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What Drives Customer Loyalty with Complaint Resolution?
Tor Wallin Andreassen
This paper was published in Journal of Service Research, Vol 1, No 4, 1999
Tor Wallin Andreassen is an Associate Professor of Marketing at The Norwegian
School of Management. He is the founder and director of the Norwegian Service
Forum and the Norwegian Customer Satisfaction Barometer. He is currently a
Visiting Professor at the Owen School of Management, Vanderbilt University, 401
21st Avenue South, Nashville, TN 37215, USA. Email: tor.w.Andreassen@bi.no
The author is thankful for initial comments offered by Professor Evert
Gummesson, Stockholm University and Professor Roland T. Rust, Vanderbilt
University, funding provided by Forum for Service Studies at the Norwegian
School of Management, and for data provided by the Norwegian Customer
Satisfaction Barometer. Finally, help and support offered by colleagues at the
Center for Service Marketing at Owen Graduate School of Management, is
acknowledged.
2
Abstract
Even though customer satisfaction and loyalty has been studied at length, few if
any studies have focused on antecedents to customer loyalty for dissatisfied
complaining customers. A theoretical model focusing negative affect, satisfaction
with complaint resolution, and corporate image as antecedents to customer loyalty
is proposed and tested empirically. First, satisfaction with complaint resolution
has a positive impact on customer loyalty. Complaint resolution is thus an
important element of the company’s customer retention strategy. Second, negative
affect caused by the initial service failure has a negative impact on satisfaction
with complaint resolution and customer loyalty. From this finding we can imply
that the customer starts the resolution process from a deficit. Finally, corporate
image has a positive impact on customer loyalty. From this finding we can learn
that corporate image plays a role not only in attracting new customers, but also in
retaining existing dissatisfied customers.
Key words: Dissatisfaction, complaint resolution, negative affect, corporate
image, customer loyalty.
3
Introduction
Today it has become a truism that service quality is crucial to customer
satisfaction, customer retention, and profitability. Statements like “Satisfaction
guaranteed”, “Quality is our number 1 priority”, “Built to last”, and “No surprise
or money back” are evidence of service companies’ belief in quality as the bridge
to future revenue. However, not all companies manage to deliver services of high
quality and to the satisfaction of its customers. Whereas satisfaction with a service
or service provider may be a strong incentive for customers to maintain or increase
current retention rate, dissatisfaction with a service or service provider may be a
strong incentive to exit from the interaction. In fact Reichheld & Sasser (1990)
claim that for suppliers of services, customer defection may have a stronger impact
on the bottom line than scale, market share, unit cots, and other factors usually
associated with competitive advantage.
The primary focus of previous research on customer dissatisfaction, cf. (Day &
Landon, 1976; Gilly & Gelb, 1982; Bearden & Teel, 1983a; Richins, 1983; Richins,
1987; Singh, 1990; Folkes, 1984, 1988) has been to explain which particular type of
complaint behavior a dissatisfied customer might choose. In a review of the
complaint literature, Robinson (1978) claims that most studies have not been
generalizable. On the other hand, work related to resolution management, cf.
(Hirschman, 1970; Fornell and Wernerfeldt, 1987, 1988; Rust, Subramanian and
4
Wells, 1992) is mostly theoretical derivations based on stringent mathematical
assumptions.
In short one is left with the impression that work related to antecedents to
customer loyalty for dissatisfied complaining customers is lacking. This is
surprising given current research focus on relationship marketing, customer
loyalty and the importance of customer retention for the company's long term
profitability.
The purpose of this paper is to examine the impact of negative affect, corporate
image and satisfaction with complaint resolution on customer loyalty. The study
is limited to dissatisfied complaining customers. Respondents are recruited from
twelve different service industries. A conceptual model treating satisfaction with
complaint resolution, initial negative affect, corporate image, and customer loyalty
as latent variables with multiple indicators is proposed. Next, the results of an
empirical study testing the model are presented. Finally the implications of the
findings are discussed.
