International Journal of Quality and Service Sciences
Achieving customer loyalty through service excellence in internet industry:
Paramaporn Thaichon Antonio Lobo Ann Mitsis Article information: To cite this document: Paramaporn Thaichon Antonio Lobo Ann Mitsis , (2014),"Achieving customer loyalty through service excellence in internet industry", International J ournal of Quality and Service Sciences, Vol. 6 Iss 4 pp. - Permanent link to this document: http://dx.doi.org/10.1108/IJ QSS-03-2014-0024 Downloaded on: 20 October 2014, At: 00:01 (PT) References: this document contains references to 0 other documents. To copy this document: permissions@emeraldinsight.com The fulltext of this document has been downloaded 14 times since 2014* Users who downloaded this article also downloaded: Paramaporn Thaichon, Antonio Lobo, Ann Mitsis, (2014),"An empirical model of home internet services quality in Thailand", Asia Pacific J ournal of Marketing and Logistics, Vol. 26 Iss 2 pp. 190-210 http://dx.doi.org/10.1108/APJ ML-05-2013-0059 Alison M. Dean, (2002),"Service quality in call centres: implications for customer loyalty", Managing Service Quality: An International J ournal, Vol. 12 Iss 6 pp. 414-423 Paul Morris, (1991),"Making Customer Satisfaction Your Biggest Profit Centre", Logistics Information Management, Vol. 4 Iss 1 pp. 32-35 Access to this document was granted through an Emerald subscription provided by 394654 [] For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
1 Achieving customer loyalty through service excellence in internet industry
1. Introduction Customer loyalty increasingly becomes very important and appears to be the main concern of many businesses, especially when many companies are facing costly challenges in customer acquisition (Abdolvand, Charkari, & Mohammadi, 2006) and high customer turnover (Spiller, Vlasic, & Yetton, 2007). This research aims to investigate the antecedents to customer loyalty of Internet Service Providers (ISPs), especially when customer turnover has become a hot issue in ISP industry in many countries. For example, Australian ISP market witnessed that up to 35% of their customers discontinued in 2007 (Spiller et al., 2007). Similarly, an average of 10% of home internet customers in Thailand switched service providers each year over the period from 2003 to 2009 (Thaichon & Quach, 2013). For that reason, the telecommunications industry is under pressure to keep, maintain and increase their existing customer base. This scenario provides an opportunity for internet service providers to evaluate determinants that influence customer loyalty, which in turn, can be employed to nurture long term customer retention in the competitive home ISP market.
Previous research shows that business performance improves as the number of loyal consumers increases (Jahanzeb, Fatima, & Khan, 2011). Recruiting new customers also cannot guarantee long-term success for a company especially when that company cannot retain its customers (C. Wang & Wu, 2012). In fact, a 2% increase in the customer retention rate is equal to a 10% decrease in the cost of customer acquisition in the mobile phone service industry in China (Han, Lu, & Leung, 2012). Hence, keeping a loyal customer is more profitable in the long run in comparison to acquiring new customers (C. Wang & Wu, 2012). D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
2 In addition, a loyal customer is willing to endorse the brand among their peers, and ignore the negative message promoted by the others (Tam, 2012). Yet, there is limited research about customer retention and brand loyalty in the ISP context. Additionally, there is limited research about service quality and its measurements in the ISP context. The two widely used scales for evaluating service quality are SERVQUAL for generic services and E-S-QUAL for services associated with information technology (He & Li, 2010; Rafiq, Lu, & Fulford, 2012). Nonetheless, both of these scales do not take into account the specific issues relevant to customers of high-tech ISPs. SERVQUAL and E-S- QUAL focus on service providers who operate via the internet platform (Vlachos & Vrechopoulos, 2008) and not those who actually provide the internet connection and platform for online business-to-business and business-to-customer activities. Recent researchers have attempted to develop service quality measurement scales in different high-tech contexts, for example Shamdasani, Mukherjee, and Malhotra (2008) in the self-service internet technologies and Vlachos and Vrechopoulos (2008) with mobile telephony. However, none of them have effectively analysed the ISPs service quality dimensions. This area therefore deserves further investigation. Hence, this study aims to investigate the specific service quality dimensions and attributes, and their differing influence on the overall service quality of ISPs.
For these reasons, this paper aims to investigate the antecedents to brand loyalty in the internet consumption market with a view to developing an in-depth understanding about consumer behaviour, and creating an ideal model for ISP service quality. As the result of that, ISPs will be able to increase customers satisfaction, trust, commitment, and value, as well as reduce the current issues relating to customer switching in the home ISP market. The literature review and formulation of hypotheses related to each construct are then discussed in D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
3 the next section. This paper concludes with a discussion of the implications of the research, limitations and future research direction.
2. Literature Review 2.1 Service quality dimensions
The earliest service quality model was introduced by Parasuraman, Zeithaml, and Berry (1985), and called SERVQUAL, including tangibles, reliability, responsiveness, assurance and empathy. SERVQUAL was initiated based on Parasuramans et al. (1985) gap model between performance and expectations: as performance exceeds expectations, quality increases and vice versa. In other words, the central idea in this model viewed service quality as a function of the different scores or gaps between expectations and perceptions (V. A. Zeithaml, Berry, & Parasuraman, 1996). However, as stated earlier, SERVQUAL and E-S- QUAL focus on service providers who operate via the internet platform (Vlachos & Vrechopoulos, 2008) and not those who actually provide the internet connection and platform for online business-to-business and business-to-customer activities. In order to deal with this matter, this study aims to investigate the specific service quality dimensions and attributes and their differing influence on the overall service quality of ISPs
Previous research has endeavoured to explore the dimensions of service quality in telecommunications industry. Lai, Griffin, and Babin (2009) confirms that network quality is an important drivers of overall service quality in the Chinese telecommunications market. Nonetheless, Abdolvand et al. (2006) suggest that businesses should not only focus on network quality, but also pay attention to customer support in order to enhance overall service quality perception. Moreover, it is argued that company websites provide an effective communication and information channel between companies and their customers D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
4 (Grigoroudis, Litos, Moustakis, Politis, & Tsironis, 2008). On the other hand, service providers possess good reputation with regards to their security practice, consumers tend to believe that purchasing with them is safe (Roca, Garca, & Vega, 2009). Therefore, this study proposed the dimensions of overall service quality in ISP industry as network quality, customer service and technical support, information quality and website information support, and security and privacy.
