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The Factors That Affect Customer Value and Its Impact on the Customer Loyalty

DOI: 10.33258/birci.v1i4.122
Authors:
Jefry Rom Donny
Jefry Rom Donny
Jefry Rom Donny
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Undang Juju
Undang Juju
Undang Juju
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Eddy Jusuf
Eddy Jusuf
Eddy Jusuf
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Maskarto Lucky Nara Rosmadi
Maskarto Lucky Nara Rosmadi
Maskarto Lucky Nara Rosmadi
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Abstract and Figures

This study aims to find out and analyze the factors that influence customer value and their impact on customer loyalty. This study uses quantitative methods with descriptive and verification approaches using explanatory surveys. The analysis technique uses SEM analysis. From the results of the study obtained data that the factor of consumer psychology moves from the point of not good to good while the customer value factors and customer loyalty moves from good enough to well. Verification results show both partially and simultaneously these factors have a positive and significant effect. Customer value has a positive and significant effect on customer loyalty with the magnitude of its influence stronger when compared to consumer psychology and the marketing mix towards customer value. This proves empirically that customer value factors are intervening between consumer psychology and marketing mix with customer loyalty.
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299
The Factors That Affect Customer Value and Its Impact on the
Customer Loyalty
Jefry Romdonny1, Undang Juju2, Eddy Jusuf2, Maskarto Lucky Nara Rosmadi3
1Doctoral Student, Pasundan University, Indonesia
2Pasundan University, Indonesia
3Institute of Economic Kridatama Bandung, Indonesia
makartolucky@gmail.com
Abstract: This study aims to find out and analyze the factors that influence customer value
and their impact on customer loyalty. This study uses quantitative methods with descriptive
and verification approaches using explanatory surveys. The analysis technique uses SEM
analysis. From the results of the study obtained data that the factor of consumer psychology
moves from the point of not good to good while the customer value factors and customer
loyalty moves from good enough to well. Verification results show both partially and
simultaneously these factors have a positive and significant effect. Customer value has a
positive and significant effect on customer loyalty with the magnitude of its influence stronger
when compared to consumer psychology and the marketing mix towards customer value. This
proves empirically that customer value factors are intervening between consumer psychology
and marketing mix with customer loyalty.
Keywords: customer value; service quality; consumer psychology; customer loyalty
I. Introduction
In the era of globalization and business competition that is so tight, competitive
advantage over a product has its own value for consumers [1]. The competitive advantage
that the company has gives a proposition value and supports customer value [2], [3].
Therefore, companies must effectively plan strategies in an effort to attract the attention of
customers. Customer value includes product quality and service. Providing optimal service is
the right strategy applied to the success of business activities [4], [5], because maintaining is
more difficult than getting new customers [6], [7].
To maintain customers, of course business people must be able to know the tastes of
consumers, especially from the social psychological aspects and consumer culture which can
change at any time [8]. By understanding what is the obligation of the producer, the quality of
service provided is considered as a differentiator in an effort to meet the needs of customers
or consumers [9], [10]. The development of a service company to consumers or customers
must also be improved [11]. customer value indicates that the product produced can be
accepted by consumers. This must be addressed by the producers as well as an evaluation
material on how to retain consumers (consumer loyalty) so as not to turn to other products or
companies [12], [13].
From the description above, the researcher can formulate several problems, namely:
1. How big is the impact of service quality on customer value
2. How big is the impact of consumer psychology on customer value
3. How big is the impact of customer value on customer loyalty
The purpose of this study is to know and analyze the impact of service quality and
consumer psychology on customer value and its effect on customer loyalty.
Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume I, No 4, December 2018, Page: 299-305
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
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300
II. Review of Literature
2.1 Customer Value
Customers are long-term investments for companies that must be given the best
service for the continuity of their business. Companies must be able to create customer value
in the process of buying and providing good service [14], [15]. Therefore, companies must be
able to utilize people's preferences, create services, and market surveys in order to be able to
support customer value for the products they produce better and satisfactorily [16], [17], [18].
To be able to satisfy customers, companies must be able to combine several elements
including customer information, human resources, and business capabilities they have [19].
With the steps taken by the company it is expected that customers can be satisfied so that it
will increase customer value. Conversely, if the customer is not satisfied, it will have an
impact on distrust of the products produced by the company [20]. The results of empirical
research conducted by Eid [21], Ganguli & Roy [22], Sohibah, Mohammad, Salim, & Ismail
[23] , Tabassum, Zafar, Ali, Alam, & Ali [24], Al-Hawari & Mouakket [25], Wu & Liu [26]
it can be concluded that customer value has a positive and significant effect on customer
loyalty.
