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EMPLOYEES’ ENGAGEMENT AND CUSTOMERS’ LOYALTY FOR UTILITARIAN SERVICES: A MODERATED MEDIATION MODEL
Corresponding Author(s) : Sajjad Ahmad Afridi
Humanities & Social Sciences Reviews,
Vol. 9 No. 3 (2021): May
Abstract
Purpose of the study: The present study aimed to determine the impact of employee engagement on customers’ loyalty through customers’ engagement. Moreover, this study also aimed to examine the moderating role of customers’ trust and the mediating role of customers’ engagement on the relationship between employees’ engagement and customers’ loyalty.
Methodology: The data were collected from 220 insurance service users through a non-probability sampling technique. Data reliability and validity were confirmed through Cronbach’s alpha and confirmatory factor analysis and hypotheses were tested through Andrew F. Hayes model 7.
Main Findings: Results show a significant direct effect of employee engagement on customers’ loyalty. Moreover, the findings confirmed the significant role of customers’ engagement as a mediator between employee engagement and customers’ loyalty. Results also confirmed customers’ trust moderating effect between employee engagement and customers’ engagement. Furthermore, the result confirmed the mediation of trust-based-customers engagement between the link of employee engagement and customers’ loyalty.
Applications of this study: This study would have some positive repercussions for utilitarian services such as insurance services providers. For instance, this study's findings revealed the process through which companies can make customers more loyal. Insurance companies through their employees' engagement and customer engagement can make a dyade that can better explain customers’ loyalty.
Novelty/Originality of this study: This study explored the underlying mechanism that links employee engagement to customers’ loyalty. Moreover, this study introduces a new term “trust-based engagement†as an important attribute in enhancing customers’ loyalty in general and particularly for insurance companies.
Keywords
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- Afridi, S. A., Shahjehan, A., Haider, M., & Munawar, U. Abasyn Journal of Social Sciences.
- Akaka, M. A., & Vargo, S. L. (2015). Extending the context of service: from encounters to ecosystems. Journal of Services Marketing, 29(6/7), 453-462. doi:10.1108/JSM-03-2015-0126 DOI: https://doi.org/10.1108/JSM-03-2015-0126
- Astuti, H. J., & Nagase, K. (2014). Patient loyalty to healthcare organizations: Relationship marketing and satisfaction. International Journal of Management and Marketing Research, 7(2), 39-56.
- Bowden, Gabbott, M., & Naumann, K. (2015). Service relationships and the customer disengagement–engagement conundrum. Journal of marketing management, 31(7-8), 774-806. DOI: https://doi.org/10.1080/0267257X.2014.983143
- Bowden, J. L.-H. (2009). The process of customer engagement: a conceptual framework. Journal of marketing theory and practice, 17(1), 63-74. DOI: https://doi.org/10.2753/MTP1069-6679170105
- Bowen, J. T., & Shoemaker, S. (2003). Loyalty: A strategic commitment. The Cornell Hotel and Restaurant Administration Quarterly, 44(5-6), 31-46. DOI: https://doi.org/10.1177/001088040304400505
- Brodie, Hollebeek, L. D., Jurić, B., & Ilić, A. (2011). Customer engagement: Conceptual domain, fundamental propositions, and implications for research. Journal of service research, 14(3), 252-271. DOI: https://doi.org/10.1177/1094670511411703
- Brodie, R. J., Fehrer, J. A., Jaakkola, E., & Conduit, J. (2018). Actor Engagement in Networks: Defining the Conceptual Domain. Journal of service research, 1094670519827385.
- Cain, L., Tanford, S., & Shulga, L. (2018). Customers’ Perceptions of Employee Engagement: Fortifying the Service–Profit Chain. International Journal of Hospitality & Tourism Administration, 19(1), 52-77. DOI: https://doi.org/10.1080/15256480.2017.1305312
- Coulter, A. (2011). Engaging patients in healthcare: McGraw-Hill Education (UK).
- Dörnyei, Z. (2007). Research methods in applied linguistics: Quantitative, qualitative, and mixed methodologies: Oxford University Press Oxford.
