Customer loyalty and the role of relationship length

Abstract

PurposeThe objective of this study is to examine the effect of corporate image, perceived value, and switching costs on customer loyalty in customer/provider relationships of different length.Design/methodology/approachFive key constructs, namely: corporate image, perceived value, switching costs, customer loyalty, and length of relationship, were employed. Using a systematic sampling technique, student interviewers randomly approached customers exiting hair salons. The final survey sample consisted of 279 respondents.FindingsThis paper supports a contingency model with regard to customer loyalty and its antecedents. The results suggest that corporate image impacts customer loyalty in both newer and older relationships. Whereas in newer relationships, corporate image has a cardinal influence on switching costs, in more‐established relationships switching costs are influenced primarily by perceived value. In both cases, switching costs influence customer loyalty.Research limitations/implicationsAs extant research claims that relationship quality, and not length, moderates the relationship between loyalty/repurchase behavior and their antecedents, future research could adopt relationship quality as a moderator to test the model of the present study.Practical implicationsThe results support the importance of enhancing corporate image to retain newer customers. In longer‐established relationships, corporate image remains a determinant of repurchase decisions. However, customer value also has a significant influence on switching costs and loyalty.Originality/valueThe current study moves beyond customer‐perceived value, switching costs, and corporate image to demonstrate that relationship length has a significant influence on customer loyalty.