INTRODUCTION

The concept of value co-creation and its role in the services context has received more importance in recent studies of service literature (Gronroos, 2011; Gronroos and Voima, 2013; Edvarddson et al, 2011, Cova et al, 2011). Value co-creation can be a decisive construct for service firm’s performance given the role of customer in service process. Gronroos and Voima, (2013 p.139) narrate the role of customer as “The customer creates value through past, current, and/or imagined future experiences in a temporally fluctuating individually and socially accumulated process”. Service loyalty has remained increasingly important area for service marketers as Jones and Taylor (2007 p.50) quote “small improvements in retaining loyal customers can make big improvements to customer value”.

Though value co-creation and service loyalty are extensively studied in the services literature, studies linking value co-creation with service loyalty are scant in the research. Indian banking industry is witnessing a robust growth in the recent past (Vijaykumar et al., 2011; Singh and Arora., 2016, Mehta P., 2017). The factors influencing customer journey in the context of the emerging banking trends needs to examined (Singh and Arora., 2015, Sharma RL., 2017; Chakraborty, D., 2015; Sharma S., 2017). Therefore current paper makes an attempt to examine the link between value co-creation behavior and service loyalty in banking industry.

THEORETICAL FRAMEWORK:

Value Co-Creation:

Value co-creation is not a recent phenomenon. Galvagno and Dalli (2014 p. 644) define “Co-creation is the joint, collaborative, concurrent, peer-like process of producing new value, both materially and symbolically”. The concept of customer value co-creation received much importance since ever the new paradigm of marketing discipline in the form of Service Dominant Logic (SDL) has been introduced by Vargo and Lusch (2004, 2008). The paradigm of S-D logic is based on the principle that firms do not deliver value, but rather frame value propositions. Vargo and Lusch (2008) stated that “The customer is always co-creator of value”, which introduced a new perspective to the value concept. Though the co-creation concept turned decade old, the significance this concept has for researchers and marketers in understanding how customers contribute to value co-creation is still scant (Payne et al., 2008). We have few studies emphasizing on the customer perspective of value co-creation (Fang et al., 2008, Xie et al., 2008). Xie et al (2008) laid emphasis on customer behavior and its importance in value co-creation. Finally Yiand Gong (2011) have explored the dimensions of customer value co-creation behavior through series of studies in their work. The study has developed a scale to measure customer value co-creation behavior. The dimensions are ‘customer participation behavior’ and ‘customer citizenship behavior’. The former being described as ‘in-role’ and latter being described as ‘extra-role’. The 8 dimensions of Yiand Gong (2011) study are:

Information seeking:

The degree to which customers seek information from the service provider that facilitates service consumption

Information sharing:

The degree to which customers share necessary information to the employees of service provider

Responsible behavior:

The degree to which customers behave cooperatively by following the guidelines of employees

Personal interaction:

The degree of interpersonal skills exhibited by customer in terms of respect, courtesy, politeness, and friendliness

Feedback:

The degree to which customer is open to give comments and suggestions.

Advocacy:

The degree to which customer is ready to recommend the service to family and friends.

Helping:

The degree to which customer is open to help new customers without employee intervention.

Tolerance:

The degree to which customers maintain patience in case of a delay in service delivery.

Service Loyalty:

Service Loyalty is another important area for service marketers since the long-term relationship in the form of repurchase alters the fortunes of companies. Service loyalty has received importance in the past and factors such as service quality, service satisfaction (Caruana, 2002, Luarn and Lin., 2003), values (Andreassen and Lindestad., 1998) and commitment (Dwyer et al., 1987) are identified to have an impact on service loyalty. Service loyalty is defined as “as an interaction of attitude and behavior such that the behavior (loyalty) is determined by the strength of relationship between relative attitude and repeat patronage”- Sudhahar et al., (2006 p.1814). A seven dimensional scale has been developed by Sudhahar et al (2006) to measure the customers’ service loyalty in retail banking sector. The seven dimensions are behavioral dimension, attitudinal dimension, cognitive dimension, conative dimension, affective dimension, trust dimension, commitment dimension. Jones and Taylor (2007) review the service loyalty scales to propose simple measures for service loyalty where the authors suggest that behavioral and attitudinal loyalty measures serve the purpose.

Value Co-creation and Service Loyalty:

Few studies explored relationship between customer value and loyalty but those studies didn’t consider value co-creation construct (Brodie et al, 2009; Flint et al, 2014).Co-creation behavior is found to be determinant of customer satisfaction(Vega-Vazquez, 2013).Loyalty of a customer is primarily measured by the repurchase intentions. Auh et al (2007) studied the coproduction’s influence on loyalty in financial service setting. There is a dearth of research value co-creation behavior and its consequences despite the increasing importance of value co-creation concept, Salwan (2012) developed value propositions for bankers, emphasizing the importance of value co-creation in the banking and SME context. It offers insights into the role of co- creation in Indian banking sector and suggests that it has huge potential in future. Apart from these works as far as we are aware no works have studied the link between value co-creation behavior and services management constructs. Drawing cues from the extant literature we try to bridge the unfilled gap by examining the relationship between customer value co-creation behavior and service loyalty. Therefore we propose hypotheses to examine the link between the co-creation behavior (participation behavior and citizenship behavior) and the service loyalty constructs mostly used (Jones and Taylor, 2007). The conceptual model of the study is shown in figure 1.

