Magazine article CRM Magazine

Business Schools Suggest New Loyalty Metrics: Marketing Experts Create a Five-Part Model to Measure Customer Commitment

Magazine article CRM Magazine

Business Schools Suggest New Loyalty Metrics: Marketing Experts Create a Five-Part Model to Measure Customer Commitment

Article excerpt

A group of marketing professors in the business schools at Rice University in Houston and Fordham University in New York have come up with a customer loyalty model that has five dimensions--affective, normative, economic, forced, and habitual--arguing that current systems that only look at affective, normative, and calculative commitment are "insufficient."

The three-dimensional model for measuring customer loyalty, they said, was taken from employee-commitment studies and then applied to customer loyalty research. This is a problem because people view their commitments to their jobs differently than their commitments to brands, according to Vikas Mittal, a marketing professor at Rice's Jones Graduate School of Business and one of the researchers involved in the study. The findings were published in the Journal of Service Research.

"When it comes to brand commitment, factors such as habit and convenience, benefits offered, and good treatment are a lot more important," he says.

The researchers assessed customer loyalty using repurchase intentions, which Mittal says "can provide companies with a measure of organic growth."

The five elements all play a role in customers' decisions to repurchase goods or services from companies. Affective commitment is characterized by a customer's positive emotions toward a company, normative commitment is formed when a customer believes a company shares his beliefs and values, economic commitment is based on a consumer's sense of investment in a brand, such as when he earns reward points or other loyalty program benefits; forced commitment results from a perceived absence of alternatives; and habitual commitment arises when consumption behavior is performed repetitively and automatically.

The researchers found that customer satisfaction with the companies' products or services is the single largest contributor to customer loyalty.

"Systematically, our findings show that affective commitment is the strongest predictor of loyalty," Mittal says. "Further, forced commitment has a negative association with loyalty, and habitual commitment has a positive association."

Based on these findings, Mittal recommends that brands try to minimize the feeling of forced commitment. …

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