Does Satisfaction Mediate the Relationship Between Relationship Equity and Customer Loyalty?

Abstract

Relationship equity provides additional value to customers other than the usual core service or product offerings. Satisfaction with the relationship provokes an affective state in customers‟ mind about the company and is regarded as one of the key determinants of customer loyalty. This paper investigates the impact of relationship equity on customer loyalty and examines the mediating effect of satisfaction on the relationship between these two constructs in business-to-business (B-to-B) context. The paper shows that relationship equity affects customer loyalty positively. It also reveals that satisfaction fully mediates the link between relationship equity and customer loyalty. The managerial implications of the findings are discussed.