The effects of distributive, procedural, and interactional justice on customer retention: An empirical investigation in the mobile telecom industry in Tunisia

Journal of Retailing and Consumer Services 37 (2017) 89–100

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The effects of distributive, procedural, and interactional justice on customer retention: An empirical investigation in the mobile telecom industry in Tunisia ⁎,1

Nedra Bahri-Ammaria, a b

MARK

, Anil Bilgihanb

Department of Marketing, IHEC, Carthage, Tunisia Department of Marketing, Florida Atlantic University Boca Raton, FL, USA

A R T I C L E I N F O

A BS T RAC T

Keywords: Mobile phone service Loyalty programs Distributive justice Procedural justice Interactional justice Retention SEM

The framework offered in this study provides empirical evidence concerning the interaction between distributive, procedural and interactional perceived justice and loyalty program satisfaction on relational satisfaction in the mobile telecommunication context. Firms that rely on justice perception for strategy implementation are able to attain customer retention. This study suggests a theoretical model of customer retention that aims at investigating the role of satisfaction with loyalty program on relationship marketing. The structural equation modeling was used to test the hypothetical relationships. A self-administrated questionnaire was distributed to a total of a convenience sample of 520 customers of multiple mobile phone companies. The target population includes customers who have subscribed to a loyalty program. Results show that distributive justice moderates the relationship between satisfaction with the loyalty program and relational satisfaction. The results highlight the need to focus on distributive justice in order to nurture satisfaction and loyalty. Satisfaction with the loyalty program is a key predictor of a satisfactory relationship with the operator and customer retention.

1. Introduction Loyalty programs have been the subject of several previous studies (e.g. Kandampully et al., 2015; Söderlund and Colliander, 2015; Kreis and Mafael, 2014; Pez, 2009; García-Gómez et al., 2006; Mimouni and Volle, 2003; Lewis, 2004; Verhoef, 2003; Meyer-Waarden, 2007). The focus of such research includes themes from the role of loyalty programs in behavioural and affective loyalty (Söderlund and Colliander, 2015; García-Gómez et al., 2006; Mimouni and Volle, 2003) to the influence of loyalty programs and short-term promotions on customer retention (Verhoef, 2003; Lewis, 2004). On one hand, loyalty programs, whether in the form of membership cards (Tanford et al., 2011) or rewards programs (Hu et al., 2010), were predicted to

have direct influences on customer loyalty, parallel to the effect of switching costs (Baloglu, 2002). On the other hand, other frameworks show that the influence of such programs on loyalty behaviour is transient (e.g. Sharp and Sharp, 1997). Moreover, loyalty programs have been criticized, as researchers have posited doubt as to whether they actually work because they fail to understand customer behaviours and expectations (Xie and Chen, 2014). Loyalty program members do not necessarily engage in an on-going relationship with the firm. According to Söderlund and Colliander (2015), in some cases, customers may even feel frustrated and unfairly treated because they fail to collect the promised rewards, to misunderstand the procedures or to perceive a discriminatory interpersonal behaviour. Keropyan and GilLafuente, (2012) highlight that mobile telecommunication companies

⁎

Corresponding author. E-mail addresses: [email protected] (N. Bahri-Ammari), [email protected] (A. Bilgihan). Nedra Bahri-Ammari Nedra Bahri-Ammari is an associate professor of Marketing and Management at the IHEC of Carthage, Tunisia. She is member of the LRM laboratory and the Co-Director of the Master “Marketing” at IHEC Carthage. She holds a Doctorate in marketing and a master degree in Marketing form ISG of Tunisia, University of Tunis. She is a graduate of marketing from ISG of Tunis, University of Tunis. Dr. Bahri's researches include: business-to-customer and business-to-business marketing, customer relationships management (CRM), social-CRM, digital Marketing, customer satisfaction, loyalty, retention, technology's implementation, firm profitability, enterprise Resource Planning (ERP) and Supply Chain Management. She has published in International peer-reviewed academic journals as: International Journal of Contemporary Hospitality Management; Journal of Hospitality and Tourism Technology; Journal of Research in Marketing and Entrepreneurship; Management Research review; Journal of Marketing Research and Case Studies; International Journal of Customer Relationship Marketing and Management; An International Journal of Science, Engineering and Technology. She has published a book on CRM and loyalty strategy also participated in the writing of books on tourism and social CRM. She has published in international and national academic conferences proceedings (AFM, EUROMED, World Research Summit for Hospitality and Tourism, Marketing Trends, WASET, IBIMA, Academy of Marketing Science…). 1

http://dx.doi.org/10.1016/j.jretconser.2017.02.012 Received 9 November 2016; Received in revised form 5 February 2017; Accepted 27 February 2017 0969-6989/ © 2017 Elsevier Ltd. All rights reserved.