H₁: Co-creation behavior has significant influence on behavioral loyalty

H₂: Co-creation behavior has significant influence on behavioral loyalty

CONCEPTUAL MODEL:

MEASUREMENTS:

Customer Co-creation behavior scale was adopted from Yi and Gong. (2011). Behavioral loyalty and attitudinal loyalty are measured with help of scale developed by Sudhahar et al (2006) for the Indian banking context. All the scale items were measured on 1-5 Likert scale where 1 implies “strongly disagree” and 5 implies “strongly agree”.

Study:

A total of 480 questionnaires have been mailed to users of banking services. The respondents were asked to give their responses for their most frequent transacted bank. A total of 428 responses have returned out of which 402 were usable. All the responses have been checked for EFA and the items of co-creation behavior loaded on respective dimensions using SPSS.21. Similarly, EFA was run for behavioral loyalty and attitudinal loyalty constructs. Both the constructs loaded on the single factor. KMO scores for all the constructs were more than .600 and Bartletts’ test of sphericity was also found significant for all the constructs (see Table1, Table2, Table3).The scale's reliability was examined through confirmatory factor analaysis (CFA). CFA results yielded adequate alpha coefficients surpassing the threshold of 0.8 (Anderson and Gerbing 1988). SEM was used to test the significance of co-creation behavior on both behavioral loyalty and attitudinal loyalty. The findings of the study are discussed in the next part.

Table 1: KMO and Bartlett's Test for Co-creation Behavior

Kaiser-Meyer-Olkin Measure of Sampling Adequacy		.704
Bartlett's Test of Sphericity	Approx. Chi-Square	274.108
Bartlett's Test of Sphericity	Sig.	.000

Table 2 : KMO and Bartlett's Test for Behavioral Loyalty

Kaiser-Meyer-Olkin Measure of Sampling Adequacy		.664
Bartlett's Test of Sphericity	Approx. Chi-Square	27.839
Bartlett's Test of Sphericity	Sig.	.000

Table 3: KMO and Bartlett's Test for Attitudinal Loyalty

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.		.656
Bartlett's Test of Sphericity	Approx. Chi-Square	43.898
Bartlett's Test of Sphericity	Sig.	.000

FINDINGS:

The results indicate that customer’s value co creation behavior positively influences behavioral loyalty and attitudinal loyalty and turns out to be statistically significant consistent with our Hypothesis 1 and Hypothesis 2 (see Table 4). Co-creation behavior found to be major determinant of service loyalty in the context of banking services. Co-creation behavior impact on the behavioral loyalty was slightly higher when compared to attitudinal loyalty which could be due to the discrepancy between a customer’s intention and actual behavior.

DISCUSSION:

The study has implications for service marketers and researchers. The results indicate that dimensions of customer participation behavior have significant impact on service loyalty. The results of the study emphasize on the importance of customer’s readiness to engage with the service firm. Future studies can look into the relationship between co-creation behavior and customer life time value, and customer engagement. Co-creation behavior has significant impact on both attitudinal and behavioral loyalty. This can be attributed to the consumer’s readiness to engage with the service provider in the process of realizing the value and fulfill all the responsibilities of the customer as the service situation requires (Filling the application forms properly, waiting in line, transacting as per the directions of bank). The higher a customer exhibits co-creation behavior, the customers greater will be the loyalty of customers. Hence managers should aim at improving the co-creation behavior of customer by enhancing the benefits of the co-creation and improving the rewards of value co-creation. This will also improve the relationship quality of the service brand and customer (Fournier, 1998). Service marketers should put constant efforts to increase customer’s readiness to share personal information by ensuring no harm to the privacy of customers. It can be inferred that customers’ willingness to share the information ensures that he/she has trust in the service provider (responding to the bank employee queries, providing the right information regarding nominees, taxes etc). Therefore service managers need to ensure that customer information sharing behavior is enhanced by increasing the credibility of the bank. Information seeking and personal interaction are the other factor that needs attention of the bank managers. Awareness programs and developing various touch points can increase the information seeking behavior of the customer. Employees should be trained with interpersonal skills to facilitate personal interaction between customer and employees. Managers should develop customer reward/incentive programs which encourage customer citizenship behavior and this might also reduce the stress on the employees since active customers will help novice customers.

CONCLUSION:

The dimensions customer participation behavior and customer citizenship together have significant impact on the service loyalty. Customer co-creation behavior has many implications for service managers. Co-creation behavior is an under researched area that can be explored further by the service researchers.

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Received on 19.03.2018 Modified on 11.04.2018

Asian Journal of Management. 2018; 9(2):909-912.

DOI: 10.5958/2321-5763.2018.00143.9

Hypothesis No	Relationship	Parameter	t- value	Significant/insignificant
H₁	Co-creation^- Behavl^	β= .53	6.46	Significant
H₂	Co-creation^- Attdnl^	β= .42	4.54	Significant