Customer loyalty and customer retention in services industry with a specific focus on the restaurant industry

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Schaeffer, Emilie
Issue Date
MA in Marketing
Dublin Business School
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Motivation: A lot of restaurant guess that service loyalty is important for future business growth but most of the time managers know neither ins and outs from customer loyalty nor the marketing strategy to set up to reach loyalty. Problem statement: The purpose of this work is to demonstrate how firms in the restaurant industry, have to set up a service marketing strategy, in a relationship marketing orientation, to establish customer loyalty and to retain customer by including factors that influence service experience in order to take advantage of service loyalty benefits. Approach: First a literature review has been done to explain the main theory, framework and models concerning service loyalty. Then a quantitative research has been conducted through questionnaire survey among restaurants managers based on a census in order to get a deep understanding about their marketing strategy, their opinions and knowledge about loyal customers. Finally, focus group sessions have been set up to provide new insight by identifying from the customer side, trends and patterns about customer loyalty in restaurants. The purpose was to know why customers do/don't stay loyal and which elements impact on their loyalty when they go to eat in a restaurant. Results: The findings show the paramount necessity of customer loyalty for restaurant but also of all the prerequisite and factors affecting the loyalty such as customer satisfaction, service quality, staff competences, servicescape quality and word of mouth. Benefits from loyalty are mentioned but also the importance of service recovery for loyalty in case of failure. Originality / Value: Lots of studies have been done about customer loyalty for consumers goods in general but also about services industry. However this report has a value added compared with the others studies because it focuses on restaurant sector only. In service loyalty, literature speaks essentially about hotel, bank industry but few deal with restaurants. Hence this study fills the gap between the literature and the reality which makes its originality and value.