2.1.1 Network quality Service providers have to deliver a high level of service quality standard especially in core service driver, in order to maintain a competitive advantage and improve the degree of service quality perception and customer satisfaction (Parasuraman et al., 1985). Network quality includes the number of errors, downloading and uploading speed and system response time (Vlachos & Vrechopoulos, 2008). In the ISP context, network quality refers to the quality of the network or the quality and strength of the network signal of the network (Y. Wang, Lo, & Yang, 2004). In mobile phone networking service, the network quality can be discussed on call quality, coverage, and network, such as dropped calls, static and broken conversation during cellular phone calls (Asaari & Karia, 2003). Hence, for the Internet service provider, any dropped connection of the internet can lead to low network quality in customers perspective.
A company that can deliver high quality service has a better chance of recruiting customers who are willing to return and pass the firm performances praises to others (Ojo, 2010). It is necessary for ISPs to equally focus on both technical quality (i.e. internet connection speed, download speed, connection reliability) and functional quality (i.e. the effective and rapid solution of technical problems, and employee behaviour) in order to D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
5 improve service quality (Deng, Lu, Wei, & Zhang, 2010; Kyriazopoulos, Grigoroudis, Siskos, Spyridakos, & Yannacopoulos, 2007; Woo & Fock, 1999). Previous research confirms that network quality is one of the most important drivers of overall service quality in Chinese (Lai et al., 2009), Hong Kong (Cheng, Lai, & Yeung, 2008), and Korean mobile service provider markets (H. Kim & Yoon, 2004), as well as in Greece internet service provider industry (Kyriazopoulos et al., 2007). We, therefore, propose the following: Proposition 1: Network quality is positively associated with ISPs overall service quality
2.1.2 Customer service and technical support Customer service is an important part of everyday encounters. Responsiveness of technical and customer service staff is another key determinant factor in choosing an ISP (Santouridis & Trivellas, 2010). Shops and call centers are the two major points of interactions between the ISPs personnel and customers (Leelakulthanit & Hongcharu, 2011). Leelakulthanit and Hongcharu (2011) claim that these two contact points reflect the quality of corporate management practices. Besides, ISPs personnel and the service environment can provide cues to customers regarding the nature of the service itself, for example employee dress, personal appearance, attitudes, and behaviors (V. Zeithaml, Bitner, & Gremler, 2010). Therefore, the personnel are expected to have pleasant voices, polite manners, and dedicate attention to customers needs and concerns (Carraher, Welsh, & Cash, 2010).
Service providers need to proactively invest in improving the quality of customer service, in order to gain an advantage over their competitors (Asaari & Karia, 2003). For example, service providers should detail employee guidelines, which provide disciplinary steps taken when customers approach or when undesirable behaviors or actions occur D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
6 (Carraher et al., 2010). Leelakulthanit and Hongcharu (2011) report that an ISP that differentiates itself by offering reliable customer support will gain an advantage over their competitors. In addition, by equipping employees with innovative technology and right tools, the company grants them the ability to take ownership of their jobs, and as a result, this will improve the overall quality of the service provided (Asaari & Karia, 2003).
Previous research in Turkish telecommunication industry confirm this view by proving that customer complaints handling is an important factors in determining service quality (Aydin & zer, 2005). Abdolvand et al. (2006) also suggest that businesses should pay attention to customer support in order to enhance overall service quality perception and customer satisfaction. In other words, an ISP with an outstanding customer service and technical support is more likely to have higher perceived overall service quality. Based on the above discussion, we propose the following: Proposition 2: Customer service and technical support is positively associated with ISPs overall service quality
2.1.3 Information quality and website information support Businesses need to provide information that helps customers to understand the products offerings and supports customer decision making (Hasley & Gregg, 2010), such as detailed product description, transparent price information, company information, professional advice, research reports, contact information, and hyperlinks to relevant websites (Yang, Bi, & Zhou, 2005). Yang et al. (2005) also stated that lacks of information completeness makes it harder for customers to get the right message and picture of the statement. On the other hand, too much information might make it more difficult for customers in finding the right information. Therefore, companies need to know what kind of information should be included on their D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
7 websites and what kind of information distracts customers from their decision making (Hasley & Gregg, 2010).
