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Under a Creative Commons license Open access AbstractThis article attempts a qualitative review of the concept of customer loyalty and companies' need to comprehend the character of customer loyalty in order to find a sound fit between their customer loyalty schemes and the prevailing nature of loyalty among customers. It suggests the mechanics of engendering customer loyalty by deliberating upon the concepts and dynamics of customer satisfaction and emotional attachment, the factors primarily responsible for promoting customer loyalty. A quantitative framework to assess customer loyalty to assess customer loyalty comprehensively through measurement of its antecedents and outcomes has also been proposed and discussed. KeywordsCustomer loyalty Customer satisfaction Emotional attachment Preference Premium Patronage Cited by (0)© 2018 Published by Elsevier Ltd on behalf of Indian Institute of Management Bangalore. IntroductionPostmodern consumers do not buy a product or service; they seek to purchase a series of memorable events, created by the firm, that produce a personal consumption journey (Pine and Gilmore, 1999). No longer satisfied with generic offerings, many consumers require personalized, contextualized experiences in all their interactions with a firm (De Keyser et al., 2015). In response, retailers aim to achieve competitive advantages and differentiate themselves from competitors by offering more personal, unique experiences to their customers (Pine and Gilmore, 1999; Verhoef et al., 2009; Klaus and Maklan, 2013; Åkesson et al., 2014; Stein and Ramaseshan, 2016). The resulting customer experience (CX) refers to all the interactions between a customer and a product, firm, or any part of the organization that provokes reactions from a customer. This experience is strictly personal and concerns the customer's involvement at different levels, including the customer's cognitive, affective, emotional, social and physical responses to the retailer and its technology, which then determine customers' overall shopping service experience (Verhoef et al., 2009). Recently, Forbes (2019) presented ten firms that experienced dramatic turnarounds by investing in their customer experiences. For example, the report specifies that, since investing in customer experience, Target's reputation and sales have significantly risen. In turn, CX has become critical for the success of firms in nearly all industries (Sharma and Chaubey, 2014; Wei et al., 2019), because a superior CX can enhance various performance outcomes. Firms that offer strong CX grow revenue faster than those which do not, attracting greater brand preferences, meaning they can charge more for their products, thereby outperforming other firms on both stock price growth and total returns (Harvard Business Review Analytic Services, 2014; Forrester Report, 2018). The Temkin Group Insight Report (2016) demonstrates that a moderate increase in CX generates an average revenue increase of $823 million over three years for a firm whose annual revenue is $1 billion. In the same vein, CX is considered to be the main reason for explaining why iPhone prices have risen by at least 10% each year since 2011, meaning that Apple continues to break its own sales record year after year (Martech Advisor, 2019). Accordingly, Rudkowski et al. (2019) suggest that retailers invest in CX to obtain a competitive position and to realize key business objectives, such as those of market share and sales revenue. A positive CX can also influence customer commitment and determine customer preferences, which inform their purchase decisions (Gentile et al., 2007), satisfaction (Shankar et al., 2003), communication with potential customers (Keiningham et al., 2007), and their loyalty to the brand (Brakus et al., 2009; Srivastava and Kaul, 2016). Consequently, firms are urged to implement CX programs. But even when CEOs believe they deliver superior CX, often only a small percentage of their customers agree (Bain and Company, 2005). In France, for instance, 70% of firms claim to focus on customers, but no customers agree (Capgemini, 2017). Analyzing the financial services industry, Kantar's report (2018) points out that 91% of top executives consider CX to be a crucial tool for the future of their business; however, only one third of their customers strongly consider their banks to be focused on customer experience. Similarly, Oracle's analysis (2011) indicates that 86% of buyers will pay more for a better CX, but only 1% feel that firms meet such expectations. To overcome this perceptual gap, firms need a clearer understanding of what CX entails within individual sectors and, particularly, what distinguishes it from customer satisfaction (Meyer and Schwager, 2007). CX simultaneously incorporates various dimensions that jointly enhance a firm's performance; however, not all dimensions of CX are beneficial. Moreover, it is essential to underline that no single dimension improves performance when in isolation; instead, as indicated by Johansson and Kask (2017), who examined combinations of business strategy, retail format and multi-channel setup, only the right combination of dimensions will improve performance. Managers need to be able to identify and measure the importance of various essential CX dimensions, as well as their synergy, which in turn influences business performance, so they can therefore allocate their time and resources appropriately. Even