1. INTRODUCTION

Customer loyalty is about preferences where people choose particular products and shops over other products and shops by other companies. Customer loyalty is exhibited when a customer chooses a particular product of the same brand consistently over a long span of time and establishes the loyalty with that particular company and brand. Customer loyalty is a key objective in relationship marketing.

There are four different factors of customer loyalty viz. psychological, economic, technical and contractual. People develop a sense of loyalty towards preferred-brand as the stated brand has always fulfilled their expectations, which signifies the psychological influence. Economic factor is concerned with that preferred brand facing economic disadvantages due to poor customer loyalty and so, this instigates loyalty within customers to keep their preferred brand at par with its previous standards. When a company adapts its technical procedures according to a supplier the change causes immense technical problems and so this becomes a ground for customer loyalty. Contractual factor is another reason for customer loyalty as a customer is bound to the company because of legal reasons involved in the agreement between the customer and the company.

From the very emergence of commerce, we can trace programs and policies oriented towards incentivizing customers to return to the same seller and spend their money with them. Today customer loyalty developing practices are widespread across all traders regardless of sizes or types. Since the year 2012 the number of journals published has remained high and consistent (refer Figure 1.1 for details). From the introduction of copper coins and stamps and frequent flyers incentives by American airlines in the 18^th and 19^th century, to customer loyalty cards and mobile apps today, customer loyalty has evolved a long way. American sellers in the 18^th century gave copper coins to customers which could be redeemed at the stores, which made the customers come back to them. These costly coins were later replaced by stamps. The frequent flyers incentive program of American airlines which offered incentives to their regular passengers was a major customer loyalty building program of the 19^th century. Today loyalty cards and mobile apps have become some of the most common tools used for customer loyalty building.

Scholars have discovered that firms have been increasing their focus towards customer understanding. They have observed that firms are developing practices to help ensure their customers have a reasonable opportunity to understand the products they have bought. They have recognized the need to differentiate between customer satisfaction and customer understanding. Scholars have also identified that the most effective practices and systems to evaluate customer understanding are to be undertaken post sales, hence questionnaires are an effective tool to measure customer satisfaction and customer loyalty (Saetang and Pathomsirikul, 2016).

Of the existing papers there has been more focus on the methods and techniques used to give the customer an experience which would make them loyal. There is less research on the actual gain that a company gets through its customer loyalty attraction methods.

In this paper, in order to bridge the gaps in methodological and thematic review existing and pertaining to the subject, systematic literature has been used, the objective of which is to answer the research question initiated by us: What are the different aspects of customer loyalty in a relationship marketing system and how does it benefit the company? In order to meet this purpose, first the systematic review results will be presented, then the secondly the different approaches to build customer loyalty will be discussed, and then the discussion on identified knowledge gap.

Figure 1.1 Year wise plot of number of journals on the topic customer loyalty

2. SYSTEMATIC LITERATURE REVIEW METHODOLOGY:

Literature reviews ofmanagement field are generally accounted in a narrative manner and are censured for lacking meticulousness and also for beingalready in the mind of the researcher which results into lack of objectivity. Unlike management field, reviews taken in the field of treatment and medicine are improvised by being reproducible, very transparent and systematic (Tranfield, Denyer and Smart, 2003). According to the specifications generally acceptedof the methodology of systematicliterature review, we display the scope of this review, the procedure of identification of relevant literature works and the matter included in this review under the following subheadings.

2.1 Scope of The Performed Literature Review:

There are two criteria taken into consideration, form and content, whilediscussing the scope of this review. Articles from academic journals which are also called ‘certified knowledge’ are included in the boundary of our review. These articlesare called so because they have supposedly undergone proper review performed by fellow researchers (Alles and Rodriguez, 2009). The form excludes non-academicarticles and book chapters involving interviews, editorials, short magazine articles and viewpoints. When content is considered, the focal point of this review is on theaspects of customer loyalty towards the benefits of the company, for which we excluded articles focusing on the benefits of loyalty from the consumer’s perspective in the beginning.

2.2 Identification of Pertinent Literature:

The identification process of applicableliterature was performed in two episodes in January 2012 and July 2017. In the first phase, we looked for certain combinations of the keywords ‘relationshipmarketing’, ‘customer loyalty’, ‘empirical, and ‘models’ in four databases: Emerald, Scopus, Science Direct and Ebsco’s Business Host Ultimate. These databases proved to be high on the bulk of standard academic content they provided and so were chosen. These were also very relevant tomanagement as well as business research. The first episode of search gave 230 results in July 2017(refer Table2.1 for the details). Two of the authors listedand numberedthe 230 identified results. The yielded information included title of the article, publication year, journal, author(s), document genre and database. Out of 230, 42 came out to be duplicates and 19 were less relevant to the concerned topic. Three of the authors read the abstracts of the left 169 papers independently to verify their relevanceto the topic. A final agreement was reached by jointly reviewing, when there happened to be a. disagreement between two investigators. 24 articles were excluded for non-compliance for being off topic and also not inclined towards academic criteria. This phase continued till it finally resulted into 145 articles. Next, these articles were taken to be examined by three of the authors for final inclusion. Further, after jointly reviewing 103 articles was excluded and final number of articles reached to 42.