Apart from information quality, businesses have to provide well-designed websites in order to be successful. In terms of online retailing context, website design refers to the extent which customers perceives shopping experience with an online retailer as user friendly (H. F. Lin, 2007). As ISPs operate in both online and offline environment, apart from face to face customer support, websites are a very important channel of communications between ISPs and customers. In general, websites should deliver a wide variety of information in a format that is easy to understand and follow (H. Kim & Niehm, 2009). Positive website environments are also significant, as positive website environments permit customers to manage more information and forecast more positive outcomes (H. Kim & Niehm, 2009). A company that can deliver high level of information quality and website information support will be more likely to have higher overall service quality. Therefore, Yang et al. (2005) recommend that administrators of a websites should pay more attention to user-friendly design, visually attractive webpage appearance, intuitive layout and categorisation, high readability, easy-to-use search and simple navigations. The following proposition has been formulated: Proposition 3: Information and website support is positively associated with ISPs overall service quality
2.1.4 Security and privacy Customer information can offer a competitive advantage to all businesses and play a critical role in supporting all activities in a business (Lauer & Deng, 2007). Through customer information businesses can study their customers unique preferences and D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
8 behaviors, which later can specifically be used for target advertising and promotions (Resnick & Montania, 2003). However, privacy often appears in the marketing literature as customers concern on acquiring personal data and using its generated information, especially in this information age (Castaeda & Montoro, 2007; Chang & Chen, 2009). In other words, privacy concern refers to the likeliness that businesses obtain data about individuals and make inappropriate use of it (Roca et al., 2009).
On the other hand, security is defined as an extent to which a customer perceive a whole transaction, including payment methods, and instruments for storing and transmitting all confidential information, as safe (Chang & Chen, 2009). Apart from that, perceived security refers to a threat that forms a case, condition, or incident with potential to cause economic privation to data or network resources under destruction, exposure, alteration of data, rejection of service, and/or fraud, misuse and mistreatment (Roca et al., 2009). Lack of perceived security and high risks in transmitting sensitive information, such as credit card numbers are major reasons why many potential consumers do not shop online (Chang & Chen, 2009).
In term of theirs relationship with service quality, privacy and security (security of payments and privacy of given information) are positively related to service quality especially in e-commerce (Ha & Stoel, 2012), and in online retailing contexts (Wolfinbarge & Gilly, 2003). Yang, Jun, and Peterson (2004) also report that security is one of important dimensions of online service quality. Besides, Yoo and Donthu (2001) developed a measurement instrument for an Internet shopping site called SITEQUAL, which includes four dimensions (1) ease of use; (2) aesthetic design; (3) processing speed; and (4) security. In addition, Roca et al. (2009) report that when service providers have good reputation on their D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
9 security practice, consumers tend to believe that purchasing with them is safe. In other words, an ISP with an outstanding security and privacy policy is more likely to have higher perceived overall service quality. Hence the following has been proposed: Proposition 4: Security and privacy is positively associated with ISPs overall service quality
In short, overall service quality is proposed as a four-factor second order construct which emanates from network quality, customer service and technical support, information and website support and security and privacy.
2.2 Customer cognitive and affective evaluations The second set of constructs in Figure 1 explores the underlying relationships between ISPs overall service quality and customers evaluations including their trust, overall satisfaction, commitment and perceived value.
2.2.1 Customer trust Trust is known as a foundation of a long-term relationship, as a possible advanced exchange relationship between buyers and sellers (Hong & Cho, 2011). Customer trust refers to the customers perceptions of attributes of service providers, including the ability, integrity, and benevolence of the providers (Deng et al., 2010). Additionally, customer trust relates to the perception of customers on the ability of a brand to fulfill its promise while expertise refers to a brand capability of realising its promises (Ou, Shih, Chen, & Wang, 2011).
D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
10 In an ISP industry, customer trust can be evaluated by exploring how customers feel about their service provider in terms of the companys honesty, responsibility and professional manners, and if the customers think that the ISP understands and cares about them (S. Chiou, 2004). The quality of the service offered by the service provider impacts the level of trust that the customer places in the service provider and the service (Gounaris & Venetis, 2002). In addition, a high level of service quality has a positive influence to customer word-of-mouth, which in return has a positive impact on customer trust (Sabiote & Roman, 2009). We, therefore, propose the following: Proposition 5: ISPs overall service quality leads to customer trust
2.2.2 Customer overall satisfaction Customer satisfaction is reported to be a key success factor and long-term competitive advantage for businesses in all industries (Ojo, 2010). This happens because consumers tend to change their service provider if they are not happy with current products or services (Bayraktar, Tatoglu, Turkyilmaz, Delen, & Zaim, 2011). Consumer satisfaction is the happiness, fulfilment and pleasure that a consumer has towards a brand and its products or services through their expectations and overall experience with the brand (Parasuraman et al., 1985). In fact, satisfaction does not come from the product or the service itself but from the consumers perception and expectations of the attributes and quality of the service as they relate to that individual (Cameran, Moizer, & Pettinicchio, 2010).
Therefore, different consumers tend to judge the same service experience differently depending on their own beliefs and expectations. The level of a customers satisfaction is dependent on the ability of the supplier to meet the customers norms and expectations (V. A. Zeithaml et al., 1996). In other words, once consumers try the service and, if the initial D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
11 expectations of the overall service quality are exceeded, they would be satisfied. Furthermore, during the consumption process, consumers tend to use their expectations as a foundation to evaluate their satisfaction with the service, and in return, their satisfaction influences their post-purchase behaviour, especially in repurchase decision (Tam, 2012).
Previous research by Bayraktar et al. (2011) state that in the Turkish mobile service market, customer satisfaction is influenced by customer expectations and perceived quality. Additionally, in telecommunication industry, service quality is found to have a strong relationship with customer satisfaction in the mainland China (Deng et al., 2010; Lai et al., 2009), and Hong Kong (Woo & Fock, 1999). Hence, an ISP which has a higher level of good overall service quality will tend to have a higher level of overall satisfaction among the consumers. As a result, the following has been proposed: Proposition 6: ISPs overall service quality leads to overall customer satisfaction
2.3. Customer commitment Customer commitment has been defined as a consumers conviction to maintain a relationship that might produce functional and emotional benefits (Hur, Park, & Kim, 2010). J. Lin and Wu (2011) consider customer commitment as a consumers persistent wish and attempt to retain a relationship with a service provider. In term of theirs relationship with service quality, positive overall service quality impacts on commitment that customers have toward a particular brand and the associated service provider (Jahanzeb et al., 2011). The overall service quality including reliability and responsiveness can be considered as cognitive evaluations of performance over time which can be anticipated to build affective attachment (Fullerton, 2005).