- Frennea, C., Mittal, V., & Westbrook, R. A. (2014). 10 the satisfaction profit chain. Handbook of service marketing research, 182. DOI: https://doi.org/10.4337/9780857938855.00017
- Frow, P., McColl-Kennedy, J. R., & Payne, A. (2014). Co-creation practices: Their role in shaping a health care ecosystem. Industrial Marketing Management, 56, 24-39. doi:10.1016/j.indmarman.2016.03.007 DOI: https://doi.org/10.1016/j.indmarman.2016.03.007
- Giovanis, A. N., & Athanasopoulou, P. (2018). Consumer-brand relationships and brand loyalty in technology-mediated services. Journal of Retailing and Consumer Services, 40, 287-294. DOI: https://doi.org/10.1016/j.jretconser.2017.03.003
- Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of applied Psychology, 87(2), 268. DOI: https://doi.org/10.1037/0021-9010.87.2.268
- Hollebeek, L. D. (2011). Demystifying customer brand engagement: Exploring the loyalty nexus. Journal of marketing management, 27(7-8), 785-807. DOI: https://doi.org/10.1080/0267257X.2010.500132
- Hollebeek, L. D., Srivastava, R. K., & Chen, T. (2019). SD logic–informed customer engagement: integrative framework, revised fundamental propositions, and application to CRM. Journal of the academy of Marketing Science, 47(1), 161-185. DOI: https://doi.org/10.1007/s11747-016-0494-5
- Hu, L. t., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural equation modeling: a multidisciplinary journal, 6(1), 1-55. DOI: https://doi.org/10.1080/10705519909540118
- Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co-creation: a service system perspective. Journal of service research, 17(3), 247-261. DOI: https://doi.org/10.1177/1094670514529187
- Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management journal, 33(4), 692-724. DOI: https://doi.org/10.5465/256287
- Kim, N. (2014). Employee turnover intention among newcomers in travel industry. International Journal of Tourism Research, 16(1), 56-64. DOI: https://doi.org/10.1002/jtr.1898
- Kumar, V. (2013). Profitable customer engagement: Concept, metrics and strategies: SAGE Publications India.
- Kumar, V., & Pansari, A. (2016). Competitive advantage through engagement. Journal of Marketing Research, 53(4), 497-514. DOI: https://doi.org/10.1509/jmr.15.0044
- Li, L. P., Juric, B., & Brodie, R. J. (2017). Dynamic multi-actor engagement in networks: the case of united breaks guitars. Journal of Service Theory and Practice, 27(4), 738-760. DOI: https://doi.org/10.1108/JSTP-04-2016-0066
- Lowe, G. (2012). How employee engagement matters for hospital performance. Healthcare Quarterly, 15(2), 29-39. DOI: https://doi.org/10.12927/hcq.2012.22915
- Macey, W. H., & Schneider, B. (2008). The meaning of employee engagement. Industrial and organizational Psychology, 1(1), 3-30. DOI: https://doi.org/10.1111/j.1754-9434.2007.0002.x
- Malhotra, N. K., Kim, S. S., & Agarwal, J. (2004). Internet users' information privacy concerns (IUIPC): The construct, the scale, and a causal model. Information systems research, 15(4), 336-355. DOI: https://doi.org/10.1287/isre.1040.0032
- Meesala, A., & Paul, J. (2018). Service quality, consumer satisfaction and loyalty in hospitals: Thinking for the future. Journal of Retailing and Consumer Services, 40, 261-269. DOI: https://doi.org/10.1016/j.jretconser.2016.10.011
- Mittal, V., Han, K., & Westbrook, R. A. (2018). Customer Engagement and Employee Engagement: A Research Review and Agenda Customer Engagement Marketing (pp. 173-201): Springer. DOI: https://doi.org/10.1007/978-3-319-61985-9_8
- Pansari, A., & Kumar, V. (2017). Customer engagement: the construct, antecedents, and consequences. Journal of the academy of Marketing Science, 45(3), 294-311. DOI: https://doi.org/10.1007/s11747-016-0485-6
- Pansari, A., & Kumar, V. (2018). Customer engagement marketing Customer engagement marketing (pp. 1-27): Springer. DOI: https://doi.org/10.1007/978-3-319-61985-9_1
- Plé, L. (2016). Studying customers’ resource integration by service employees in interactional value co-creation. Journal of Services Marketing, 30(2), 152-164. DOI: https://doi.org/10.1108/JSM-02-2015-0065
- Ram, P., Swapna, B. G., & Prabhakar, G. V. (2011). Work environment, service climate, and customer satisfaction: Examining theoretical and empirical connections. International Journal of Business and Social Science, 2(20).
