Customer retention

Gustafsson, Johnson and Roos (2005) stress that customer retention have three drivers which are customer satisfaction, calculative commitment and affective commitment. Customer satisfaction comes from product quality and service quality which is supported by price fairness. Calculative commitments come from the lake of choice or the high cost associated the switching products or services. Affective commitment is strengthened by the customer involvement with the company that eventually results in trust and commitment (Gustafsson, Johnson, & Roos, 2005). Chiung-Ju and Wen-Hung (2008) listed different tactics the retailers use to enhance customer loyalty which branch from financial, social and structural bonding activities. Financial bonding includes discounts and interest rate. Social bonding is the relationship created between the two parties during a business interaction and follow up interactions (Chiung-Ju & Wen-Hung, 2008). The final tactic is structural where the organization set up rules, policies and procedures to structure its relationship with the customers.

Chiung-Ju, L., & Wen-Hung, W. (2008). Do loyal and more involved customers reciprocate retailer’s relationship efforts? Journal of Services Research, 8(1), 63-90.

Gustafsson, A., Johnson, M., & Roos, I. (2005). The Effects of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention. Journal of Marketing, 69(4), 210-218.