What are drivers of customer loyalty across economic conditions, industries, firms, and customers [PhD Yi-Chun Ou, 24 April]

Dissertation: Toward a further understanding of drivers of customer loyalty across economic conditions, industries, firms, and customers

Promotor(s): prof. P.C. Verhoef

Customer loyalty is important for firms to compete in service industries. The literature indicates that three marketing activities effectively influence customer loyalty. They are value equity, brand equity, and relationship equity, i.e., customer equity drivers (CEDs). However, contextual factors, such as economic climate and competitiveness, can impact the importance of the drivers. This dissertation focuses on examining crucial but untested contextual situations on the link of CEDs and loyalty.

First, we consider economic conditions as a contextual factor and ask how firms can retain customers during recessions, by investigating the moderating role of consumer confidence. We show that value equity is an effective loyalty strategy for service industries during recessions (i.e., relatively lower consumer confidence).

Second, we consider industry- and firm characteristics and ask why CEDs work better in some industries/ firms. We are able to recommend managers which industry- and firm characteristics should be seriously taken into account when developing loyalty strategies and which should be not. For example, we find that loyalty strategies work better in contractual settings (e.g., insurance and mobile phone service providers) than non-contractual settings (e.g., retailing).

Finally, as nowadays firms aim to create strong customer emotions, we study their effects on loyalty and how they influence the role of service value, brands and relationships. Importantly, we show that inducing positive emotions reduces the impact of service value, brands, and relationships. In sum, firms may use the findings of this dissertation to develop context-specific loyalty strategies and thereby strengthen competitive advantages.