- Salanova, M., Agut, S., & Peiró, J. M. (2005). Linking organizational resources and work engagement to employee performance and customer loyalty: the mediation of service climate. Journal of applied Psychology, 90(6), 1217. DOI: https://doi.org/10.1037/0021-9010.90.6.1217
- Schaufeli, W. B., Salanova, M., González-Romá, V., & Bakker, A. B. (2002). The measurement of engagement and burnout: A two sample confirmatory factor analytic approach. Journal of Happiness studies, 3(1), 71-92. DOI: https://doi.org/10.1023/A:1015630930326
- Slåtten, T., & Mehmetoglu, M. (2011). Antecedents and effects of engaged frontline employees: A study from the hospitality industry. Managing Service Quality: An International Journal, 21(1), 88-107. DOI: https://doi.org/10.1108/09604521111100261
- So, K. K. F., King, C., & Sparks, B. (2014). Customer engagement with tourism brands: Scale development and validation. Journal of Hospitality & Tourism Research, 38(3), 304-329. DOI: https://doi.org/10.1177/1096348012451456
- Vivek, S. D. (2009). A scale of consumer engagement. University of Alabama Libraries.
- Vivek, S. D., Beatty, S. E., & Morgan, R. M. (2012). Customer engagement: Exploring customer relationships beyond purchase. Journal of marketing theory and practice, 20(2), 122-146. DOI: https://doi.org/10.2753/MTP1069-6679200201
- Wajid, A., Raziq, M. M., Malik, O. F., Malik, S. A., & Khurshid, N. (2019). Value co-creation through actor embeddedness and actor engagement. Marketing Intelligence & Planning. doi:10.1108/MIP-07-2018-0241 DOI: https://doi.org/10.1108/MIP-07-2018-0241
- Wangenheim, F. v., Evanschitzky, H., & Wunderlich, M. (2007). Does the employee–customer satisfaction link hold for all employee groups? Journal of Business Research, 60(7), 690-697. DOI: https://doi.org/10.1016/j.jbusres.2007.02.019
- Yi, Y., & Gong, T. (2013). Customer value co-creation behavior: Scale development and validation. Journal of Business Research, 66(9), 1279-1284. doi:10.1016/j.jbusres.2012.02.026 DOI: https://doi.org/10.1016/j.jbusres.2012.02.026
- Young, H. R., Glerum, D. R., Wang, W., & Joseph, D. L. (2018). Who are the most engaged at work? A metaâ€analysis of personality and employee engagement. Journal of Organizational Behavior, 39(10), 1330-1346. DOI: https://doi.org/10.1002/job.2303
- Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of service quality. Journal of marketing, 60(2), 31-46. DOI: https://doi.org/10.1177/002224299606000203
References
Afridi, S. A., Shahjehan, A., Haider, M., & Munawar, U. Abasyn Journal of Social Sciences.
Akaka, M. A., & Vargo, S. L. (2015). Extending the context of service: from encounters to ecosystems. Journal of Services Marketing, 29(6/7), 453-462. doi:10.1108/JSM-03-2015-0126 DOI: https://doi.org/10.1108/JSM-03-2015-0126
Astuti, H. J., & Nagase, K. (2014). Patient loyalty to healthcare organizations: Relationship marketing and satisfaction. International Journal of Management and Marketing Research, 7(2), 39-56.
Bowden, Gabbott, M., & Naumann, K. (2015). Service relationships and the customer disengagement–engagement conundrum. Journal of marketing management, 31(7-8), 774-806. DOI: https://doi.org/10.1080/0267257X.2014.983143
Bowden, J. L.-H. (2009). The process of customer engagement: a conceptual framework. Journal of marketing theory and practice, 17(1), 63-74. DOI: https://doi.org/10.2753/MTP1069-6679170105
Bowen, J. T., & Shoemaker, S. (2003). Loyalty: A strategic commitment. The Cornell Hotel and Restaurant Administration Quarterly, 44(5-6), 31-46. DOI: https://doi.org/10.1177/001088040304400505
Brodie, Hollebeek, L. D., Jurić, B., & Ilić, A. (2011). Customer engagement: Conceptual domain, fundamental propositions, and implications for research. Journal of service research, 14(3), 252-271. DOI: https://doi.org/10.1177/1094670511411703
Brodie, R. J., Fehrer, J. A., Jaakkola, E., & Conduit, J. (2018). Actor Engagement in Networks: Defining the Conceptual Domain. Journal of service research, 1094670519827385.
