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The loyalty ripple effect: Appreciating the full value of customers

Dwayne D. Gremler (Department of Business, College of Business and Economics, University of Idaho, Moscow, ID, USA and)
Stephen W. Brown (College of Business, Arizona State University, Tempe, AZ, USA)

International Journal of Service Industry Management

ISSN: 0956-4233

Article publication date: 1 August 1999



The influence of loyal customers can reach far beyond their proximate impact on the company. This impact is analogous to the ripple caused by a pebble tossed into a still pond. In this article we introduce the loyalty ripple effect construct and define it as the influence, both direct and indirect, customers have on a firm through (1) generating interest in the firm by encouraging new customer patronage or (2) other actions or behaviours that create value for the organization. That is, in addition to their revenue stream, we suggest loyal customers may engage in several behaviours, including word‐of‐mouth communication, that add value to or reduce costs for the firm. In our discussion, we provide some examples to illustrate our point and conduct an exploratory study related to arguably the most salient ripple generator, word‐of‐mouth communication. The paper concludes with managerial implications and provides some suggestions for future research.



Gremler, D.D. and Brown, S.W. (1999), "The loyalty ripple effect: Appreciating the full value of customers", International Journal of Service Industry Management, Vol. 10 No. 3, pp. 271-293.




Copyright © 1999, MCB UP Limited

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