D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
12 A research by Morgan and Hunt (1994) also report that overall service quality is a direct antecedent of commitment in a retail services context. Besides, overall service quality represents potential relationship benefits that will be lost if a customer switches to other service provider (Morgan & Hunt, 1994). In other words, when customers are satisfied with a service provider, they tend to think that they should stay with their service provider because of what the company has done for them (Cater & Zabkar, 2009). Therefore, a company that can deliver high level of overall service quality will be more likely to have higher customer commitment. Based on the above discussion, we propose the following: Proposition 7: ISPs overall service quality leads to customer commitment
2.2.4 Customer value Creating and delivering greater value is known as a primary source of competitive advantage (Tam, 2012). Customer value has often been described as an exchange between what customers receive and what customers have to give to purchase a service (Lai et al., 2009; Shirin & Puth, 2011; Tam, 2012). Values can be in forms of quality, quantity, time spending, price, brand name, design, social approval, excitement, experience, knowledge, self-respect, credibility, and security that consumers may receive from using a product or service (Bell, 2009). In order to increase customer value, companies can either add more benefits to their service or reduce the costs associated with the service itself as well as the use of the service (Tam, 2012; C. Wang & Wu, 2012). For instance, benefits may include extra product or service attributes, good customer service, after-sales support (Shirin & Puth, 2011), and enhanced quality of the service (Tam, 2012).
In e-commerce settings, researchers (Chen & Dubinsky, 2003) state that perceived service quality is positively related to perceived value. Likewise, in terms of Internet D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
13 retailing, perception of service quality can positively influence perceived value of shopping at an Internet retailer (J. Kim & Damhorst, 2010). In hospitality industry, Hu, Kandampully, and Juwaheer (2009) verify that service quality exerts a positive impact on perceived value by collecting data of customers from hotels in Mauritius. Supporting this view, Cronin, Brady, and Hult (2000) confirm that service quality affect perceived value. In telecommunications market, apart from monetary costs, overall service value is also determined by service quality (Lai et al., 2009). Hence the following has been proposed: Proposition 8: ISPs overall service quality leads to customer value
3. Attitudinal and Behaviral Loyalty This study adopts the composite loyalty approach which suggests a simultaneous assessment of attitudinal and behavioural loyalty (Dick & Basu, 1994). Attitudinal loyalty is evaluated by customers inner thoughts of attachment, positive word-of-mouth and recommendations (V. A. Zeithaml et al., 1996). Attitudinal loyalty can be determined by exploring if customers consider themselves to be loyal patrons of this ISP, as well as if they think this ISP is the best choice for them (H. Kim & Niehm, 2009). In addition to attitudinal loyalty, behavioural loyalty is measured by the number of customers which remain with their service provider (V. A. Zeithaml et al., 1996). The two final endogenous constructs of attitudinal and behavioural loyalty is investigated in light of customer evaluations, namely trust, satisfaction, commitment and value as discussed in the following sections.
Trust plays an important role in determining customer loyalty. When customers trust the service provider, they will continually use the service and even recommend the service to potential customers (Deng et al., 2010). In telecommunications market, (J. S. Chiou & Droge, 2006) point out that customer trust has been shown to be important and is related to the D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
14 emotional nature of consumer loyalty long-term orientation in the relationship. For instance, researchers found that trust positively influences customer attitude and behavior intention in mobile commerce context (Deng et al., 2010). Pirc (2006) also claim that customer trust in the mobile service provider have positive and direct effect on loyalty in Slovenia mobile phone industry. Similar results also reported in Taiwan ISP research by S. Chiou (2004), and in the United Kingdom mobile phone research by Ranaweera and Prabhu (2013). Therefore, an ISP which has a higher level of brand trust will tend to have a higher level of attitudinal and behavioural loyalty among the consumers.
In addition to trust, customer overall satisfaction also has a strong impact on customer loyalty, especially in the Hong Kong Internet service market (Cheng et al., 2008). Cheng et al. (2008) confirm that, customers who experience a high level of satisfaction are most likely to stay with their existing service providers and maintain their service subscriptions. Hence, businesses must increase the level of customer satisfaction by upgrading service quality, which in turn influences purchase and repurchase intentions in ISP markets (Seth, Momaya, & Gupta, 2008). Research in Tehran also reports that satisfaction of university students has a direct and positive effect on their loyalty (Kheiry, Rad, & Asgari, 2012). Previous study in in Malaysian mobile services context found that when customers feel more satisfied, they tend to become more loyal, and there are higher chances that they want to continue with their service provider (Mokhtar, Maiyaki, & Mohd Noor, 2011). Another research in Pakistan telecommunications states that there is a positive relationship between customer satisfaction and customer loyalty (Khokhar et al., 2011). Hence, an ISP which has a higher level of overall customer satisfaction will tend to have a higher level of attitudinal and behavioural loyalty among the consumers.
D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
15 Moreover, numerous studies have recently demonstrated that there is a positive correlation between customer commitment and customer repurchase. For example, Cater and Zabkar (2009) report that affective and calculative commitment positively affects the customers intention to continue a relationship with their service provider in a Central and Eastern European in the service sector. Verhoef (2003) found a positive connection between affective commitment and customer loyalty in financial services industry. Fullerton (2005) states that calculative commitment and affective commitment are positively influence behavioral intentions (Cater & Zabkar, 2009; Fullerton, 2005).
