Value co-creation and customer retention in services: Identifying a relevant moderator and mediator

Abstract

This research explores the effects of the DART model of value co-creation on customer retention. To do so, the current research examines the moderating role of types of customer (i.e., corporate vs. retail) and the mediating effect of customer engagement. Two studies were conducted through structured surveys among 362 bank customers (Study 1) and 316 hotel customers (Study 2). Partial least-squares-based structural equation modeling (PLS-SEM) was employed to analyze the data. The results of Study 1 show that each element of the DART model significantly influences customer retention. The effects of dialog, risk assessment, and transparency on customer retention are found to be higher (lower) for corporate (retail) customers, while the effect of access on customer retention is higher (lower) for retail (corporate) customers. Study 2 further identified customer engagement as a mediator explaining the underlying mechanism in the links between each element of the DART model and customer retention. Theoretical contributions and managerial implications of the findings are discussed.