offline. This characteristic enables us to isolate the effects of the medium on satisfaction, separate from the effects of service attributes.
Prior research studies on satisfaction and loyalty have primarily been conducted in the offline environment. We extend previous research in many ways. First, to our knowledge, ours is the first empirical study to compare the effects of the medium (online versus offline) on customer satisfaction, loyalty, and the relationship between satisfaction and loyalty. Second, we study the reciprocal relationship between customer satisfaction and loyalty that offers the potential for deeper insights into the nature of the relationship between these constructs. We also empirically test this reciprocal relationship. Much prior research has focused on the impact of customer satisfaction on loyalty, but not vice-versa. Third, unlike previous studies that have generally focused on action/behavioral loyalty, we focus explicitly on attitudinal loyalty to the service provider. Attitudinal loyalty is similar to affective/conative loyalty proposed by Oliver (1999) and represents a higher-order, or long-term, commitment of a customer to the organization, which cannot be inferred by merely observing customer repeat purchase behavior. Customer retention can occur without attitudinal loyalty, if for example, the customers are indifferent, or there are no other viable choices in the market.
2. Conceptual framework and research hypotheses
Consistent with Oliver (1999), we define satisfaction as the perception of pleasurable fulfillment of a service, and loyalty as deep commitment to the service provider. We focus on attitudinal loyalty, rather than on behavioral loyalty (Day, 1969; Dick & Basu, 1994) for the following reasons. A behaviorally loyal customer may be spuriously loyal, that is stay with an organization or service provider until he/she can find some better alternative in the marketplace (Dick & Basu, 1994). An attitudinally loyal customer, on the other hand, has some attachment or commitment to the organization and is not easily swayed by a slightly more attractive alternative. Attitudinal loyalty not only indicates higher repurchase intent, but also resistance to counter-persuasion, resistance to adverse expert opinion, willingness to pay a price premium, and willingness to recommend the service provider to others.
We selected the travel industry as the context for our study for three reasons: (1) Although people can make travel choices (reservations) online, they still have to experience the service offline. Therefore, the actual service encounter itself is no different if the same service provider and service options are chosen online or offline. (2) The travel industry is one of the largest industries online and has had a relatively long history of online presence. Thus, many people are comfortable making travel choices online. (3)