Managing Consumer Loyalty: An Expanded Model of Consumer Experience Management and Consumer Loyalty

Introduction

Consumers do not buy goods or services; rather, they buy the benefits and experiences that goods and services deliver to them (Grönroos, 2001).

In the light of above statement, managing superior consumer experiences seems to be an important focus of a firm. Consumer Experience Management (CEM) is emerging as a strong strategic weapon to maintain long-term relationships with the profitable consumers. Facing new forms of competition, service firms are striving hard to deliver superior consumer experiences. The delivery of superior consumer experiences has become an important concern to develop consumer loyalty, which can be one of the competitive advantages for a firm (Berry & Carbone, 2007; Singh & Saini, 2016). A consumer often recalls their past experiences to make repurchases and spread positive word-of-mouth publicity (Yi & La, 2004; Dhananjayan, 2007).

In service industry, consumers frequently face uncertainty issues due to intangibility, unawareness, perishability, and complexity in service outputs (Crosby, Evans, & Cowles 1990). Prior literature suggests that consumer’s evaluation (satisfaction), confidence and reliability (trust), and enduring desire to attach (commitment) with a service provider influence them to continue their journey with a brand/firm. Therefore, consumer satisfaction, trust, and commitment reflect their assessment about the depth of consumer-firm relationship (Crosby et al., 1990; Hennig-Thurau Gwinner, & Gremler, 2002; Gwinner, Gremler, & Bitner, 1998).

Though there are large number of studies on managing consumer experiences and consumer loyalty, yet it lacks empirical substantiation to the impact of consumer experience management in building consumer loyalty. The present study aims at investigating the impact of CEM on both forms of consumer loyalty. The study also examines whether CEM directly influences loyalty or there needs to be a pre-requite psychological state in the transition for developing loyalty.

This paper has been organized as follows. First, theoretical background, an integrated conceptual framework, and related hypotheses have been presented. The next section presents the methodology and reliability/validity of proposed constructs. Thereafter, the results under Confirmatory Factor Analysis (CFA) and Structural Equation Modeling (SEM) using multiple group analysis in AMOS17.0 have been followed by discussion and implications. Finally, limitations and future research directions have been discussed.