Groundwork of consumer loyalty

In Ndubisi’s (2007) article, four basis of customer loyalty strategy are mentioned, which are trust, commitment, conflict handling and communication. It is argued that the four identified underpinnings of relationship marketing are directly linked to and are capable of predicting customer loyalty (Ndubisi, 2007).

· “Trust” has been defined as a willingness to rely on an exchange partner in whom one has confidence (Moorman et al., 1992). It is also defined as the belief that a partner’s word or promise is reliable and a party will fulfill his obligations in the relationship (Schuur and Ozanne, 1985). There are also some other definitions about trust, for example, the shared values (Morgan and Hunt, 1994), mutual goals, actions with positive outcomes and making and keeping promises (Ndubisi, 2007).

· “Commitment” is another important determinant of the strength of a marketing relationship, and a useful construct for measuring the likelihood of customer loyalty and predicting future purchase frequency (Morgan and Hunt, 1994) According to Ndubisi (2007), commitment is higher among individuals who believe that they receive more value from a relationship. Highly committed customers should be willing to reciprocate effort on behalf of a firm due to past benefits received (Ndubisi, 2007) and highly committed firms will continue to enjoy the benefits of such reciprocity.

· “Communication” is also an important underpinning of customer loyalty strategy (Ndubisi, 2007). It refers to the ability to provide timely and trustworthy information, which takes place during the pre-selling, selling, consuming and post-consuming stages (Anderson and Narus, 1990). Companies should keep in touch with valued customers, provide timely and trustworthy information on service and service changes (Ndubisi, 2007). It is the communicator's task in the early stages to build awareness, develop consumer preference (by promoting value, performance and other features), convince interested buyers, and encourage them to make the purchase decision (Ndubisi and Chan, 2005). Communications also tell dissatisfied customers what the organization is doing to rectify the causes of dissatisfaction (Ndubisi, 2007).

· “Conflict handling” is another important underpinning of customer loyalty. It is defined by Dwyer and his partners (et al., 1987) as a supplier's ability to avoid potential conflicts, solve manifest conflicts before they create problems, and discuss solutions openly when problems do arise. In Ndubisi and Chan’s (2005) research, they found a significant relationship between conflict handling and customer loyalty, indirectly through trust and perceived relationship quality.