Academic journal article The South East Asian Journal of Management

Employee Rhetorical Sensitivity as a Mediator in the Relationship between Customer Orientation and Customer Retention

Academic journal article The South East Asian Journal of Management

Employee Rhetorical Sensitivity as a Mediator in the Relationship between Customer Orientation and Customer Retention

Article excerpt

INTRODUCTION

Tourism industry has experienced tremendous changes over the decades. Information technology advancement has changed the tourism industry landscape with the emergence of new travel middlemen that are called as travel cybermediaries. This travel cybermediaries such as Trivago, Agoda and Airbnb offer wider selection for consumer to plan their own travel and holiday without assistance of travel agency. Nowadays, more and more customers prefer to utilize these travel cybermediaries in planning their travel and holiday where they can 'mix and match' the offers to create their own travel packages that suit their budget and timing. By doing so, the customers can save more money as compared to utilizing travel agency services. This scenario is supported by Lang (2000), who stressed that internet has changed the customer purchasing behavior especially in the tourism industry. According to Euromonitor (2017), there is an increase in impulse purchase of online booking trip as compared to physical visit to the travel agency in buying holiday package in Malaysia. With advancement of in information technology travel agencies areis facing intense competition from travel cybermediaries.

Therefore, travel agency needs to utilize their resources to improve relationship quality (Bataineh, Al-Abdallah, Salhab, & Shoter, 2015) and customer relationship management (Zare & Chukwunonso, 2015) in order to retain current customers and ultimately remain competitive in the marketplace. Kim and Ok (2010) confirmed that customer orientation is an important elements in enhancing customer retention especially in the food-service industry. Moreover, previous researchers have rigorously studied relationship marketing but studies specifically on employee rhetorical sensitivity are still lacking especially in the case of travel agency (e.g. Lang, 2000; Mokhtaruddin, Che Wel, Alam, & Khalid, 2018). As proved by Knutson, Komolsevin, Chatiketu, and Smith (2003), rhetorical sensitivity will lead to more effective communication by salesperson and thus induce firm's sales performance. Furthermore, Sin, Tse, Yau, Chow, and Lee (2005) states that, business performance consists of sales growth, customer retention, return on investment and market share. Therefore, currentthis study intends to investigate employee rhetorical sensitivity as a mediator in the relationship between customer orientation and customer retention in travel agency context.

LITERATURE REVIEW

Customer orientation

Deshpande, Farley and Webster (1993), define customer orientation as a set of organization belief that position customer interest as first priority in managing business, and at the same time protect other stakeholders such as owner, managers, and employees, in order to achieve a long-term profitable relationship. In other words, the focus of on the needs of current and potential customer only is inadequate, whereand the value and belief of customer focus has to be reinforced and practiced in the overall organization. In short, customer orientation is the focus of the organization as a whole.

Customer retention

Customer retention can be defined as the way of converting the new customers into regular clients through creating greater customer value, and long-term customer satisfaction (Kotler & Armstrong, 2013). Jeng and Bailey (2012) further define customer retention as customer engaging in a formal or informal relationship with the firm over a period of time and at the same time perform repeat purchases.

Previous studies investigated various predictors of customer retention. This predic- tor ranges from relationship marketing tools (Bojei, Julian, Aniza, Che, & Ahmed, 2013), relationship marketing (Asif Ur Rahman & Masoom, 2012), loyalty program membership (Bolton, Kannan, & Bramlett, 2000), CRM (Ghahfarokhi & Zakaria, 2009) and customer satisfaction (Hennig-Thurau & Klee, 1997). Thus, customer retention is the ultimate goals of the entire organization. …

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