Journal of Retailing and Consumer Services 37 (2017) 89–100

N. Bahri-Ammari, A. Bilgihan

2.1. Justice theory

should spare no effort in seeking solutions to keep their own customers satisfied and thus loyal to the company. Social justice may offer valuable insights for customer loyalty programs since it refers to the idea that an action or decision is morally right. If a loyalty program is perceived as fair and just, it could potentially increase customer loyalty. Creating a positive justice perception within customers’ minds is an important task of service companies. If a customer feels he/she perceived an unjust treatment, it will trigger the customer to switch the service provider (Gohary et al., 2016). Söderlund and Colliander (2015) underscore that rewards through loyalty programs affect the perceived justice, which was measured in their study through distributive justice and, ultimately, affects the satisfaction. Furthermore, they believe that the preferential treatment to certain customers as part of a loyalty program is the ideal condition to activate a situation of perceived justice. A significant number of previous studies in perceived justice have been devoted to service recovery, retailing context, switching behaviour and complaint process (e.g. Nikibin et al., 2012; Tax et al., 1998; Blodgett et al., 1993). In the same view, Pez (2009) demonstrated the moderating effect of perceived justice in the link between satisfaction with the loyalty program and relationship satisfaction in the French mobile phone sector. In the context of healthcare public services, Vinagre and Neves (2010) have attempted to validate the impact of perceived justice and emotions on patient satisfaction. Their results suggested the relevance of positive emotions, procedural and relational justice in patients’ satisfaction process. In their framework, Aurier and Siadou-Martin (2007) investigated the role of perceived justice components on the evaluation process in a dining consumption experience. The findings highlighted both direct and indirect impacts on satisfaction through perceived quality and a notable link with trust. Several studies investigated the role of perceived justice facets on consumer responses (e.g. Aurier and Siadou-Martin, 2007) in the case of Northern European countries. As an example, these have a high number of service providers and a large market size (Söderlund and Colliander, 2015). Nevertheless, no studies have focused on perceived justice in emerging countries. This study focuses on the impact of the perceived justice in the mobile telecommunication services context in Tunisia. Tunisia has a developed telecommunications infrastructure with a 76% mobile penetration. This sector has shown an exceptional growth following the integration of two competing operators. In this context, several important steps have been made to renovate the regulatory framework. These include the passage from the oligopoly system (i.e., Tunisie Telecom) to an open market. Three operators share the market of mobile communication are Tunisie Telecom, Ooredoo and Orange Tunisie which offer different loyalty programs to their customers, hence, making it a suitable context to study loyalty programs. In sum, the current research aims at underscoring the role of perceived justice dimensions (i.e. distributive, procedural and interactional) and satisfaction with the loyalty program in explaining customer's relational satisfaction and retention. The first objective is to identify, in the case of Tunisia, which perceived justice component moderates the interaction between satisfaction with the loyalty program and relationship satisfaction in the service context. The second objective is to reveal the role of this interaction and its contribution to predicting consumer retention process.

The rational decision-making approach is derived from the economics literature, and it is valuable in predicting economic outcomes (Stevenson et al., 1990). However, economics research has also acknowledged that fairness theory is important in understanding customer decision making (Kagel and Wolfe, 2001). Thus, customer fairness perceptions, as opposed to the rational decision-making perspective, also explains the customer repatronage and recommendations (Humphrey et al., 2004). The theory of justice has been well investigated in various contexts including marketing (Söderlund and Colliander, 2015; Smith et al., 1999; Tax et al., 1998) and information systems (Fu et al., 2015). The fundamental notion of justice suggests that organizations’ actions are assessed by customers/employees on the basis of fairness and they responded according to their fairness perceptions (Wetsch, 2006). People are attentive to the justice of events and situations in their everyday lives, across a variety of contexts (Tabibnia et al., 2008). They react to actions and decisions made by organizations every day. A customer's perceptions of these decisions as fair or unfair can influence the customer's subsequent attitudes and behaviours. In other words, customers’ satisfaction and loyalty are based on whether or not they felt that they were treated fairly, whether or not justice was done (Murphy et al., 2015). Fair offers led to higher happiness ratings and activation in several reward regions of the brain (Tabibnia et al., 2008) which suggests justice would play an important role in investigating loyalty and rewards programs. The conceptual framework of the current research draws from the equity theory (Adams, 1963), which hypothesized that judgments of equity and inequity were the result of comparison between oneself and others based on inputs (i.e., what a person perceives to contribute) and outcomes (i.e., what a person gets out of an exchange). Much later, Greenberg (1987) presented the organizational justice theory which stems from the equity theory as well. It focused on how an employee judged the behaviour of the organization and the resulting employee's reaction (e.g. attitude or behaviour). Perceived justice has been lately treated in several relationship marketing studies to explain the customer satisfaction process (Pez, 2009; Aurier and Siadou- Martin, 2007). Previously, this construct has often been adopted in theory to deal with service failure occurrence (Sabadie, 2000; Tax et al., 1998; Blodgett et al., 1993). Tax and Brown (1998) considered that justice provided a global framework for understanding the complaint process from the beginning to the end, hence the relevance of the phenomenon. Perceived justice is viewed as a pledge of the continuity of partner's relationship and is meant to develop high customer loyalty intentions. Many investigations deduced that perceived justice had a significant effect on positive and negative emotions of customers in case of a service recovery (Lopes and da Silva, 2015; Vinagre and Neves, 2008; DeWitt et al., 2007). Earlier research has shown that perceived justice has often been conceptualized as a construct consisting of three dimensions namely, distributive justice, procedural justice and interactional justice (Aggarwal and Larrick, 2012; Maxham and Netemeyer, 2003; Blodgett et al., 1997). 2.1.1. Distributive justice The principle of distributive justice (Greenberg and Tyler, 1987) suggests that fairness perceptions are induced when an individual compares an outcome (e.g. membership points) with a comparative other's outcome (Nguyen and Klaus, 2013). In organizational behaviour, distributive justice is defined as perceived fairness of how rewards and costs are shared by group members. For instance, when customers of the same telecommunication company are received different benefits, customers may feel that distributive justice has not occurred. According the principle of distributive justice, loyalty program members' outcomes (e.g. discounts, more data) should be based upon their inputs (e.g. years of commitment). Therefore, a customer

2. Theoretical background This research is structured into four parts. Firstly, a review of the literature in this context is presented along with the conceptual framework of this research. Secondly, a conceptual model of the determinants of retention is proposed and then research hypotheses are presented. Next, we introduce the research methodology. Finally, the analysis is presented and discussed and then theoretical and managerial implications offered for future research directions are proposed. 90

