A study on industrial customers loyalty to application service providers – The case of logistics information services

The growth of application service providers has been phenomenal in application service industry worldwide. Application service providers usually provide service which is comprised with modularized and standard components. Customers can easily switch to another supplier based on the comparison between cost and benefit if their service is comprised with modularized and standard components. So, keeping a long-term relationship with industrial customers is getting an imperative strategy for application service providers in order to pursue more predictable source of revenues and successive income streams. Yet, cost-effective feature of ASPs is not the sufficient condition for ensuring business success. Cultivating relationship management whose core concept is to enhance loyalty of existing customers gradually becomes a critical issue for application service providers. This study investigates economic and psychological factors simultaneously and compares subtle difference between influences of economic and psychological factors on customer loyalty. Empirical result from a questionnaire survey leads to several findings. The importance of psychological factors is relative importance to loyalty formation in comparison with economic factors. Service quality both directly and indirectly affects customer loyalty. Trust affects loyalty mediated by affective commitment. Switching barrier affects continuous commitment, while it positively moderates the relationship of service quality and loyalty. This finding is contrary to literature. Moreover, influences of affective and continuous commitment are distinct by business types. Findings reveal that psychological factors are also important to loyalty formation in B2B environment. Firms could pay more attention on commitment. Implications and limitations are discussed. Keywords—Commitment, Loyalty, Switching barrier, Service quality, Trust.