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Investing in customer loyalty: the moderating role of relational characteristics

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  • M. Balaji

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Abstract

The purpose of this study is to explore the linkages between relationship investment, relationship quality, and loyalty, as well as the moderating role of relational characteristics of age (length of relationship), density (number of unique relational ties), and dependence (extent of dependence on relationship partnership). Based on the interpersonal perspective, this study extends previous research by incorporating relational characteristics in understanding the effects of relationship investment strategies on loyalty. Responses collected from 381 actual retail banking customers were analyzed using structural equation modeling and hierarchical regression analysis. The results show that in forming customer loyalty, relationship investments, satisfaction, and commitment play a critical role. However, it was found that these relationships are moderated by the relational characteristics. Specifically, the effect of relationship satisfaction on loyalty decreases as the length of the relationship increases. On the contrary, a positive satisfaction and loyalty relationship was observed for high density users. These findings help managers in developing and implementing relationship investment strategies that enhance customer loyalty. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • M. Balaji, 2015. "Investing in customer loyalty: the moderating role of relational characteristics," Service Business, Springer;Pan-Pacific Business Association, vol. 9(1), pages 17-40, March.
  • Handle: RePEc:spr:svcbiz:v:9:y:2015:i:1:p:17-40
    DOI: 10.1007/s11628-013-0213-y
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    File URL: http://hdl.handle.net/10.1007/s11628-013-0213-y
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    References listed on IDEAS

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    Cited by:

    1. Giovanis, Apostolos N. & Athanasopoulou, Pinelopi, 2018. "Consumer-brand relationships and brand loyalty in technology-mediated services," Journal of Retailing and Consumer Services, Elsevier, vol. 40(C), pages 287-294.
    2. Ana Olavarría-Jaraba & Jesús J. Cambra-Fierro & Edgar Centeno & Rosario Vázquez-Carrasco, 2018. "Analyzing relationship quality and its contribution to consumer relationship proneness," Service Business, Springer;Pan-Pacific Business Association, vol. 12(4), pages 641-661, December.
    3. Ana Isabel Polo Peña & Dolores María Frías Jamilena & Miguel Ángel Rodríguez Molina, 2017. "The effects of perceived value on loyalty: the moderating effect of market orientation adoption," Service Business, Springer;Pan-Pacific Business Association, vol. 11(1), pages 93-116, March.
    4. Chen-Ya Wang & Priyanko Guchait & Cheng-Hsin Chiang & Wan-Ting Weng, 2017. "When customers want to become frontline employees: an exploratory study of decision factors and motivation types," Service Business, Springer;Pan-Pacific Business Association, vol. 11(4), pages 871-900, December.
    5. Temperini, Valerio & Gregori, Gian Luca & Pizzichini, Lucia, 2019. "E-learning as a marketing tool for Tour Operators. The ‘Go Academy’ case study," MPRA Paper 94075, University Library of Munich, Germany.
    6. Nyadzayo, Munyaradzi W. & Khajehzadeh, Saman, 2016. "The antecedents of customer loyalty: A moderated mediation model of customer relationship management quality and brand image," Journal of Retailing and Consumer Services, Elsevier, vol. 30(C), pages 262-270.
    7. Mask, Rickey & Works, Richard, 2018. "How Social Capital, Supply Chain Integration, and Customer Loyalty Affect Performance," MPRA Paper 91332, University Library of Munich, Germany.
    8. WeiWei Chen & Hsiao-Ching Lee, 2018. "How to explain service failure? Impacts of justifications," Service Business, Springer;Pan-Pacific Business Association, vol. 12(2), pages 331-356, June.
    9. Kerstin Bremser & María del Mar Alonso-Almeida & Josep Llach, 2018. "Strategic alternatives for tourism companies to overcome times of crisis," Service Business, Springer;Pan-Pacific Business Association, vol. 12(2), pages 229-251, June.
    10. Chenini, Abderrahim & Touaiti, Mustapha, 2017. "Building Destination Loyalty Using Tourist Satisfaction and Destination Image: A Holistic Conceptual Framework," MPRA Paper 90639, University Library of Munich, Germany, revised 16 May 2018.

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