Additionally, the more time and effort customers have invested in the relationship with their service provider, the less inclined the customers are to break up that relationship (Bgel, Buunk, & Verhoef, 2010). Therefore, customers with high levels of calculative commitment will be unwilling to switch to another service provider because of the great switching costs (Bgel et al., 2010; Cater & Zabkar, 2009). Hence, an ISP which has a higher level of perceived switching is likely to have a higher level of continuance commitment, which leads to a greater level of attitudinal and behavioural loyalty.
Customer value can be considered as an evaluation of weighted "get" elements in comparison to "give" elements (Heskett, Thomas , Loveman, Sasser, & Schlesinger, 1994). Value plays a significant role in many businesses. A research conducted in the Australian mobile service context report that value is related significantly and positively to mobile loyalty more than service quality and switching costs do (Lee & Murphy, 2008). In the Thai mobile service context, value has a positive influence to customer retention (Leelakulthanit & Hongcharu, 2011). In the Chinese mobile data services, customer value also has direct effects on repurchase intention (Qian, Peiji, & Quanfu, 2011; Y. Wang et al., 2004) and attitudinal D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
16 loyalty (Qian et al., 2011). Likewise, Lien, Wen, and Wu (2011) found a significant link between perceived value and behavioral intentions in Taiwanese online shopping context. Similar findings also reported in the Taiwanese mobile commerce context (S. Chiou, 2004). As a result, it can be concluded that an ISP with greater value will have a higher level of attitudinal and behavioural loyalty among its customers. Based on extant literature the following relationships were proposed: A summary related to the conceptual model is presented in Table 1. Proposition 9a : Customer trust leads to attitudinal loyalty Proposition 9b : Customer trust leads to behavioural loyalty
Proposition 10a : Customer overall satisfaction leads to attitudinal loyalty Proposition 10b : Customer overall satisfaction leads to behavioural loyalty Proposition 11a : Customer commitment leads to attitudinal loyalty
Proposition 11b : Customer commitment leads to behavioural loyalty
Proposition 12a : Customer value leads to attitudinal loyalty Proposition 12b : Customer value leads to behavioural loyalty
Drawn upon the previous discussion, a conceptual model is depicted in Figure 1.
Figure 1: Proposed conceptual model. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
17
Table 1: Summary of the literature review A summary of literature related to the proposed Literature P1: Network quality ISPs overall service quality Cheng, Lai and Yeung (2008); Lai et al., (2009); Kim and Yoon (2004); Kyriazopoulos et al., (2007); Thaichon, Lobo, and Mitsis (2014) P2: Customer service and technical ISPs overall service quality Abdolvand et al. (2006); Asaari and Karia, (2003); Aydin and zer (2005); Thaichon et al. (2014) P3: Information and website support ISPs overall service quality Thaichon, Lobo, and Mitsis (2012); Thaichon et al. (2014) P4: Security and privacy ISPs overall service quality Ha and Stoel (2012); Thaichon et al. (2014); Wolfinbarge and Gilly (2003); Yoo and Donthu (2001) P5: ISPs overall service quality customer trust Chiou (2004); Gounaris and Venetis (2002); Sabiote and Roman (2009) P6: ISPs overall service quality customer satisfaction Bayraktar et al. (2011); Deng et al. (2010); Lai et al. (2009); Woo and Fock (1999) P7: ISPs overall service quality customer commitment Cater and Zabkar (2009); Jahanzeb et al. (2011); Morgan and Hunt (1994); Thaichon et al. (2014) P8: ISPs overall service quality customer value Chen and Dubinsky (2003); Hu, Kandampully and Juwaheer (2009); Lai et al. (2009); Kim and Damhorst (2010) P9a: Customer trust attitudinal loyalty DeWitt, Nguyen and Marshall (2008); and Matzler, Bidmon and Grabner-Kruter (2006) P9b: Customer trust behavioural loyalty Amin, Ahmad and Hui (2012); Castaeda and Montoro (2007); Deng et al. (2010); and Morgan and Hunt (1994) P10a: Customer satisfaction attitudinal loyalty Kheiry, Rad and Asgari (2012); Khokhar et al. (2011); Mokhtar, Maiyaki and Mohd Noor (2011) P10b: Customer satisfaction behavioural loyalty Cheng et al. (2008); Mokhtar, Maiyaki and Mohd Noor (2011); Seth, Momaya and Gupta (2008) P11a: Customer commitment attitudinal loyalty Bgel et al. (2010); Cater and Zabkar (2009); Verhoef (2003) P11b: Customer commitment behavioural loyalty Bgel et al. (2010); Cater and Zabkar, (2009); Fullerton (2005) D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
18 P12a: Customer value attitudinal loyalty Qian, Peiji and Quanfu (2011) P12b: Customer value behavioural loyalty Leelakulthanit and Hongcharu (2011); Lien, Wen and Wu (2011); Qian, Peiji and Quanfu (2011); Wallace, Giese and Johnson (2004); Wang, Lo and Yang (2004); and Wang and Wu (2012)
3. Implications This study contributes both theoretical and practical implications. ISPs overall service quality is widely considered as one of key factors determining customer attitudinal loyalty, repurchase intention and unfavourable behavioural intentions. This study is original in that it is the first of its kind which attempts to investigate the dimensions of an ISPs service quality, and the effects of ISPs overall service quality on attitudinal and behavioural loyalty in high- tech services. The ISPs overall service quality dimensions are identified as (1) network quality, (2) customer service and technical support, (3) information quality and website information support, and (4) security and privacy. It has revealed the differences in service quality dimensions in an ISP context, which results in a better understanding of ISPs service quality.
