The customer satisfaction–loyalty relation in an interactive e-service setting: The mediators

Journal of Retailing and Consumer Services 19 (2012) 202–210

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The customer satisfaction–loyalty relation in an interactive e-service setting: The mediators Shu-Ching Chen n College of International Management, Ritsumeikan Asia Pacific University, Beppu, Japan

a r t i c l e i n f o

a b s t r a c t

Available online 26 January 2012

This study aims to examine the relation between customer satisfaction and loyalty through the introduction of commitment, trust, involvement and perceived value as mediators in the e-service context. An online consumer survey on selected web auction sites was used for the data collection. The findings suggest that customer satisfaction is an essential ingredient for service loyalty, but that mediators exist between satisfaction and loyalty. Commitment, trust and involvement are each proven to be partial mediators between satisfaction and loyalty, while perceived value is proven to be a complete mediator. The results have implications for the retention of satisfied customers in an interactive e-service setting. & 2012 Elsevier Ltd. All rights reserved.

Keywords: Customer satisfaction Customer loyalty e-service

1. Introduction Customer loyalty is an essential factor in business survival and development. A loyal customer is regarded as a competitive asset for an organisation, as customer loyalty is a vital determinant in predicting profit levels (Reichheld and Teal, 1996) and market share (Baldinger and Rubinson, 1997). In particular, the intense competition in the retail market emphasises the need to retain existing customers (Sirohi et al., 1998). The effort required to acquire new customers is much greater than that required to retain existing customers (Stone et al., 1996). Understanding which factors may influence the development of loyalty in current customers is, therefore, critical in business management. Previous researches have made sound contributions to this field in terms of defining the predicting factors of customer loyalty. In general, customer satisfaction is regarded as the prerequisite for customer loyalty. A satisfied customer is more likely to stay with a business (Reichheld and Teal, 1996; Abdinnour-Helm et al., 2005). Some researchers have argued, however, that a satisfied customer may not be a loyal customer (Oliver, 1999). Therefore, in addition to customer satisfaction, there are other variables that may influence current customer loyalty development and also need to be examined. Consumers currently show increasingly favourable attitudes toward online shopping, however, research into internet-based marketing practices remains scarce (Taylor and Lee, 2008). This is

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particularly the case in regard to research into e-service provided by non-store-based e-retailers (de Ruyter et al., 2001). Also, few studies have examined the relation between customer satisfaction and loyalty in the e-commerce context (Balabanis et al., 2006; Christodoulides and Michaelidou, 2011). Moreover, a literature review of the relevant studies suggests some critcal factors that drive, or lead to, customer satisfaction and/or customer loyalty. A number of variables that moderate the relation of satisfaction and loyalty have also been found (Voss et al., 2010). Significantly, commitment, trust, involvement and perceived value are suggested in several studies as influencing the customer satisfaction– loyalty relation (e.g., Caceres and Paparoidamis, 2007; Cyr et al., 2007; Olsen, 2007; Hume and Mort, 2008). Nevertheless, it is difficult to find empirical evidence of the impact of these variables as mediators of the relation in the e-service context. The above discussion leads to the development of the three research questions to be examined here: (1) Is customer satisfaction the only predictor of loyalty? (2) Is there a possible mediator between customer satisfaction and loyalty? (3) What is the effect of each possible mediator on the customer satisfaction–loyalty relation? Accordingly, this study aims to address the identified gaps in the existing knowledge of customer satisfaction and customer loyalty in the e-service context and outline the results of these research questions. Specifically, this study selects auction type e-retailers as the research context, due to the provision of new aspects on issues of customer retention (Haruvy et al., 2008) and chooses satisfied customers as informants, due to the arguable cause-and-effect between customer satisfaction and customer loyalty (e.g., Reichheld and Teal, 1996 vs. Oliver, 1999). In order to find answers to these research questions, this study examines the relation between customer satisfaction and loyalty

S.-C. Chen / Journal of Retailing and Consumer Services 19 (2012) 202–210

in the non-store based e-retail setting, and introduces the service website related variables of commitment, trust, involvement and perceived value as mediators in the formation of e-loyalty, as well as assessing the degree of mediation of each of these factors. By carrying out these tasks together, this study will provide a fuller view of the research area of e-service from different perspectives, as it is a research area that remains to be explored (e.g., Taylor and Lee, 2008). It will also provide guidelines for managers on the retention of satisfied customers in the e-commerce context. This topic continually attracts a considerable amount of attention from researchers and practitioners (e.g., Balabanis et al., 2006). This study contributes to the relevant studies of customer satisfaction and loyalty by providing insights into the factors that influence the formation of the customer satisfaction–loyalty relation; providing insight into the existing e-commerce studies by presenting empirical evidence from a non-store based e-retail setting and by providing managerial implications for marketing practice based on empirical evidence of the role of customer satisfaction in online customer loyalty behaviour in relation to the various influential mediators in the e-service context.

