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Building Customer Commitment

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Introduction

´╗┐LITERATURE REVIEW 1. Introduction Commitment is as an essential ingredient for successful long-term relationships. Developing a customer?s commitment in business relationship does pay off in increased profits, customer retention, willingness to refer and recommend. In relationship marketing literature, commitment has widely been acknowledged to be an integral part of any long-term business relationship (Anderson and Weitz 1992). In most case it is described as a kind of lasting intention to build and maintain a long-term relationship (Dwyer, Schurr, and Oh 1987). 1. Customer commitment definition Commitment has been defined as ?an implicit or explicit pledge of relational continuity between exchange partners? (Dwyer, Schurr and Oh 1987). It is believed to imply a willingness to make short-term sacrifices to realize long-term benefits (Dwyer, Schurr, and Oh 1987). According to Anderson and Weitz (1992), committed partners are willing to invest in valuable assets specific to an exchange, demonstrating that they can be relied upon to perform essential functions in the future. Dwyer, Schurr, and Oh (1987) propose that ?the buyer?s anticipation of high switching costs gives rise to the buyer?s interest in maintaining a quality relationship. ...read more.

Middle

Instrumental commitment is shown whenever some form of investment (time, other resources) in the relationship is made. Finally, the temporal dimension of commitment indicates that the relationship exists over time. In a more simple approach according to Dig Deeper (2006), there are three different forms of commitment have been identified: instrumental, relational, and values-based. Instrumental commitment occurs when customers are convinced that no other offer or company could do a better job of meeting their needs. They are not just very satisfied, but unbeatably satisfied. All expressed and latent needs have been met. Relational commitment is that customers can become highly attached to a company's people. An emotional tie may be formed with an individual person, a work group or the generalized company as a whole. Values-based commitment is that customers become committed when their values are aligned with those of the company. Values are core beliefs that transcend context and serve to organize and direct attitudes and behaviors. 1. Measure of customer commitment Customer commitment is the intention of a customer to maintain a long-term relationship with a supplier. ...read more.

Conclusion

3. Dwyer, F. Robert, Paul H. Schurr and Sejo Oh (1987), ?Developing Buyer Seller Relationships,? Journal of Marketing, 51 (April), 11-27. 4. Deeper, D. (2006). Customer Relationship Management [pdf]. Available at :< http://searchcrm.techtarget.com/feature/Understanding-customer-commitment>[Accessed 13 May 2012]. 5. Gundlach, Gregory, Achrol, R and Mentzer, J (1995), ?The Structure of Commitment in Exchange,? Journal of Marketing, 59 (1), 78-92. 6. Ganesan, Shankar (1994), ?Determinants of Long-Term Orientation in Buyer Seller Relationships,? Journal of Marketing, 58 (April), 1-19. 7. Homans, George C. (1958), ?Social Behavior as Exchange,? The American Journal of Sociology, 63 (May), 597-608. 8. Morgan, Robert M., Hunt, Shelby D. (1994), ?The commitment-trust theory of relationship marketing,? Journal of Marketing Vol.58 (3)20-38. 9. Meyer, J. P., Allen, N. J., & Gellatly, I. R. (1990), ?Affective and continuance commitment to the organization: Evaluation of measures and analysis of concurrent and time-lagged relations,? Journal of Applied Psychology, 75, 710?720. 10. Meyer, J. P., & Allen, N. J. (1984), ?Testing the ?side-bet theory? of organizational commitment: Some methodological considerations,? Journal of Applied Psychology, 69, 372?378. 11. Pritchard, Mark, Havitz, M and Howard, D. (1999), ?Analyzing the Commitment-Loyalty Link in Service Relationships,? Journal of the Academy of Marketing Science, 27 (3), 333-48. ...read more.

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