The conceptual model
Management discovers the organization's inability to satisfy its customers via two
feedback mechanisms: exit and voice (Hirschman, 1970). Exit implies that the
5
customer stops buying the company's services while voice is customer complaints
expressing the consumers' dissatisfaction directly to the company. Customer exit
or change of patronage will have an impact on the long-term revenue of the
company. According to Hirschman (1970) and Fornell and Wernerfeldt (1987) the
number of customers who defect due to dissatisfaction, may be reduced;
• if the number of dissatisfied customers is reduced (e.g. improved service
quality).
• if the number of dissatisfied non-complaining customers is reduced (e.g.
increased voice).
• if the number of lost complaining customers is reduced (e.g. improved
complaint resolution).
In our model we do not limit customer loyalty of dissatisfied complaining
customers to a function of satisfaction with complaint resolution. We believe that
negative affect caused by negative disconfirmation of expectations from the initial
service encounter may have a negative impact on the satisfaction judgement of
complaint resolution and customer loyalty. We also believe that most customers
have formed a perception of and attitude toward the supplier. Previous
experience, word-of-mouth, media or advertising may be the background for this
corporate image. This customer held image of the company is believed to have a
positive impact on customer loyalty. The conceptual model is illustrated in Figure
1.
6
Place Figure 1 about here
Since the effects of disconfirmation on satisfaction are well established, we will
briefly describe customer satisfaction and customer loyalty, but focus our
discussion on initial negative affect and corporate image as the "new" variables.
7
Methods
In the following section we will discuss the constructs in the conceptual model,
proposed analysis, and sample.
Defining the measures
Initial negative affect
Most references on affect build on Bradburn's (1969) affect-balance theory which
claims that events in life alternate between the positive and the negative, and that
instances of one do not preclude occurrences of the other. This argument is
particularly relevant to services since the service product consists of a number of
attributes which may be perceived as pleasant or unpleasant (Oliver, 1993).
Bearden and Teal (1983b) suggest that consumer complaint behavior (i.e. voice/no
voice) is an action resulting from the emotions of dissatisfaction. Due to monetary
costs, frustration, anxiety, tension the customer begins in a deficit (Oliver, 1997).
Initial negative affect is the common denominator describing the unsatisfactory
service encounter experienced by customers who voiced or have not voiced their
dissatisfaction to the company. Depending on degree of deficit, initial negative
affect is believed to impact on the satisfaction judgment of the resolution process
and customer loyalty. Affect is a generic term covering a whole range of
preferences, evaluations, moods and emotions. Emotions refer to a complex
8
variety of affects, beyond merely feeling good or bad. It involves intense feelings
with physiological arousal, which may last for some time (Fiske & Taylor, 1991).
Research in consumer satisfaction, (cf. Westbrook, 1980), and in psychology, (cf.
Schwartz & Clore, 1983), shows that positive and negative affective orientations
color later affective judgment of every variety. The Mano and Oliver Framework
(1993) identifies negative affect as a negative antecedent to satisfaction. Initial
negative affect triggered by the initial service failure my thus have a negative
impact on the satisfaction judgment of complaint resolution due to the customer
being in a negative state of mind. It is also likely that initial negative affect for the
same reason may have a negative impact on customer loyalty. Based on the above
discussion there is ample reason to believe that excitation transferred from one
source, i.e. dissatisfaction with the initial service, to another, i.e. satisfaction with
complaint resolution, may color subsequent customer loyalty both directly and
indirectly.
In summary, a customer who is dissatisfied with the initial service encounter
experiences some degree of negative affect, e.g. anger, disappointment, negative
surprise. For dissatisfied complaining customers, initial negative affect is believed
to impact on the satisfaction judgment of complaint resolution and customer
loyalty. In this respect both cognitive and affective elements are assumed to
influence customer loyalty, i.e. whether customers exit or remain.