Round 2 of literature screening was performed to achieve the aim of revalidating the number of records in July and August of 2017.The criteria of inclusion and exclusion was further even more refined since the authors had now been more familiarized to the literature. It was targeted towards excluding the benefits of customer loyalty from the customer’s viewpoint. The final number of articles that were to be included was 42. The second phase efforts of processing of the literature work analysis is displayed in the Table 2.1 and Figure 2.1.

2.3 Results of Systematic Literature Review:

The 42 articles for the final inclusion were published between the year 2011 and 2017 (details provided in Figure 2.2). After 2011, the topic of customer loyalty has been considerably increasing and gaining importance in the academic. During this period the companies started to utilize more opportunities in customer loyalty.

Figure 2.1 Flow chart representing process of selectionof articles for the literature review

Figure 2.2 Year wise plot of number of journalstaken into consideration in the process of review of literature.

3. METHODOLOGICAL REVIEW:

The objective of this methodological review is to provide an overview of various aspects of building customer loyalty in the domain of relationship marketing. Under methodological approaches, various articles were referred to from which, excerpts relating to aspects loyalty were extracted. These were then further refined and classified by the members of the research group in few sessions into, quantitative research, qualitative research, non-empirical methods and mixed methods. Methodological fragmentation was observed in these papers can be accounted to the difference in themes, and the diversity of research questions addressed in the works that were subjected to review along with the varying analysis levels. Though most of the works considered had an inclination towards empirical methods, a considerable number of them included good amount of qualitative approach as well. The novelty of the topic can be pointed out as the key reason for this. This particular methodological status aptly displays the different phases that these new disciplines go through before maturing. Every time a research work is to be conducted in an important segment, the initial focus will be on issues pertaining to definition, after which exploration studies take place before shifting of focus to methods and measures (Passmore and Fillery-Travis 2011). Since significant prior researches have been carried out in this domain, now the path is clear for further profound quantitative research. From the literature review performed on the studies available, major aspects of customer loyalty building were identified through qualitative analysis and the same will be presented below under the section thematic review.

4. THEMATIC REVIEW (ASPECTS OF CUSTOMER LOYALTY):

The impact of customer loyalty on the long term operation and growth of a company can be deduced only after considering the various aspects of customer loyalty. The various aspects of customer loyalty can be broadly identified as customer specific aspects, marketing mix aspects and company specific aspects. These aspects can also be externally influenced by the culture of the country in which the company is operating, regional biases and loyalty and reward programs offered to the customers (Kumar, Sharma, Shah andRajan, 2013). Among the papers which were considered for literature review, these themes could be identified directly from about 35% works and indirectly from the discussions in about 40% papers.

4.1 Customer Specific Aspects:

Those factors which are specific to individual customers are included in customer specific aspects or customer specific variables. The nature of the interaction between the customers and the company is largely determined by these aspects. Both behavioral as well as attitudinal characteristics, along with product awareness and demographics fall under this theme. A lot of study has already been done regarding the nature of behavioral aspects. The exchange characteristics displayed in a relationship between customer and a firm are related to the behavioral aspects (Reinartz and Kumar, 2003). The characteristics like trust, preferences and satisfaction also belong to attitudinal aspects.

4.1.1 Behavioral Aspects:

The major components of behavioral aspects include the manner of interaction between the customer and the company (Kumar, Sharma, Shah and Rajan, 2013). Studies in the past have proven that behavioral aspects have a key role to play in delivering customer value. Those characteristics which influence and affect the relationship between the customer and the firm are referred to as exchange characteristics, which includes, the amount of spending by customers, the rate at which they purchase and marketing strategies the firm adopts (Reinartz and Kumar, 2003). Research from the past also reveal that characteristics of customer exchange related to the purchase behavior displayed in the past are a strong indicator to show the future purchase behavior of the buyers. It has been discovered that, the product returns in more developed economies tent to show a downward facing parabola shaped relationship with respect to customer loyalty (Petersen and Kumar, 2009). Due to the lack of multiple level channels of shopping in emerging and developing economies, the impact of the customer behavior in shopping through multiple channels on profitable customer loyalty is expected to be minimal. Furthermore, since the purchases made by a customer are spread out across different sellers and vendors influencing the customers to cross buy has turned out to be increasingly harder in such economies. A multinational corporation (MNC) can persuade its buyers to increase their spending through the introduction of loyalty programs which are based on rewards, through which they can induce customer loyalty profitably.

