The Customer Loyalty Model
The Customer Loyalty Model
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ABSTRACT
Objectives: The objectives of the study are: i) To determine whether customer loyalty is two-dimensional or one-dimensional. ii) To evaluate the antecedents of the customer loyalty
Methods: Articles were reviewed on the basis of their currency and relevance.
Results: The customer loyalty model is based on attitudinal loyalty and behavioral loyalty. Empirical studies have identified the following antecedents of the customer loyalty model: satisfaction, commitment, commitment, communication and conflict handling.
Conclusion: The customer loyalty model is two-dimensional.
Introduction
The customer loyalty model was proposed by Dick and Basu (1994). The model depicts loyalty as a two-dimensional construct. Dick and Basu (1994) viewed loyalty as an interaction of attitudinal loyalty and behavioral loyalty. Based on this model, customers can be classified as spurious loyal, latent loyal, attitudinal loyal or non-loyal. The model also consists of several dimensions which include: acts of purchase, customer satisfaction, customer trust, customer commitment and customer loyalty. The two-dimensional view, was first proposed by Day (1969) but it has since been modified by Jacoby and Chestnut (1978) and Mahony, Madrigal and Howard (2000). A study by East et al. (2000) proposed that customer loyalty should be treated as a behavioral construct only. There are other researchers who support East and his colleagues by suggesting that customer loyalty is purely behavioral.
The objectives of the review are to:
To determine whether customer loyalty is two-dimensional or one-dimensional
To evaluate the antecedents of the customer loyalty
Methodology
A secondary review was conducted to identify relevant articles that would help us to determine whether customer loyalty is one-dimensional or two-dimensional. Articles were picked from the Business Source Complete database and the following strategy was used:
Article included in the review were not more than 15 years old
Only articles with abstracts and whose authors were qualified enough were included in the review
Articles were selected according to their relevance.
Only peer reviewed articles were included in the study.
Results
Garland and Gendall (2004) conducted a study to test Dick and Basu (1994) customer loyalty typology. Garland and Gendall (2004) used a large sample of 1,700 respondents from a bank. In order to ascertain whether customer loyalty is one-dimensional or two-dimensional used the relevant behavioral and attitudinal measures. The study by Garland and Gendall (2004) supports Dick and Basu’s customer loyalty typology. A study by Huaxine (2010) argues that loyalty is multi-dimensional. The participants in this study were drawn from the wine-retail industry and the study was empirical in nature. Huaxine’s findings are supported by Hart et al. (2001). Hart and his friends drew their sample from grocery retailing companies and the objective of the study was to analyze the behavioral and attitudinal loyalty of retail customers. Hart et al. (2001) used repeat purchase behavior as the behavioral measure. The study concluded that customers are both attitudinally and behaviorally loyal. All the other articles that were reviewed support Dick and Basu’s customer loyalty topology.
The articles that were reviewed identified several antecedents of customer loyalty. Firstly, a study that was conducted by Bennett and Bove (2001) identified satisfaction as one antecedent of customer loyalty while commitment as a useful construct for measuring the likelihood of customer loyalty and predicting future purchase frequency. On the other hand, Ndubiri and Chan (2005) believe that communication informs the customers about the available goods and services and facilitates them in making the purchase decision. Ndubiri and Chan (2005) also established a relationship between conflict handling and customer loyalty (2005). Ndubiri and Chan (2005) believes that firms should have the capacity to solve any conflicts to ensure customers are satisfied and in order for them to become loyal.
Conclusion
Research studies concur that customer loyalty is two-dimensional and its antecedents are satisfaction, commitment, commitment, communication and conflict handling. There is no doubt that customer loyalty is a key ingredient in a business. However, future prospective studies should conduct in-depth research to examine its validity in different markets and product categories.
References
Bennett, R. and Bove, L., 2001. Identifying the key issues for measuring loyalty. Australasian Journal of Market Research, 9 (2), 27-44
Dick, A. S. & Basu, K. (1994). Customer Loyalty: Toward and Integrated Conceptual Framework. Journal of the Academy of Marketing Science, Vol. 22, No. 2, pp. 99-113.
East, R., K. Hammond, P. Harris, & W. Lomax (2000). First-store loyalty and retention. Journal of Marketing Management, 16, 307-325.
Garland and Gendall (2004). Testing Dick and Basu’s customer loyalty model. Australasian Marketing Journal, 12(3), 81-90
Hart, S., Andrew, S., Leigh, S. & Nikolaos, T. (2001). Are Loyalty Schemes a Manifestation of Relationship Marketing? Journal of Marketing Management, 15(6), pp. 541-562.
Huaxine, C. (2010). Study on the Customer Loyalty of Chinese Commercial Banks. International Journal of Business Management, 5(3), pp. 202-05
Jacoby, J. & Robert, C. (1978). Brand Loyalty Measurement and Management. New York: John Wiley & Sons.
Mahony, D., Madrigal, R. & Howard, D. (2000). Using the psychological commitment to team (PCT) scale to segment sport consumers based on loyalty. Sport Marketing Quarterly, 9 (1), 15-25.
Ndubisi, N.O. & Chan, K.W. (2005). Factorial and discriminate analyses of the underpinnings of relationship marketing and customer satisfaction. International Journal of Bank Marketing, 23(3), pp.542-557.