2. Theoretical development and hypotheses 2.1. Customer loyalty and customer satisfaction Customer loyalty is a significant objective for e-retailers. It is found to be negatively related to customers’ searches for alternatives (Srinivasan et al., 2002). This suggests the pivotal role of customer loyalty in e-retail survival and development. The concept of customer loyalty has been largely defined through attitudinal and behavioural aspects (e.g., Too et al., 2001). In the e-commerce context, customer loyalty has been defined as ‘‘ythe customer’s favourable attitude toward an electronic business resulting in repeat buying behaviour’’ (Anderson and Srinivasan, 2003, p. 125). In this study, customer loyalty refers to customers having favourable attitudes toward target e-retailers, shown through repeat purchase intentions and behaviours. The widely accepted concept of customer satisfaction is that of overall satisfaction (e.g., Gustafsson et al., 2005), with customer satisfaction having been defined as overall satisfaction with customer expectations and consumption experiences. Also, overall satisfaction has been suggested to be a function of disconfirmation, which is a utility of both expectations and performance (Oliver, 1997). The definition of customer satisfaction has been derived from customers’ overall evaluation of the store experience in the retail context (Macintosh and Lockshin, 1997), and the performance of an offering to date in the service context (Gustafsson et al., 2005). In the e-commerce context, satisfaction is defined as the contentment of the consumer with deference to his/her previous purchase experiences with an e-commerce firm (Anderson and Srinivasan, 2003). Satisfying customer needs and wants is the key to gaining customer loyalty (Oliver, 1997). Customer satisfaction has been found to have a direct and positive effect on customer purchase intentions and repeat behaviour (e.g., Tsiotsou, 2006; Chiou and Pan, 2009). Moreover, overall satisfaction can enhance loyalty in both the online and offline contexts, and the positive relation between satisfaction and loyalty can be stronger online than it is offline (e.g., Shankar et al., 2003). Nevertheless, past emprical evidence has also suggested the existence of difference in the effect of customer satisfaction on customer loyalty (e.g, Oliver, 1999 vs. Agustin and Singh, 2005) and the existence of difference in the strength of the relation between customer satisfaction and loyalty in an e-commerce context (e.g., Balabanis et al., 2006 vs. ForeSee Results, 2008). In addition, the relation between customer

