The effects of perceived value, satisfaction, and advertising on share of wallet and word of mouth in a retailing context

Abstract

Customer loyalty as a topic has been of interest to managers and researchers for several decades. There are a few antecedents for explaining customer loyalty in marketing literature, and researchers have discussed the consequences of loyalty. The reason for interest toward loyalty is the wide assumption that loyal customers have higher retention rates, they buy more, and are more willing to share by word of mouth (WOM) and electronic WOM (eWOM). This is why loyalty is linked to companies' financial performance.

The aim of this study was to investigate perceived value (PEVA) and customer satisfaction as the antecedents of loyalty outcomes, such as share of wallet (SOW) and WOM in a retailing context. In addition, the moderating effects of background variables and advertising were investigated. The survey was implemented from February 17, 2016 to March 6, 2016 by using the online survey program Webpropol 2.0. Overall, 2072 respondents took part in the survey. The data were further analyzed by using IBM SPSS Statistics 22 and Smart PLS 2.0 software.

The results showed that PEVA/satisfaction have a positive effect on SOW and WOM/eWOM. It seemed that PEVA might be a slightly better predictor of loyalty metrics than of satisfaction. In addition, the results showed statistically significant moderating effects of 1) length of relationship; 2) following the company in the print media; 3) the company's online ads; 4) following the company on social media; and 5) customer age and their relationship between PEVA/satisfaction and eWOM. Statistically significant moderating effects were not found on the relationship between PEVA/satisfaction and SOW/WOM.

The study supported the prior literature, stating that PEVA and satisfaction have a positive effect on loyalty outcomes, such as SOW, WOM, and eWOM.