Customer Loyalty and Customer Satisfaction

Customer Loyalty can be difficult to define given the different views that are presented within the

literature. Zithaml, Berry and Parasuraman (1996) determine that loyalty includes a customer’s

intention to stay with an organisation and that loyalty includes four elements: repurchase intentions,

recommending the service provider to other customers, less complaints and tolerance of price

increases. Oliver, (1999) provides a different definition and describes loyalty as a customer’s overall

attachment to a product, service, brand or organisation.

A better appreciation of the factors that influence the loyalty of customers, particularly their attitudes

and changing needs can help companies to develop strategies to prevent customer defection

(Coyles & Gokey, 2002). Customer loyalty is important as it can have a powerful impact on a firm’s

performance and it is considered to be a source of competitive advantage (Lam, et al., 2004).

There is a strong level of agreement that customer loyalty and satisfaction are linked; however, there

is an absence of consensus as to what constitutes customer satisfaction (Caruana, 2002); in

addition, despite the fact that many loyal customers are satisfied, this does not always translate into

customer loyalty (Kuo & Ye, 1999, Jones & Sasser, 1995) and studies have shown that satisfied

customers may express a desire to switch to a competitor but it may prove to be difficult due to a lack

of suitable alternatives (Pantouvalkis & Lymperopoulos, 2008, citing Mittal & Lassar, 1998). In

contrast however, Reicheld & Sasser, (1990), indicate that high customer satisfaction should provide

increased loyalty, which makes it less likely that a customer will decide to switch to a competitor.

In addition to customer satisfaction, it has been suggested by numerous Researchers that there are

other key antecedents to customer loyalty including perceived value, service quality, corporate

image, reputation, trust and switching costs (Ishaqa, 2012, Lam et al, 2004, Bitner, 1995); however,

although Researchers have posited that there is a connection, it can be argued that the connections

is not fully