203

satisfaction and loyalty in an e-commerce setting remains to be explored (Balabanis et al., 2006; Christodoulides and Michaelidou, 2011), Therefore, we propose the following hypothesis: H1. Customer satisfaction has a direct and positive effect on customer loyalty in the e-service context. 2.2. The mediator Previous empirical studies have shown a direct link between customer satisfaction and loyalty (e.g., Tsiotsou, 2006). In addition, a direct link between each of the variables of commitment, trust, involvement and perceived value, and either customer satisfaction, or loyalty, has been found, as shown in Fig. 1. Significantly, the consistent concluding remarks in the relevant studies state that these variables remain to be studied as mediators in terms of the customer satisfaction–loyalty relation. For example, commitment has been found to have a moderating effect on the relation between satisfaction and loyalty (Liljiander and Strandvik, 1995), and to also be an antecedent of loyalty (Caceres and Paparoidamis, 2007), or the consequence of customer satisfaction (Meyer et al., 2002). Trust has been found to be a predicting variable of satisfaction (Chiou, 2004), as well as that of loyalty (Cyr et al., 2007). In addition, involvement has been suggested as a consequence of satisfaction and an antecedent of loyalty (e.g., Olsen, 2007), as well as a moderator in some studies ˜ eda, 2011). Similarly, perceived value has been (e.g., Castan empirically found to be an antecedent of satisfaction (e.g., Hume and Mort, 2008), as well as of loyalty (Parasuraman and Grewal, 2000). It has also been argued that perceived value is a moderator of the relation between satisfaction and loyalty (Anderson and Srinivasan, 2003). Gaps found in the relevant extant research (see Fig. 1), thus, provide a base for introducing the roles of commitment, trust, involvement and perceived value as mediators in the current research of the customer satisfaction– loyalty link in the online context. A discussion regarding these variables, leading to the formation of the hypotheses, is continued in the following sub-sections. Commitment. Commitment reflects a customer’s desire to maintain a valued relationship (Morgan and Hunt, 1994). It can be viewed as a force that binds customers to continue purchasing services, or products, from a particular seller, and is experienced by an individual as ‘‘ya frame of mind or psychological state that compels an individual toward a course of action’’ (Meyer et al., 2002, p. 301). Garbarino and Johnson (1999) defined commitment in the business to customer (B2C) relation as ‘‘ycustomer psychological attachment, loyalty, concern for future welfare, identification, and pride in being associated with the organization’’ (p. 73). This study follows Garbarino and Johnson’s (1999) definition of commitment in terms of the research purpose and research context. Commitment is viewed as a proxy for loyalty (Oliver, 1997). Previous research has identified three principal behavioural consequences of commitment. These are as follows: Repurchase of the brand (Coulter et al., 2003); resistance to switching to a competing brand (Gustafsson et al., 2005) and resistance to negative feelings generated by specific incidences of dissatisfaction (Caceres and Paparoidamis, 2007). Study of the relation between commitment and loyalty in the online context has, however, been limited (Ranaweera et al., 2005). In addition, commitment has been identified as being positively influenced by customer satisfaction. Most satisfied customers will be more effectively committed to the supplier (Meyer et al., 2002). The general idea that customer loyalty results from satisfaction and a positive commitment has, however, been challenged. Though satisfied customers show repeat purchase

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Satisfaction Chiou 2004; Pavlon 2003; McKnight & Chervany 2001

Hume and M ort 2008; Yang & Peterson2004

Priester 2004; Thomsen etal 1995

Zineldin & Jonsson 2000 Olsen 2007

Meyer et al. 2002; Wetzels & de Ruyter 1998 Anderson & Srinivasan 2003; Agustin and Singh 2005

Bloemer & de Ruyter 1998; Homburg & Giering 2001; Castaneda 2011

Perceived value

Liljiander & Strandvik 1995

Involvement

Commitment Trust Bloemer & Kasper 1995; Mittal & Zaichowsky 1985; Pritchard et al 1999; Olsen 2007

Mittal & Kamakura 2001; Oliver 1999; Shankar et al. 2003; Tsiotsou 2006; Yang & Peterson 2004

Debling 1998; Liljiander & Strandvik 1995; Caceres & Paparoidamis 2007

Parasuraman & Grewal 2000

Cyr et al 2007; Gefen & Straub 2004; Luarn & Lin 2003 Loyalty Fig. 1. A review of the roles of proposed variables in the relevant extant research.

behaviours due to their positive commitment, a negatively committed customer showing a negative attitude might still purchase repeatedly (Liljander and Strandvik, 1995). This seemingly contradictory attitude and behaviour can occur when a customer has no alternative, or has high perceived switching costs in an ongoing dissatifying relationship. Also, as has been mentioned previously, the mediating role of commitment in the customer satisfaction–loyalty relation remains to be explored. Therefore H2. Commitment acts as a mediator variable between customer satisfaction and customer loyalty in the e-service context. Trust. Trust has been defined as ‘‘..the expectations held by the consumer that the service provider is dependable and can be relied on to deliver on its promises’’ (Sirdeshmukh et al., 2002, p. 17). Based on previous research, this study defines trust as being a belief in the e-retailer’s ability (including e-retailer dependability, competence, integrity and benevolence) to fulfil its obligations in a commercial relationship with its customers. Trust plays an important role in customer behaviour (Morgan and Hunt, 1994). Past studies have shown that there is a greater willingness to buy from an online retailer if trust is present (e.g., Luarn and Lin, 2003). Trust is also a fundamental factor influencing online purchase intentions (Schlosser et al., 2006) and webbased auction participation (Pavlou and Gefen, 2004). Higher levels of trust result in higher loyalty to an e-service provider (Cyr et al., 2007). In addition, trust and satisfaction are recognised as being positively related (Pavlou, 2003). Trust has been found to be generated from a customer’s overall satisfaction (Zineldin and

