Customer Loyalty Theory

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Recommended: Literature review on brand loyalty among consumers

The customer loyalty is considered as prime determinant of long-term financial performance of firms. Three conceptualizations of customer loyalty have been identified in literature: behavioral loyalty, attitudinal loyalty, and composite measure of loyalty (Uncles et al., 2003b). Recent studies (Bennett & Rundle-Thiele, 2002; Rundle-Thiele, 2005a) indicate that a multidimensional view of customer loyalty is important to understand dimensions and measures of loyalty. Dick & Basu (1994) argue that both behavioral and attitudinal loyalty are important, when emphasis is both on understanding past behaviors as well as predicting future patronage by the customer. The present study considers both behavioral and attitudinal dimensions of loyalty …show more content…

Another disadvantage of attitudinal measurements is that while operationalizing attitudinal loyalty, researchers use either antecedents or consequences of loyalty (Odin, Odin & Valette-Florence, 2001). Composite Loyalty For understanding long-term relationships, both behavioral and attitudinal dimensions of loyalty are important (Dick and Basu, 1994). The composite approach to loyalty considers customers‘ favorable attitudes, intentions, and repeat purchasing as measures of true loyalty (Shoemaker & Lewis, 1999; Rundle-Thiele, 2005b). Dick and Basu (1994) define loyalty as the strength of the relationship between an individual‘s relative attitude and their repeat patronage. Research findings support the two-dimensional measures as better predictors of customer‘s loyalty (Chaudhuri & Holbrook, 2001; Ganesh, Arnold & Reynolds, 2000; Rauyruen & Miller, 2007; Yi & Jeon, 2003). Therefore, in line with various researchers, this study proposes a composite measure of customer loyalty incorporating both behavioral and attitudinal

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