The objectives of this study were achieved both theoretically and empirically. This study presents preliminary evidence investigating the effect of relational benefits on perceived value to win customer loyalty. The results of this study have demonstrated that relational benefits are found significantly related to perceived value and indirectly influence customer loyalty via perceived value. Relational benefits play an important role in enhancing the value perceptions of customers. The findings suggest that customers judge the functional value based on all dimensions of relational benefits, which also can add symbolic value for the customers through the interaction with the service providers. The explanation for the relationship between relational benefits and perceived value could be that customers come to know that each time they visit a coffee outlet, they know what to expect and they will be recognized by employees who provide a great service to them. The customers have confidence that they will have a quality consumption experience each time they visit the coffee outlet and know that the employees will greet them by name and offer better service to them. It is believed that customers judge their value perceptions through these relational benefits in terms of functional value and also symbolic value. Therefore, it is apparent that as customers continue to receive relational benefits, particularly confidence benefits, every time they come in contact with the coffee outlet providers, they become aware of functional and symbolic value perceptions.
Furthermore, this study, as expected, supports that relational benefits have direct effect on customer loyalty (Hennig-Thurau et al., 2002). It goes without saying that the more positive perception customers showed on relational benefits, the more positive attitude customers showed on loyalty. In other words, such customer loyalty may require the perception of a high quality service with special emphasis on relational benefits. The above findings in understanding customers’ consumption experience of coffee outlets may serve as the foundation for coffee outlet operators to improve their marketing strategies to gain competitive advantages. On the other hand, this study also found that relational benefits have indirect effect on customer loyalty through perceived value. In view of the results obtained, we can say that perceived value play an important role between relational benefits and customer loyalty. It seems therefore that perceived value captures the fundamental effect, above relational benefits, and projects them onto loyalty, acting as a mediating variable.
This study empirically supports the finding that perceived value plays an important role in influencing customer loyalty (Cronin et al., 2000 and McDougall and Levesque, 2000). It is important to highlight that the study has adopted the multi-dimensional approach beyond the value for money to perceived value. This study identified that not only perceived functional value but also perceived symbolic value are significant predictors of customer loyalty. The findings have enabled this study to expand existing knowledge of the value perceived by the customer visiting coffee outlets in particular, by comparing the different value perceptions. Compared to previous studies which view value for money as functional value to influence customer loyalty (e.g. McDougall and Levesque, 2000 and Tam, 2004), the findings of this study reveal that symbolic value involving how a customer can improve the way they are perceived and how they gain pleasure in a stylish coffee outlet with a good reputation is a determinant value perception beyond the functional value in the prediction of customer loyalty. Previous studies focusing on functional value itself reach limited interpretation of how perceived value can affect customer loyalty. The results suggest that researchers should study customer loyalty not only as functional value but also symbolic value. The findings also suggest that customer loyalty can be generated through improving functional value as the bedrock and then building on top of this with symbolic value. The findings imply that marketers should not solely compete in price, location, and quality of functional value, but should differentiate their products and services from other competitors by providing symbolic value perception derived from social, emotional, aesthetics, and reputational aspects to attract and retain customers. Thus, it is believed that the relationships between perceived value and customer loyalty will be more thoroughly comprehended with functional and symbolic value perceptions, especially enhanced by relational benefits in an increasingly competitive.
This study provides a comprehensive view for coffee outlets to review their competitive advantages in relation to how the customers responded to their consumption experience, helping marketers and operators to provide benefits and value in their products and service offering, and further refine and adjust their marketing strategies to meet customers’ desires and needs effectively, ultimately to win customer loyalty. Finally, the model built for the present study is empirically tested from coffee outlet industry. This study could then be extended to other aspects of the hospitality industry where there exists competition across country or cultural comparison.