Purpose – The purpose of this research is to examine different customer satisfaction and loyalty metrics and test their relationship to customer retention, recommendation and share of wallet using micro (customer) level data. Design/methodology/approach – The data for this study come from a two-year longitudinal Internet panel of over 8,000 US customers of firms in one of three industries (retail banking, mass-merchant retail, and Internet service providers (ISPs)). Correlation analysis, CHAID, and three types of regression analyses (best-subsets, ordinal logistic, and latent class ordinal logistic regression) were used to test the hypotheses. Findings – Contrary to Reichheld’s assertions, the results indicate that recommend intention alone will not suffice as a single predictor of customers’ future loyalty behavior. Use of a multiple indicator instead of a single predictor model performs better in predicting customer recommendations and retention. Research limitations/implications – The limitation of the paper is that it uses data from only three industries. Practical implications – The presumption of managers when looking at recommend intention as the primary, even sole gauge of customer loyalty appears to be erroneous. The consequence is potential misallocations of resources due to myopic focus on customers’ recommend intentions. Originality/value – This is the first scientific study that examines recommend intentions and its impact on retention and recommendation on the micro (customer) level.

In research on customer loyalty in services, satisfaction has often been mentioned as an important determinant. However, empirical evidence concerning the relationship between loyalty and satisfaction has remained equivocal. This may be even more so for services that are delivered over an extended period of time in which consumers actively take part. We propose that for the extended service experience consumers are motivated by the realisation of values and that attainment of these values affects patronage decisions. Moreover, as the service delivery process is extensive we argue that consumer mood during the service delivery is another important factor that may have an impact on loyalty deliberations. Therefore, in this paper we examine the simultaneous effect of satisfaction, value attainment and positive mood in an extended service setting. The results reveal that the relationship between satisfaction and loyalty with respect to extended services is moderated by value attainment and positive mood. More specifically, the satisfaction-loyalty association is strongest when consumers perceive that the service does not help them in the attainment of instrumental values and when low positive moods are experienced. In contrast, the relationship between satisfaction and loyalty is weakest when the service helps consumers in attaining their values and when they experience a positive mood. This signifies that value attainment and positive mood do indeed play an additional role in explaining customer loyalty. An important implication is that value attainment and positive mood may function as a buffer for diminishing loyalty as a result of lower levels of service satisfaction.