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Library's collection Library's IT development CancelThis study aimed to examine the influence of customer satisfaction on
financial performance and customer advocacy with the role of customer loyalty as
intervening variable, on companies with local brands in Indonesia. This study
encompassed samples of 68 firm-years comprised 14 companies in various sectors
listed in Indonesia Stock Exchange and whose brands appear on the published index
of Indonesia Original Brands (IOB) between 2011 until 2015. From eight
hypotheses proposed, three hypotheses are proven in this study. Based on data
processing utilizing PLS, there is a strong positive influence of customer
satisfaction to customer loyalty and from customer loyalty to customer advocacy.
The results also suggested that customer satisfaction in Indonesia has a significant
influence on short term financial performance when correlated to profitability, yet
not on long term performance measured against market value. However, customer
loyalty and customer advocacy do not have relationship with profitability
performance and market value. This low significance of this relationship might be
due to excessive resources spent to turn customer into loyal and be the advocate.