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Review Journal Why do cutomers switch? The dynamics of satisfaction versus loyalty.

03 Juni, 2012


Theme / Topic : Customer Loyalty as long-term business profitability.
Title                 : Why do cutomers switch? The dynamics of satisfaction versus loyalty.
Author             : Banwari Mittal
Marketing Faculty Member, Northern Kentucky University, Highland Heights, Kentucky, USA
Walfried M. Lassar
Assistant Professor of Marketing, University of New Hampshire, New Hampshire, USA
Year                 : 1998


Background and Problems      : In the literature, the company must know the marketing strategy that's right for his efforts so that customers can faithfully on goods/services produced. Although companies are realizing the value of keeping customers loyal, no one knows for sure how to do it. Companies measure customer satisfaction, and hope that if the satisfaction scores are good, the customers will stay with the firm. But even satisfied customers leave for the lure of a competitor’s offer. Service industries present a more difficult setting for understanding customer disloyalty as opposed to manufactured goods industries. This is because, for service firms, the basis of consumer choice and continued patronage are less obvious. Services are intangible, and they cannot be completely standardized. At the minimum, they vary according to the mood of the service provider and service customer at the moment of service delivery. Thus, in service businesses, what is given and received is relatively intangible. Consequently, customer evaluative criteria are less well articulated, and the appraisal of the value received is much more subjective Therefore, to understand customer disloyalty for service businesses.


Research Purposes      :

  1. Does customer satisfaction always ensure customer loyalty? Is satisfaction merely a necessary prerequisite for loyalty, or a sufficient one? Or are satisfaction and loyalty entirely independent? 
  2. Is service quality related to satisfaction? Is it related to loyalty? Is it related more to loyalty than to satisfaction, or vice versa? 
  3. Do different components of service quality (such as functional and technical quality) influence satisfaction differently than they influence loyalty? 
  4. And, finally, does this pattern of influence differ across high contact versus low contact service industries?

Methodology

Variable          : variables used is the measures of overall satisfaction, intention to switch, technical quality, functional quality, and the SERVQUAL scale. Satisfaction was measured by this item:
Overall, with this facility, I am: (1) Extremely dissatisfied. (2) Somewhat dissatisfied. (3) Feel neutral. (4) Somewhat satisfied. (5) Extremely satisfied. Loyalty was measured by this item: If there was another____ that you could go to, would you switch over to it? (1) no; (2) perhaps; and (3) definitely. Technical quality was measured by this item: The overall quality of work performed by this ____ is: (1) Very poor. (2) Poor. (3) Average. (4) Good. (5) Excellent. Functional quality was measured by this item: The overall quality of the service at this ____ is: (1) Very poor. (2) Poor. (3) Average. (4) Good. (5) Excellent.
For SERVQUAL, we used its latest, 21-item, version (Parasuraman et al., 1994), all items measured as perceptions on 5-point Likert scale; (1) strongly disagree; (2) disagree; (3) feel neutral; (4) somewhat agree; to (5) strongly agree.

Data    : The data used is the primary data . instrument of research using a questionnaire. Respondents over 30 years of age were 70 percent, over 40 were 28 percent, and over 50 were 12 percent. Twenty-five percent had high school as their highest grade, and 63 percent had college degrees. Twenty-seven percent had income less than $25,000, and 20 percent had income exceeding$60,000.

Research Phase :  In this research the analysis done by the consumer response to collect by providing questionnaires to health clinics or service facility repair cars. Respondents were recruited from PTA organizations, mailbox drops, and mall intercepts in two US cities. One hundred and ten customers answered the survey for a car repair service, and 123 for a health care facility they utilized within the past one year.
Research models : Model research conducted using the discriminant analysis method and image.








Results and Conclusion

The results show that for health care services, functional quality played a more significant role than did technical quality (discriminant coefficient 0.679 for the former versus 0.444 for the latter). In contrast, for car repair services, technical quality played a more significant role than did functional quality (signified by the discriminant coefficient of 0.755 for the former
compared to 0.333 for the latter).
In SERVQUAL, Reliability can be deemed to represent “technical quality,” whereas the Responsiveness, Assurance, and Empathy dimensions reflect “functional quality”. Therefore, these three dimensions were combined to compute a total score. In fact, for health care services, Reliability fails to enter the discriminant function; that is, it does not make a significant contribution beyond the determinant role played by Responsiveness/ Assurance/Empathy.

Notwithstanding the popularity of satisfaction surveys in service industries, the dynamics of satisfaction and loyalty defy intuitive assumptions managers typically make. It turns out that the relationship between satisfaction and loyalty is asymmetrical: while dissatisfaction nearly guarantees switching, satisfaction does not ensure loyalty.


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