It is vital for Internet Service Providers (ISPs) to obtain accurate information regarding their service quality as perceived by their customers. This information would certainly enable them to formulate appropriate marketing strategies which would work in their favour towards achieving competitive advantage and long term sustainability. By enhancing service quality, firms can influence loyalty and encourage customers repurchase intention. This knowledge enables service providers to formulate appropriate marketing strategies by focusing on the key dimensions of the service quality, which would work in their favour in achieving competitive advantage and long term sustainability. In general this study contributes towards a new body of knowledge with regards to the future potential of ISPs globally. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
19
4. Conclusion and Limitations This study provides valuable insights into customer loyalty in the home internet services. The proposed research will develop an understanding about consumer buyer behaviour of services, and will create an ideal model for retention. Beneficiaries of this study include various stakeholders, including consumers of ISPs, ISPs themselves, the government, and other commercial interests. Practical implications that can be produced from this research will form a foundation for the service providers in the home ISP to develop new retention strategies. By making customers more central in company operations, these strategies can potentially reduce the expenses associated with acquiring new customers. As the result of that, ISPs will be able to reduce the current issues relating to customer switching in the home ISP market, as well as in other countries that have similar demographic profiles.
In term of limitations, the model in this study is conceptual and has not been tested by exploratory research. A quantitative research is recommended in order to evaluate the model and to examine whether theoretical relationship between items and their hypothesised factors are supported by the data, as well as to provide more insights for the ISP market. Moreover, the paper did not examine the interrelationships between the affective evaluation constructs, i.e. customers trust, satisfaction, commitment, and value. Future research should investigate these relationships in order to understand more about the effects of service quality on those constructs. Replications of this research in other contexts such as other countries (e.g. Thailand, Cambodia and Burma) and other services settings (e.g. banking) are also recommended to examine the generalisability of the findings and verify the model.
D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
20 5. References Abdolvand, N., Charkari, M., & Mohammadi, R. (2006). Technical model for improving customer loyalty with m-commerce: mobile service providers. International Journal on Computer Science and Information Systems, 1(2), 50-62. Asaari, M., & Karia, N. (2003). Business Strategy: Customer Satisfaction Among Cellular Providers in Malaysia. Paper presented at the The European Applied Business Research Conference, Venice, Italy. Aydin, S., & zer, G. (2005). The analysis of antecedents of customer loyalty in the Turkish mobile telecommunication market. European Journal of Marketing, 39(7/8), 910-925. Bayraktar, E., Tatoglu, E., Turkyilmaz, A., Delen, D., & Zaim, S. (2011). Measuring the efficiency of customer satisfaction and loyalty for mobile phone brands with DEA. Expert Systems with Applications, 39, 99-106. Bell, R. (2009). An Exploratory Research on Perceived Value in Professional Business Services. Australia: Australian Catholic University. Bgel, M., Buunk, A., & Verhoef, P. (2010). A comparison of customer commitment in five sectors using the psychological investment model. Journal of Relationship Marketing, 9, 2-29. Cameran, M., Moizer, P., & Pettinicchio, A. (2010). Customer Satisfaction, Corporate Image, and Service Quality in Professional Services. The Service Industries Journal, 30(3), 421-435. Carraher, S., Welsh, D., & Cash, R. (2010). An examination of Chinese entrepreneurs and intrapreneurs: High tech or high touch customer service? . Paper presented at the The 2010 Small Business Institute (SBI) Conference, Albuquerque, NM. Castaeda, J., & Montoro, F. (2007). The effect of Internet general privacy concern on customer behaviour. Electronic Commerce Research, 7, 117-141. Cater, B., & Zabkar, V. (2009). Antecedents and consequences of commitment in marketing research services: the clients perspective. Industrial Marketing Management, 38(7), 785-797. Chang, H., & Chen, S. (2009). Consumer perception of interface quality, security, and loyalty in electronic commerce. Information & Management, 46(7), 411-417. Chen, Z., & Dubinsky, A. (2003). A conceptual model of perceived customer value in e- commerce: A preliminary investigation. Psychology & Marketing, 20(1), 323-347. Cheng, T., Lai, L., & Yeung, A. (2008). The Driving Forces of Customer Loyalty: A Study of Internet Service Providers in Hong Kong. International Journal of E-Business Research, 4(4), 26-42. Chiou, J. S., & Droge, C. (2006). Service quality, trust, specific asset investment, and expertise: direct and indirect effects in a satisfaction-loyalty framework. Journal of the Academy of Marketing Science, 34(4), 613-627. Chiou, S. (2004). The antecedents of consumers loyalty toward Internet Service Providers. Information & Management, 41, 685-695. Cronin, J., Brady, K., & Hult, M. (2000). Assessing the effects of quality, value, and customer satisfaction on consumer behavioural intentions in service environments. Journal of Retailing, 76(2), 193-218. Deng, Z., Lu, Y., Wei, K., & Zhang, J. (2010). Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China. International Journal of Information Management, 30, 289-300. Dick, S., & Basu, K. (1994). Customer loyalty: Toward an integrated conceptual framework. Journal of the Academy of Marketing Science, 22(2), 99-113. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
