The antecedents and consequences of customer loyalty: The roles of customer satisfaction and consumer trust -commitment

The objective of this dissertation is to develop and test a model of customer loyalty. This model can help explain the process that a customer follows to pledge loyalty, sometimes even subconsciously, to a product or service provider. From the provider\u27s perspective, this process enables a firm to have a superior marketing performance based on the consideration that a loyal customer always is going to repurchase from the same provider. The whole model is composed of two sides: the firm and the consumer side. The firm is the entity that starts the process with the production of a consumer value package that includes a product or service and a strategy to deliver it into the consumer\u27s hands. On the consumer side, the customer may or may not be satisfied with his or her first consumption experience. Only when the consumer is satisfied can it be said that the process for him or her to become loyal starts. Finally, again on the firm side, the consequence of customer loyalty is a firm\u27s superior marketing performance. This superior marketing performance includes higher market share, profitability, and competitive advantage (Moon and Kang 1999). This dissertation focuses on the process that occurs on the consumer side. It is specifically proposed that after a first satisfying experience, a customer requires some kind of reinforcement to become loyal. Such reinforcement would come either by a cognitive process (familiarity and perceived risk) or by an affective process (shared values and norms and opportunistic behavior). The result of those processes is the formation of consumer trust and commitment, which in turn, lead to customer loyalty. This dissertation suggests that consumer trust and commitment have a key-mediating role in the process of building loyalty. Consumer trust and commitment have been regarded previously as important conditions necessary to increase cooperation and loyalty among partners (Morgan and Hunt 1994, Moorman, Deshpande, and Zaltman 1993). The contention of this dissertation is that a buying process with trust and commitment will be able to generate customer loyalty involving repeated purchases in a long-term relationship between a firm and its customers. Guided by a modeled set of relationships, some hypotheses were tested using survey data in the long-distance phone industry. After a rigorous sample data collection and several statistical analyses (factor analysis, correlation analysis, regression analysis, and structural equation modeling) it is concluded that the existence of trust and commitment as mediating variables is important to increase the explanation of customer loyalty. Because not all the initially suggested variables were found significant, a post-hoc model is developed including only the significant variables (see figure 7). This tested model explains about 40% of the variance of the dependent variable customer loyalty and has goodness of fit indexes that are adequate