Impact of customer orientation on word-of-mouth and cross-buying

Abstract

PurposeThe purpose of this paper is to examine the direct impact of proactive customer orientation (PCO) and responsive customer orientation (RCO) on word-of-mouth (WoM) and cross-buying (CB). Further, this study tests the mediating role of perceived value (PV) in the relationship between customer orientation (CO) (PCO and RCO) and WoM as well as CB in the context of retail banking in an emerging market, India.Design/methodology/approachThe authors used cross sectional survey research design to collect data from 443 customers of retail banks in India. The authors analyzed the data using IBM AMOS 23.0 taking structural equation modeling approach to test the hypothesized relationships.FindingsThe findings of the study suggest that PCO positively influences CB but there is no significant relationship between PCO and WoM. RCO positively influences WoM and CB. PV partially mediates the relationship between RCO and WoM as well as CB. PV does not mediate the relationship between PCO and WoM or the relationship between PCO and CB.Practical implicationsThis study shows that managers need to focus on proactive as well as RCO. Further, managers need to adopt RCO in order to ensure cross-buying and promote WoM recommendations by customers. By practicing PCO managers can promote CB. Also, managers will be able to enhance CB and promote WoM recommendations if the value delivered by the bank is perceived to be adequate by customers.Originality/valueThis study contributes to current knowledge in retail banking by testing the relationship between CO and CB as well as WoM through data obtained from customers in an emerging economy. This study also tests the mediating role of PV for the above-mentioned relationships.