as our understanding about the importance of CX is increasing, CX budgets are not (Gartner, 2018). Although prior research identified relationships between the individual or aggregated effects of CX dimensions and performance outcomes; however, these studies tended to overlook the ways in which CX dimensions might be interacting with each other and by implication how they could be substituted for or complement one another. Recent work by Boon et al. (2019) emphasizes how, when practices fit into a coherent system, they underpin one another and create positive synergies; whereas, when practices do not fit, they may detract from each other's effects. Yet some scholars propose theoretical arguments suggesting that the effects of CX depend on different combinations of its dimensions (Gentile et al., 2007; Grønholdt et al., 2015; Lemon and Verhoef, 2016). Åkesson et al. (2014) highlighted the notion that firms need to coordinate those customer experiences that generate value and create loyalty whenever customers interact with the resources within its service systems. According to Grønholdt et al. (2015), firms must carefully decipher which CX dimensions, and appropriate combinations, from both rational and emotional perspectives, will actually create superior customer loyalty. However, most of previous research have tended to examine the independent or aggregated effects of CX dimensions, thus neglecting the possibility that multiple CX dimensions are interactive in their stimulation of customer loyalty. Indeed, Lemon and Verhoef (2016) urge that researchers should go beyond typical paths in order to assess the combined effects of those elements that constitute CX. They call for more research that combines these specific elements to reveal their influence on customer experience, to thereby provide a deeper understanding of this multidimensional concept. This study therefore seeks to expand and further CX knowledge by empirically analyzing the effects of the interactions between different CX dimensions and how these may differ across different customer groups to influence customer loyalty. Can a combination of CX dimensions be used effectively to trigger and alter customer loyalty? What are the optimal configurations of CX dimensions that lead to better customer loyalty? In other words, our intention is to identify customer experience dimensions that drive customer loyalty in a more holistic manner. In doing so, we will blueprint the combinations of customer experience dimensions that boost customer loyalty which has not been previously undertaken in CX literature. With our theoretical framework, we expect that a single, specific outcome can result from different combinations of causal factors (Ragin, 2000). Our findings differ with the dominant analyses that employ individual or aggregate measurements of CX. Instead we empirically uncover combinations of CX dimensions that influence positively customer loyalty within the DIY sector. More precisely, our approach is founded on configurational logic, and we consider notions of complementarity and substitution to argue that CX dimensions combine to form different bundles, all of which may increase customer loyalty. This approach enabled us to identify how CX dimensions combine into distinct configurations to generate improved customer loyalty. More precisely, some CX dimensions are complementary and mutually strengthening, while others are redundant. Furthermore, some dimensions can be substituted for others. Thus, when CX dimensions act as substitutes, the improvement of a firm's performance does not require further investment. Previous research has not clearly investigated those dimensions that are complimentary to each other, or those that can be substituted with one another. This complement versus substitute framework can contribute to a deeper understanding of CX dimensions. Therefore, we propose a configurational approach that better reflects the causal complexity between CX dimensions, and, in so doing, identify how CX dimensions interact to affect customer loyalty, thus highlighting the importance of the interactions between dimensions. We focus on the DIY retailing sector, which has witnessed considerable growth in recent decades (Watson and Shove, 2008; Sands et al., 2009). In France alone, the DIY market was worth an estimated €26.0 billion in 2018 (European DIY Retail Association/Global Home Improvement Network, 2019). However, research from Bazaarvoice (2019) identified a gap in loyalty between firms and customers within the DIY sector. For instance, the report indicates that, of the 15 leading DIY stores, only nine were recognized by just 10% of consumers. Therefore, it is clear that DIY retailers should create CX that captures loyalty (Bazaarvoice, 2019). What's more, the orientation of loyalty is essential for sectors with high purchase frequency, a category in which the DIY sector belongs (Leenheer et al., 2007; Vasel and Zabkar, 2009). These novel findings will provide empirical evidence detailing how managers should combine CX dimensions to achieve customer loyalty in the DIY sector, as well as contributing important implications to the wider marketing literature. Apart from few exceptions, there is little large-scale empirical evidence that analyses customer experience at the level of the customer (e.g. see Gao et al., 2019 for comprehensive reviews). Moreover, scholars have also pointed out that the literature is scare when it comes to understanding CX