The determinants and performance outcome of the firm's capacity to maintain customer loyalty

Abstract

AbstractThis research aims to study the determinants and performance‐outcome of the firm's capacity to maintain a loyal customer base. Therefore, this research investigates the influence of sustainable product development on the firm's capacity to maintain customer loyalty. Furthermore, this research investigates the moderating influence of marketing resource intensity on sustainable product development and the firm's capacity to maintain customer loyalty. Moreover, this research investigates the firm profitability as a performance outcome of the firm's capacity to maintain customer loyalty. This research uses the panel dataset of 433 manufacturing firms from the United States. The findings from fixed‐effect regression analysis confirm the significant positive influence of sustainable product development on the firm's capacity to maintain customer loyalty. The moderation analysis confirms the significant positive influence of marketing resource intensity on sustainable product development and the firm's capacity to maintain customer loyalty. The results also confirm the contribution of the firm's capacity to maintain customer loyalty to firm profitability. This study contributes to the customer loyalty literature stream by theorizing the capacity to maintain customer loyalty construct and empirically studying its performance outcome, the contribution of sustainable product development in the firm's capacity to maintain customer loyalty and the moderating role of marketing resource intensity in this regard, under the resource‐based view. Based on the study findings, this research suggests that managers need to emphasize sustainable product development in the firms to strengthen the firm's capacity to maintain customer loyalty and recognize the interactional role of marketing resource intensity in this regard.