A matter of fit? Service configurations for customer loyalty

Abstract

Improving customer loyalty is paramount for service companies. Nevertheless, the task is riddled with challenges, as evidenced by existing studies that have unveiled dilemmas and presented mixed findings. Our study takes the configurational approach and argues that developing customer loyalty is a matter of fit among relevant design choices in the service context. Specifically, we investigate how the service configurations among service rules formalization (SRF), service employee commitment (SEC), service contact time (SCT), and cost leadership strategy (CLS) yield customer loyalty intention (CLI) in a service context characterized by certain customer contacts. We conduct a multi-respondent survey covering managers, employees, and customers to collect data from 141 service shops in Hong Kong. To analyze the collected data, we employ fuzzy-set qualitative comparative analysis (fsQCA). The results show that the combinations of low SRF, high SEC, and high SCT and of high SEC and low SCT under CLS lead to high CLI. This research offers valuable insights into the configurational design for customer-contact services and the practical means of promoting customer loyalty in customer-contact service firms.