Determinant of Customer Loyalty and Its Impact on Switching Cost: The Study of Freight Forwarding Market in Thailand
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Abstract
The objectives of this research were to examine the influence of logistics service quality (LSQ) and customer relationship management (CRM) that affect customer loyalty and the switching cost. The research was conducted using a quantitative medthod using questionnaire with 228 international shipper companies in Thailand and using linear regression analysis and structural equation modelling (SME). The results indicated that the customer loyalty in the freight forwarder market significantly influenced towards the switching cost in terms of procedure cost, financial cost, and relational cost. This study found that customer loyalty highly affected the switching cost in the aspect of procedure costs, followed by financial cost, and relational cost, respectively. In addition, the study of LSQ and CRM indicated that customer knowledge management (CM) as an element of CRM highly affected customer loyalty (CL), followed by LSQ in terms of logistics output quality (OC), logistics process quality (PQ), and capability quality (CQ), as well as other elements of CRM such as IT usability (IT) significantly affected customer loyalty respectively. The contribution of this research is that the result can be used as a guideline in creating and keeping customer loyalty in the Thai freight market through emphasizing on CRM and LSQ of international shipper companies continuously, which will affect the switching costs in order to create a strong customer base for sustainable business growth.
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