Royalties From Loyalties

Fay, Christopher J.

doi:10.1108/eb039626

Cited by 24 publications

(12 citation statements)

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“…One point of view is that loyalty is simply another term for customer retention; a customer who continues to buy is a loyal customer. However, Fay (1994) reports the case of one retail organisation which found that the customers it retained the longest were actually the least pro®table because of their strategic bargainseeking behaviour.…”

Section: Understanding Customer Loyaltymentioning

confidence: 95%

“…Romano (1995) suggests that 65±70 per cent of encounters that meet or exceed the expected threshold of customer satisfaction merely involve hygiene factors, having no impact on customer loyalty. In a business-tobusiness survey, Fay (1994) found that while over 70 per cent of companies ranked price as the ®rst or second least satisfactory issue, interviews with switchers found that no more than 10 per cent had changed suppliers because of price. Satisfaction, therefore, seems a necessary, although insuf®cient, cause of loyalty.…”

Section: Satisfaction and Dissatisfactionmentioning

confidence: 98%

“…Many researchers, however, have identi®ed a discontinuity between satisfaction and loyalty (Edwards et al, 1994;Fay, 1994;Romano, 1995; the Ogilvy Loyalty Centre, UK, cited in Rosenspan, 1998;Wood, 1998;PA Consulting, 1999;Harte-Hanks Market Research, 1999).```Satisfaction is an inherently unstable and temporary mental state'' and a poor way of predicting customer retention' (Frederick Reichheld quoted in Cash Jr., 1996). Romano (1995) suggests that 65±70 per cent of encounters that meet or exceed the expected threshold of customer satisfaction merely involve hygiene factors, having no impact on customer loyalty.…”

Section: Satisfaction and Dissatisfactionmentioning

confidence: 98%

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Does service failure influence customer loyalty?

Burton¹

2002

J of Consumer Behaviour

136

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There is a general consensus that customer loyalty to service providers is not solely dependent upon their level of satisfaction or dissatisfaction. However, the identified antecedents of loyalty remain, at best, highly speculative. The aim of this extensive literature review is to give some understanding of the nature of customer loyalty and the antecedent effects of service dissatisfaction.The research reviewed suggests that customer loyalty is an attitudinal state, reflecting value, trust and commitment within supplier–customer relationships. Satisfaction is one of several antecedents of loyalty. A key influence on loyalty is the offer of unique value‐delivering advantages not provided by competitors. Thus firms need to develop positive value‐based exit barriers to achieve loyalty. When service failures occur, the recovery process is likely to have a greater impact on loyalty than the original service failure. The key to successful recoveries was found to be the customer's perception of ‘fairness’. Recovery programmes must get it right first time. Customers who remain dissatisfied after a complaint has been handled are more dissatisfied than if no recovery attempt had been made. Dissatisfaction and customer satiation are major causes of a customer's exit. The solution to customer satiation is dynamic value creation. Collection and monitoring of customer data is needed for success and two‐way communication is vital. Copyright © 2002 Henry Stewart Publications.

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Section: Understanding Customer Loyaltymentioning

confidence: 95%

Section: Satisfaction and Dissatisfactionmentioning

confidence: 98%

Section: Satisfaction and Dissatisfactionmentioning

confidence: 98%

See 1 more Smart Citation

Does service failure influence customer loyalty?

Burton¹

2002

J of Consumer Behaviour

136

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“…Hoteliers need to keep employees longer, not only due to the cost of hiring and training new employees, but also tenured employees tend to provide a more positive performance, which is linked to customer satisfaction (Bedeian et al, 1992). Employee job satisfaction is directly associated with customer loyalty; customer loyalty is unequivocally related to profitability (Fay, 1994;Iaffaldano and Muchinsky, 1985); therefore, maintaining quality employees would be the ideal method to sustain a solid reputation and build a repeat customer base (Keane, 1996).…”

Section: Justification For Job Satisfaction Studymentioning

confidence: 98%

Individual employment characteristics of hotel employees that play a role in employee satisfaction and work retention

Brasier

Way²

2010

International Journal of Hospitality Management

113

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“…However, the fundamental goal for an organization is still customer retention or customer loyalty (Evans & Lindsay, 1996;Fay 1994;Gerson, 1993). Customer loyalty/ retention is the willingness of customers to repurchase from a particular organization.…”

Section: Dependent Variable (Perceived Service Quality (Psq))mentioning

confidence: 98%

Modeling the Effects of a Service Guarantee on Perceived Service Quality Using Alternating Conditional Expectations (ACE)*

et al. 2002

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This paper addresses the dearth of empirical research on the relationship between service guarantee and perceived service quality (PSQ). In particular, we examine the moderating effects of a service guarantee on PSQ. While a recent study provided empirical evidence that service quality is affected by service guarantee and employee variables such as employee motivationlvision and learning through service failure, the nature and form of the relationships between these variables remain unclear. Knowledge of these relationships can assist service managers to allocate resources more judiciously, avoid pitfalls, and establish more realistic expectations. Data was obtained from employees and customers of a multinational hotel chain that has implemented a service guarantee program in 89 of its hotels in America and Canada. As the employee variables could affect performance in a non-linear fashion, we relaxed the assumption of model linearity by using the Alternating Conditional Expectations (ACE) algorithm to amve at abetterfitting, non-linear regression model for PSQ. Our findings indicate the existence of significant non-linear relationships between PSQ and its determinant variables. The ACE model also revealed that service guarantee interacts with the employee variables to affect PSQ in a non-linear fashion. The non-linear relationships present new insights into the management of service guarantees and PSQ. Explanations and managerial implications of our results are presented and discussed.

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Royalties From Loyalties

Abstract: If quality begets customer satisfaction and customer satisfaction begets customer retention, why doesn't customer retention beget customer loyalty—and greater profits? Because loyalty's a fickle thing—and needs proper management to thrive.

Cited by 24 publications

References 0 publications

Does service failure influence customer loyalty?

Does service failure influence customer loyalty?

Individual employment characteristics of hotel employees that play a role in employee satisfaction and work retention

Modeling the Effects of a Service Guarantee on Perceived Service Quality Using Alternating Conditional Expectations (ACE)*

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