, gender and switching costs have a significant moderating effect on the early, but not the later stages of loyalty.
This study offers a rare test of the Theory of Planned Behaviour within a non- contractual customer-service context. It augments existing research on validating Oliver’s (1997) loyalty model by proposing a mediating effect of trust and commitment and a moderating effect of service type, switching costs, gender, age and education. The main conclusions of this study are: first, building and sustaining service loyalty is a complex strategic management objective. Second, understanding the key factors that drive service loyalty and the conditions that either enhance or hinder its development is essential for a complete understanding of the phenomena. Therefore, the overarching managerial implication of this study is to provide service managers with a segmentation tool and a framework to build attitudinal loyalty and to reach behavioural loyalty goals.

Guided by the results of this study, services managers will be better informed in selecting the most effective marketing strategy to a particular group of customers and in identifying and moving customers with varying degree(s) of loyalty along the loyalty ladder. Fruitful areas for future research would include examining the conceptual model across different service, culture and industry contexts. Moreover, although this study strives to capture the dynamic nature of the construct, future research that uses longitudinal design would be needed to test the relationships in the full conceptual model over time. Finally, collecting objective data or data from different sources would also be useful to control for the possible effect of common method variance on coefficient estimates in survey research.

• Item Type: Thesis (PhD)
• Qualification Level: Doctoral
• Additional Information: Due to copyright restrictions the full text of this thesis cannot be made available online. Access to the printed version is available once any embargo periods have expired
• Keywords: Customer loyalty, services
• Subjects: H Social Sciences > HB Economic Theory
• Colleges/Schools: College of Social Sciences > Adam Smith Business School > Management
• Supervisor's Name: Paton, Professor Robert
• Date of Award: 2010
• Depositing User: Dr Dahlia El-Manstrly
• Unique ID: glathesis:2010-2314
• Copyright: Copyright of this thesis is held by the author.
• Date Deposited: 23 Dec 2010
• Last Modified: 14 Jan 2014 14:18
• URI: https://theses.gla.ac.uk/id/eprint/2314