4.1.2 Attitudinal Characteristics:

The feelings expressed by customers towards a company and the offerings it makes are referred to as attitudinal characteristics. The attitudes of customers can be greatly influenced by various components and factors which includes preferences of the consumer, customer satisfaction, the level of trust developed by the customer and the amount of customer awareness. Attitudinal characteristics of consumers also sometimes tend to be influenced by demographic factors like gender, location, income, and age of customers. Factors such as trust and satisfaction also perform a major role in efforts to create loyalty. Satisfaction can be defined as a positive attitude developed by customers as a result of consuming a particular service or product. Satisfaction can be further categorized into social satisfaction and economic satisfaction. Social satisfaction is developed as a result of the customer evaluating the psychological features of the relationship they have with the company. Economic satisfaction on the other hand refers to the evaluation made by customers regarding the economic benefits as a result of their relationship with the firm. Although certain studies have failed to establish the link between loyalty and satisfaction, there are numerous studies which have established a favorable impact of satisfaction on developing and increasing customer loyalty (Liu, Guo and Lee, 2011).

4.2 Marketing Mix Aspects:

As far as the modern developed economies are concerned, former researches have displayed the effect of marketing mix elements on the measures of performance of business viz. communication through word of mouth, customer loyalty, referrals, market share of the product and the price of the product. As pointed by Kumar, Sharma, Shah and Rajan in 2013, the elements of marketing mix are believed to be highly influential by many researchers in customer loyalty approach development in rising economies.

4.2.1 Product:

The value provided by the product and the quality of the product, perceived by the customer in modern economies have a positive impact on developing customer loyalty (Pan, Xie and Sheng, 2012). When certain characteristics of the product or the service offered overshoots the customer’s expectations, it leads to building of customer loyalty. On the other hand, if the value provided by the service is lower than the expectation of the customer, researchers have discovered that consumers tend to swap the product for a competitor brand, which would lead to reduction in customer loyalty. Consumers tend to compare the benefits offered by each of the products that they consume on the basis of which they decide upon the ultimate purchase choice. The customer’s intention to purchase is ascertained by the benefits and costs of actually using each of the products (Lai, Babin and Griffin, 2009).

4.2.2 Promotion:

A combination of various advertising and promotional techniques may have to be used to achieve positive results due to the level of diversity in developing economies. Due to the majority of middle and low income population in such developing economies, an efficient technique of attracting target markets would be through sales promotion activities that advertise products sold at discounted rates.

4.2.3 Service Quality:

In economies which are fully developed, it has been proven that efficiently managed relationship with customers and excellent quality of service will assist a company in developing customer loyalty (Kumar, Sharma, Shah and Rajan, 2013). The lack of data available and the restricted usage of data analytics show that standardized service quality has a better chance of creating a profitable customer loyalty as compared to customized service quality.

4.2.4 Social Media:

In all developed, and most of the developing economies, the relevance of various platforms on social media like Twitter, YouTube and Facebook have increased significantly in executing marketing strategies initiated by the company. In such economies, the volume of investment in the traditional media have gone down significantly, while the amount of spending in social media have increased significantly (Marketing Charts, 2012). Social marketing has been established by many researchers to be a critical tool for maximizing the company’s revenues.

4.3 Company Specific Aspects:

Those aspects which a multinational company uses for persuading a developing economy are included under company specific aspects. These factors furtherlead to development of profitable customer loyalty include competition, localization and innovation.

4.3.1 Competition:

A major factor in persuading consumer’s decision to purchase and creating loyalty among customers is competition in the market. Any advantage that a company has over its competitors will create a surplus which is used to expand its share in the market, develop new products and delivering new services in a developed economy (Gans, 2002).

4.3.2 Localization:

Localization is a tool used by multinational corporations to differentiate itself from competitors to draw more customers and increase their markets especially in emerging markets. Researches from the past have successfully confirmed the relationship between customer loyalty and localization (Yue, Xie and Sheng, 2012). A lot of companies have made use of localization in order to develop loyalty. The “Maharaja Burger” introduced by McDonalds in India is a prime example of a localization tool implemented by an MNC to capture the market and build loyalty.

4.3.3 Innovation:

Various factors such as the affordability of a product for the consumers in the middle and low income sections, accessibility of the product to the customers, and the ability of the innovation to penetrate markets that are underserved and be available to the customer, determine the success of an innovation in a developing economy (Varadarajan, 2012). The relationship between customers and the firm are crucially affected by technological advancements and innovations. Further adaptive innovations of established innovations will help Multinational Corporations to develop fresh market segments and customer loyalty in developing economies.