We express the above as:
9
H1: For dissatisfied complaining customers, initial negative
affect (INA) is negatively correlated with satisfaction with
complaint resolution (SCR).
H2: For dissatisfied complaining customers, initial negative
affect (INA) is negatively correlated with customer loyalty
(CL).
Satisfaction with complaint resolution
Oliver claims that satisfaction is derived from the Latin satis (enough) and facere
(to do or make) (Oliver, 1997, p. 11). Satisfaction is consequently related to
providing what is being sought to the point where fulfillment is reached. In the
marketing literature, satisfaction is defined in several ways:
The evaluation of emotions. (Hunt, 1977, p. 460)
Favorability of the individual's subjective evaluation. (Westbrook, 1980,
p. 49)
Summary psychological state resulting when the emotion surrounding
disconfirmed expectations is coupled with the consumer's prior feelings
about the consumption experience. (Oliver, 1981, p. 27)
A positive outcome from the outlay of scarce resources. (Bearden &
Teel, 1983a, p. 21)
10
Satisfaction is the consumer's fulfillment response. It is a judgment that
a product or service feature, or the product or service itself, provided (or
is providing) a pleasurable level of consumption-related fulfillment,
included levels of under- or overfulfillment. (Oliver, 1997, p. 13)
Finally, Fornell & Wernerfeldt (1987) define customer dissatisfaction as:
[....] a state of cognitive/affective discomfort caused by an insufficient
return relative to the resources spent by the consumer at the stage of the
purchase/consumption process.
From the above definitions it is understood that satisfaction is related to a
subjective evaluation of emotions. The emotion occurs as a function of
disconfirmation and relative output to input. The end result is a positive or
negative feeling of fulfillment. From the latter definition it is clear that negative
fulfillment can be restored by increasing the customer’s return, e.g. through good
complaint resolution.
In line with previous customer satisfaction studies where satisfaction is found to
impact on customer loyalty, we claim that satisfaction with complaint resolution
have a positive impact on customer loyalty. We express this as:
11
H3: For dissatisfied complaining customers, satisfaction with
complaint resolution (SCR) is positively correlated with
customer loyalty (CL).
Corporate image
According to Dowling (1988) corporate image is a construct similar to the construct
of self-concept in psychology. Both terms refer to a set of thoughts and feelings
having reference to an object (e.g. a company or person). Corporate image is
believed to have the same characteristics as self-schema (Markus, 1977). It consists
of cognitive generalization about the self and is derived from past experiences. To
most consumers schemas develop -become richer or change- over time. In the case
of dissatisfaction with complaint resolution this update may be gradual or
massively. In keeping with Rothbart’s (1981) terminology this may be termed
bookkeeping and conversion respectively.
Building on Keller (1993), substituting brand with organization may give a
definition of corporate image: “ [P]erceptions of an organization reflected in the
associations held in consumer memory.” Associations are close to what is termed
schemas in cognitive psychology, i.e. “[P]eople’s cognitive structures that
represent knowledge about a concept or type of stimulus, including its attributes
12
and the relations among attributes” (Brewer & Nakamura, 1984; Fiske & Linville,
1980).
Proof of the importance of corporate image was found in the Norwegian Customer
Satisfaction Barometer (NCSB). In all industries studied a positive correlation
between corporate image and customer satisfaction existed, and customer
satisfaction was positively correlated with customer loyalty in eight industries.
Interestingly, in the service station industry a positive correlation existed between
corporate image and customer loyalty. This may be due to the nature of the
service (generic) and the structure of the industry (large concentration, and
similarity in service concepts) which means there are hardly any switching costs
associated. Andreassen and Lindestad in their studies found that corporate image
played an active role in the formation of customer loyalty among existing
customers (Andreassen & Lindestad, 1998a, 1998b).