Jonsson, 2000). Past studies suggest the possible mediating role of trust in the customer satisfaction–loyalty relation. Hence H3. Trust acts as a mediator variable between customer satisfaction and customer loyalty in the e-service context. Involvement. The concept of involvement has been defined as an unobservable state of motivation, or interest, toward the consumption of a product (Coulter et al., 2003). It is also viewed as a person’s motivational state of mind regarding an object, or the effects of behavioural resources, in the achievement of related goals (Olsen, 2007). In this study, involvement is defined as a person’s unobservable motivational state of mind in regard to the target e-retailer. Involvement has been the main topic of interest in consumer behaviour research (Tsiotsou, 2006). A customer with high involvement will have a strongly favourable attitude, such that s/he is expected to be easily satisfied (Priester, 2004). Customers with high involvement are also less likely to change their attitudes and, consequently, more likely to hold long-term attitudes of satisfaction (Priester, 2004). Also, involvement has been suggested as having a powerful impact on customer loyalty (e.g., Olsen, 2007). In addition, involvement has been suggested as a moderating variable in many studies of attitude and behaviour relations (e.g., ˜ eda, 2011). In contrast, few Homburg and Giering, 2001; Castan empirical studies have tested involvement as a mediator in the relation between satisfaction and loyalty. Olsen (2007) found that involvement is a complete mediator between satisfaction and repurchase loyalty in the context of merchandise purchasing, however, the mediating role of involvement in the customer

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role of perceived value on the relation between satisfaction and loyalty. To the best knowledge of the author, however, the mediating role that perceived value plays in the customer satisfaction–loyalty relation remains unexamined. Thus, we hypothesise the following:

satisfaction–loyalty relation has still not been empirically examined in different research settings, such as services. Thus H4. Involvement acts as a mediator variable between customer satisfaction and customer loyalty in the e-service context. Perceived value. Customer value is regarded as being ‘‘ythe fundamental basis for all marketing activity’’ (Holbrook, 1994, p. 22). Customer perceived value has been defined as the consumer’s overall evaluation of the utility of a product, based on perceptions of what is received and what is given (Zeithaml, 1988). Many researchers have stated that customer perceived value is evaluated from the perspective of the consumption experience (e.g., Augustin and Singh, 2005; Anderson et al., 2006). Creating a successful shopping experience for customers is imperative to retailers. In the case of online shopping, a successful shopping experience can be determined by the value of overall e-store performance, the value of the time spent shopping, the value of the product price and the effort involved in shopping (Sirdeshmukh et al., 2002). In this study, perceived value refers to the overall evaluation of the extrinsic cues of the target e-retailer, based on customers’ perceptions of what they received and what their input to the shopping experience was. Perceived value is described as one source of competitive advantage (Woodruff, 1997). It is a positive influential factor on, and a strong predictor of, customer satisfaction (Hume and Mort, 2008). Perceived value is also found to be a powerful predictor of purchase intention and willingness-to-buy (Zeithaml, 1988), as well as motivation for patronage (Holbrook, 1994) and repeat purchase behaviour (Parasuraman and Grewal, 2000). In addition to the direct relation with loyalty, perceived value has been argued to be a moderator of the relation between satisfaction and loyalty (Anderson and Srinivasan, 2003). Anderson and Srinivasan (2003) found that the relation between satisfaction and loyalty appears to be strongest when the customer feels that the current e-retailer provides higher overall value than do other e-retailers. In brief, most studies have suggested that perceived value is a significant driving force of customer satisfaction and customer loyalty. Some studies have also tested the moderating

H5. Perceived value acts as a mediator variable between customer satisfaction and customer loyalty in the e-service context. To summarise, a conceptual framework including the four proposed mediators and the five types of satisfaction–loyalty relations at the person-to-store level, as previously discussed in this study, is presented in Fig. 2.

