Studies have shown a strong positive relationship between customer satisfactions and repurchase intentions (McDougall and Levesque 233-543; Caruana 87-126; Olsen 165-187). However, some researchers have suggested that mere satisfaction is not enough to keep customers loyal in highly competitive markets (Jones and Sasser 180-211). The relationship between customer satisfaction and loyalty may vary according to the degree of competition in the market. Customers who are satisfied with the service will also switch suppliers if they see that there is a better alternative elsewhere.
On the other hand, where there is no other choice, customers will continue purchasing from the same supplier even though they are dissatisfied with the service. Recent research has examined the relationship between customer satisfaction and financial performance. Bernhardt et al. (48-78) revealed that restaurants with increased customer satisfaction mean scores achieved higher percentage increases in average monthly profits than those restaurants with stable or reduced customer satisfaction mean scores.
Anderson, Fornell and Lehmann (306-363) found that, contrary to the general belief, there was a trade off between customer satisfaction and market share. Since their data were cross-sectional, they explained that in the short-run, market share might be gained by seeking customers with preferences falling outside the target market. However, in the long run, they expected customer satisfaction and market share to be positively related. In summary, customer satisfaction is an important determinant of post-purchase behaviour, which in turn is expected to affect the firm’s future profitability.
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From the preceding discussion, it is posited that the more satisfied customers feel with the service they receive, the more likely it is that they will repurchase the service and recommend it to other people. Thus, the eighth hypothesis is: H8: Satisfaction will have a positive effect on post-purchase behaviour Figure 1 shows an integrative model of the relationships to be assessed Towards A Framework for Relationship Value Management We now develop a framework for relationship value management.
This conceptual framework presents a strategic approach to managing an organization in order to maximize value to customers and the organization through the integrated management of relevant stakeholders. We commence with an overview of the framework and outline how this comprises of a central value process (derived from the value literature) and three key stakeholder groups (derived from the six markets model). Next, we explain in more detail how the framework is developed with reference to the nine core streams of value literature.
Finally, we discuss integrative aspects and the interdependencies within the framework. Overview of the framework for relationship value management The framework for relationship value management is shown in Figure 3. The framework has two main elements; the central value process and the surrounding stakeholder interaction processes. At the centre of the model is the value process, which is aimed at determining a total organizational value proposition.
This value process involves four sequential value-based activities: value determination, value creation, value delivery and value assessment. The model also illustrates how the value process has linkages with specific stakeholders. Within the value relationship management framework all the stakeholders in the six markets model potentially have a role to play. All these stakeholders are represented in the three circular stakeholder groupings surrounding the central key value process in Figure 3.
These groupings comprise customers, the employees and external stakeholders — of whom shareholders are especially important in a publicly-owned organization. Each of the six market domains described above is represented within the three groups including: customer markets and referral markets (within the customer group); internal markets and recruitment markets (within the employee group) and influence, including shareholders and supplier and alliance markets (within the external stakeholder group).
Each of the three major stakeholder groups represents opportunities for value creation and delivery. In each of the three stakeholder groups in Figure 3 there are a number of key value activities which have been represented as three circular sub-processes. Within the customer group, these key activities are customer attraction, measuring customer satisfaction and ensuring customer retention. Within the employee group, the key activities are employee recruitment, employee satisfaction and employee retention.
The external stakeholder activities involve stakeholder engagement (engaging the right stakeholders, e. g. investors and suppliers), stakeholder satisfaction and stakeholder retention (retaining them and ensuring that the needs of e. g. shareholders are satisfied). Whilst most organizations will place much of their emphasis on shareholders within this group, it is important that other stakeholders including influence markets, particularly for the not-for-profit sector, and supplier and alliance markets are managed in a way that ensures they are also part of the whole value process.