Can Tourism Providers Buy their Customers’ Loyalty? Examining the Influence of Customer-Provider Investments on Loyalty

As many segments of the tourism industry reach the maturation stage, marketers have turned their attention to building long-term relationships with their best customers. Despite the importance of customer loyalty for understanding these relationships, there is no consensus as to how loyalty develops. Most loyalty programs currently being used promote repeated purchases but are ineffective in enhancing customers’ psychological attachment. The purpose was to test a conceptual framework of the development of loyalty that is grounded in resource theory, reciprocity, and customer equity. The results indicated that if customers perceived that a provider was making an investment in them, they in turn made a similar investment in the provider, and those investments led to loyalty. The findings revealed that investments of love, status, and information were more closely associated with loyalty than investments of money. These findings support the proposed theoretical model and help explain how well-designed loyalty programs may lead to increased psychological attachment. Recommendations for effective relationship marketing strategies are provided.