The Relationship Between Individual Customer Satisfaction and Loyalty: The Moderating Role of Firm-Level Signals


  • Fengxia Zhu Cleveland State University, USA
  • Shuya Lu Cleveland State University, USA
  • Chris Groening Kent State University, USA
  • Jian Kang China National Institute of Standardization, China


customer satisfaction, customer loyalty, customer satisfaction magnitude, customer satisfaction noise, brand portfolios, WOM intensity


Although the moderators between customer-level satisfaction and loyalty have been a significant area of study within the field of marketing, scant research examines how firm-level signals may amplify the relationship. This study integrates signaling and social influence theories to gain a better understanding of how firm-level customer satisfaction, WOM intensity, and brand portfolios may serve as signals to affect the relationship between customer-level satisfaction and loyalty. We collected six-year longitudinal data from 125 firms in China and analyzed data using Hierarchical Linear Modeling (HLM) and floodlight moderation analyses. The results reveal that firm-level customer satisfaction magnitude and noise both positively moderate the customer-level satisfaction–loyalty relationship. We also find that negative WOM intensity weakens customer-level satisfaction and loyalty relationship, but only for firms using house-of-brands. These findings establish useful theoretical insights and managerial implications for customer retention.


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