3. Research method 3.1. Research context This study chooses auction type e-retailers as the research context. This type of e-retailer is classified by Korgaonkar et al. (2006) in their study of online retailing as the pure e-retailer, which conducts a purely e-retail based business, offers a flat-site for individuals to sell and buy products on their website and provides auction functions for individuals to sell and purchase products on-line. This type of e-retailer also provides marketing services to those who sell items on the sites and, thus, by its nature it is itself a service. This research context can allow useful contributions to existing studies of e-commerce by supplying academic evidence beyond conventional e-retailers. Moreover, research into auctions are ‘‘increasingly prevalent in all aspects of commerce’’ and offer ‘‘fresh angles on issues not addressed previously, such as customer retention [and] relationship developmenty.’’ (Haruvy et al., 2008, p. 432). Therefore, three representatives of pure e-retailers in New Zealand were selected based on the highest average daily number of visitors to these sites: eBay; Trade-me and Auctionme. The selected pure e-retailers are auction hosts and competitors in the online auction market in New Zealand. A study of these representative e-retailers at a

H2 Commitment Satisfaction

H1

Loyalty

H3 Trust Satisfaction

H1

Loyalty

H4 Involvement Satisfaction

H1

Loyalty

H5 Perceived value Satisfaction

H1 Fig. 2. Conceptual framework.

Loyalty

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store-to-person level (i.e., via the interactions between the e-retailers and their customers) allows for the provision of an insight into customers’ reponses to online services in a competitive market. 3.2. Measurement and research instrument All measurement items were adopted from previous research, and were modified and reworded to fit the e-retail context. Measures of customer loyalty were adopted from Too et al. (2001). Items focusing on customer satisfaction were adopted from Macintosh and Lockshin (1997) and Gustafsson et al. (2005). Items used for commitment were drawn from Garbarino and Johnson (1999). The items for trust were adopted from Sirdeshmukh et al. (2002). The scale for measuring involvement was adopted from Olsen (2007). Items for perceived value were adopted from Sirdeshmukh et al. (2002). A seven-point Likert type scale was used to measure each of the items, with face validity evaluated by three academic researchers. The psychometric properties of the measures are provided in the Appendix. A web-based consumer survey was used for the data collection. A brief description of the survey and a URL address was posted on the discussion board of each selected e-retailer. Two filtration questions were designed to recruit qualified respondents. The first question is Have you ever shopped at any one of these e-shops? eBay, TradeMe, Auctionme. This question was used to ensure that their on-line purchase experience has been with at least one of the selected e-retailers. Respondents who gave an answer of yes to the first screening question were then directed to the next one: Which e-shop is your most favourable one? The second question was used to ensure that the respondent has had a satisfying shopping experience with one of the selected e-retailers. One single answer can be chosen from the four options of eBay, TradeMe, Auctionme and None. Respondents who gave an answer of None to the question were not directed to the survey. Respondents successfully completing these two filtration questions were able to continue by answering the following questions in the survey. 3.3. Data collection In light of the research purposes, this research investigates consumers who have favourable online shopping attitudes towards, and actual purchase behaviour with, pure e-retailers. The rationale for this is based on the two contradictory premises that customer satsifaction can lead to customer loyalty (Reichheld and Teal, 1996), but that a satisfied customer may not be a loyal customer (Oliver, 1999). Also, few studies have examined the relation between customer satisfaction and loyalty in an e-commerce context (Balabanis et al., 2006; Christodoulides and Michaelidou, 2011). In addition, the need to segment offline customers when forming a retailing strategy is important, and the same is true in the case of online customers (Ganesh et al., 2010). It is not unusual for online customers (i.e., bidders) to migrate to competing web auction sites to obtain a better deal, as is the case in offline consumer switching behaviour. By identifying relevant influential factors of e-loyalty formation from these potential profitable customers, i.e., satisfied customers, this study can contribute to the issue of customer management by assisting managers in making strategic marketing decisions, such as customer relationship management (CRM) programmes for frequent customers. Therefore, a study of consumers’ online shopping experiences through the examination of a group of customers with satisfactory experiences of service-based e-retailers, especially auction type e-retailers, should provide a meaningful contribution to the field of marketing.

The online survey provided 554 records. Of these, 220 empty records, which were generated by visitors logging on to the survey website but not completing the questions, were removed. A further 153 records were removed because respondents did not pass the screening test of answering either one, or both, of the filtration questions, or the answers showed little variance (e.g., midpoint answer of 4 was given to most questions), or conflicting answers were found. This left a final data set of 181 usable records. The valid response rate was 32.7%. In regard to the respondent profiles, most of the online shopping customers were female (59.7%). The age of the respondents was mostly in the ranges of 20 to 30 years (33.1%), or 31 to 40 years (31.5%). Over half of the respondents were married (53%). Most respondents had had shopping and purchase experience with at least one of the selected e-retailers of between 1 and 2 years (33.1%), or 3 and 4 years (37%).

