| Abstract |
Many academicians have accepted the significance of loyalty in service industries (Bloemer et al., 1999; Caruana, 2002; Asuncion et al., 2004) and its potential impact on the development of sustainable competitive edge (Keaveney, 1995; Gremler and Brown, 1996) for the service firms. This may be attributed to the unique nature of services, increased dependency on technology and greater customer involvement in service delivery. A base of loyal customers can do wonder in terms of economic rewards and new business prospects as winning a new customer can cost as much as 6 times more than the cost of retaining an old one (Rosenberg and Czepiel, 1984) whereas profits can be increased from 25% to 125% if the potential migration is decreased by 5% depending upon the particular industry (Reichheld and Sasser, 1990). Customer loyalty clearly brings in significant benefits to the business and calls for a deeper investigation into the factors that act as its originator and contribute in its enhancement since, as mentioned by Johnson, Herrmann, and Huber (2006), the antecedents of customer loyalty are convoluted and dynamic, changing and evolving over time. The purpose of this paper is to discuss customer loyalty and its significance in the modern business arena through a comprehensive survey of literature. Further, it seeks to explore various factors that serve as antecedents to customer loyalty development. In other words, investigating the customers' checklist that they refer before deciding to sustain and develop their relationship with the company and its offerings is the key issue that this paper aims to address. The study intends to provide a framework for development of a scale for assessing customer loyalty and identifying what a particular class of loyalty would result into in terms of its contribution to the organization. The above identified framework would prove to be of great significance for service organizations in appraising different loyalty programs and also in segmenting customers depending upon organizational requirements. |
