Does intention translate into action? : investigating the impact of loyalty intention on future usage

Abstract

Purpose: The purpose of the study is to develop a structural and a predictive model of the future purchase behavior of the consumers from value, quality and satisfaction and also finding the role of consumer loyalty in the above-mentioned model. Design/methodology/approach: Based on survey and purchase data of a sample of 235 respondents, the authors have used structural equation modeling to develop a structural model and three-stage least square regression to develop and validate the predictive model. Findings: In the structural model, the authors found that perceived service quality and network quality leads to customer satisfaction which also leads to loyalty intentions. However, neither past purchase behavior nor loyalty has significant predictive power to predict future usage. But the interaction effect of loyalty and past purchase predicts future purchase significantly. Research limitations/implications: The study went beyond structural model and developed a behavioral predictive model which can overcome self-reporting bias. Also, the study focused on the moderating role of loyalty in predicting future purchase quantity, thus contributing toward the theoretical understanding of the effects of loyalty. Practical implications: Other than providing a forecasting model, the study helps the service managers to understand the importance of the relational constructs than the tangible constructs. Moreover, it also suggests optimally target the big buyers through the loyalty programs to ensure higher future revenues. Originality/value: The study provides new insight on the impact of loyalty intention of consumer’s purchase behavior and shows the boundary conditions of predictive power of loyalty intention and past purchase on future purchase. Moreover, this is one of the very few studies that have focused on these relationships in Indian context.