5. LIMITATIONS:

This work, like any other research, is not free from limitations. The first limitation faced by authors is the time bound nature of this work which, in a way limited this research only to study various existing works on the topic and then analyzing them to come out with results and findings for the identified knowledge gap. In availability of more time resource, this work could have been improved by adding empirical study to validate the findings based on primary data. Limited budget was an issue that reduced the scope of this work. With a higher budget, intensive field surveys could have been conducted to understand the views of customers on how they perceive the idea of customer loyalty. Also, surveys and studies could have been conducted to study the efforts and expenses made by companies to establish and maintain customer loyalty. These surveys and studies would have provided enough empirical primary data to analyze the case better and to come up with results backed up with statistical findings.

6. DIRECTIONS FOR FUTURE STUDIES:

Future research suggestions can be now interpreted after the methodological and thematic review of this paper. Methodologically, future studies should focus on empirical research to validate the discussed aspects of customer loyalty. Even the status of actual benefits from loyalty based pricing and similar strategies can be validated in the same way in order to arrive at an understanding if a Multinational Corporation can efficiently exercise customer loyalty programs to preserve and aim at more customers to ensure continued loyalty and to devise suitable and pertinent pricing strategies. Effectual sales promotions can be calculated to optimize these strategies. (Kumar, Sharma, Shah and Rajan, 2013).

Further, social media is one element that can help researchers with overcoming the problems of controlling all the variables quantitatively as the data regarding the same is tremendous. Another suggestion could be to shape the captured data into benefit by using updated tools. Technology is changing every day and one cannot expect any less as it grows. So, being updated with current technology helps in knowing how to have a control over such a large database and then one can work even more effectively in studies like this. Like when customer loyalty is taken into consideration, there are many opportunities that technology can give to have control on the database of all the variables. Regarding organizational performance trial, there can be many opportunities as more inclusive set of it can be advanced investigation. Different loyalty programs effect the organizational recital differently. Future research may investigate how the market reacts to different loyalty programs and come on a conclusion of specific choices of consumers and work accordingly. While targeting a particular segment of consumers, their more generic preferences could be kept in mind and the loyalty program that is given to them can be shaped accordingly. (Vaitone and Papsiene, 2016).

7. CONCLUSION:

To achieve customer loyalty has become one of the focus area in the relationship marketing and the studies proving the profit and benefits of retaining customer has given a trigger to the emergence and practice of new methods in this direction. While many research works exist on a topic like customer loyalty, the number of works that focuses on the real outcomes and effectiveness of the idea of customer loyalty are relatively lower. It comes out to be a challenging task to present the benefits of customer loyalty in a different approach to make organizations focus on its methods to improve their relation and figure out the growth through these methods in a financially efficient way. This review, even after being limited in its scope, gives important insights on the aspects of customer loyalty; and various themes encompassed within. The companies and firms have already started recognizing the importance of the subject through the growing interest of researchers in this field. There is a lot of scope of finding new methods emerging in this area in the future as discussed above. The various factors of customer loyalty like the psychological, economic, technical and contractual also gives an idea on the behavior of customer usually observed in the market.

Based on the study, it sheds light on necessity for more intense quantitative and empirical studies, along with theory-based researches, analyzing the complexity of the continuously emerging customer loyalty trends set up in the organizations, a research paradigm is required at the stage that incorporates innovative methodologies which are both time responsive and proficient of choosing the comprehensive. In conclusion, the time when the firms face serious environmental and competitive forces, a deeper research and analysis of factors impacting customer loyalty will continue to be key area in the various studies related to the organization’s practices and even under marketing to increase the base of usual customers. The insights obtained in this paper to an extent would provide a robust foundation for managerial understanding and decisions.

It is expected that this study would add to the knowledge and understanding of the concept and various aspects of customer loyalty and will encourage further studies related to the topic in the challenging and dynamic business environment.

8. REFERENCES:

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Received on 20.12.2017 Modified on 08.01.2018

Asian Journal of Management. 2018; 9(1):767-773.

DOI: 10.5958/2321-5763.2018.00120.8

Database	Scope and search criteria	First Round		Second Round
Database	Scope and search criteria	Date of search	Number of items	Date of search	Number of items
Emerald	Search: Journal Abstract Keyword: Customer Loyalty, empirical	20-Jul-17	36	28-Jul-17	28
Science Direct	Search: Journal Keyword: Customer Loyalty, Scope of search: article title	20-Jul-17	42	28-Jul-17	4
Scopus	Search: Journal Keyword:Customer Loyalty,	20-Jul-17	28	01-Aug-17	3
Ebsco’s Business Host ultimate	Search: Journal Scope: Title and abstract Keyword: Customer Loyalty, empirical	20-Jul-17	39	01-Aug-17	7
Total			145		42