Customer loyalty: an empirical study

The purpose of this paper is to focus on establishing individuals' levels of loyalty and what sustains and develops their customer loyalty. This paper recognises the importance customer loyalty has for many competitive organisations and industries. However there has been less focus on what value customer's attach to customer loyalty in this context.

A two‐stage study is presented, establishing individual levels of loyalty and then identifying the role of mediating effects in loyalty development. The first stage involved a postal survey, including a 28‐item scale, designed to measure customer loyalty, and its sustainers and vulnerabilities (mediating effects). The second stage, and the main focus of this paper, uses scores from the loyalty scale (high, medium and low levels of loyalty) to examine what sustains and develops loyalty amongst differing levels of development.

The findings highlight the importance of identifying, understanding and managing mediating effects, in the context of loyalty development. The research emphasises the importance of a differentiated approach to developing and managing customer loyalty by appropriately rewarding customers at different levels. The findings highlight the need to acknowledge the importance of reciprocity in terms of which aspects of service customers value.

The main contribution of this paper is that it uniquely identifies an approach to understanding the sustaining and vulnerability effects mediating customer loyalty development going beyond previous categorisation attempts. Understanding this approach should lead to effective customer loyalty management and greater awareness of managing recognition, reciprocity and rewards.