Abstract
Customer loyalty significantly impacts upon the success of business organization and it is considered an important source of competitive asset. Earlier, researchers have studied the relationship of customer loyalty, both patronage and recommend, with switching cost, customer satisfaction, customer value constructs in the context of business to consumer (B2C). This research study extends the previous research studies by relating these constructs in a business to business (B2B) environment. It aims to empirically test the relationship among these constructs and develops a framework for a B2B environment. The research methodology is quantitative in nature whereas convenience sampling method is adopted from a target population. A questionnaire is developed by using 31 items on a five-point Likert scale. Total 350 questionnaires are distributed during only 92 valid questionnaires are received thus the response rate is observed as 26.28%. The results of the research study show that the five independent variables (customer satisfaction, customer value, switching costs, trust and prices) are significantly correlated with each other. Therefore, B2B marketing professionals should devise their marketing strategies accordingly.
Highlights
Customer loyalty is a source of competitive asset and strongly ompacts upon the success of business organizations because retaining old customers is less expensive than attracting new customers
The coefficients of Pearson correlation test of association show that strong correlation exists between switching cost, service quality, customer satisfaction, customer loyalty and trust
Negative and almost negligible correlation exists between switching cost and price whereas low correlation exists between switching cost and customer loyalty
Summary
Customer loyalty is a source of competitive asset and strongly ompacts upon the success of business organizations because retaining old customers is less expensive than attracting new customers. Reichheld (1993) proved that the outcomes are increased revenue with lower cost of customer acquisition and repeat purchases. Customer loyalty is a source of competitive asset and strongly ompacts upon the success of business organizations because retaining old customers is less expensive than attracting new customers. Reichheld (1993) proved that the outcomes are increased revenue with lower cost of customer acquisition and repeat purchases. According to Kotler (1997), customer loyalty is the key factor in the market strategic planning. Strong vendor and buyer relationship enhances the association (Doney & Cannon, 1997); and relationship of loyal buyers in an organization engages in a long-term mutual benefit which focuses on enhancing the competitiveness and reduces the transactional costs (Reichardt 1993). Companies strive to build a long term relationship with their customers and try to retain them to gain their competitive advantage, which results in reduced revenue base and consistent revenue. The research on customer loyalty in the business to business (B2B) perspective is limited but its impact in business to consumer (B2C) context is widespread; as the B2B context is completely different from the B2C context, its implications are different (Li, 2012)
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