The Role of Consumer Confidence in Creating Customer Loyalty

Ou Y., de Vries L., Wiesel T., Verhoef P.


Abstract
How can firms retain customers during recessions? To answer this question, we investigate the moderating role of consumer confidence (CC) on the effects of three types of crucial customer loyalty strategies. These strategies are value equity (VE), brand equity (BE), and relationship equity (RE), collectively called customer equity drivers (CEDs). We build on economics and marketing theories to develop our hypotheses on the concerned moderating role. A meta-analysis is used to synthesize the multilevel results of 13 service industries and to test the hypotheses. In addition, we use several robustness checks to validate the findings of the meta-analysis. The results consistently show that CC partly influences the effects of CEDs on customer loyalty and this influence varies across industries. These findings suggest that managers in service industries should consider CC as an important criterion for effectively adjusting customer loyalty strategies to their specific situation. Specifically, during recessions, when CC is relatively low, VE is effective for retaining customers, but this is more apparent for noncontractual settings than for contractual settings. Also, BE is more effective but only for noncontractual firms. © The Author(s) 2013.

Keywords
consumer confidence; contractual settings; customer equity drivers; customer loyalty; meta-analysis



Publication type
Article in Journal

Peer reviewed
Yes

Publication status
Published

Year
2014

Journal
Journal of Service Research

Volume
17

Issue
3

Start page
339

End page
354

Pages range
339-354

Publisher
SAGE Publications Inc.

Language
English

ISSN
1094-6705

DOI

Full text

Affiliation
BI Norwegian Business School; Rijksuniversiteit Groningen; Westfalische Wilhelms-Universitat Munster