Customer Relationships - Customer Decision Making and Loyalty Behaviours

Customer Relationships - Customer Decision Making and Loyalty Behaviours

Abstract

Aiming at attracting and retaining customers at a profit, the importance of customer relationships management is self-evident in marketing field. How to manage the relationship with customers is one of the most significant problems which received widely attention from both academic and practice. This article examines the mechanics of customer relationships mainly focus on customers' decisions making and loyalty behaviors. By investigating the decision making process and factors influencing consumers' decisions making thoughtfully, connections between consumer commitment, trust, satisfaction and loyalty are identified. Then, the dissymmetry between behavioral intentions and actual purchase behaviors is explicitly illustrated. Detailed survey findings prove authors arguments, which disperse through the whole report and summarized in one graph to show all the data. This study provides insight as to how organizations could develop customer retention strategies finally.

Introduction

Today's marketing aims to create customer value, satisfy customer needs and retain customers in a profitable level (Kotler 2009). Since organizations recognize that attracting a new customer is more high-priced than retaining a loyal customer, it is widely accepted as customer-centered activities to build long-term relationship with prospective customers (Berry & Parasuraman 1991, Evans and Laskin 1994). Thus to gain further profit, organizations need to focus on customer relationships building by understanding more about the customers behavior.

Realizing customer decision making process and the influencing factors can greatly help organizations establish marketing strategies and reduce risks by satisfied customers more and communicated customers well. Customer satisfaction, trust and commitment turn out to become the central concepts of customer relationships (Doney & Cannon 1997, Garbarino & Johnson 1999, Morgan & Hunt 1994, Moorman, Zaltman & Despandé 1992). Furthermore, they are also considered as the guide of consumer decision making regarding to marketing organizations as well as perceived service quality and perceived value (Garbarino & Johnson 1999). Customer loyalty which based on satisfaction and commitment play a significant role in re-purchasing. However, it is recognized that the gap between behavioral intentions and actual behaviors is inevitable.

In this article, quantitative data was collected through a series of questionnaires. The investigation was conducted in Loughborough, Leicester and Nottingham to collate the customers' views of six companies in service sector. The data used of this survey is under the assumption that the chosen respondents could represent all customers.

Decision Making

1. Decision Making Process

How customers conduct buying behavior may be illustrate to a decision-making process. The most commonly used one separates the whole procedure into five basic steps: 1. Need recognition/problem awareness, 2.information search, 3.evaluation of alternatives, 4.purchase, 5.post-purchase evaluation of decision.(Shown in figure 1.1)

Figure 1.1 the consumer decision-making process, Jobber (2007)'s

Theoretically, all purchase actions should follow this ordinal rank. In fact, this procedure could be end at any time and any moment.

2. Factors Influencing Decision-making

It is widely accepted that there are four main factors impact decision-making: cultural, social, personal, and psychological, and these elements impenetrate the whole process from the beginning of perceiving a stimulus to the final post purchase manner. Culture factor includes culture and values, sub-culture and social class. Social factor, which covers groups, family, roles and status, accounts for the interactions between customers and relevant groups. Personal factor containing age and life cycle stage, occupation, economic situation, gender, personality, life style and self-concept plays a crucial role in choosing products and services. Motivation, perception, learning and beliefs and attitudes attribute to psychological factor which determine customers perceive.

On the other hand, as the guide of consumer decision making, consumer commitment, consumer trust and customer satisfaction are also concerned to be the main focuses on which the factors influencing consumer decision making can be explored. More interestingly, the former four factors have interactions with the later three (customer commitment, trust and satisfaction). The following part