Since an existing consumer's attitude toward a company is primarily experience-
based, positive/negative disconfirmation may strengthen/ weaken the customer's
impression of and attitude toward the company. There are several possible
reasons why attitudes formed through direct experience are good predictors of
behavior. First, direct experiences provide a great deal of information. An
attitude developed as a function of experience may be better informed and more
robust. Second, because behavior provided an initial basis for forming the
13
attitude, the behavioral implications of the attitude may be clearer. Third, the
links between the attitude and the actual experience may make the attitude more
accessible in memory, and thus come to mind more readily confronted with a
similar situation. In the context of dissatisfaction with services and/or
dissatisfaction with complaint resolution we believe that corporate image may
function as a moderator to intended consumer behavior, i.e. one or two negative
experience does not cause the customer to exit from the market or change
patronage. In the case of dissatisfaction with services we believe that a good
corporate image may function as moderator on future intent and thus reduce
incentives to exit as a function of dissatisfaction with complaint resolution.
We express the above discussion as:
H4: For dissatisfied complaining customers, corporate image
(CI) is positively correlated with customer loyalty (CL).
The above hypotheses can be tested empirically by calculating the significant path
coefficients. The existence of significant path coefficients in the right direction
with the right sign is needed in order to clarify the hypothesized antecedents to
customer loyalty for dissatisfied complaining customers.
14
The sample
Data for this study were generated as a function of the annual process of collecting
data for the Norwegian Customer Satisfaction Barometer (NCSB) in 1996. At the
end of the NCSB-interview each respondent was asked if she, within the last six
months, had reason to be dissatisfied with the service for which he or she was
interviewed. If the respondent answered affirmatively, he or she was, as the last
question of the NCSB-interview, asked to participate in a new dissatisfaction study
at some agreed date and time within the next two to three weeks. No incentives
were promised or mentioned. If the respondent accepted the invitation, he or she
was called back and interviewed at the agreed date and time. Each interview
lasted from 12 to 15 minutes. No response at this stage was handled using three
callbacks. All telephone interviews both for the NCSB and the dissatisfaction
study were handled by an independent professional market research bureau.
The final sample contained 201 respondents of whom 55.2 per cent were males and
44.8 per cent females from 12 service industries. The average household income
was about NOK 380,000 (USD 60,000). The respondents' age varied between 18
and 80, a small skewness toward younger respondents. Mean birth year was 1955.
Average education was one to two years of college education, with a small bias
towards respondents not having finished their college degree. The respondents
were equally distributed between urban and rural areas.
15
Operationalizing the measures
Initial negative affect, corporate image, satisfaction with complaint resolution or
customer loyalty cannot be measured directly by using an objective measure
(Simon, 1974). If, however, they are treated as abstract and theoretical
phenomenon they can be measured as a weighted average of multiple indicators
(Johnson & Fornell, 1991). Measurement errors in the index are taken care of
through the quality and quantity of the measures being used (Fornell, 1989).
Consequently initial negative affect, corporate image, satisfaction with complaint
resolution, and customer loyalty were measured using multiple indicators. A
description of the indicators is presented in Appendix A. Standardized parameter
estimates for the indicators of the latent variables in the model are included in
Appendix B. The number of items making up each measure and Cronbach alpha
coefficients, which express internal consistency in measures, gives characteristics
of the latent variables. The Cronbach alpha coefficients are presented in Appendix
B. All Cronbach alpha scores are within the accepted zone.
Proposed analysis
We treat initial negative affect, satisfaction with complaint resolution, corporate
image, and customer loyalty as latent variables with multiple indicator measures
(i.e. ni, si, ci, and cli) (Bolton & Drew, 1991; Oliver, 1992). Customer loyalty is a
16
function of initial negative affect (-INA), satisfaction with complaint resolution
(+SSR), and corporate image (+CI). This can be expressed as:
Eq. 1 CL = ƒ( INA, SSR, CI, ζ1)
SCR = ƒ( INA, ζ2)
ζi, are error terms containing all other elements not accounted for in the equations.
