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    The enhanced loyalty drivers of customers acquired through referral reward programs

    Access Status
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    Authors
    Ramaseshan, Balasubramani
    Wirtz, J.
    Georgi, D.
    Date
    2017
    Type
    Journal Article
    
    Metadata
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    Citation
    Ramaseshan, B. and Wirtz, J. and Georgi, D. 2017. The enhanced loyalty drivers of customers acquired through referral reward programs. Journal of Service Management. 28 (4): pp. 687-706.
    Source Title
    Journal of Service Management
    DOI
    10.1108/JOSM-07-2016-0190
    ISSN
    1757-5818
    School
    School of Marketing
    URI
    http://hdl.handle.net/20.500.11937/56997
    Collection
    • Curtin Research Publications
    Abstract

    Purpose: The purpose of this paper is to extend prior research on referral reward programs (RRPs) by examining if and how the mode of customer acquisition (RRP-acquired customers vs non-RRP-acquired new customers) moderates the relationships between customer satisfaction and attitudinal loyalty, perceived switching costs and attitudinal loyalty, and attitudinal loyalty and behavioral loyalty (i.e. recommendations, cross-buying, and total spend). Design/methodology/approach: Set in a banking context, this study is the first in an RRP context to link survey data with actual purchase data from a bank’s CRM records. Specifically, the survey captured customers’ satisfaction, perceived switching costs and attitudinal loyalty, whereas the CRM data provided actual loyalty behaviors (cross-buying and total spend). Findings: The findings show that the effect of satisfaction on attitudinal loyalty, and the effects of attitudinal loyalty on recommendations, cross-buying, and total spend were stronger for RRP-acquired customers than for non-RRP-acquired new customers. Furthermore, perceived switching costs had a lower effect on attitudinal loyalty for RRP-acquired customers than for non-RRP-acquired new customers. Practical implications: The findings offer managers a better understanding of how RRP-acquired customers differ from non-RRP-acquired new customers with regard to their satisfaction, perceived switching costs, and attitudinal and behavioral loyalty, thus enabling effective management of RRPs. Originality/value: This is the first empirical study that explores the differences between RRP-acquired customers and non-RRP-acquired new customers with regard to the effects of satisfaction and perceived switching costs on attitudinal loyalty, and the effect of attitudinal loyalty on behavioral loyalty.

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