THE INFLUENCE OF RELATIONSHIP QUALITY ON CUSTOMER LOYALTY IN THE CONTEXT OF OUTSOURCING RELATIONSHIPS IN THE MALAYSIAN HOTEL INDUSTRY

Securing loyalty and creating long-term relationships with existing customers has emerged as an important marketing agenda to service providers. It is more cost effective to re- market to the existing customers rather than attract, educate, and convert new ones. Thus, customer retention has been suggested as an easier and more reliable source of superior performance and long-term profitability. The increase in competitions in the hotel industry has made it crucial for service providers to retain the customers as well as the personnel. There are customers who remain loyal because of the value received from the services or high quality relationships demonstrated by the service providers. While relationship quality has been identified as an important predictor of customer loyalty, perceived value is also likely to influence customer loyalty. However, limited research has been conducted and minimal attention has been given to the relationships between perceived value, relationship quality, and customer loyalty in the context of outsourcing relationship. Therefore, this study intends to investigate the influence of perceived value and relationship quality on customer loyalty in the context of outsourcing relationships in the Malaysian hotel industry. Results of the study show that relationship quality mediates the relationship between perceived value and customer loyalty.