Logistics outsourcing performance and loyalty behavior

Abstract

PurposeThe purpose of this paper is to examine how goal achievement and goal exceedance influence the aspects of loyalty in logistics outsourcing relationships. Specifically, it aims to develop and test a model of customer loyalty across two cultures to determine if dedicated strategies for building loyalty are required.Design/methodology/approachThis effort develops a conceptual model that provides a better understanding of the relationship between two dimensions of logistics outsourcing performance (goal achievement and goal exceedance) to loyalty across cultures. The model is then tested using structural equation modeling along with multi‐group analysis.FindingsThe findings indicate that goal achievement strongly influences the loyalty aspects of retention and referrals, but not extension. Meanwhile, all three dimensions of loyalty were influenced by goal exceedance of the logistics provider. Further, goal achievement was found to have a stronger effect on retention only, with goal exceedance demonstrating a stronger influence on extension and referrals. In addition, cultural differences in the model were identified.Research limitations/implicationsFuture research should examine more transactional settings as well as other potential moderators that may be consequential to the examination of loyalty formation.Practical implicationsThe findings suggest that logistics service providers (LSPs) need to have an appreciation for the differences between goal achievement and goal exceedance as it relates to loyalty formation. In addition, LSPs need to adapt their performance goals based on cultural differences that may exist across their markets.Originality/valueThe close examination of the two dimensions of outsourcing performance on three aspects of loyalty behavior builds on the extant literature. The examination across the two national settings provides yet another contribution of the study.