Magazine article Journal of Services Research

Customer Satisfaction and Word of Mouth Intentions: Testing the Mediating Effect of Customer Loyalty

Magazine article Journal of Services Research

Customer Satisfaction and Word of Mouth Intentions: Testing the Mediating Effect of Customer Loyalty

Article excerpt

INTRODUCTION

Customer satisfaction is a critical factor which has drawn the attention of marketing academicians and practitioners. The focus has been largely due to rising competition, and also because it is the basis for strengthening customer relationships. Customer satisfaction is known to impact loyalty, which positively impacts profits and is quite relevant in the hospitality and other service related industries stated Bowen and Chen (2001). Due to its ability to impact profits, satisfaction is at the core of sustained competitive advantage; which is contingent on delivering high service quality levels constantly observed Sulek and Hensley (2004). Service quality is widely known for its ability to impact customer satisfaction. Hence, customer satisfaction in the service context cannot be studied without giving due consideration to service quality. Also, customer satisfaction is known to impact loyalty propagated Ladhari et al. (2008) and Word of Mouth (WOM) intentions observed Schneider and Bowen (1999).

Although customer satisfaction has been given a high amount of consideration in hospitality and the related context, loyalty should be given higher attention as it is closer to the outcome of services. According to Prentice (2013) despite the vitality of customer satisfaction for the hospitality industry, customer loyalty holds greater importance due to its ability to measure success. Customer behaviour is tested through the path between satisfaction and loyalty, as the former impacts the later significantly statedSalleh et al.(2013), and Awara and Aanyadighibe (2014) Satisfaction also leads to better recommendations to prospective customer as per Berry et al. (2006). However, satisfaction does not lead to high levels of repeat purchase under all situations stated Lee and Back (2008).But, satisfaction is responsible in developing customer attitude largely and is true for various service types, and would impact the customer's intention to purchase the service again or exhibit loyalty observed Ekinci et al. (2008). The focus on loyalty dominaings hospitality services are expected to identify attributes which would increase loyalty; which was proposed in a study which analyzed its relationship with satisfaction according to Bowen and Chen (2001).

The relationship between customer satisfaction and behavioural intentions have received strong followership in the services theory stated Bufquin et al. (2017), Namkung and Jang (2007). Behavioural intentions usually include return intentions, positive WOM intentions, and recommendations (Bufquin et al., 2017). The relationship between satisfaction and intentions have been direct and positive stated Kim et al., (2009), Namkung and Jang, (2007), and Ryu et al. (2010) in the context of restaurants.

Therefore, it is quite evident that customer satisfaction is a key variable which impacts behavioural intentions viz., loyalty and WOM intentions. Customer satisfaction alone is not responsible for directing future purchase or spreading positive recommendations. In addition, loyalty would also lead to WOM intentions. The presence of loyalty would have a different impact on the customer's WOM intentions. This proposition brings up the following research question.

RQ1: Does loyalty act as a mediator in the relationship between customer satisfaction and WOM intentions?

A literature review is presented in the following section, in which the focus is on discussing how customer satisfaction is related to service quality, loyalty and WOM in the context of the restaurant. Further, research methods are discussedincluding sampling, data collection, and scale development. Analysis and results follow after, which specifically tests the significance of mediating relationships. Theoretical and managerial implications are then described, and then finally limitations, and scope for further research are presented.

Literature Review

Service quality has been discussed widely in literature. …

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