A reflective measurement model was used, where the observed variables are
caused by the latent variables (Bollen, 1989). Endogenous (dependent) latent
variables are labeled η, and the exogenous (independent) latent variable is labeled
ξ. The dependence of the latent variables is then expressed as η = Βη + Γξ + ζ.
The relationships hypothesized in this study were analyzed by using structural
equation modeling (LISREL VIII, ML) (Jöreskog & Sörbom, 1989). A selection of fit
indices reported by LISREL 8.12a is included in Appendix C. According to the fit
indices the theoretical models fit the data reasonably well (Medsker, Williams, &
Holahan, 1994; Hair, Anderson, Tatham, & Black, 1995). Reestimation of the same
model using Generalized Least Squares (GL) reports parameter estimates in the
same range with the same sign. This is an indication of good model fit of the
structural model (Olsson, 1996).
17
Parameter estimates
According to Jöreskog (1993) and Anderson and Gerbing (1988) a two-step
approach is preferable for testing structural equation models. 1 First, the
measurement model is estimated without imposing any structural constraints.
This allows for inspection of the lack of fit that can be attributed to the
measurement alone. The second step includes the structural relationships
proposed by the theoretical framework. By using the two-step approach one
avoids the confusion in interpretation that can result from one-step approach
(Anderson & Gerbing, 1988). This study employed the two-step approach.
The estimated standardized path coefficients between the endogenous and
exogenous variables (i.e. the gamma matrix) are illustrated in Table 1.
Place Table 1 about here
1 Fornell and Yi (1992) who claim that the underlying assumptions of the two-step
approach are difficult to meet challenge this view.
18
As can be seen from Table 1 initial negative affect has a negative impact on
satisfaction with complaint resolution and customer loyalty. Corporate image has
a positive but somewhat weaker impact on customer loyalty. Satisfaction with
complaint resolution has strong positive impact on customer loyalty (0.57, t =
5.52).
Discussion
The growing recognition of relationship marketing makes the importance of
understanding post-purchase consumer evaluations more important. Based on the
model structured and the data sampled H1 is accepted. Initial negative affect has a
significant negative impact on satisfaction with complaint resolution. H2 is
accepted. Initial negative affect has a significant negative impact on customer
loyalty. H3 is accepted. Satisfaction with complaint resolution has a significant
positive impact on customer loyalty. H4 is accepted. Corporate image has a
significant positive impact on customer loyalty.
A successful complaint resolution, as perceived by the complainer, is a positive
surprise and may create strong positive feelings (delight). An unsuccessful
resolution will create strong negative feelings (anger). Both outcomes will impact
customer loyalty. This finding is in keeping with numerous studies of customer
satisfaction. Interestingly in this study satisfaction with complaint resolution was
19
the stronger driver of customer loyalty. These findings support the importance of
understanding antecedents to satisfaction with complaint resolution. 2
The negative affect cause by negative disconfirmation of expectations in the initial
service encounter has a carry over effect on the satisfaction judgment of complaint
resolution. Independent of the outcome of the resolution process, negative affect
stimulates exit behavior. The findings from hypotheses one and two point to the
importance of improving service quality in order to avoid failures. Johnston goes
one step further when he suggests that manager must actively seek out dissatisfied
non-complaining customers (Johnston, 1995). His claim is supported by this
study.
A good corporate image can compensate for a bad or mediocre complaint
resolution. Customers will balance the complaint resolution experience with
previous encounters, i.e. customers may consider the initial incident as irregular
and not representative for the company. If the customer perceives the incident
which gave reason to complain as a one-time episode this will not change the
customer’s attitude toward to company. In this respect corporate image functions
2 In a forthcoming study one researcher found that equity rather than
disconfirmation of expectation was the stronger driver of satisfaction with service
recovery (Andreassen, forthcoming 2000).