Cain, L., Tanford, S., & Shulga, L. (2018). Customers’ Perceptions of Employee Engagement: Fortifying the Service–Profit Chain. International Journal of Hospitality & Tourism Administration, 19(1), 52-77. DOI: https://doi.org/10.1080/15256480.2017.1305312
Coulter, A. (2011). Engaging patients in healthcare: McGraw-Hill Education (UK).
Dörnyei, Z. (2007). Research methods in applied linguistics: Quantitative, qualitative, and mixed methodologies: Oxford University Press Oxford.
Frennea, C., Mittal, V., & Westbrook, R. A. (2014). 10 the satisfaction profit chain. Handbook of service marketing research, 182. DOI: https://doi.org/10.4337/9780857938855.00017
Frow, P., McColl-Kennedy, J. R., & Payne, A. (2014). Co-creation practices: Their role in shaping a health care ecosystem. Industrial Marketing Management, 56, 24-39. doi:10.1016/j.indmarman.2016.03.007 DOI: https://doi.org/10.1016/j.indmarman.2016.03.007
Giovanis, A. N., & Athanasopoulou, P. (2018). Consumer-brand relationships and brand loyalty in technology-mediated services. Journal of Retailing and Consumer Services, 40, 287-294. DOI: https://doi.org/10.1016/j.jretconser.2017.03.003
Harter, J. K., Schmidt, F. L., & Hayes, T. L. (2002). Business-unit-level relationship between employee satisfaction, employee engagement, and business outcomes: A meta-analysis. Journal of applied Psychology, 87(2), 268. DOI: https://doi.org/10.1037/0021-9010.87.2.268
Hollebeek, L. D. (2011). Demystifying customer brand engagement: Exploring the loyalty nexus. Journal of marketing management, 27(7-8), 785-807. DOI: https://doi.org/10.1080/0267257X.2010.500132
Hollebeek, L. D., Srivastava, R. K., & Chen, T. (2019). SD logic–informed customer engagement: integrative framework, revised fundamental propositions, and application to CRM. Journal of the academy of Marketing Science, 47(1), 161-185. DOI: https://doi.org/10.1007/s11747-016-0494-5
Hu, L. t., & Bentler, P. M. (1999). Cutoff criteria for fit indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural equation modeling: a multidisciplinary journal, 6(1), 1-55. DOI: https://doi.org/10.1080/10705519909540118
Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co-creation: a service system perspective. Journal of service research, 17(3), 247-261. DOI: https://doi.org/10.1177/1094670514529187
Kahn, W. A. (1990). Psychological conditions of personal engagement and disengagement at work. Academy of Management journal, 33(4), 692-724. DOI: https://doi.org/10.5465/256287
Kim, N. (2014). Employee turnover intention among newcomers in travel industry. International Journal of Tourism Research, 16(1), 56-64. DOI: https://doi.org/10.1002/jtr.1898
Kumar, V. (2013). Profitable customer engagement: Concept, metrics and strategies: SAGE Publications India.
