Abstract
Understanding customer loyalty has been a growing concern for the services industry. In a context of increasing competitive pressures, such loyalty is seen as a key element in service companies’ success. Maintaining customer loyalty and identifying its underlying factors, however, are recognizably difficult to do. Grounded on the use of cognitive mapping techniques, this paper proposes a knowledge-based framework for the identification of the key determinants of customer loyalty, and the relationships among them. A step-by-step guide to the development of such a framework is presented, and illustrated through a practical application in the banking context. The resulting findings are supportive of the applicability of such methods for understanding customer loyalty, and the improvement of long-term relationships with customers. They are furthermore indicative of new ways in which knowledge can be incorporated into management activities to improve service outcomes. Some managerial implications of our contribution and avenues for future research are also reported.
Highlights
Considered “hot topics” in service industries, service quality and customer loyalty have long been recognized as critical driving forces of business performance for firms wishing to gain sustainable competitive advantages
By applying this methodology to bank customer loyalty in particular, we aim to show that the use of fuzzy cognitive maps (FCMs) can give rise to conceptually coherent and empirically valid knowledge-based frameworks to dynamically analyze and understand the reciprocal influence of key determinants of customer loyalty
There appears to be substantial scope to explore the use of fuzzy cognitive mapping to improve our understanding of the customer loyalty phenomenon, using the knowledge of those most directly involved with those customers in day-to-day operations
Summary
Considered “hot topics” in service industries, service quality and customer loyalty have long been recognized as critical driving forces of business performance for firms wishing to gain sustainable competitive advantages (cf. Amin et al 2011; Lee, Chulhyun 2014; Ferreira et al 2015a). This paper aims to explore the applicability of these maps in supporting the identification of key determinants of customer loyalty and enhancing the levels of transparency in the decision making processes related to these variables. By applying this methodology to bank customer loyalty in particular, we aim to show that the use of FCMs can give rise to conceptually coherent and empirically valid knowledge-based frameworks to dynamically analyze and understand the reciprocal influence of key determinants of customer loyalty (in this case, within banks). The following section presents the methodological background of our application; the ensuing section describes the steps followed for the construction of our FCM, highlighting the results obtained and presenting managerial recommendations; the final section presents concluding remarks and avenues for future research
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