Abstract

Customers are playing an increasingly active role in the service industry and the importance of their participation is gradually been recognized. This study aims to develop and test a model for investigating, how customer participation enhances relationship benefits that help in winning customer loyalty. Using a self-administered questionnaire survey, 400 respondents from personal training industry were used for this study. The results show that customer participation has an indirect effect on custom loyalty via relationship benefits. In addition, customer participation also has direct influence and indirect influence via customer-employee relationships and customer-firm relationships respectively on relationship benefits. The results also reveal that loyalty to employee has significant and positive effect on loyalty to firm as well. These findings help firms to have a better understanding of customer participation, develop competitive strategies that differentiate them from competitors and win customer loyalty in an aggressive market.

Key words: Customer participation, customer-employee relationships, customer-firm relationships, relationship benefits, customer loyalty.