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this case, customers perceive the loyalty program as just when they are satisfied with the program and its relationship with the provider (Kuikka and Laukkanen, 2012; Hess et al., 2011). Interactional justice focuses on the two-way interactions between customers and marketers, including the manner in which the customer is treated with respect, interest, friendliness, honesty, and politeness (Lacey and Sneath, 2006). Even when customers perceive that outcomes and procedures are reasonable, they may still feel mistreated if they discern unfair status treatment due to the manner in which the marketer delivers the value proposition. The satisfaction from interactional justice will reinforce the maintenance of a valuable relationship between parties (Moorman et al., 1992). Consumer engagement is a result of an interactive relationship and the culmination of a mutually beneficial agreement between the two parties. Thus, the positive perception of effort from the operator (made by the staff contact) induces an interactional justice and helps to preserve as long as possible the relationship between the two parties (Wulf et al., 2001; Bove and Johnson, 2006). For example, members are privileged compared to regular customers. Indeed, they are supported by staff in case of problem arises and may not wait for their turns to treat a request, they are given priority. Major operators (e.g. SFR and Bouygues) put at their disposal a team which makes sure their demands are met at any time. Interactional injustice in the context of service delivery is positively correlated with complaints. Thus, consumers who are disappointed about interactional injustice, tend to complain and signal the failure of the service. Justice along with complaint management (ability to speak) can, consequently, have a positive effect on satisfaction vi-à-vis the loyalty program and maintain the relationship with the operator (Tax et al., 1998). Interactional justice is closely related to the concept of functional quality. Operators must avoid any form of procedural unfairness perceived by the customer, such as bad faith, lack of respect, lack of understanding, lack listening and lack of empathy.

who has invested a large amount of input (e.g. time, money, energy) should receive more from the group than someone who has contributed very little. Distributive justice is presented as the ratio of "rewards / contributions" each of the parties (e.g. customer and operator). It is very much like the quality-price ratio, time and effort spent on the purchase and consumption compared to the service offered (Aurier and Siadou-Martin, 2007; Smith et al., 1999; Adam, 1965). When a consumer is disappointed due to a poor quality-price ratio or a different treatment of customers, there will be a low propensity to complain. When client believes to have very little chance of improvement, the injustice leads to silence and non-participative action from the customer (Aurier and Siadou-Martin, 2007). Within a loyalty program context, distributive justice becomes conspicuous when the difference between delivered program rewards and assigned investments is acceptable. For example, most telecommunications companies such as SFR, Vodafone, Bouygues, and AT & T meet the customers’ requirements when changing a line or a plan. Additional costs are borne by the company during a first change. For the second, the customer is informed. Discounts on the invoice and the use of loyalty cards in which other stores are also offered. Adherence to a selected group is also provided by the operators. This makes it possible for the customer to have a better perception of the actions undertaken by the operator, and that will reinforce their commitment based on the cognitive evolution of the value of the relationship (Terrasse, 2003; Gundlach et al., 1995; Moorman et al., 1993). 2.1.2. Procedural justice Blodgett et al. (1997) defined procedural justice as “the perceived fairness of policies, procedures, and criteria used by decision makers to arrive at the outcome of a dispute or negotiation”. The procedural justice deals with the procedures used to reach the outcomes of an exchange (Chebat and Slusarczyk, 2005), e.g. organizational levels involved in the process. It reflects the degree that an individual perceives that outcome allocation decisions have been fair and just. In a loyalty program context, the use of fair procedures helps communicate that customers are valued members of the group. Berry and Seiders (1998) present this justice dimension as the way in which to understand a claim or to perceive the quality of service. This construct explains the methods used by organizations to assign benefits to individual's structural characteristics of decision-making. This form of justice for the rewards seems to play a facilitating role in building the satisfaction with the loyalty program, trust, and commitment, as well as in reducing the perceived risk associated with any purchase. The procedural injustice is positively correlated with negative word-ofmouth and negatively correlated with silence in the context of banking / insurance, supermarkets, hotels and restaurants (Aurier and SiadouMartin, 2007). In the employee compensation and satisfaction context, Olafsen et al. (2015) found a positive relationship between procedural justice and need satisfaction, indicating that if the procedure for determining the compensation was perceived as fair, the employees felt more autonomous and more competent, and, in turn, more intrinsically motivated for their work. In other words, the perception of procedural justice is positively related to motivation through the satisfaction of the basic psychological needs.

2.2. Satisfaction with the Loyalty Programs The focal point of the many companies’ marketing activities is customer loyalty to their products and services (Vesel and Zabkar, 2009). Researchers have long established that loyal customers are crucial to any successful service firm (Kandampully et al., 2015; Bowen and McCain, 2015). In order to achieve that goal, customer's loyalty has become a strategic objective set by many companies. Several studies have focused on the effects of loyalty programs rewards and their impact on customer satisfaction and behavioural responses generated by these programs (Söderlund and Colliander, 2015; Kreis and Mafael, 2014; Bojei et al., 2013; Villacé-Molinero et al., 2013). Pez (2009) investigated the moderating effect of perceived justice on this relationship and showed the significant effect of all dimensions. Pei et al. (2014) find that consumers’ perception of fairness positively influences their behavioural intentions, hence highlighting the importance of fairness in loyalty program satisfaction. O′Brein and Jones (1995) highlighted that loyalty programs should first meet certain criteria including the monetary value of the reward, the extensive range of rewards offered, the easy access to rewards, and the reward utility. Customers’ perceptions of loyalty programs differ according to individual factors their satisfaction with the rewards offered (Demoulin and Zidda, 2008).

2.1.3. Interactional justice Interactional justice refers to the fairness of interpersonal treatment by service providers. Floger and Cropanzano (1998) has divided this dimension into two components: (1) the explanation of apology, justification and explanation of failures, (2) the effort provided by the company to find solutions to problems, and those who are related to people during the procedure such as honesty, politeness, courtesy, and empathy. Interactional justice with a loyalty program refers to the provider's effort to communicate and explain the contractual bonds and to treat customers with respect and courtesy without discrimination. In

2.3. Relationship satisfaction In the mobile telecommunication market, the ability to provide high degree of relationship satisfaction is critical (Rahul and Majhi, 2014). Relationship satisfaction is an emotional state felt by consumers. This state results from an overall evaluation of a customers’ relationship with a company (De Wulf et al., 2001). It is a key concept in the study of customer relational outcomes. Relationship satisfaction reflects the 91

