Identification and analysis of moderator variables

Purpose Research on the relationship between customer satisfaction and customer loyalty has advanced to a stage that requires a more thorough examination of moderator variables. Limited research shows how moderators influence the relationship between customer satisfaction and customer loyalty in a service context; this article aims to present empirical evidence of the conditions in which the satisfaction‐loyalty relationship becomes stronger or weaker. Design/methodology/approach Using a sample of more than 700 customers of DIY retailers and multi‐group structural equation modelling, the authors examine moderating effects of several firm‐related variables, variables that result from firm/employee‐customer interactions and individual‐level variables (i.e. loyalty cards, critical incidents, customer age, gender, income, expertise). Findings The empirical results suggest that not all of the moderators considered influence the satisfaction‐loyalty link. Specifically, critical incidents and income are important moderators of the relationship between customer satisfaction and customer loyalty. Practical implications Several of the moderator variables considered in this study are manageable variables. Originality/value This study should prove valuable to academic researchers as well as service and retailing managers. It systematically analyses the moderating effect of firm‐related and individual‐level variables on the relationship between customer satisfaction and loyalty. It shows the differential effect of different types of moderator variables on the satisfaction‐loyalty link.