20
as an aggregated expectation formed through previous encounters or external
sources.
Managerial implications
The findings from the present study illustrate the importance of a professional
resolution process. The fact that satisfaction with complaint resolution has the
strongest impact on customer loyalty underscores the importance of complaint
resolution in creating long-term customer interactions. This calls for a deeper
understanding of antecedent to satisfaction with complaint resolution in order to
achieve satisfaction. Negative affect caused by the initial service failure has a
strong carryover effect on the satisfaction judgment of the resolution and future
intent. This calls for programs, which may improve the company’s current service
quality. Given negative affect’s impact on customer loyalty the importance of
actively seeking out dissatisfied non-complaining customers is apparent from this
study. The importance of developing and confirming a good corporate image is
also apparent from this study. Like a shadow from the past a good corporate
image moderates any negative effects caused from dissatisfaction with complaint
resolution. On the other hand, dissatisfied complaining customers who where not
satisfied with the company’s effort in trying to recover, will update their current
perception of and attitude toward the company. A similar experience in the next
encounter may stimulate exit behavior despite numerous previous successful
21
encounters. This argument is supported by the carry over effect from negative
affect on customer loyalty. A good corporate image is created partly as a function
of what the company does in its daily operations, and partly through its marketing
communication, and partly through the media. People’s perception of a company
will create expectations of the company with regard to complaint resolution.
Dissatisfied complaining customers expect more from a company they have
experienced as or perceive as being customer oriented. Complaint management
and complaint handling must thus be designed in accordance with the company’s
profile communicated through media or advertisements.
Summary
Building on theory from consumer behavior, affect-balance theory, and cognitive
psychology this paper considered dissatisfaction with services and antecedents to
customer loyalty. A theoretical model was proposed and tested empirically based
on a cross-sectional national sample of 201 dissatisfied complaining customers of
services. The results suggested that negative affect caused by the initial service
failure have a negative impact on satisfaction with complaint resolution and
customer loyalty. Second, satisfaction with complaint resolution has a positive
impact on customer loyalty. Finally, corporate image had a positive impact on
customer loyalty. Of the three constructs, satisfaction with complaint resolution
has the strongest impact of customer loyalty. The paper pointed out the
22
importance of successful complaint resolution and initiatives that actively seek out
dissatisfied non-complaining customers. Finally, customers’ satisfaction with
complaint resolution may confirm or stimulate change of current perception of and
attitude toward the company. A negative outcome plus the effect of negative
affect from the initial service failure may speed up this process.
23
APPENDIX A
Measures
Initial negative affect
Using Watson & Telgen's (1985) typology of affect, high negative affect was
measured combining three works (Watson & Tellegen, 1985; Russel, 1980;
Plutchik, 1980).
• disappointed
• angry
• surprised
To which degree would you say that your dissatisfaction at that moment can be
described as follow: (to the interviewer: by “that moment” we refer to the moment
dissatisfaction arose)
1. Disappointment (possible description of dissatisfaction at the moment
dissatisfaction arose) (-5=in very low degree, +5=in very high degree)
2. Anger (possible description of dissatisfaction at the moment dissatisfaction
arose) (-5=in very low degree, +5=in very high degree)
24
3. (negative) Surprise(possible description of dissatisfaction at the moment
dissatisfaction arose) (-5=in very low degree, +5=in very high degree)
Corporate image
The construct is operationalized through the use of four items, which is believed to
reflect corporate image. These items were derived at after a pretest among 400
respondents concerning banking and charter services and applied in the
dissatisfaction study. The items are:
• opinion of the company
• the company’s profile
• perception of company being customer-oriented
• company related word of mouth from other
I am going to ask you now some few questions regarding your general attitude
and feelings for *?COMPANY.