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healthcare public service context by Vinagre and Neves (2008) for the procedural and distributive justice. According to Elamin (2012), distributive justice is the best predictor of satisfaction along with the procedural and interactional which particularly in the managerial system, and in the handling of customers’ complaints (Tax et al., 1998; Goodwin and Ross, 1992). When the consumer perceives that benefits provided by its company are acceptable compared to investments such as price, other expenses and psychological efforts, then the consumer feels a fair treatment that enhances the relationship with the service provider. In the same vein, Consuegra et al. (2007) found that price fairness (acceptability of a price based on previous prices or competitors’ prices) is a powerful predictor of satisfaction and loyalty. Loyalty programs should enable the company to develop rewards based on customer transactions. Mayser and Von Wangenheim (2012) confirm that companies treat their customers according to their profitability. It is the case of distributive justice which is based on equity between rewards given and customer transactional value in retail setting context and in the case of Northern European countries (Söderlund and Colliander, 2015). Interactional justice is considered as a prominent determinant of relational satisfaction placed before procedural justice and after distributive justice (Elamin, 2002). Others have demonstrated a positive impact of interactional justice on satisfaction (Vinagre and Neves, 2010). Certain studies also confirm the effect of all dimensions of perceived justice as a moderating variable on the relationship between satisfaction with a loyalty program and relational satisfaction (Pez, 2009; Savard, 2003; Tax et al., 1998; Blodgett et al., 1997). Thus, we propose to test these links in the case of the emerging countries as:

whole experiences of consumers and is regarded as the cumulative assessments of the past experiences with the company through its products, services, and interactions (Garbarino and Johnson, 1999; Mimouni and Volle, 2003; Najjar et al., 2011). The transition from transactional marketing to relationship marketing does not only depend on satisfaction or dissatisfaction after a consumer transaction, but also on the experiences made with the product or the company (Nefzi, 2007). The research of Mimouni and Volle (2003) focuses on the service quality offered by the brand which influenced the consumer's relational satisfaction after past experiences. Others advance that relational satisfaction contributes to explaining the behavioural loyalty (Chumpitaz and Paparoidamis, 2007; Tax et al., 1998). 2.4. Retention Retention is defined as the way in which a company can keep its customers and maintain their portfolio (Crie, 1996). Retention is measured through the consumption span of brand products (Zeithaml et al., 1996; Henning-Thurgau, 2004). The more the customer remains, the more he will buy, and the more he will accept the price increase, the more he will spread the word-of-mouth about the brand. Coviello et al., (2001) reported that retention is a top priority for firms who have practiced relationship marketing and that it was meant to stimulate the movement of inactive customers and reactivate customer relationship with certain actions. Gilad et al. (2011) show that retention played the role of a mediator between customer acquisition and financial performance. Retention reduces the cost of customer acquisition, cuts management costs down and increases profits for the customer. Becker et al. (2009), Reinartz et al. (2004) report that retention is related to top management approach to successful customer relationship management. Others confirm and add other antecedents to retention such as trust and satisfaction (Reinartz and Kumar, 2000; Bove and Johnson, 2006; Bahri-Ammari, 2014a). Marketers must tabulate on the variables that positively affect loyalty and ensure the retention of their clients. This can be achieved through a good treatment of claims process and the process of contact and relationship tracking (Lawrence and Buttle, 2006). Personalization, interaction with staff and how to deal with customers constitute equity in service offering (Bojei et al., 2013).

H1. The stronger perceived justice with mobile service by the customer (distributive, procedural and interactional) is; the higher the impact of satisfaction with loyalty program on relationship satisfaction. H1a. The stronger distributive justice with mobile service by customer is; the higher the impact of satisfaction with loyalty program on relationship satisfaction. H1b. The stronger procedural justice with mobile service by customer is; the higher the impact of satisfaction with loyalty program on relationship satisfaction.

3. Conceptual model and hypotheses

H1c. The stronger interactional justice with mobile service by customer is; the higher the impact of satisfaction with loyalty program on relationship satisfaction.

Customer retention is of critical importance in the mobile services industry and therefore it is vital to examine the factors that are antecedents to it. Fig. 1 displays a theoretical model to understand why and how a customer stays loyal to a mobile service provider. The model describes how to form customer retention through perceived justice, satisfaction with the loyalty program and relationship satisfaction. The final outcome variable in the model is retention. The following sections present and discuss the nature of the constructs of the model. (Fig. 2).

3.2. Relationship between satisfaction with loyalty program and relational satisfaction A number of studies evidence the strong and positive relationship between satisfaction to the program and relationship satisfaction (García-Gómez et al., 2006; Pez, 2009). This relation has been confirmed in the service sector and especially in the telecommunication sector (Sweeney and Swait, 2008; Bahri-Ammari, 2014a). Once the customer is satisfied with the loyalty program services and the offered rewards, they will develop a relational satisfaction that will help to explain their future behaviour with the brand. Thus, the second hypothesis:

3.1. Moderating effect of perceived justice and the relationship between satisfaction with the loyalty program and relational satisfaction Several studies in Business to Customer (B2C) have emphasized the importance of justice to ensure customer satisfaction (Söderlund and Colliander, 2015; Bitner, 1995; Tax et al., 1998; Goodwin and Ross, 1992; Bitner et al., 1990; Oliver and Swan, 1989). Oliver and Swan (1989) affirmed in their study that perceived equity affects positively the relationship satisfaction. Some researchers specify that perceived justice has an effect on service quality and further supports its effect on satisfaction (Aurier and Siadou-Martin, 2007). Indeed, some researchers show that customer satisfaction was directly and positively influenced by perceived justice. This link has been also established in the

H2. Satisfaction with the mobile service loyalty program has a direct positive impact on the relational satisfaction with the service provider. 3.3. Relationship between satisfaction with loyalty program and retention Sharp and Sharp (1977) confirmed the significant impact of loyalty programs on consumer retention. Bolton (1998), Bolton et al. (2000) show that customer's satisfaction affects consumer's retention. Lewis 92

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Fig. 1. Conceptual model.

H4. Relationship satisfaction has a direct positive impact on customer retention in the mobile telecommunication context.

