The Role of Corporate Image for Quality in the Formation of Attitudinal Service Loyalty

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Drawing from signaling theory, this study investigates the processes through which corporate image (CI) for quality affects attitudinal loyalty. The research hypotheses are examined using data from a cross-sectional survey and two scenario-based experiments. Overall, findings across these three studies suggest that the effects of CI upon loyalty are channeled through customer satisfaction and perceived value. The effects of CI on perceived value and loyalty are stronger relative to the effects of employee interaction quality (IQ) when IQ is measured as an overall evaluation. However, when employee IQ is measured in reference to a specific service encounter, it becomes a stronger driver of perceived value and loyalty relative to CI. Regardless of the context of measurement (i.e., overall evaluation vs. a specific service encounter), employee IQ exerts a stronger influence on customer satisfaction than CI. CI negatively moderates the effect of employee IQ on customer satisfaction and loyalty, rendering the effect of employee IQ upon customer evaluations less critical for service providers with stronger CIs. The findings highlight the relevance and importance of CI as a signal of unobservable quality, which should be measured and closely monitored by management. Managers should also recognize the central role of customer satisfaction, especially in channeling the effects of IQ upon loyalty, and therefore, design policies that enhance frontline employee ability and motivation to deliver satisfying customer experiences.