The Linkages Between Customer Satisfaction and Four Loyalty Behaviors in the Presence of Moderators

Abstract

This study investigates the effects of moderators on the relationship between customer satisfaction and four common loyalty behaviors: (1) repurchase intentions, (2) positive word-of-mouth, (3) negative word-of-mouth, and (4) share-of-wallet. This evaluation is performed across three service industries and for two moderators—switching costs and variety seeking. The former is thought to be most relevant at low satisfaction levels whereas the latter is thought to be most relevant at high satisfaction levels. Eight hypotheses are formulated and tested.

The data were collected from about 150 customers of cell phone services, restaurant services, and banking services, each. The three services differ in their potential to invite switching costs and variety seeking behavior. The survey consisted of questions assessing overall satisfaction, repurchase intentions, positive word-of-mouth, negative word-of-mouth, variety seeking, and switching cost. One questions assessed the share-of-wallet loyalty behavior. Published scales were used. An inspection of the Cronbach coefficients revealed very good scale reliabilities with alpha score mostly well above 0.85 (Nunnally 1978).

Following Hayes (2013), the hypotheses were tested using regression-based moderator analysis. The analysis produced mixed results at α < .05. For switching costs as a moderator, the effects seem to be service and loyalty behavior dependent. For the phone services, switching costs significantly moderate the satisfaction–repurchase intention relationship, the satisfaction–negative word-of-mouth relationship, and the satisfaction–share-of-wallet relationship. Switching costs do not moderate the relationship between satisfaction and positive word-of-mouth for any of the services. Switching costs do not moderate any of the relationships for banking and restaurant services.

For variety seeking as a moderator, the effects are also service and loyalty behavior dependent. Variety seeking significantly moderates the satisfaction–repurchase intention relationship only for the restaurant service. The findings further suggest that variety seeking does not moderate the relationship between satisfaction and word-of-mouth. For banking services variety seeking significantly moderates the satisfaction–negative word-of-mouth relationship. The results suggest that variety seeking does not moderate the relationship between satisfaction and share-of-wallet.

The findings yield two general implications. First, with respect to future investigations into moderators of the satisfaction–loyalty relationship, loyalty should not be operationalized as a single behavior construct. Different loyalty related behaviors exhibit different moderators. The second key conclusion is that moderators are service dependent. Therefore, future studies into moderators should refrain from analyzing and reporting on pooled industry results.References available upon request.