Investigating temporal effects of risk perceptions and satisfaction on customer loyalty

Abstract

Purpose - The purpose of this paper is to examine how product usage satisfaction mediates the link between two types of perceived risk and loyalty intentions, and investigate the three moderating effects (overall satisfaction of provider, switching costs, and remaining contract time) of the product usage satisfaction-loyalty intentions linkage. Design/methodology/approach - Using a longitudinal study, a total of 253 usable responses are collected from time T to time T+1. The paper uses the partial least squares (PLS-Graph 3.0) approach for structural parameters in the proposed model. Findings - The findings show that the temporal effect of performance risk and product usage satisfaction negatively increases, whereas the temporal effect between product usage satisfaction and loyalty intentions decreases over time. While the moderating effect between overall satisfaction of provider and product usage satisfaction strengthens loyalty intentions, the switching costs attenuate loyalty intentions. The proposed model can be used to predict both the change in customer behavior and the moderating effects of overall satisfaction of providers (or switching costs) in the context of smartphone replacement period. Originality/value - This paper makes unique contributions to the literature. First, using the consumption-system approach as a theoretical base, the paper extends the product usage satisfaction-loyalty intentions linkage that can appear as a dynamic spiral during subsequent periods. Second, considering the temporal effects of the proposed relationships, the paper identifies the role of perceived risk that reveals how product usage satisfaction mediates the link between two types of perceived risk and loyalty intentions. Third, the paper emphasizes the importance of moderating effects when considering smartphone usage with a particular brand.