2.2 Service Quality
Service is an effort given by the company to consumers so that they are interested in
buying the products they produce. Providing services to consumers is subjective so it is
difficult to measure. Therefore, companies must know the characteristics and characteristics
of each consumer [27]. Good service quality will be a special power for consumers to choose
the products they want. Therefore, service quality will have a direct impact on customer
satisfaction [28], [29].
By providing optimal service quality, it will have an impact on customer loyalty and
indirectly related to buying products that producers produce [30], [31], [32]. The results of
empirical research conducted by Heri [28], Alex and Thomas [ 30], Yu [31], and Qomariah
[33] it can be concluded that giving good services to consumers will have a positive impact
on the company's image, the products produced.
2.3 Customer Psychology
Consumer psychology is one of the supporting factors that can affect customer value.
This was revealed by Rintamaki et al. [34] that in order for customer value to be formed, the
company (producer) needs to understand aspects of consumer psychology. Rintamaki's
opinion is reinforced by Jahanshahi et al. [35] and Chang & Dibb [36] that there are several
factors that can influence customer value, including situational, psychological and socio-
cultural.
However, basically the customer value must be expected by the producer
psychologically in order to have a positive impact. The results of empirical research
conducted by Scheers [37] & Chang [38] can be concluded that consumer psychology has a
positive impact on customer value related to the products and services it receives.
2.4 Customer Loyalty
Quality services and products will add to the attractiveness of consumers for goods
produced by producers. This factor can cause consumers to be loyal and will not turn to
Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume I, No 4, December 2018, Page: 299-305
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
www.bircu-journal.com/index.php/birci
emails: birci.journal@gmail.com
birci.journal.org@gmail.com
301
similar products from other manufacturers. By maximizing service and satisfaction to
consumers, it will maintain loyalty and loyalty for a long period of time [33], [39], [40].
Therefore customer satisfaction is the most relevant to customer loyalty and a driver
of success in marketing [41], [42]. The results of empirical research conducted by Chen &
Tsai [39], Fiol, Alcaniz, Tena, & Garcia [40 ], Lam, Shankar, Erramilli, Murthy [43],
Gounaris, Spiros, Tzempelikos, & Kalliopi [44] it can be concluded that the quality of
customer value and customer loyalty is important for the success of a company in increasing
its relationship with customers and achieving competition competitive in organizational
performance.
III. Research Methods
This research was conducted at the Triples S ball company located in Majalengka
Regency, West Java, Indonesia. The research method uses quantitative methods with
exploratory and explanatory descriptive approaches. Sources of data come from primary data
and secondary data using structured interview techniques through questionnaires. Test the
normality of the data with the help of SPSS version 20.00 software. The collected data is then
analyzed and processed using Structural Equation Modeling (SEM) software Lisrel 8.72.
IV. Results and Discussion
Empirical data obtained from Triple S soccer ball company are:
Figure 1. Number of Customers Based on Length of Use
Based on Figure 1 above, it can be explained, that of the total number of customers
used as respondents as a whole population, the majority came from vulnerable time more
than 6 months to 12 months as many as 154 respondents, while the least customers were
those who used soccer balls Triple S more than 2 years, namely 21 respondents. From the
results of the validity and reliability test on customer value factors, service quality, consumer
psychology, and customer loyalty are all valid with values above 0.300, while reliability with
values above 0.700.
34
139
154
47 21
Number of Customers Based on Length of Use
< 3 bulan
> 3 s.d 6 bulan
> 6 s.d 12 bulan
> 1 s.d 2 tahun
> 2 tahun
months
months
months
months
years
Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume I, No 4, December 2018, Page: 299-305
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
www.bircu-journal.com/index.php/birci
emails: birci.journal@gmail.com
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302
From the results of statistical analysis using Structural Equation Modeling (SEM) software
Lisrel 8.72 the following results are obtained:
Figure 2. Structure of Relationship of All Research Variables
From Figure 2 above can be explained, that the service quality factors and consumer
psychology have a positive and significant effect on customer value. While the customer
value factor has a positive and significant effect on customer loyalty. By understanding the
value of consumers and consumer psychology, the manufacturer of soccer brand Triple S will
better understand the right way to win the hearts of consumers who will have a positive
impact on the sale of Triple S brand football. With the increase in sales of Triple S brand
soccer, the survival of manufacturers Triple S brand soccer balls are maintained and
employees of Triple S soccer manufacturers can still work well. Therefore producers need to
pay attention and understand the psychological conditions of consumers better so that
consumer value is maintained properly. This result is in accordance with the opinion
expressed by Qomariah [33] and Chen & TSai [39] that customer value and customer loyalty
are important and important for the success of a company. This opinion is supported by the
results of a study conducted by Fiol, Alcaniz, Tena, & Garcia [40], Lam, Shankar, Erramilli,
Murthy [43] that customer value and loyalty can improve relations between producers and
consumers and achieve the expected goals of producers.