(2004), Verhoef (2003) further highlight that there is a significant effect of satisfaction with the loyalty program and retention. According to Bahri-Ammari (2014a), the influence of the satisfaction with the loyalty program on customer retention can be explained by word-of-mouth intentions. Söderlund et al. (2014) confirm that satisfaction with loyalty programs enhances the customer's intention and can also cause valuable word-of-mouth which attracts more customers. Bojei et al. (2013) also add that customer service leads to an increase in customer retention and an increase in acquisition through word-of-mouth. These results are correlated with the impact of satisfaction with loyalty programs and the customer lifetime value (Meyer-Waarden, 2007). The notion of word-of-mouth is one of the retention dimensions (Roh et al., 2005). Hence the following hypothesis is proposed:

4. Research setting and sample The choice of the telecommunication industry in this framework is related to the vital role of loyalty and retention in this service setting. Many experts have emphasized market maturity and the number and variety of competitive choices among service providers. According to the Appendix A, the market operator in Tunisia consists of 3 operators with their market shares (Ooredoo 40.5%, Tunisie Telecom 36.3% and Orange Tunisie 23.2%). The working-age population represents (15 years and older) 76.3% of the total population. The (The GDP/capital) is equal to 9600 dollars (www.intt.tn). Consequently, all types of service providers focus on customer retention as a source of growth (Amdocs Market Insight & Strategy, 2011).

H3. Satisfaction with mobile service loyalty program has a direct positive impact on the customer's retention. 3.4. Relationship between relationship satisfaction and customer retention

4.1. Sample

Eriksson and Vaghult (2000) reveal that relationship satisfaction has a significant positive effect on customer retention. Bahri-Ammari (2014a) has also shown the positive contribution of relationship satisfaction to explain word-of-mouth as one among other retention dimensions in the case of telecommunication service in Tunisian telecommunications service context. Relationship satisfaction is the overall evaluation of the experience between the parties during the relationship (Garbarino and Johnson, 1999); therefore, it depends on the overall experience of the customer with the company, which constitutes the relational satisfaction (Spreng et al., 1996). Relationship satisfaction also makes consumer retention easier (Bolton et al., 2000). According to Jolley et al. (2006), consumption habit moderates the relationship between these two concepts. The correlation is also reinforced by the personalization of the provided services (Bojei et al., 2013). Higher relationship satisfaction corresponds to higher customer retention. Therefore, we propose the following hypothesis:

To confirm the research model and to test the research hypotheses, a self-administrated questionnaire is developed and distributed to a total of a convenience sample of 520 customers of multiple mobile phone companies. The target population includes customers who have subscribed to a loyalty program. The questionnaire is administrated over a period from the beginning of October 2015 to the beginning of December 2015 in several places: in front of the agencies of the various operators. The respondents are from our entourage and from academic institutions: students, administrators and teachers. The survey is carried out on a personal basis, but is self-completed. A total of 504 completed and exploited questionnaires were collected (after eliminating incomplete response). This sample size allows us to perform multiple data analysis (multivariate and SEM). An appropriate sample size should be ten times the number of items used in the questionnaire (Jöreskog and Sörbom, 1982). In this research, the sample size seems to be appropriate to conduct SEM analysis (504 > 27 items multiplied by 10). 93

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Fig. 2. Results model.

25% and 24% were above 45. A total of 92% have attained higher education level.

4.2. Measurements All the measurement items were adopted from the literature and adjusted to the research setting. Four items for interactional justice and four items for procedural justice are adopted from Folger and Konovsky (1989) and Maxham and Netmeyer (2002a,b). Distributive justice is measured by the four items developed by Maxham and Netmeyer (2002a,b). The three scales of perceived justice have a good reliability. Satisfaction with the loyalty program is measured with four items of O′Brien and Jone, (1995) used by Mimouni and Volle (2003). To measure Relationship satisfaction, four items of Gremler and Gwiner, (2000) are used in this study. Retention was measured with four items adopted from Zeithmal, (1996) and Henning-Thurgau (2004). All scales used in this study can be seen in Appendix B and all the items were measured on a five-point Likert scale ranging from extreme disagreement (1) to extreme agreement (5).

5.2. Model stability Bootstrap tests the stability of the measurement model by ensuring the stability of contributions and co-variances (or correlations) factor. AMOS software simulates the measurement model for n samples (set by default to 200) in order to assess the stability of the model and by providing a set of statistics for each estimated parameter (Akrout, 2010). The results of the stability test by Bootstrap show that the majority of standardized factors linking the different contributions and manifest variables to their respective dimensions have a ratio between bias and error less than or equal to 1. The results also show that the majority of correlations between the different latent variables of the overall measurement model have a ratio between bias and error bias less than or equal to 1 (Table 1). The results show that using the ML method provided fairly robust results that can be used later in evaluating the reliability and validity of the measurement scales. The stability of the correlations between the latent variables is particularly important in assessing the discriminant validity of the measurement scales.

5. Empirical findings 5.1. Sample profile 39% of respondents were male and 61% were female. In terms of age, the majority of respondents (48%) were 25–44, 28% were below 94

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Table 1 Standardized factorial contributions and correlations stabilities. Correlations

Mean Boostrap

Estimate

SE*

Biais

SE-Biais

Biais/ SE-Biais

CR

CI**

Pv***

Satprog→ ReSat Satprog→ Retent ReSat→Retent Variables SATP1 SATP2 SATP3 SATP4 SATR1 SATR2 SATR3 RETEN1 RETEN2 RETEN3 RETEN4

0.242 0.825 0.175 Mean Boostrap 0.598 0.503 0.728 0.550 0.374 0.534 0.958 0.742 0.843 0.541 0.614

0.382 0.632 0.08 Estimate 0.604 0.512 0.724 0.548 0.374 0.532 0.954 0.746 0.841 0.540 0.618

0.065 0.079 0.064 SE* 0.057 0.068 0.064 0.069 0.051 0.038 0.014 0.034 0.033 0.049 0.044

0.002 −0.002 0.006 Biais −0.005 −0.005 0.009 0.007 0.002 0.003 0.0013 −0.004 0.003 0.003 −0.002

0.005 0.006 0.005 SE-Biais 0.005 0.005 0.007 0.005 0.003 0.003 0.002 0.004 0.004 0.004 0.004

0.4 −0.34 1.2 Biais/ SE-Biais −1 −1 1.2 1.4 0.7 1 0.65 −1 0.75 0.75 −0.5

3.723 10.443 2.734 CR 10.491 7.397 11.375 7.971 7.334 14.052 68.429 21.824 25.545 11.041 13.955

[0.134,0.378] [0.625,0.875] [0.082,0.365] CI** [0.260,0.488] [0.170,0.40] [0.306,0.690] [0.185,0.446] [0.067,0.202] [0.220,0.359] [0.063,0.232] [0.483,0.647] [0.60, 0.778] [0.202,0.373] [0.292,0.467]

0.010 0.010 0.333 Pv*** 0.010 0.010 0.010 0.010 0.010 0.010 0.010 0.010 0.010 0.010 0.010

* **

Standard error of bootstrapped mean. Related to the estimated values bootstrapped. Probability that the bootstrap mean is outside the confidence interval.

