Title: The Impacts of Customer Loyalty on Negative Word-of-Mouth Communication and Repurchase Intention
Abstract: IntroductionCompanies try hard to survive in the cost-cutting and intensive competitive pressure. Thus, in today's ever-changing business world, the race for a higher market share has become linked to the concept of customer loyalty. As customers become harder to reach and engage in a technologically advanced and information rich world, the need for businesses to create loyal customers and sustainable business and plan strategies aimed at retention, has never been more important. In this regard, loyalty marketing is one of the most important vehicle not only to increase customer centric initiatives but also for increasing direct and indirect revenues and business continuity especially for many retail companies including banks, airlines, hotels etc. (Donavan & Samler, 1994). Hence, it is very important to estimate the customers' future decision since the company can take corresponding actions proactively.Creating a good customer loyalty helps companies to be different from their competitors and be one step in front of them. Therefore, the customer loyalty is important matter of concern of the companies. So, establishing a loyalty program strategy should be a company's highest priority. Because, loyalty marketing is a system that was designed to create stronger bonds between customers and businesses has turned into a massive revenue stream. The program revenue generated via alliances with credit card issuers and consumer businesses that profit off loyalty programs are making businesses rich (De Boer & Gudmundsson, 2012).Especially, in recent years, almost all banks have significantly increased their variety of services in individual banking and focused on the customer loyalty. Co-branded credit cards are examples of this case. In addition, co-branded credit card is an outcome of bank's and airlines/hotels' collaborative loyalty initiatives and today there are many examples of this case. Through these credit cards banks aim to keep their number of customers, assure customer satisfaction and even turn satisfaction to customer loyalty (Savasci & Tatlidil, 2006).From this point on, it is useful to examine the customer loyalty and so, it is noteworthy to keep in mind that customer loyalty may also affect negative word-of-mouth communication intention and repurchase intention of customers. This situation is much more important in service industry and, consequently, this research has been conducted on banking services. The extreme competition and saturation in the financial markets and the growing demand of products and services have forced banks to create robust Customer Relation Management (CRM) strategies and increased the need for creating loyal customers. To point out the findings in marketing and finance literature with displaying the interaction between customer loyalty, word-of-mouth communication and repurchase intention is the main purpose of this study.Literature ReviewBrand or company loyalty is a key marketing asset for companies. Marketers evaluate aspects of it through a number of metrics, including repurchase rate, share of requirements, willingness to pay a price premium, and other measures. In increasingly competitive markets, being able to build loyalty in customers is seen as the key factor in winning market share (Jarvis & Mayo, 1986). A robust loyalty strategy must be executed through a comprehensive customer loyalty programmes that have currently been adopted by firms seem to be aimed at motivating repeat purchases. (Hart et al., 1999). Loyalty depends on in a number of factors, including satisfied and influential customers who are willing to recommend the brand, hidden values or emotional benefits, which are effectively communicated and a strong image for the product, the user, or the usage experience (Farris et al., 2010).In todays' globalised competition the strategic importance of satisfaction, quality and consequently loyalty has increased through winning consumer preferences and maintaining sustainable competitive advantages (Petruzzellis et al. …
Publication Year: 2015
Publication Date: 2015-05-01
Language: en
Type: article
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Cited By Count: 18
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