In addition, customer value is a very important one in order to increase sales of Triple
S. brand soccer balls. This is because if customers feel that what is received is more than the
sacrifice they make, surely this will delight the Triple S brand soccer customers. and finally
the customer becomes a loyal customer. This result is in accordance with the opinion of
Castaneda et al. [41] and Srinivasan, Anderson & Ponnavalu [42] that by giving satisfaction
to consumers it will have an impact on the success of product marketing. This opinion is
consistent with the research conducted by Tzempelikos, & Kalliopi [44] that customer
relations is a way to improve competitiveness and overall organizational performance.
Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume I, No 4, December 2018, Page: 299-305
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
www.bircu-journal.com/index.php/birci
emails: birci.journal@gmail.com
birci.journal.org@gmail.com
303
IV. Conclusion
From the research results, it can be concluded that consumer psychology and service
quality have a positive impact on customer value. By paying attention to the optimal service
element, it will make consumers / customers feel comfortable so as to create high customer
value. While customer value has a positive and significant impact on loyalty. The higher the
customer value, the more positive customer loyalty will be to the products produced by the
company. Therefore if the price is high but the benefits obtained by the customer are not
many, it will have an impact on the loyalty given by the customer.
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Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume I, No 4, December 2018, Page: 299-305
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
www.bircu-journal.com/index.php/birci
emails: birci.journal@gmail.com
birci.journal.org@gmail.com
304
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Budapest International Research and Critics Institute-Journal (BIRCI-Journal)
Volume I, No 4, December 2018, Page: 299-305
e-ISSN: 2615-3076(Online), p-ISSN: 2615-1715(Print)
www.bircu-journal.com/index.php/birci
emails: birci.journal@gmail.com
birci.journal.org@gmail.com
305
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... σ = 0.2 was chosen in order to not let a large number of samples cluster around the mean, i.e., to incorporate diversity in consumer interest. The a = 0.9 ensured that around 90% of the network is active [38], and the γ = 0.01 was chosen to maintain a significantly lower spread of negative influence [30]. Assuming influencer interaction with followers generates a large influence impact on the follower [28], we use the influence update c = 0.7. ...
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E-commerce system websites have helped to expand the business into the international sphere. Manage satisfaction, trust and customer loyalty to the use of services in the long term in view very important for business development. Lack of studies on the quality of service of E-commerce in the hotel industry in Malaysia in general and on the East Coast of Peninsular Malaysia in particular has prompted this study to be done. The main objective of this study was to identify and measure the perception of foreign tourists to the service factors of E-commerce website that influence satisfaction, trust and loyalty. Based on previous studies, a conceptual framework of this study were established, the relationship between E-commerce service quality, satisfaction, trust and customer loyalty in the hotel industry in the East Coast of Peninsular Malaysia. Tourism sector is the second largest foreign exchange earner after manufactured goods and the seventh largest contributor to the Malaysian economy with a Gross National Income (GNI) of RM47.2 billion in year 2013. The hotel industry is one of the tourism sectors. The hotel industries have international dimensions and have the use of the highest sites. Tourism and hotel industry, especially has proven to be a catalyst for development and these dynamics have turned the industry into a key-driver for economic growth.
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Impact of Product Quality, Service Quality and Contextual Experience on Customer Perceived Value and Future Buying Intentions
Article
Full-text available
  • Jan 2011
Recognizing that high satisfaction leads to high customer loyalty, companies today are aiming for total customer satisfaction. This article explains relative impact of product quality, service quality and contextual experience on customer perceived value and intention to shop in the future. The data has been collected using a questionnaire from 205 customers of a national retailer chain. The relative importance of product quality, service quality and contextual experience on customer perceived value and thus on customer preference and future intentions was measured using multiple regression. Also, the contribution of perceived value to preference and thus on future buying intention was also measured. Structural Equation Model (SEM) using Amos 4 was used to find the overall fitness of the model. It was found that product quality, service quality and contextual experience have a major influence on customer perceived value.
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Reviewing and Conceptualising Customer - Perceived Value
Article
Customer-perceived value is of concern for consumers wishing to make sound purchase choices, for practitioners who are keen to improve their customers' perceptions of value, and for researchers seeking to clarify the conceptual underpinnings of customer-perceived value and its relationship with other marketing variables. This paper synthesises the literature from marketing, economics, axiology and psychology to provide a holistic review of the customer-perceived value concept. Drawing on these sources facilitates deeper understanding and conceptualisation of customer-perceived value. Specifically, the paper seeks to understand customer-perceived value in both services and new shopping contexts, such as the online setting. The implications for researchers and managers are considered.
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