University Report: Customer Value, Loyalty, and Satisfaction

This report delves into the interconnectedness of customer value, loyalty, and satisfaction, emphasizing their critical roles in business success. It defines customer value as the perceived worth of a product or service relative to its price and the fulfillment of customer needs. Customer loyalty is described as the sustained preference for a brand, even when alternatives exist. Customer satisfaction is defined as the alignment between product performance and customer expectations. The report highlights the positive relationship between customer value and satisfaction, and the mediating role of customer satisfaction in fostering customer loyalty. It argues that customer satisfaction is essential for repeat purchases and recommendations, ultimately linking customer value to customer loyalty. The report concludes that customer satisfaction acts as a crucial mediator, influencing the transition from perceived value to sustained loyalty.

Running head: CUSTOMER VALUE, LOYALTY AND SATISFACTION
Customer Value, Loyalty and Satisfaction
The Name of the Student:
The name of the University:
Author Note:

1CUSTOMER VALUE, LOYALTY AND SATISFACTION
Table of Contents
Introduction....................................................................................................................2
Discussion......................................................................................................................2
Definitions..................................................................................................................2
Interrelation................................................................................................................2
Mediating Role of Customer Satisfaction..................................................................3
Conclusion......................................................................................................................3
References......................................................................................................................4

2CUSTOMER VALUE, LOYALTY AND SATISFACTION
Introduction
With growing time, business organisations perceived the significance of customer
satisfaction, as it is easier and less costly to retain the existing customers by continuously
satisfying their needs than trying to win new customers. This report discusses the interrelation
between customer value, loyalty and satisfaction, and their co-dependency.
Discussion
Definitions
Integrating various interpretations of customer value, it can be said that it is the value
that the customer finds in the offerings of the product and the price that he has to pay for it in
relation to the satisfaction of its use (Martelo Landroguez, Barroso Castro & Cepeda-Carrión,
2013). Customer loyalty, on the other hand, is related to the retention of customers for a long
period. When a customer continuous to purchase from a particular brand or company despite
the fact that other brands or companies offer the same product in a lower price or with some
added bonus, that customer is categorised as a loyal customer (Toufaily, Ricard & Perrien,
2013). The definition of customer satisfaction can be viewed as the relation between the
performances of the products of the organisation and the needs and requirements of the
customers (Orel & Kara, 2014).
Interrelation
Customer value has a direct and positive relation to customer satisfaction. When a
customer perceives value in a product, which means the customer finds the requirements in
that product, and has to pay and expected amount for it, the customer become satisfied with
that purchase. Customer satisfaction also has a positive effect on the customer loyalty (Lam et
al., 2004). A satisfied customer become a repetitive buyer, in other words a loyal customer, of

3CUSTOMER VALUE, LOYALTY AND SATISFACTION
that product, and recommends it to other prospective customers. Hence, it can be said that
customer satisfaction leads to customer loyalty.
Mediating Role of Customer Satisfaction
In order to satisfy the customer, the organisations need to offer products that have all
the expected requirements and perform as anticipated by the customer while purchasing.
Therefore, it can be said that a customer is satisfied when the perceived value of the product
is aligned with the result of use. On the other hand, a customer would not purchase a product
repetitively and become a loyal customer of a product or brand unless it does not fulfil all the
requirements and the customer is satisfied with it (Caruana, 2002). Thereafter, in order to
become a loyal customer, the customer has to be satisfied with product, which is possible
only through meeting the customer value of the product. Concluding from the above
discussion, it can be said that the customer satisfaction has a mediating roe between customer
loyalty and value.
Conclusion
The above discussion explicitly indicates that the customer satisfaction plays a
mediating role between customer value and customer loyalty. Customer value is the
customer’s perception of the product, whether it satisfies all the needs and costs within
affordable range, before purchase. Customer loyalty is the act of purchasing the same product
repetitively or becoming a repetitive customer of a particular brand or company. Before
becoming loyal, a customer has to be satisfied, and that can happen only when the product
meets the customer value.

4CUSTOMER VALUE, LOYALTY AND SATISFACTION
References
Caruana, A. (2002). Service loyalty: The effects of service quality and the mediating role of
customer satisfaction. European journal of marketing, 36(7/8), 811-828.
Lam, S. Y., Shankar, V., Erramilli, M. K., & Murthy, B. (2004). Customer value, satisfaction,
loyalty, and switching costs: an illustration from a business-to-business service
context. Journal of the academy of marketing science, 32(3), 293-311.
Martelo Landroguez, S., Barroso Castro, C., & Cepeda-Carrión, G. (2013). Developing an
integrated vision of customer value. Journal of Services Marketing, 27(3), 234-244.
Orel, F. D., & Kara, A. (2014). Supermarket self-checkout service quality, customer
satisfaction, and loyalty: Empirical evidence from an emerging market. Journal of
Retailing and Consumer Services, 21(2), 118-129.
Toufaily, E., Ricard, L., & Perrien, J. (2013). Customer loyalty to a commercial website:
Descriptive meta-analysis of the empirical literature and proposal of an integrative
model. Journal of Business Research, 66(9), 1436-1447.