Factors affecting customer retention of e-marketplace industries through Stimulus-Organism-Response (SOR) model and mediating effect

Abstract

This research aims to study the factors influencing customer retention of E-Marketplace businesses by applying the SOR theory and the mediating effect by examining the relationship between value perception, customer engagement, brand loyalty, and customer retention variables by creating a model based on the SOR theory to study the influence of environmental factors that will lead to customer retention mechanisms. The study focused on a sample group of 426 people who have used E-Marketplace services using an online questionnaire as a research tool. The model was analyzed using the CFA and the hypothesis was tested using the SEM analysis. The results showed that stimuli (S), such as customer value perception, had a strong positive influence and a crucial role in the development and creation of a mechanism for assessing individuals' internal feelings (O) on two variables, customer engagement, brand loyalty, and directly influence customer retention. Furthermore, significant evidence also showed that brand loyalty has an important role as a mediator between customer value perception and customer retention, which is the outcome factor (R) of this study. This structural model can explain customer engagement and retention up to 86.50 percent. Therefore, this research has value as a theory and guideline in formulating an operational strategy for E-Marketplace businesses.