The Driving Forces of Customer Loyalty

Abstract

In this study we examine the driving forces of customer loyalty in the broadband market in Hong Kong. We developed and empirically tested a model to examine the antecedents of customer loyalty towards Internet service providers (ISPs) in Hong Kong. Structural equation modeling (SEM) was used to evaluate the proposed model. A total of 737 valid returns were obtained through a questionnaire survey. The results show that customer satisfaction, switching cost, and price perception are antecedents that lead directly to customer loyalty, with customer satisfaction exerting the greatest influence. Although we found that service quality significantly influences customer satisfaction, which in turn leads to customer loyalty, we did not find a direct relationship between service quality and customer loyalty. Our results also reveal that corporate image is not related to customer loyalty. Our empirical investigation suggests that investing huge resources in building corporate image can indeed be a risky strategy for ISPs.

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