Marketing Division
Markets, Consumers and Exchanges are the three broad themes that define the focus and contribution of the marketing group at the Weatherhead School of Management. The research outputs of the marketing faculty make unique and substantial contributions to the knowledge base in each of these broad areas, and to the dynamics that tie them together.
Consumer Loyalty Dynamics in Service Markets
Professor Jagdip Singh
In the February 2005 issue of the prestigious Journal of Marketing Research, Professor
Jagdip Singh published his recent work co-authored with Professor Clara
Agustin (Universitat Pompeu Fabra, Barcelona, Spain) on consumer loyalty dynamics
in service markets. Full citation: “Curvilinear Effects of Consumer Loyalty Determinants
in Relational Exchanges” Journal of Marketing Research (February): 96-108.
Professor Jagdip Singh talks about insights from his current research…
“Despite the emerging consensus that winning consumer loyalty is critical for a firm’s long-term survival and bottom line returns, the marketing discipline remains divided about the key loyalty determinants and the mechanisms by which they operate. Some extol the virtues of fully satisfying consumers by exceeding their expectations. Others contend that a total trust strategy is the ultimate test of consumer loyalty, and satisfaction based strategies are untenable. Yet others chide the discipline for falling prey to faddish trends involving satisfaction and trust, and challenge marketers to consider that it is value that drives loyalty. These debates and divides appear to grow in intensity and stridency even as consumer loyalty remains elusive and unpredictable.
My research with Clara Agustin takes an initial step in bridging these divides by (a) simultaneously examining the effects of multiple determinants including satisfaction, trust, and value on loyalty intentions; (b) utilizing complex mechanisms involving curvilinear effects, and (c) focusing on ongoing relational exchanges where consumers have established some level of relationship with service providers based on an experience stream of past episodes.
What did we find? While managerial practice has emphasized singular factors and simple mechanisms, our results confirm that strategies guided by simplicity and singularity are probably unproductive. The empirical processes conform to a worldview that is complex and curvilinear. Ensuring satisfaction and positive value appear consistently as hygiene factors in loyalty mechanisms. Without fulfillment of these lower-order needs, managers are unlikely to maintain the loyalty of its consumer base. Beyond this essential fulfillment, it is more rewarding to invest efforts in enhancing trust mechanisms that allow fulfillment of higher-order, motivator needs. Further complexities emerge because of the interrelationships among the loyalty determinants. Satisfaction affects trust and value judgments, while trust plays a direct role in shaping value evaluations. Within these complexities, the hygiene role of satisfaction and value, and the motivator role of trust remain consistently compelling.
Managers are likely to feel the urge to sort through our results to address a bottom line question, “Which
loyalty determinant is most important?” Our response, “They all are.” Balancing investments in loyalty determinants to match the target segment and relational context are crucial questions that deserve careful analysis. Consider a manager facing two target segments—one
that is generally loyal to the product/service offered, and a second that occasionally
uses the product or service offered but does not evidence strong loyalty. For
this situation, our results suggest that (a) managers invest in trust-building
factors for the first segment while holding their current investments in satisfaction
and value, and (b) for the second segment, managers should fine tune their satisfaction
and value investments without necessarily investing additional resources in trust-building
activities. Thoughtful, rigorous analysis and careful tracking of consumer loyalty
mechanisms is needed to oil the engine of relationship marketing.”
Being interesting teachers and good researchers is what being a member of the marketing faculty at Weatherhead is all about. So please, look around, and contact any of us if you have questions or special interests that fit with what you see here.
February 2005
