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Abstract This paper discusses the theoretical foundations for the measurement of a multiphase model of customer loyalty development. A hypothesis is specified and a methodology discussed which highlights the phases in the development of a scale to measure customer loyalty. Based on this a measurement scale has been developed. The scale is described and justified in terms of its validity and reliability. Finally, the stage is set for the planned use of the scale to measure the different phases of customer loyalty.
INTRODUCTION
The development of customer loyalty has become an important focus for marketing strategy in recent years, but the concept of customer loyalty remains relatively unexplored. While a number of studies has distinguished between the attitudinal and behavioural dimensions of loyalty,1 these have not adequately explored the complex interrelationships between the two dimensions, and the dynamic processes by which loyalty is initiated and sustained. This research builds on the work of Oliver2,3 by seeking to develop a scale for measuring customer loyalty. Furthermore, it seeks to use the scale to explore how the structure and strength of loyalty changes through four phases hypothesised by Oliver.4,5
It is important to gain a greater understanding of the dynamic multiphase processes of loyalty development for a number of reasons. In practical terms this knowledge could be used to segment customers according to their phase within the process, an implication being that marketing strategy should be adapted to the relationship-based needs of individual customers. Customers who are at a different phase in their relationship of the process may show differing levels of forbearance in the event of a service failure6,7 or increased competition8 and may call for differentiated strategies.
The paper begins by summarising the main literature relating to customer loyalty and contextually positioning Oliver's model.9,10 From this, a hypothesis is developed that identifiable phases in the development of customer loyalty occur which reconcile the seemingly divergent behavioural and attitudinal dimensions of loyalty. Each phase of the process is then discussed including the characteristics of each phase. The methodology describes the development and validity measures of the scale.
CUSTOMER LOYALTY
The current focus on customer loyalty both academically and practically is fuelled by the debate on frequency programmes or loyalty programmes.11-14 Many frequency programmes offer...