***

Convergent validity tested by the average variance extracted from the constructs (Table 3) indicates acceptable values (between 0.757 and 0.875). Measurement of discriminant validity is established by verifying that the shared variance between the constructs is lower than the average variances extracted (Fornell and Larcker, 1981; Gerbain and Anderson, 1988). The results show (Table 3) that the relationships between the latent variables are not as strong as those between the construct and their observed variables. Each measure is specific to a particular variable. This confirms discriminant validity.

5.3. Scale properties Exploratory and confirmatory factor analyses are conducted to assess the validity of the measurement model. An initial diagnosis of the items on SPSS 17.0 shows that the solutions are satisfactory for all scales adopted. The Cronbach's alpha (α) for each scale over the acceptable value of 0.70. This result indicates the reliability of the instruments. As for the internal reliability of the scales (as shown in table 2), the results obtained at the level of the exploratory factor analysis are confirmed. The measurement model used is the Jöreskog Rhô or Rhô of Ksi (Jöreskog et al., 1999). All the Rhô values are acceptable and superior to 0.7 (Roussel et al., 2002). Measurement of convergent and discriminant validity are also conducted (Fornell and Larcker, 1981; Anderson and Gerbing, 1988).

5.4. Hypotheses testing and study results The two–step approach recommended by Anderson and Gerbing (1988) is used. The First step is performed on Lisrel 8.80 to ensure the

Table 2 Scales’ reliability and validity. Scale

Scale properties

Items

Standardized Loadings

Critical ratio (CR)

Joreskog'sRhô

Distributive justice α = 0.875

4 items

DJ1 DJ2 DJ3 DJ4

0.678 0.792 0.705 0.565

1.000 10.223 9.809 8.262

0.942

Procedural justice α = 0.790

4 items

PJ1 PJ2 PJ3 PJ4

0.694 0.697 0.708 0.527

1.000 9.160 9.211 7.514

0.785

Interactional justice α = 0.857

4 items

IJ1 IJ2 IJ3 IJ4

0.974 0.515 0.454 0.946

1.000 10.022 8.594 26.275

0.870

Relationship satisfaction α = 0.850

3 items

SATR1 SATR2 SATR3

1.000 0.812 0.879

1.000 11,746 9,049

0.845

Satisfaction with loyalty program α = 0.795

4 items

SATP1 SATP2 SATP3 SATP4

0.610 0.693 0.558 0.506

1.000 8,185 9,813 8,683

0.795

Retention α = 0.758

4 items

RETEN1 RETEN2 RETEN3 RETEN4

0.769 0.817 0.551 0.616

1.000 13.423 9.137 10.263

0.850

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Table 3 Discriminant validity.

Distributive justice Procedural justice Interactional justice Relationship satisfaction Satisfaction with loyalty program Retention

AVE

Distributive justice

Procedural justice

Interactional justice

Relationship satisfaction

0.875 0.760 0.757 0.795

1 0.538 0.521 0.452

1 0.442 0.480

1 0.426

1

0.775

0.460

0.455

0.401

0.504

1

0.800

0.562

0.484

0.320

0.365

0.452

validity of the measurement model (CFA). Then, a path analysis is used to test the hypothetical causal relations of the research model. The values of the indices show an acceptable fit between the empirical and theoretical model (χ2=/ df =2154; CFI=0.980; NFI=0.930; GFI=0.985; AGFI=0.978; RMSEA=0043; RMR=0.052). Thus, the model is globally acceptable, supporting, as such, the proposed theoretical model in this study. In order to test the research hypotheses, the standardized estimates and the significance of t-test are examined for each path. The model tests four hypotheses by introducing satisfaction with the loyalty program as explanatory variables; distributive justice, procedural justice and interactional justice as moderator variables and relationship satisfaction and retention as dependent variables. The link between satisfaction with loyalty program and relationship satisfaction is checked. Satisfaction with loyalty program positively explains relational satisfaction with (γ=0.815, CR =5.888). Hence, this validates previous research of Pez (2009) and Garcia-Gomez et al. (2006) in the mobile telecommunication services context (Table 4). A multi-group analysis is used to test the moderating effect of the perceived justice dimensions (distributive, procedural and interactional) on the relationship between satisfaction with loyalty program and relationship satisfaction (Table 5). The interaction is calculated with the software Lisrel 8.80 by introducing dimension/ by dimension (as seen in Table 3). In our case, the perceived justice (Z) is a moderating variable of the relationship between satisfaction with the program (X) and relationship satisfaction (Y) (Chumpitaz and Vanhamme 2007). So, as shown in Table 5, the results indicate that there is a significant effect between satisfaction with loyalty program and relationship satisfaction (Estimate=0.911; CR=3.6942; p=0.000). The interaction between perceived justice dimensions (distributive, procedural and interactional) and satisfaction with loyalty program on relationship satisfaction was significant, which evidences the first hypothesis (H1a, H1b and H1c). Results confirm the moderator effect of perceived justice's dimensions on relationship between satisfaction with loyalty program and relationship satisfaction with a strong difference in the contribution values. H1-a has the stronger contribution (Estimate=0.911; CR=3.6942; M =3.85); H1-b (Estimate=0.370; CR=3.391; M =3.24) and H1-c (Estimate=0.530; CR=3.492; M =3.34). Then, the hypothesis H1 is accepted (p=0.000). Satisfaction with loyalty program helps to explain the reason for customer retention (β=0.233, CR =4.014). This again confirms the findings of Verhoef (2003). However, retention is not directly and