Kumar, V., & Pansari, A. (2016). Competitive advantage through engagement. Journal of Marketing Research, 53(4), 497-514. DOI: https://doi.org/10.1509/jmr.15.0044
Li, L. P., Juric, B., & Brodie, R. J. (2017). Dynamic multi-actor engagement in networks: the case of united breaks guitars. Journal of Service Theory and Practice, 27(4), 738-760. DOI: https://doi.org/10.1108/JSTP-04-2016-0066
Lowe, G. (2012). How employee engagement matters for hospital performance. Healthcare Quarterly, 15(2), 29-39. DOI: https://doi.org/10.12927/hcq.2012.22915
Macey, W. H., & Schneider, B. (2008). The meaning of employee engagement. Industrial and organizational Psychology, 1(1), 3-30. DOI: https://doi.org/10.1111/j.1754-9434.2007.0002.x
Malhotra, N. K., Kim, S. S., & Agarwal, J. (2004). Internet users' information privacy concerns (IUIPC): The construct, the scale, and a causal model. Information systems research, 15(4), 336-355. DOI: https://doi.org/10.1287/isre.1040.0032
Meesala, A., & Paul, J. (2018). Service quality, consumer satisfaction and loyalty in hospitals: Thinking for the future. Journal of Retailing and Consumer Services, 40, 261-269. DOI: https://doi.org/10.1016/j.jretconser.2016.10.011
Mittal, V., Han, K., & Westbrook, R. A. (2018). Customer Engagement and Employee Engagement: A Research Review and Agenda Customer Engagement Marketing (pp. 173-201): Springer. DOI: https://doi.org/10.1007/978-3-319-61985-9_8
Pansari, A., & Kumar, V. (2017). Customer engagement: the construct, antecedents, and consequences. Journal of the academy of Marketing Science, 45(3), 294-311. DOI: https://doi.org/10.1007/s11747-016-0485-6
Pansari, A., & Kumar, V. (2018). Customer engagement marketing Customer engagement marketing (pp. 1-27): Springer. DOI: https://doi.org/10.1007/978-3-319-61985-9_1
Plé, L. (2016). Studying customers’ resource integration by service employees in interactional value co-creation. Journal of Services Marketing, 30(2), 152-164. DOI: https://doi.org/10.1108/JSM-02-2015-0065
Ram, P., Swapna, B. G., & Prabhakar, G. V. (2011). Work environment, service climate, and customer satisfaction: Examining theoretical and empirical connections. International Journal of Business and Social Science, 2(20).
Salanova, M., Agut, S., & Peiró, J. M. (2005). Linking organizational resources and work engagement to employee performance and customer loyalty: the mediation of service climate. Journal of applied Psychology, 90(6), 1217. DOI: https://doi.org/10.1037/0021-9010.90.6.1217
Schaufeli, W. B., Salanova, M., González-Romá, V., & Bakker, A. B. (2002). The measurement of engagement and burnout: A two sample confirmatory factor analytic approach. Journal of Happiness studies, 3(1), 71-92. DOI: https://doi.org/10.1023/A:1015630930326
Slåtten, T., & Mehmetoglu, M. (2011). Antecedents and effects of engaged frontline employees: A study from the hospitality industry. Managing Service Quality: An International Journal, 21(1), 88-107. DOI: https://doi.org/10.1108/09604521111100261
So, K. K. F., King, C., & Sparks, B. (2014). Customer engagement with tourism brands: Scale development and validation. Journal of Hospitality & Tourism Research, 38(3), 304-329. DOI: https://doi.org/10.1177/1096348012451456
Vivek, S. D. (2009). A scale of consumer engagement. University of Alabama Libraries.
Vivek, S. D., Beatty, S. E., & Morgan, R. M. (2012). Customer engagement: Exploring customer relationships beyond purchase. Journal of marketing theory and practice, 20(2), 122-146. DOI: https://doi.org/10.2753/MTP1069-6679200201
Wajid, A., Raziq, M. M., Malik, O. F., Malik, S. A., & Khurshid, N. (2019). Value co-creation through actor embeddedness and actor engagement. Marketing Intelligence & Planning. doi:10.1108/MIP-07-2018-0241 DOI: https://doi.org/10.1108/MIP-07-2018-0241
Wangenheim, F. v., Evanschitzky, H., & Wunderlich, M. (2007). Does the employee–customer satisfaction link hold for all employee groups? Journal of Business Research, 60(7), 690-697. DOI: https://doi.org/10.1016/j.jbusres.2007.02.019
Yi, Y., & Gong, T. (2013). Customer value co-creation behavior: Scale development and validation. Journal of Business Research, 66(9), 1279-1284. doi:10.1016/j.jbusres.2012.02.026 DOI: https://doi.org/10.1016/j.jbusres.2012.02.026
Young, H. R., Glerum, D. R., Wang, W., & Joseph, D. L. (2018). Who are the most engaged at work? A metaâ€analysis of personality and employee engagement. Journal of Organizational Behavior, 39(10), 1330-1346. DOI: https://doi.org/10.1002/job.2303
Zeithaml, V. A., Berry, L. L., & Parasuraman, A. (1996). The behavioral consequences of service quality. Journal of marketing, 60(2), 31-46. DOI: https://doi.org/10.1177/002224299606000203