1. In general, how positive or negative would you say that your perception of
*?COMPANY is? (-5=very negative, +5=very positive)
2. How satisfied or dissatisfied are you with the way *?COMPANY presents
itself? (To the interviewer: we refer here to the way the company presents itself
to the public e.g. through advertising, attitudes the company expresses and the
like) (-5=very dissatisfied, +5=very satisfied)
25
3. To what extent do you perceive *?COMPANY as customer oriented? (-5=in
very low degree, +5=in very high degree)
4. How positive or negative do you perceive that others mention *?COMPANY?
(-5=very negative, +5=very positive)
Satisfaction with complaint resolution
Market researchers distinguish between transaction-specific satisfaction and their
global evaluation of the service (Holbrook & Corfman, 1985; Olshavsky, 1985). In
this study satisfaction with complaint resolution (SCR) was measured using two
items;
• overall satisfaction with complaint resolution (aided)
• compared to ideal performance, i.e. complaint resolution
1. How satisfied or dissatisfied are you with the way *?COMPANY has so far
kept you informed regarding the development of your case? (-5=very
dissatisfied, +5=very satisfied)
2. Imagine an ideal way of processing complaints. If you consider *?COMPANY’s
way of processing your complaint so far, how far from or close to do you think
*COMPANY is to this ideal? (-5= very far from the ideal, +5= very close to the
ideal).
Customer loyalty
26
Two items are used.
• remaining loyal to the company
• providing referrals
1. How probable or improbable is that you will continue being a customer of
*?COMPANY in a year from now? (-5=very improbable, +5=very probable)
2. In case a friend of yours asks you for advice when choosing COMPANY, how
probable or improbable is that you would recommend the person to choose
*?COMPANY? (-5=very improbable, +5=very probable)
APPENDIX B
Place Table B-1 about here
Place Table B-2 about here
27
28
APPENDIX C
Model fit
Place Table C-1 about here
29
Table 1
Influence on the exogenous variable on the endogenous variables
Satisfaction with
complaint resolution
Initial negative
affect
Corporate Image
Satisfaction with
complaint resolution
- 0.28
(0.09)
t = -2.97
Customer loyalty 0.57
(0.10)
t = 5.55
-0.19
(0.09)
t = -2.00
0.17
(0.09)
t = 1.93
30
Table B-1
Standardized parameter estimates for the indicators of the seven latent variables
in the model
Indicator Estimate
Initial negative affect λx1.1 0.78
Initial negative affect λx1.2 0.46
Initial negative affect λx1.3 0.62
Corporate image λx4.13 0.69
Corporate image λx4.14 0.55
Corporate image λx4.15 0.53
Corporate image λx4.16 0.48
Customer loyalty λy1.1 0.77
Customer loyalty λy1.2 0.77
Satisfaction with complaint resolution λy2.3 0.85
Satisfaction with complaint resolution λy2.4 0.88
31
Table B-2
Chronbach alpha coefficients for seven constructs
Construct Number of items Cronbach's alpha
Satisfaction with complaint
resolution
2 .88
Initial negative affect 3 0.55
Corporate image 4 .79
Customer loyalty 2 .76
“Norms”
(Nunnally, 1967, p. 226) 0.5 - 0.8
((Nunnally, 1978, p. 245-
246)
0.7 - 0.8
(Peterson, 1994) 0.77 3
3 Mean score across 4.286 alpha coefficients, 1.032 samples and 832 studies investigated
32
Table C-1
Fit indices provided by LISREL
Indices Values
Chi square 40.71
39 df
(P = 0.40)
RMSEA 0.015
GFI 0.96
AGFI 0.94
NFI 0.93
NNFI 1.0
CFI 1.0
CN 307.70
33
Figure 1
The conceptual model
CL
η1
ζ1
s2
s1
CI
ξ2
c1
ci
c4
γ12
β12
ζ2
SSR
η2
INA
ξ1
n1
n2
n3
γ11
γ21
s1
s2
-H2-H1
H3
H4
34
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