Satprog→ ReSat Satprog→ Retent ReSat→Retent *

Path Coefficients and t-test *

0.815 (5.888) 0.233 (4.014) 0.170 ( 1.183)*

Retention

1

Table 5 Moderator effect. Relationship satisfaction Satisfaction with loyalty program

Estimate= 0.911; CR=3.6942; p=0.000 CMIN/DF=3.185/ CFI=0.965/ NFI=0.950/ RMSEA=0.06075/ GFI= 0.9891/AGFI=0.982

Satisfaction with loyalty program

SLP X procJUST SLP X disJUST SLP X intJUST Estimate= 0.53; tEstimate= 0.91; tEstimate= 0.37; tvalue=3.492; value=3.694; value=3.391; p=0.000* p=0.000* p=0.000* CMIN/DF=2.713/ CFI=0.940/ NFI=0.909/ RMSEA=0.075/GFI= 0.944/AGFI=0.903

significantly predicted by relationship satisfaction (β=0.170 CR =1.183). This may be surprising because the findings of Eriksson and Väghult (2000) have suggested the contrary. This result also explains the crucial role of loyalty as a mediating variable between relationship satisfaction and retention. This result can also be explained by the context of the research and by the behaviour of Tunisian consumer. 6. Discussion To date, only few studies dealing with loyalty programs have considered the possibility that different treatment of different customers may elicit justice perceptions (Söderlund and Colliander, 2015). Companies already acknowledge that not all customers are equally profitable, and therefore they often attempt treating the most profitable customers better (Mayser and Von Wangenheim, 2012). Drèze and Nunes (2009) further claim that loyalty programs serve to segregate customers. Less attention, longer waiting time, fewer “extras”, and higher prices are what can be expected for customers who are nonmembers. (Laczniak and Murphy, 2006). Therefore, preferential treatment of some customers, within the frame of a loyalty program, is a good example of a situation in which justice perceptions can be elicited (Söderlund and Colliander, 2015). Current research provides both theoretical and managerial implications in a fair loyalty program context. The result of the research shows that greater levels of satisfaction with loyalty program lead to greater retention. This result corroborates those of Swait, (2008), Verhoef (2003) and Garbarino and Johnson, (1999). The main goal of a loyalty program is to foster long-term relationships with customers in order to create repeat purchases. Using loyalty programs may increase customer loyalty only if the company offers a satisfactory loyalty program. A loyalty program should be created around customer benefits. Our results also revealed the moderating role of perceived justice dimensions (i.e., distributive justice, procedural justice, and interactional justice). Loyalty programs should be developed with the justice principle in mind. Rewarding customers with coupons, discounts, special offers based on their

Table 4 Results synthesis. Structural path

Satisfaction with loyalty program

Hypothesis testing Supported Supported Not supported

This hypothesis is supported at 0.1 level.

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for a pleasant cumulative service experience. In such experience, customers should mainly feel the “fairness” of outcomes, interaction, contact employee's treatment, and satisfaction with the loyalty program. The most important finding of this research is that consumers care more about the distributive justice of a loyalty program than about the procedural and the interactional justice. Thus, managers of mobile phone services should reconsider the distributive fairness regarding outcomes of the program. The prices, the loyalty rewards and the basis of the loyalty programs (cumulating points proportionally to calling pattern) should be more distinctive to limit service switching behaviour and to create commitment and retention. For example, the operator's sales department must understand the expectations of customers by offering professional customer service to facilitate the delivery of rewards and a clear explanation of the rules and regulations as well as the eligible benefits. Also extending the range of rewards offered to new members to those already benefiting from an old loyalty program would contribute to better distributive justice. Mobile phone services should not underestimate the importance of providing a prompt solution to loyalty programs’ failure. Procedural justice appears to be relevant to customer commitment and call managers attention to the necessity of establishing transparent and unambiguous procedures (Aggarwal and Larrick, 2012; Maxham and Netemeyer, 2003). Loyalty programs which present complex admissibility conditions and dense specification to obtain the rewards (number of points, time validity, and requested amount of consumption) are perceived as unfair and could lead to customer relationship rupture. To enhance their competitiveness in a struggling market, mobile phone services have to be more creative in their marketing strategies regarding the nature of loyalty gratifications. Thus, managers must carefully study the level of rewards that actually affect loyalty. Customer retention via loyalty is a crucial business strategy that telecommunication companies should adopt. In this highly competitive sector, the business strategy must be clear in its communication policy and be based on transparency regarding the conditions of loyalty programs and appropriate justification. This will reinforce the perceived trust of the operator and especially whether the consumer will continue or withdraw from his subscription. Concerning the interactional justice which is closely related to the concept of functional quality, Mobile Service Company, for example, can offer more support, and treat privileged clients in a customized manner. Providers should consider customers’ perception according to certain variables: the educational level (92% have a higher educational level in our study), the territory, the promotion period, and the equity sensitivity in order to offer suitable products. They also should opt for territorial marketing regarding their offers because customer's behaviour differs from one region to another. For example, a business strategy offering a personalized loyalty program according to a territory can be well perceived by the population in question given the problem of perception between the regions and in relation to the capital. A loyalty program based on mutual knowledge between the two parties is necessarily very well perceived by the consumer. This reinforces the relationship and, ultimately, satisfaction with the program and relational satisfaction.

