Customer loyalty and complex services

Abstract

Based on theory from consumer behavior and cognitive psychology, the purpose of this paper is to discuss and test corporate image and customer satisfaction as two routes to customer loyalty. Based on data from 600 individual customers categorized as having high or low service expertise of three companies within the package tour industry, a conceptual model is proposed and tested empirically using structural equation modeling. The data used in the study are included in The Norwegian Customer Satisfaction Barometer. The paper concludes by claiming that for complex services, corporate image and customer satisfaction are not two separate routes to customer loyalty. Corporate image impacts customer loyalty directly whereas customer satisfaction does not. This finding was consistent with high and low service expertise. These results challenge the disconfirmation paradigm which predicts customer satisfaction as the primary route to customer loyalty. From a managerial perspective, information regarding the relative strength of the two routes is vital with regard to resource allocation in order to improve customer loyalty.