The Missing Link: Where Does Value Fit in the Picture: An Abstract

Abstract

Customer loyalty in the service exchange has been shown to be a primary objective when designing and implementing a marketing or service strategy (Cronin et al. 2000). While the extant literature is replete with examples of the importance of loyalty as a competitive advantage (c.f. Wolter et al. 2017), loyalty remains a somewhat elusive and perhaps understood concept. The primary purpose of this paper is to first increase our understanding of loyalty as an outcome of the service experience. To his end, we outline five loyalty outcomes resulting from the service exchange. Further, we attempt to determine key drivers of each outcome and to determine if the same antecedents influence each loyalty outcome. The findings demonstrate that loyalty is contingent upon consumer’s level of satisfaction with the service encounter, yet this effect is mediated by perceptions of value in four of the five cases examined. The primary theoretical implication herein is that, while satisfaction is necessary for the stimulation of loyalty, its effect is contingent on perceptions of value. This implies that, while satisfaction with the service encounter is necessary for stimulating loyalty, it is the perception of value received that emerges as the primary driver of loyalty. From a practical perspective, service providers are reminded that, while it is important that their customers feel that the encounter with the service provider is positive, they MUST feel that they are also receiving an exceptional value within the exchange process. In practice, this means that providers must not only focus on the face-to-face encounter that their customers experience but that the customer must also feel that the service itself be perceived as being an exceptional value.