THE RELATIONSHIP BETWEEN INDIVIDUAL CUSTOMER SATISFACTION AND LOYALTY: THE MODERATING ROLE OF FIRM-LEVEL SIGNALS

Although the moderators between customer-level satisfaction and loyalty have been a significant area of study within the field of marketing, scant research examines how firm-level signals may amplify the relationship. This study integrates signaling and social influence theories to gain a better understanding of how firm-level customer satisfaction, WOM intensity, and brand portfolios may serve as signals to affect the relationship between customer-level satisfaction and loyalty. We collected six-year longitudinal data from 125 firms in China and analyzed data using Hierarchical Linear Modeling (HLM) and floodlight moderation analyses. The results reveal that firm-level customer satisfaction magnitude and noise both positively moderate the customer-level satisfaction–loyalty relationship. We also find that negative WOM intensity weakens customer-level satisfaction and loyalty relationship, but only for firms using house-of-brands. These findings establish useful theoretical insights and managerial implications for customer retention.