Content area
Full Text
ABSTRACT
Although the moderators between customer-level satisfaction and loyalty have been a significant area of study within the field of marketing, scant research examines how firm-level signals may amplify the relationship. This study integrates signaling and social influence theories to gain a better understanding of how firm-level customer satisfaction, WOM intensity, and brand portfolios may serve as signals to affect the relationship between customer-level satisfaction and loyalty. We collected six-year longitudinal data from 125 firms in China and analyzed data using Hierarchical Linear Modeling (HLM) andfloodlight moderation analyses. The results reveal that firm-level customer satisfaction magnitude and noise both positively moderate the customer-level satisfaction-loyalty relationship. We also find that negative WOM intensity weakens customerlevel satisfaction and loyalty relationship, but only for firms using house-of-brands. These findings establish useful theoretical insights and managerial implications for customer retention.
INTRODUCTION
The customer satisfaction-loyalty relationship has been a prominent research topic in the marketing field (Aksoy et al., 2013; Chandrashekaran et al., 2007; Kamran-Disfani et al., 2017; Schirmer et al., 2018; Srivastava & Rai, 2013; Wangenheim, 2003). The literature finds customer satisfaction plays an important role in increasing customer loyalty (Chen, 2012; Kamran-Disfani et al., 2017; Mittal & Kamakura, 2001; Srivastava & Rai, 2013). A stream of literature focuses on examining moderators between customer satisfaction and loyalty. The moderators often include external factors that firms cannot control such as customer, situational, industry, and marketplace characteristics (e.g., Homburg & Giering, 2001; Schirmer et al., 2018; Seiders et al., 2005; Walsh et al., 2008). The research results offer reactive marketing strategies for firms to respond to customer and market changes. However, little attention has been paid to examining how signals sent out by firms may strengthen the customer satisfaction-loyalty relationship. It is meaningful to bridge the research gap because firms can take the initiative to communicate these signals and form proactive strategies to enhance customer loyalty. Consequently, firms can actively manage customer loyalty instead of passively responding to changes in the customer base or the overall market.
Notably, there is a distinction between customer satisfaction at the customer and firm levels (a single customer vs. multiple customers). At the customer level, customer satisfaction is transaction-specific which provides specific diagnostic information about a particular product or service encounter, and at the...