The Role of Consumer Confidence in Creating Customer Loyalty

Yi-Chun Ou*, Lisette de Vries, Thorsten Wiesel, Pieter Verhoef

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

38 Citations (Scopus)

Abstract

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

Original languageEnglish
Pages (from-to)339-354
Number of pages16
JournalJournal of Service Research
Volume17
Issue number3
DOIs
Publication statusPublished - Aug-2014

Keywords

  • consumer confidence
  • customer equity drivers
  • customer loyalty
  • contractual settings
  • meta-analysis
  • EMPIRICAL-ANALYSIS
  • BUSINESS CYCLES
  • SATISFACTION
  • SERVICE
  • RETENTION
  • TRUST
  • METAANALYSIS
  • COMMITMENT
  • PROGRAMS
  • EQUITY

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