Explaining Customer Loyalty to Retail Stores: A Moderated Explanation Chain of the Process

Explaining Customer Loyalty to Retail Stores: A Moderated Explanation Chain of the Process

Arturo Z. Vasquez-Parraga (University of Texas Rio Grande Valley, USA) and Miguel A. Sahagun (High Point University, USA)
DOI: 10.4018/978-1-7998-1412-2.ch002

Abstract

This chapter reassesses the process of how store customers become loyal to their stores; what are the core subprocesses generating customer store loyalty, and what contributing moderators enrich the final outcome. A new empirical research is designed to identify and test a parsimonious model of core relationships and moderators. The result is an explanation chain that incorporates relational variables, trust, and commitment to the traditional transactional one, customer satisfaction, and the moderating factors of the relational variables. The findings reveal that 1) customer commitment is the major contributor of explanation to true customer loyalty, significantly more than the contributed explanation of customer satisfaction, and 2) four cognitive attitudes and four affective attitudes significantly moderate the relational effects of trust and commitment on customer store loyalty and, thus, contribute, though in small amounts, to a stronger explanation.
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Conceptual Framework

The conceptual framework of this study focuses on true loyalty, the core process store customers use to achieve it, and the moderating forces and attitudes intervening in the process either as shapers of a common path in customer loyalty formation or modifiers of specific paths in customer loyalty implementation.

Customer Store Loyalty

Store customers develop loyalty in various representations. Some of these refer to behavior, like going to the same store every week because the store is close to consumers’ home, and others reflect attitudes like cognitive and affective. Past studies have focused on behavioral loyalty and helped build customer loyalty programs that encourage customers to repeat purchase in the same stores. Loyalty programs do not attempt to proactively influence customer attitudes. Customer loyalty involves both human behavior and attitudes; “a favorable correspondence between relative attitude and repeat patronage” (Dick & Basu, 1994, p. 102).

Thus, following Dick and Basu (1994) and Oliver (2010), this study examines customer loyalty in its three dimensions, cognitive, affective and behavioral. Both behavior and attitudes act in unison to generate customer store loyalty, true loyalty. True loyalty requires a meaningful presence of both positive attitudes and behavioral experience in consumers. The absence of attitudes limits the human experience to “spurious” loyalty and the absence of behavioral experience limits the attitudes to “latent” loyalty (Dick & Basu, 1994). “Spurious” loyalty is often represented or exemplified by repeat purchase and customer retention - themes that have been the focal point of abundant research.

Key Terms in this Chapter

Customer Trust: Customer’s confidence in a product or person or company.

Customer Commitment: Customer’s engagement or continuous obligation to buy the same product or use the same company.

Store Customer: Buyers and users of store products.

Customer Store Loyalty: Long-term relationship of customers to their stores.

Explanation Chain of Customer Store Loyalty: The process of customer store loyalty is explained using three antecedents in a sequential order as follows: it starts with customer satisfaction, which influences trust. Trust is essentially linked to commitment as per previous literature, and commitment is the immediate antecedent of customer loyalty: Satisfaction ? trust ? commitment ? customer store loyalty.

Vasquez-Alonso (V-A) Approach: Refers to the conceptual model designed to explain customer store loyalty using four core variables (customer satisfaction, trust, commitment, and loyalty) to account for the main effects, and eight secondary variables to account for the moderating effects. The last group includes four cognitive variables (store familiarity, store choice, customer perceived risk, and communication) moderating the effects of trust and commitment on customer loyalty, and four affective variables (customer opportunism, consumer involvement, customer shared personal values, and customer shared management values) likewise moderating the effects of trust and commitment on customer loyalty.

Customer Satisfaction: Customer’s fulfillment or gratification for buying a product or using a company.

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