Analyzing consumers' loyal and disloyal behaviors for the customer retention and defection management: models and its applications

Abstract

The importance of long-term customer relationships has increased because of severe competition across many industries including retailing. There might be two retaining strategy: (1) loyal behavior management strategy can gives firms the competitive advantage because loyal customers can make a firm to gain various benefits such as the increase of purchasing frequency and quantity; (2) disloyal behavior management strategy is also important because firms can minimize disadvantages by effectively managing consumers`` postpurchase dissatisfaction behavior such as complaint. This study develops a framework for understanding the mechanisms of consumer``s loyal behavior. The proposed framework (1) uses a multidimensional conceptualization for the loyalty construct; (2) incorporates merchandise value, service quality, attractiveness of alternatives, variety seeking, and interpersonal relationships as the antecedents of store loyalty; and (3) specifies store satisfaction and switching costs as a key mediator to link the five antecedents and store loyalty. The proposed model is tested by path analysis using data from five service contexts-department store (N = 234), discount store (N = 203), retail clothing (N = 179), hair beauty shop (N = 172), and online shopping mall (N = 206). The results support multidimensional view for the loyalty construct with finding of sequential relationships between its four dimensions-cognitive, affective, conative, and action loyalty. Moreover, this study finds that (1) satisfaction completely mediates the effect of merchandise value and service quality on store loyalty across the five service categories; (2) switching costs partially mediates the effect of variety seeking, and interpersonal relationships on store loyalty. Especially, interpersonal relationships has a strong positive influence on the switching costs for all the five service categories and variety seeking has negatively influence on it except for hair beauty shop samples. O...