4. Results A procedure to test mediators that was suggested in past studies (Barron and Kenny, 1986; Caruana, 2002) was adopted. Following Barron and Kenny (1986), this study presents four regression models (Models 1, 2, 3 and 4), as shown in Table 1, to provide evidence from testing the mediation strength of the four mediator variables (i.e., commitment, trust, involvement and perceived value) between satisfaction (independent variable) and loyalty (dependent variable). In Model 1, Regression Equation 1 (E11) shows that satisfaction (independent variable) has a significant influence on commitment (b ¼.61). Regression Equation 2 (E12) shows that satisfaction (independent variable) has a significant influence on loyalty (b ¼ .62). Regression Equation 3 (E13), showing satisfaction plus commitment (independent variables), indicates that commitment has a significant impact on loyalty (b ¼.59). Moreover, there is a large change in the regression coefficient value when commitment is included in an independent variable test (b: .26o.62). The large coefficient value change shows that commitment plays the role of a mediator and has a strong mediating effect on the relation between satisfaction and loyalty. Meanwhile, there is an improvement in the R2 value (R2: .38 vs. .60) when commitment is included in the prediction of loyalty. Therefore, Hypotheses 1 and 2 are supported. Similarly, as shown in Models 2, 3 and 4, the other mediating variables of trust, involvement and perceived value follow the rules outlined above when performing the regression analysis and testing mediation. The analysis results indicate that Hypotheses 3–5 are supported. Consequently, all the hypothesised relations in the current research model, as shown in Fig. 2, are evident. To examine the level of the mediating effect of each proposed mediator and whether it is a partial, or a complete, mediator, this study uses structural equation modelling (SEM), as suggested by Caruana (2002), in a further examination of the data. The SEM analysis is a widely used research technique related to model building (Byrne, 1998). Following the two-stage modelling approach suggested by Anderson and Gerbing (1988), both measurement and structural relations were examined. Multicollinearity can reduce the reliability of SEM estimates and affect the results. The relation between the proposed variables was assessed for multicollinearity and the results indicate that it is negligible in this study. Consequently, Table 2 shows the results of the four structural models (Models 1, 2, 3 and 4), as well as their estimates. The goodness-of-fit indices suggest a good fit for each model. Regarding the link between satisfaction and loyalty in each model, it is indicated that only Model 4, related to the test of the mediator perceived value, produces insignificant results. Overall, the results obtained from a SEM analysis provide support for a completely mediated effect of satisfaction on loyalty via

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207

Table 1 Regression model for the mediating effect test. Variable

Model 1

Model 2

Model 3

Model 4

Commitment

Trust

Involvement

Perceived value

E12 S

E11 S

E13 L

Independent variable: Satisfaction (S)

E22 S

E23 L

.26

Dependent variable: Loyalty (L) Mediator variable: Commitment Trust Involvement Perceived value

E21 S

E31 S

.43

.62

E33 L

E41 S

E42 S

E43 L

.33

.62

.61a

E32 S

.38

.62

.62

.59 .67

.28 .47

.61 .56

.44

R2

.37

.38

.60

.45

.38

.42

.22

.38

.68

.31

.38

.51

F

106.03

112.57

137.84

146.96

112.57

66.94

50.42

112.57

189.49

83.17

112.57

95.18

a

Betas reported are standarised values; E: Equation; All F-values are significant at Po .001.

Table 2 SEM model for the level of mediating effect test. Parameter

Model 1: Commitment

Model 2: Trust

Gamma

Beta

Gamma

Beta

S

C

S

T

Loyalty

S

.601 .368 5.409nnn 3.786nnn

S

Model 3: Involvement

Model 4: Perceived value

Gamma

Beta

Gamma

Beta

S

I

S

PV

.401 .477 3.797nnn 4.509nnn

S

.601 .459 6.009nnn 5.397nnn

S

.759 .252 6.250nnn .006

Commitment .647a 7.457b,nnn Trust

.683 7.806nnn

Involvement

.494 5.275nnn

Perceived value

.670 7.441nnn

Goodnessof-fit indices:

w224 ¼ 43.594, P ¼.009

w241 ¼71.368,

w224 ¼ 24.573, p ¼ .429

w232 ¼48.645,

p ¼.002

GFI ¼.950; AGFI ¼ .906 RMSEA ¼ .067; CFI¼ .978

GFI¼ .933; AGFI ¼.893 RMSEA ¼.064; CFI¼.974

GFI ¼.972; AGFI ¼ .948 RMSEA ¼ .012; CFI ¼.999

GFI¼ .949; AGFI ¼ .913 RMSEA ¼ .054; CFI¼ .983

p ¼.030

S: Satisfaction, C: Commitment, T: Trust, I: Involvement, PV: Perceived Value. a

Standardised value. t-value. nnn Po .001. b

perceived value, while a partial mediated effect of satisfaction on loyalty via commitment, trust and involvement is also separately found.

