Customer Loyalty

According to the marketing literature, customer loyalty can be defined in two distinct ways:

attitudinal and behavioral (Jacoby and Kyner, 1973). Attitudinal loyalty refers to the attachment that a consumer feels toward a particular brand, while behavioral loyalty refers to loyalty behaviors such as repeated purchase from the same supplier, increasing the scale or scope of a relationship with a supplier, or recommending a supplier to others (Hallowell, 1996). While customer loyalty has traditionally been considered to be important for packaged goods only, recent literature suggests that it is important for many types of firms, including service, industrial, retail, et cetera (Basu and Dick, 1994).

Figure 4 The two types of customer loyalty Source: Hallowell, 1996

There is also extensive research into the factors that result in customer loyalty; this research, in general, is highly specific to an individual industry or subset of industries. For example, research on the hotel industry has shown that the most important factors for cultivating customer loyalty include customer satisfaction with housekeeping and hotel image (Kandampully & Suhartanto, 2000), while another study of the hospital industry found that

• Positive feelings or affect

• Preference or like of a brand

Attitudinal Loyalty

• Repeat purchase

• Increasing scope of relationship with brand

Behavioral

Loyalty

customer satisfaction in some areas (ex: billing process) had an impact on profitability, but satisfaction in other areas (ex: nursing and daily care) did not (Nelson et al, 1992). Thus, there is little consensus between industries and disciplines on the antecedents of customer loyalty.

Links between Customer Satisfaction, Customer Loyalty and Profitability

In order to understand the importance of customer loyalty to a firm, it is important to understand customer loyalty’s impact on and relationship with customer satisfaction and profitability. Hallowell (1996), in his study of the relationship between customer satisfaction, customer loyalty and profitability in the banking industry, found that across several dimensions of customer satisfaction, there is a correlation between customer satisfaction and customer retention (or, in other words, customer loyalty behaviors), as well as a correlation between customer loyalty and profitability. Furthermore, his research also points to a reciprocal relationship between customer satisfaction and customer loyalty. Thus, according to his research:

Figure 5 The relationship between satisfaction, loyalty and profitability Source: Hallowell, 1996

The findings of Srinivasan et al. (2002) and Rangaswamy et al. (2003) echo those of Hallowell. However, the degree of the correlation, as well as any inference of any casual relationships, require further research.

Customer Loyalty in Internet-Based Industries

Literature regarding customer loyalty in internet-based industries exists, but is limited. Thus far, research indicates that antecedents leading to customer loyalty in internet based industries differ from those in traditional industries.

For example, Srinivasan et al (2002) identified eight factors, customization, contact interactivity, care, community, convenience, cultivation, choice, and character that affect loyalty in e-commerce industries (e-loyalty), and found all of them except convenience to have an effect.

Exchange Outcome Satisfaction

Additionally, Hsu et al. (2013) investigated the relationships between customer loyalty, customer satisfaction, and power in weblogs (blogs) using the framework below.

Figure 6 The exchange outcome satisfaction model of customer satisfaction and loyalty Source: Hsu et al., 2013

Exchange Outcome Satisfaction:

Information Social Exchange

Recreation

Attitudinal Loyatly Behavioral Loyalty

Using the three dimensions of exchange outcome satisfaction as outlined above, as well as the previously described concepts of attitudinal loyalty and behavioral loyalty, the researchers proposed the hypotheses:

1. A blog reader’s exchange outcome satisfaction has a positive influence on attitudinal loyalty.

2. A blog reader’s exchange outcome satisfaction has a positive influence on behavioral loyalty.

The researchers found that exchange outcome satisfaction (or readers’ satisfaction with the blog’s content) did not have a significant effect on behavioral loyalty (and thus H2 is not supported), it did have a significant positive effect on attitudinal loyalty (H1 was supported).

This model is consistent with Oliver’s assertion that affect is crucial to understanding the satisfaction response, as well as with the current understanding of the two types of loyalty.

Also, essentially all of the reasons why one might be satisfied or dissatisfied with a podcast fall are covered by this model, and is thus is an effective way to explain this small subset of e-loyalty. As blogs are similar to podcasts in structure, content, et cetera, a modified version is presented here to be used in the present research.

Information satisfaction

This refers to the listener’s satisfaction with the content of the podcast, as well as the relevance of the information contained therein. When a reader is convinced that a particular podcast serves his or her informational needs better than other podcasts, it is likely to become his or her favorite. Information satisfaction includes satisfaction with the variety of information presented, the relevance of information presented, et cetera.

Social exchange satisfaction

The social benefits that one derives from maintaining social connectivity and thus gaining acceptance and approval from others are important in motivating a consumer to take part in an online community (Dholakia et al., 2004). Thus, the second dimension exchange outcome satisfaction is social exchange satisfaction.This refers to the listener’s satisfaction with the degree to which he or she can interact with the podcast itself as well as other listeners of the podcast. Podacsting is an internet-based medium characterized by small, tight-knit communities of content providers and fans; it thus follows that evaluating the listener base’s social exchange satisfaction would be critical.

Social exchange satisfaction can refer to satisfaction with how much comments on the blog affect the content of the blog, how much comments on the blog are discussed by other readers, as well as the degree of satisfaction with interaction with other listeners at offline events, etc.

Recreation satisfaction

According to Chitturi et al. (2008), recreation satisfaction is the extent to which a reader experiences fun and pleasure when participating in a podcast. Although podcasting is used in education, the medical field, and other similar contexts, it is primarily a recreational medium and thus it follows that recreational satisfaction is the third dimension of exchange outcome satisfaction. Recreation satisfaction includes