membership status in a fair manner will reflect the satisfaction with the service operator. Loyalty programs should be easy to sign up and redeem rewards. As a key element in companies’ profitability and value, customer satisfaction has been given much attention in the marketing literature. Many companies attempt to measure customer satisfaction in order to evaluate whether they meet their customers’ needs (Sun and Kim, 2013). However, indices do not include items regarding loyalty programs. Hence, we suggest current customer satisfaction indices to include items that are related to the loyalty program. Results also reflect the work of Bahri-Ammari (2014a) which states that satisfaction explains loyalty and word-of-mouth. In the telecommunication sector, however, satisfaction explains loyalty but it is far from explaining the customer retention in the context of the service in Tunisia (Bahri-Ammari and Soliman, 2016). This contradiction can be accounted for by the nature of the service and the involvement of customers. In this case, a company should try to satisfy its customers before retaining them. The study findings indicate that satisfaction with loyalty program positively impacts customer relationship satisfaction. This result supports the research of Pez (2009) and Garcia-Gomez et al. (2006). Customers who consider that the loyalty program is efficient and provide adequate rewards are likely to evaluate their relationship more positively with the mobile service provider. The results have allowed us to advance the total moderating effect of perceived justice on the relationship between satisfaction with loyalty program and relationship satisfaction, which converges with the results of Pez (2009); Savard (2003); Tax et al. (1998); Blodgett et al. (1997). In the mobile service industry, distributive justice seems to be the most relevant dimension in customer-provider relationship before interactional and procedural justice (Elamin, 2012). The investigation has identified a significant impact of distributive justice on switching behaviour (Nikibin et al., 2012) and quality outcome (Aurier and Siadou-Martin, 2007). Distributive justice seems to be relevant in the mobile service industry as a pledge of a satisfactory and an ongoing relationship (Maxham and Netemeyer, 2003). It could be argued that equitable procedures and fairness interaction (Román and Ruiz, 2005) may be irrelevant if the customer-provider distribution is perceived as fair (Söderlund and Colliander, 2015; Aurier and Siadou-Martin, 2007). In this study, the fairness of the provider's outcomes enhances the likelihood of relationship satisfaction. The equitability of input/output ratio appears to be important in relationship outcomes with regard to procedural and interactional fairness (Aggarwal and Larrick, 2012; Blodgett et al., 1997; Maxham and Netemeyer, 2002a,b). Moreover, in the telecommunications industry, it is common that customers get commercial promotions, preferential treatment, rewards and other communications by SMS, e-mail or on their online account. Consumers can now have a customer-to-customer comparison (Söderlund and Colliander, 2015), which can result in a perception of non-equity between members of the same loyalty program and between members and non-members. The fact of paying attention to the content of this comparison is crucial for operators. Hence the need to, for example, control through social media, the exchange of information between customers to guide discussions and to apprehend reactions to situations of justice and injustice.

8. Limitations and future research 7. Contributions This research is carried out in the mobile telecommunication context in Tunisia, although it can be a representative of North African countries, a generalization of the results to other areas should be taken with caution. In this framework, cultural variables and social norms are not controlled and may be relevant to understand the study's results concerning the effect of relational satisfaction on retention. Some researchers should test the effect of cross-cultural differences on customer behaviour (Mayser and Von Wagenheim, 2012). These studies allow us to make comparisons and determine the specificities

This study offers new theoretical and empirical contributions. The first is related to the main dimensions describing the loyalty programs in terms of perceived justice (distributive, procedural and interactional) and their implication in a relationship model (Aurier and Siadou-Martin, 2007). And the second is to account for the complementarities between satisfaction and perceived justice within a loyalty program. This research demonstrates that a satisfactory loyalty program does not necessary lead to a loyal customer, but it's a prerequisite 97

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hotels, casinos, and entertainment services). We also suggest the integration of new variables such as trust and switching costs. Authors have confirmed that trust is a relational variable which acts as a full mediator between perceived justice and customer's loyalty to the provided service (DeWitt et al., 2007). The research results suggest, particularly, deep investigations to explain the disparity of the impact of the three components of perceived justice. Does distributive justice account for the variance of relationship outcomes in collective cultures vs. individualistic ones? Do customer's personality traits moderate the perception of perceived justice? And does the effect of perceived justice vary according to product categories?

of each context, which is beneficial for the operators in terms of customization of their retention strategies. Other variables may also explain some results such as equity sensitivity. This aims at identifying how customers react to a situation of justice or injustice. In other words, customer personality traits in a loyalty experience with his/her operators should be studied. Several future research paths can be suggested. Considering the results of the predictor effect of perceived justice dimensions, it could be noticed that further extension should be taken in order to evaluate the comparative impact of perceived justice dimensions on service outcomes in different service setting (e.g. retail, financial services,

Appendix A. Market characteristics (data updated in January 31, 2016)

Appendix B. Variables’ items

Variables

Items

Perceived Justice - Distributive Justice (Maxham and Netmeyer 2002a, b)

– – – –

This operator showed great efforts to provide me what I deserve of the rewards The results of the loyalty program that I received from this operator was fair given the time The results and awards obtained were as good and fair compared to other customers, The rewards were more than reasonable

- Procedural Justice (Folger and Konovsky, 1989; Maxham and Netmeyer, 2002a, b)

– – – –

Despite the strong demand this operator happened to answer quickly and fairly I feel that this operator replied in due time I think my operator has adopted policies and equitable practices to reward me Regarding its policies and procedures, this operator showed m′a fair loyalty program

- Interactional Justice (Folger and Konovsky, 1989; Maxham and Netmeyer, 2002a, b)

– The staff (customer service) of this operator treated me in a courteous manner – In their effort to reward me, the staff (customer service) of this operator showed me a real interest in trying to be fair – The staff tried to hear me out to identify my needs for awards – To reward me this operator tried to take my opinion

Satisfaction with Loyalty Program (O′Brein and Jone, 1995)

– – – –

Relationship Satisfaction (Gremler and Gwinner, 2000)

– Overall, I am satisfied with my relationship with this operator; – Overall, my experience with this operator is good – I have often been disappointed by that operator services (*) (reversed item)

Retention (Zeithaml et al., 1996; Henning-Thurgau, 2004).

– – – –

The benefits of the program are interesting There has a variety of offers related to the exchange of points The program is simple to use I made the wrong choice by deciding to be regular customer of this operator (*) (reversed item)

In the future, I'll buy most products from this operator I am a loyal customer to this operator I feel that I should continue my relationship with this operator This operator is my first choice when it comes to buying other products

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N. Bahri-Ammari, A. Bilgihan

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