Research On The Effects Of Service Employees’behavior On The Relationship Between Customer Loyalty And Profitability

With the development of the global economy and the transformation of the market from the seller-led to the buyer-led, customer loyalty is becoming a valuable resource among enterprises. Loyal customers can bring profit to the company by long-term purchase of the company’s products or services, lowering the service cost, accepting the premium and bringing a positive word of mouth. Meanwhile some management research scholars questioned this idea. They thought that the relationship between customer loyalty and profitability was relatively weak or was not monotonically increasing. Therefore, the company should correctly understand the relationship between customer loyalty and profitability. However, the previous research on customer loyalty mainly focused on the factors driving customer loyalty and the definition and measurement of customer loyalty. Researchers studied customer loyalty as an outcome variables, but not for the perspective on customer loyalty’s effect and the profitability. In addition, between intention and behavior, some natural or artificial factors may hinder the achievement of customer goals. When front-line staff are providing the service to customers, they contact and interact with customers. Customers’ perceive the service quality through the service that staff provide, thus their behavior will be influenced.Currently academia generally believe that customer lifetime value (CLV) is a reliable indicator to predict customer’s contribution to the company and help decision makers effectively recognize valuable customers so as to make full use of limited resources on valuable customers. Therefore, the correct understanding of the relationship between customer loyalty and profitability and the staff behavior’s influence on the relationship, can help managers to better manage staff and locate the most profitable customers.Based on referring to and summarizing literatures, this paper explores the effects of customer loyalty on the subsequent behavior of customers affecting profitability on the customer loyalty perspective. Meanwhile, staff behavior is introduced to investigate its influence on the relationship. According to relative theories, customer loyalty is divided into two aspects of attitude and behavior loyalty in this paper. Customer profitability are measured from four dimensions, which are premium capacity, increasing purchases, reducing acquisition costs and retention costs. The staff behavior is as a moderator variable. Then a customer-profit conceptual model is built. This paper will propose four hypotheses, and to validate the hypotheses through311data. These conclusions will have important theoretical and practical value to help company understand these influences.The research results show that customer attitude loyalty have no effects on premium capacity, increasing purchases, reducing retention costs, but have positive effects on reducing acquisition costs. So the corresponding hypothesis that attitude loyalty has positive effect on profitability is supported. Customer behavior loyalty has positive effects on the four dimensions measurement of customer profitability. So the corresponding hypothesis that behavior loyalty has positive effect on profitability is supported. In addition, service staff’s behavior doesn’t have influences on the relationship between customer loyalty and profitability. However, service staff’s behavior has positive influences on the relationship between customer loyalty and profitability. Finally, this paper proposes enlightenments and prospects about customer loyalty and profitability management according to the research results.