21 Fullerton, G. (2005). How commitment both enables and undermines marketing relationships. European Journal of Marketing, 39(11), 1372-1388. Gounaris, S., & Venetis, K. (2002). Trust in industrial service relationships: behavioral consequences, antecedents and the moderating effect of the duration of the relationship. Journal of Services Marketing, 16(7), 636-655. Grigoroudis, E., Litos, C., Moustakis, V., Politis, Y., & Tsironis, L. (2008). The assessment of user-perceived web quality: application of a satisfaction benchmarking approach. European Journal of Operational Research, 187(3), 1346-1357. Ha, S., & Stoel, L. (2012). Online apparel retailing: roles of e-shopping quality and experiential e-shopping motives. Journal of Service Management, 23(2), 197-215. Han, S., Lu, S., & Leung, S. (2012). Segmentation of telecom customers based on customer lifetime value by decision tree model. Expert Systems with Applications, 39, 3964 - 3973. Hasley, J., & Gregg, D. (2010). An Exploratory Study of Website Information Content. Journal of Theoretical and Applied Electronic Commerce Research, 5(3), 27-38. He, H., & Li, Y. (2010). Key service drivers for high-tech service brand equity: The mediating role of overall service quality and perceived value. Journal of Marketing Management, 27(1/2), 77-99. Heskett, L., Thomas , J., Loveman, G., Sasser, E., & Schlesinger, L. (1994). PuttingtheService-ProfitChain to Work. Harvard Business Review, 72(2), 164-174. Hong, P., & Cho, H. (2011). The impact of consumer trust on attitudinal loyalty and purchase intentions in B2C e-marketplaces: Intermediary trust vs. seller trust. International Journal of Information Management, 31(5), 469-479. Hu, H., Kandampully, J., & Juwaheer, T. (2009). Relationships and Impacts of Service Quality, Perceived Value, Customer Satisfaction and Image: An empirical study. Service Industries Journal, 29(2), 111-125. Hur, W., Park, J., & Kim, M. (2010). The role of commitment on the customer benefits- loyalty relationship in mobile service industry. Service Industries Journal, 30(14), 2293-2309. Jahanzeb, S., Fatima, T., & Khan, M. (2011). An empirical analysis of customer loyalty in Pakistan's telecommunication industry. Journal of Database Marketing & Customer Strategy Management, 18(1), 5-15. Kheiry, B., Rad, B., & Asgari, O. (2012). University intellectual image impact on satisfaction and loyalty of students (Tehran selected universities). African Journal of Business Management, 6(37), 10205-10211. Khokhar, S., Hussain, F., Qureshi, T., Anjum, I., Samran, A., & Arshad, R. (2011). Only customer satisfaction and customer loyalty is not enough: A study of Pakistans telecom sector. African Journal of Business Management, 5(24), 10176-10181. Kim, H., & Niehm, S. (2009). The Impact of Website Quality on Information Quality, Value, and Loyalty Intentions in Apparel Retailing. Journal of Interactive Marketing, 23(3), 221-233. Kim, H., & Yoon, C. (2004). Determinants of subscriber churn and customer loyalty in the Korean mobile telephony market. Telecommunications Policy, 28(9), 751-765. Kim, J., & Damhorst, M. (2010). Effects of Level of Internet Retailers Service Quality on Perceived Apparel Quality, Perceived Service Quality, Perceived Value, Satisfaction, and Behavioral Intentions Toward an Internet Retailer. Clothing and Textiles Research Journal, 28, 156-173. Kyriazopoulos, P., Grigoroudis, E., Siskos, Y., Spyridakos, A., & Yannacopoulos, D. (2007). Tracking changes of e-customer preferences using multicriteria analysis. Managing Service Quality, 17(5), 538-562. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
22 Lai, F., Griffin, M., & Babin, B. (2009). How quality, value, image, and satisfaction create loyalty at a Chinese telecom. Journal of Business Research, 62, 980-986. Lauer, T., & Deng, X. (2007). Building online trust through privacy practices. International Journal of Information Security, 6, 323-331. Lee, R., & Murphy, J. (2008). The Moderating Influence of Enjoyment on Customer Loyalty. Australasian Marketing Journal, 16(2), 11-21. Leelakulthanit, O., & Hongcharu, B. (2011). Factors that Impact Customer Satisfaction: Evidence from the Thailand Mobile Cellular Network Industry. International Journal of Management and Marketing Research, 4(2), 67-76. Lien, C., Wen, M., & Wu, C. (2011). Investigating the Relationships among E-Service Quality, Perceived Value, Satisfaction, and Behavioral Intentions in Taiwanese Online Shopping. Asia Pacific Management Review, 16(3), 211-223. Lin, H. F. (2007). The impact of website quality dimensions on customer satisfaction in the B2C e-commerce context. Total Quality Management and Business Excellence, 18(4), 363-378. Lin, J., & Wu, C. (2011). The role of expected future use in relationship-based service retention. Managing Service Quality, 21(5), 535-551. Mokhtar, S., Maiyaki, A., & Mohd Noor, N. (2011). The Relationship Between Service Quality and Satisfaction on Customer Loyalty in Malaysian Mobile Communication Industry. School of Doctoral Studies (European Union) Journal, 32-38. Morgan, M., & Hunt, D. (1994). The Commitment-Trust Theory of Relationship Marketing. Journal of Marketing, 58(3), 20-38. Ojo, O. (2010). The Relationship between Service Quality and Customer Satisfaction in the Telecommunication Industry: Evidence from Nigeria. . Broad Research in Accounting, Negotiation, and Distribution, 1(1), 88-100. Ou, W., Shih, C., Chen, C., & Wang, K. (2011). Relationships among customer loyalty programs, service quality, relationship quality and loyalty: An empirical study. Chinese Management Studies, 5(2), 194-206. Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A Conceptual Model of Service Quality and Its Implications for Future Research? Journal of Marketing Management, 49(1), 41-50. Pirc, M. (2006). Mobile Service and Phone as Consumption System - the Impact on Customer Switching. Proceedings of Helsinki Mobility Roundtable. Sprouts: Working Papers on Information Systems, 6(33). Qian, S., Peiji, S., & Quanfu, Y. (2011). An Integrated Analysis Framework for Customer Value, Customer Satisfactory, Switching barriers, Repurchase Intention and Attitudinal Loyalty: Evidences from China Mobile Data Services. Management Science and Engineering, 5(3), 135-142. Rafiq, M., Lu, X., & Fulford, H. (2012). Measuring Internet retail service quality using E-S- QUAL. Journal of Marketing Management, 28(9/10), 1159-1173. Ranaweera, C., & Prabhu, J. (2013). The influence of satisfaction, trust and switching barriers on customer retention in a continuous purchasing setting. International Journal of Service Industry Management, 14(1), 374-395. Resnick, M., & Montania, R. (2003). Perceptions of customer service, information privacy, and product quality from semiotic design features in an online web store. International journal of human-computer interaction, 16(2), 211-234. Roca, J., Garca, J., & Vega, J. (2009). The importance of perceived trust, security and privacy in online trading systems. Information Management & Computer Security, 17(2), 96-113. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
23 Sabiote, E., & Roman, S. (2009). The Influence of Social Regard on the Customer-Service Firm Relationship: The Moderating Role of Length of Relationship. Journal of Business and Psychology, 24(4), 441-453. Santouridis, I., & Trivellas, P. (2010). Investigating the impact of service quality and customer satisfaction on customer loyalty in mobile telephony in Greece. The Total Quality Management Journal, 22(3), 330-343. Seth, A., Momaya, K., & Gupta, M. (2008). Managing the Customer Perceived Service Quality for Cellular Mobile Telephony: An Empirical Investigation. VIKALPA, 33, 19- 34. Shamdasani, P., Mukherjee, A., & Malhotra, N. (2008). Antecedents and consequences of service quality in consumer evaluation of self-service internet technologies. The Service Industries Journal, 28(1), 117-138. Shirin, A., & Puth, G. (2011). Customer satisfaction, brand trust and variety seeking as determinants of brand loyalty. African Journal of Business Management, 5, 11899- 11915. Spiller, J., Vlasic, A., & Yetton, P. (2007). Post-adoption behavior of users of Internet Service Providers. Information & Management, 44(1), 513-523. Tam, J. (2012). Linking Perceived Service Quality to Relational Outcomes in a Chinese Context. Journal of International Consumer Marketing, 24(1), 7-23. Thaichon, P., Lobo, A., & Mitsis, A. (2012). Investigating the antecedents to loyalty of Internet service providers in Thailand: Developing a conceptual model. Paper presented at the ANZMAC 2012, Adelaide, Australia. Thaichon, P., Lobo, A., & Mitsis, A. (2014). An Empirical Model of Home Internet Services Quality in Thailand. Asia Pacific Journal of Marketing and Logistics, 26(2). Thaichon, P., & Quach, T. N. (2013). Integrated marketing communications and their influences on brand loyalty: A Thai perspective. International Journal of Studies in Thai Business, Society and Culture, 2(1), 55-79. Verhoef, P. (2003). Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development. Journal of Marketing, 67(4), 30-45. Vlachos, A., & Vrechopoulos, P. (2008). Determinants of behavioral intentions in the mobile internet services market. Journal of Services Marketing, 22(4), 280-291. Wang, C., & Wu, L. (2012). Customer loyalty and the role of relationship length. Managing Service Quality, 22(1), 58-74. Wang, Y., Lo, H., & Yang, Y. (2004). An integrated framework for service quality, customer value, satisfaction: evidence from Chinas telecommunication industry. Information Systems Frontiers, 6(4), 325-340. Wolfinbarge, M., & Gilly, C. (2003). eTailQ: dimensionalizing, measuring and predicting etail quality. Journal of Retailing, 79(3), 183-198. Woo, S., & Fock, Y. (1999). Customer Satisfaction in the Hong Kong Mobile Phone Industry. The Service Industries Journal, 19(3), 162-174. Yang, Z., Bi, Z., & Zhou, N. (2005). The double jeopardy phenomenon and the mediating effect of brand penetration between advertising and brand loyalty. Journal of advertising research, 45(2), 221-221. Yang, Z., Jun, M., & Peterson, R. (2004). Measuring costumer perceived online service quality: Scale development and managerial implications. International Journal of Operations & Production Management, 24(11/12), 1149-1174. Yoo, B., & Donthu, N. (2001). Developing and validating a multidimensional consumer- based brand equity scale. Journal of Business Research, 52(1), 1-14. D o w n l o a d e d
b y
U N I V E R S I T I
U T A R A
M A L A Y S I A
A t
0 0 : 0 1
2 0
O c t o b e r
2 0 1 4
( P T )
24 Zeithaml, V., Bitner, M., & Gremler, D. (2010). Services Marketing Strategy. Chichester, UK: John Wiley & Sons. Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The Behavioral Consequences of Service Quality. Journal of Marketing, 60(2), 31-46.
Paramaporn Thaichon is in the final stage of his PhD (Marketing) in the Faculty of Business & Enterprise at the Swinburne University of Technology, Melbourne, Australia. His research interests are in the area of brand loyalty, services marketing, consumer behaviour, relationship marketing and integrated marketing communications
Dr Antonio Lobo is an Associate Professor of marketing in the Faculty of Business & Enterprise at the Swinburne University of Technology, Melbourne, Australia. His research interests include supply chain management, services marketing and consumer behaviour. Antonios research has been published in the Journal of Consumer Marketing, Asia Pacific Journal of Marketing and Logistics, Services Marketing Quarterly and Journal of Travel and Tourism Marketing among others.
Dr Ann Mitsis is a Lecturer in Marketing in the Faculty of Business and Enterprise at the Swinburne University of Technology, Melbourne, Australia. Anns research interests and contributions have a brand focus, especially in the examination of consumers perceptions of brand loyalty, perceived quality of a brand, perceived value of a brand and how this creates positive word of mouth and active referral behaviour.