5. Discussion 5.1. Theoretical contribution This study contributes to the existing knowledge of customer satisfaction and customer loyalty by providing insight into online

satisfied consumers’ loyalty behaviour through an examination of the four influential variables of commitment, trust, involvement and perceived value, and their mediating effects on the formation of the customer satisfaction–loyalty relation. The findings indicate that customer satisfaction leads to loyalty. Nevertheless, the existence of mediators between satisfaction and loyalty is also confirmed. Though varied relations to customer satisfaction and customer loyalty have been found in past studies, most studies have examined the effect of different moderators on the customer satisfaction–loyalty relationship (Voss et al., 2010). This study, therefore, extends the existing

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research by introducing and examining the mediating variables in the linkage between customer satisfaction and customer loyalty, and providing empirical support for these mediating effects. This study also provides an alternative view of the role of commitment, trust, involvement and perceived value in the extant studies of customer satisfaction and/or customer loyalty using empirical evidence. Findings from the study suggest that perceived value proves to be a complete mediator of satisfaction and loyalty, while commitment, trust and involvement each prove to be partial mediators of satisfaction and loyalty. These findings indicate another role of commitment, trust, involvement and perceived value in the formation of customer loyalty. They also extend the previous results (see Fig. 1), which suggested that these variables are antecedents and/or consequences of satisfaction and/or loyalty as another way in which they can play the role of mediator in the customer satisfaction–loyalty relation and in the online research context. Moreover, the factors of commitment, trust, involvement and perceived value are each found to have a different degree of mediation on the customer satisfaction–loyalty relation. Thus, this study provides empirical evidence beyond Oliver’s (1999) finding that customer satisfaction may not be directly related to customer loyalty. In addition, this study echoes Olsen’s (2007) call for a further study of motivational constructs related to satisfaction and loyalty in order to improve the knowledge of motivation in the loyalty formation process. The current research makes a contribution towards this by identifying the variables of commitment, trust, involvement and perceived value as mediators in the formation of the customer satisfaction–loyalty relation in the e-service context, which also leads to a more comprehensive understanding of online consumer behaviour. Moreover, the identified driving forces of customer e-loyalty and their links with customer satisfaction highlight the significance of customer satisfaction in the formation of customer loyalty in the e-service context. Through generally reflecting on the mixed causality between customer satisfaction and commitment, trust, involvement, or perceived value found in past studies, this study not only confirms their causal sequence in the online context, but also clarifies the essentiality of customer satisfaction in the formation of e-loyalty. 5.2. Implications for managers This study suggests two approaches for e-retailers looking to improve online business performance via store loyalty. One approach concerns the way that managers can maintain loyalty in their satisfied customers, while the other pays attention to the influence of commitment, involvement, perceived value and trust on satisfied customers in their formation of loyalty to the store. The managerial implications are addressed in the following paragraphs. This study suggests that, for managers, achieving customer satisfaction is an essential ingredient of customer e-loyalty. Specifically, this study suggests that online customer satisfaction can be achieved through overall customer satisfaction, customer expectations and the shopping experience. Once customers are loyal, they show their loyalty toward the e-retailer in different psychological and behavioural dimensions. For example, customers show their best choice attitude to, and behave as a frequent shopper towards, the e-retailer. Nevertheless, the mediating roles of commitment, trust, involvement and perceived value are evident in the study. This suggests that managers need to take other factors into account to achieve customer satisfaction in order to take precautions against possible influences on, or reinforce the strength of, the linkage between customer satisfaction and e-loyalty. Moreover, empirical evidence of the mediation

