Drivers Of Customer Loyalty In A Retail Store Environment

Abstract

The determinants of customer loyalty are identified for a large U.S. retailer based on a survey of 972 customers. An ordered logistic regression is used to estimate the proportion of a retailers customers who are willing to recommend the retailers products to others based on survey results.

Statistical results document that service quality, product quality and brand image drive customer loyalty as measured by a customers willingness to recommend the retailers products to other people. Service management managers can improve these drivers of customer loyalty by better training, recognition and reward programs, day-to-day store operations, and job, product, process and store design. Given the general research objective of defining a universal model of what drives customer loyalty in a diverse set of industries, this research provides additional statistical evidence to support the theory that brand image, product quality, and service quality determine customer loyalty.