antecedents, as well the impact they have on firms' performance (Verhoef et al., 2009; Lemon and Verhoef, 2016). To bridge these research gaps, we examined the relationship between CX and loyalty in relation to the customer. Our unique theoretical framework proposes that greater customer loyalty results not from investing in individual CX dimensions, but by investing in specific configurations of them. This is because CX dimensions revealed different effects on customer loyalty depending on how they are arranged. As different generational cohorts are associated with specific values and priorities (Mcelroy and Morrow, 2010; Jackson et al., 2011), it is important to identify whether customers' generational differences matter for the creation of CX. Actually, Funches et al., 2009, Deshwal (2016), Garg et al. (2014) and Dean and Rolland (2011) posit that age categories behave differently across the dimensions of CX. For instance, customers from different generations are presumed to experience differences in environmental stimuli (Phillips and Sternthal, 1977) which would have had an impact on their overall customer experience. Similarly, by analyzing multichannel customer journeys, Hu and Tracogna (2020) demonstrate that younger customers require a greater need for attributes concerning “information” and “convenience”. However, we still lack evidence that has identified which combinations of CX dimensions can enhance customer loyalty regarding the different generations. It is worth noting that generation-based segmentation is considered to be an effective tool for improving a firm's competitiveness (Moschis et al., 2003). Following, Wang and Lang (2019), we have determined three generational groups: Generation Y (18–35), Generation X (36–55) and Baby Boomers (56–75). We have done so to identify which CX configurations best enable enhanced customer loyalty in different cohorts. Furthermore, this study applies fuzzy-set qualitative comparative analysis (fsQCA) to CX research. When compared with conventional models, this method can better demonstrate how multiple dimensions interact and influence a firm's performance. Using fsQCA is especially advantageous for examining complex phenomena such as CX, and it allows us to further advance our knowledge of CX. As indicated by Johansson and Kask (2017), applying a configurational approach will help us identify the interactions between dimensions that will lead to the improvement of customer loyalty for a retailer. Overall, we aim to enrich previous findings by identifying configurations that may lead to the enhancement of customer loyalty. In the next section, we review the relevant CX literature, considering its dimensions and their influence on customer loyalty. After we present an empirical model, we detail the study results. These results indicate some important theoretical and managerial implications. Here, we also note some limitations of our study and suggest future directions for further research. Section snippetsCustomer experience: multidimensional conceptThe term “experience” comprises different elements, definitions and perspectives (Maklan and Klaus, 2011; Walls et al., 2011), but it is also a term that is often difficult to clearly define. Experiences depend on various factors that firms may not be able to control or manage, such as customers' personal characteristics and preferences. Siqueira et al. (2020) emphasized that a CX model should capture both controllable and uncontrollable factors. As Verhoef et al. (2009) show, CX is a holistic DataWe conducted a consumer survey and collected data from DIY retailers in France between June 2017 and July 2017. The questionnaire was administered online to a representative sample of the French population, which was achieved by using a quota method (gender, age, socio-economic status). To ensure a representative national pool, we applied response rates by profile when sending the survey to panelists. Of the 18,713 invited to participate, 3423 responded positively, but we excluded 2726 who had Results and discussionThe results in Table 2 suggest that two configurations are sufficiently linked to customer loyalty; and each displays a consistency level higher than the 0.85 threshold. The overall solution consistency is 0.89. The total raw coverage score of 0.70 indicates that configurations explain a substantial proportion of customer loyalty. The raw coverage for the single causal paths ranges from 0.64 to 0.65, indicating the proportion of memberships in the outcome, explained by each term of the ConclusionThis study has sought a clearer understanding of the effects of CX on customer loyalty by detailing the systemic interactions between CX dimensions across age groups and within the customer population as whole within DIY sector. Prior research into customer experience focused on the independent or aggregate effects of CX. However, when considering CX as a holistic concept, an analysis of the interdependencies between the dimensions that comprise CX is necessary when trying to understand their AcknowledgementsThe authors gratefully acknowledge the financial support for the data collection employed in this work from the AFNOR “Performance des Organisations” endowment in collaboration with the Paris-Dauphine Foundation. Recommended articles (6)© 2020 Elsevier Ltd. All rights reserved. |
A basic idea forming the foundation of customer loyalty for small firms include the notion that
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