of commitment, trust, involvement and perceived value in the formation of e-loyalty from the perspective of satisfied customers suggests to managers the methods to select sellers that are appropriate for the characteristics of the web auction site. This will improve their online business performance. Managers should consider the impact of these mediators when managing customer satisfaction for customer loyalty in order to improve the performance of their web auction site. Managers need to strengthen customer commitment. The actions that managers can take to increase customer commitment are those that strengthen customers’ psychological attachment to, and identification with, the e-retailer, increasing their concern for the future welfare of the e-retailer and their loyalty. In addition, customer trust in the e-retailer should be recognised by managers when forming customer loyalty, without relying on interpersonal ties. This study suggests that managers must pay attention to the dependability, competency and integrity of the e-store window, as well as performing responsibly in terms of customer feedback. Managers should also consider the influential factor of involvement. The results show that fulfilling customer interests and increasing customers’ emotional involvement should be helpful in maintaining the loyalty of satisfied customers. Managers should be aware of the importance of on-line shopping in targeting satisfied customers and taking initiatives to recognise and highlight customer interests. Additionally, it is important for managers to understand how customers perceive value, then adopting their viewpoint in creating and/or delivering online services. In this study, customers determine value by product/service pricing, the time and effort they put into online shopping, and the rating of their overall on-line shopping experience. Managers need to maintain advanced online technologies to ensure user-friendly searching, requiring less time and effort by customers.

5.3. Limitations and future directions Limitations arise from the choice of the sample and its measurement. Regarding the sample choice, this study presented three pure e-retailers based in New Zealand. The respondents do not, therefore, reflect customer attitudes and behaviours related to pure e-retailers in other countries. A cross-population investigation of the same issues can make a further contribution to this area of research. Moreover, since the subjects were asked to respond to the survey in reference to their favourite e-retailer, the sample represents consumer responses that are fairly favourable. This does not present a problem when only studying loyalty, but does not capture the behaviour of non-loyal shoppers. In a consideration of the different effects between uni- and multi-store loyal customers on business performance (Chen and Cao, 2008), it would also be of interest to include respondents showing uniand multi-e-store loyalty in understanding consumers’ online purchase behaviours. In addition, we hypothesised that commitment, trust, involvement and perceived value are mediators in the loyalty formation process, but only in an examination of satisfied customers. The responses may differ from those of dissatisfied customers, which can lead to different research outcomes. Further study can, therefore, include dissatisfied customers in the examination to reveal any similarities and differences and to gain better knowledge of how managers cope with the possibility of having to develop different types of marketing strategies for different groups of customers (e.g., satisfied and dissatified customers). Finally, because of the unique features of web auction sites, it would be interesting to use a dyadic method to collect data from both e-retailers and consumers in future research.

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Appendix. Validation of measures Satisfaction (Cronbach a ¼.886)

 My overall satisfaction (e.g. e-store environment, product, service) to the e-store isy.

 Comparing with my expectation of e-store, my current shopping experience of this e-store is y.

 What do you think the service performance of this e-store against your ideal service?

 When I consider my experience at this e-store, I am y.  In general, when I think of this e-store, I amy.  When I leave this e-store, I am usually y. Commitment (Cronbach a ¼ .840)

   

I I I I

am proud to belong to this e-store. feel a sense of belonging to this e-store. care about the long-term success of this e-store. am a loyal patron of this e-store.

Trust (Cronbach a ¼ .869)

   

I I I I

feel feel feel feel

that that that that

this this this this

e-store e-store e-store e-store

is is is is

very dependable. very competent. of very high integrity. very responsive to customers.

Involvement (Cronbach a ¼.809)

 Considering this e-store is an important part of my online shopping.

 I am very motivated to buy from this e-store when shopping online.

 It is very significant to me that I buy from this e-store for online shopping. Perceived value (Cronbach a ¼.709)

 For the prices I pay for the product at this e-store, I would say shopping at this e-store is a very good deal.

 For the time I spent in order to shop at this e-store, I would say shopping at this e-store is highly reasonable.

 For the effort involved in shopping at this e-store, I would say shopping at this e-store is very worthwhile.

 I would rate my overall shopping experience at this e-store ‘‘extremely good value’’. Loyalty (Cronbach a ¼.845)

        

I really care about the fate of this e-store. I am willing to put in extra effort to buy from this e-store. I am proud to tell others that I buy from this e-store. For me, this e-store is the best alternative in my consideration. I expect to keep business relationship with this e-store for a long period of time. I would recommend this e-store to others. I buy from this e-store on a regular basis. This e-store stimulates me to buy repeatedly. I have used this e-store for online shopping for a number of years.

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