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TopResearch Background And Motivation
As the environment in which consumer marketing functions changes, customer retention takes on greater relevance. Getting new clients is a costlier approach to growing a business, but keeping existing customers is more profitable because it can gain more revenue from them. When clients are retained, word-of-mouth branding and marketing influences are more likely to occur. Extensive use of the Stimulus-Organism-Reaction (SOR) framework in comprehending customer cognitive elements and behavior (Mehrabian & Russell, 1974) resulted in the incorporation of the Theory of Reasoned Action (TRA) and its extended Relationship Marketing Theory (RMT) (Lewin & Johnston, 1997). This method aims to build long-term relationships with clients by providing them with information tailored to their unique interests and needs. Throughout this procedure, open communication is a primary goal. According to Armstrong and Hagel (2009), it requires seven times more expense to acquire a new client, and 86% of consumers are willing to spend more for a better service; then the cost of keeping an established one observing and responding to what customers want is critical to success. Thus, customer retention is one of the most important aspects of firms’ long-term success. Research has examined how relationship proneness affects the efficiency of client retention strategies (De Wulf et al., 2001). This is why it is important to first examine what researchers already know about relational proneness, which is a moderating factor in the interaction between marketing variables (word-of-mouth, customer loyalty, and customer satisfaction) and customer management operations (customer retention). Is relationship proneness linked to positive word-of-mouth, customer loyalty, and satisfaction? Does relationship proneness have a greater impact on word-of-mouth, client loyalty, and customer satisfaction than other mediating factors? In summary, customer retention is important for brands because it helps to reduce costs, increase efficiency, and build positive relationships with customers. These benefits can lead to long-term success for the brand and ensure that it remains competitive in a crowded market. Most complaints are voiced when a client interprets a positive aspect of service quality as being somehow less than ideal; this study seeks to fill a significant research gap by examining the discrepancies between consumer expectations and customer perceptions. The quality of a company's service is judged relative to the criteria set by its customers. A customer gap emerges when service delivery falls short of customer expectations, which ultimately causes client dissatisfaction with the goods or services. To fulfill these research gaps, this study raises three research questions:
- 1.
Will different market stimuli factors (e.g., product quality, service quality, price attribution) influence customer retention?
- 2.
What role do the mediating effects of word-of-mouth/loyalty and customer satisfaction serve in the relationship between market stimuli factors and customer retention?
- 3.
What role do the moderating effects of relationship proneness serve in the relationship between meditating factors and customer retention?
TopTheoretical Background
The Effects of Market Stimulus
Market stimuli refer to external factors that influence customer behavior and decision-making. In the context of customer retention, this study takes up product quality, service quality, and price attribution, which play crucial roles. For example, a high-quality product, service quality, can lead to increased customer satisfaction, which can in turn lead to increased customer loyalty and retention. Additionally, market stimuli can also affect customers' perceptions of value and their willingness to pay. For example, a product that is perceived as high-value may be more likely to be retained by customers, even at a higher price. Similarly, a product that is priced too low may be perceived as having lower value, leading to decreased customer retention. The stimulation elements provide the most basic framework for considering how consumers will react to new products. The model assumes that the response is determined by the nature of the stimulus. Product and service quality, price attribution, distribution intensity, promotion efficiency, and product novelty are just a few of the factors identified as influencing consumer reactions to new products in the “diffusion of innovations” literature (Raynard, 2017).