Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

Satisfaction and loyalty
Previous empirical research suggests that customer satisfaction is strongly associated with customer loyalty 
(Heskett et al., 1994; Karatepe, 2006). Fornell (1992) suggests that satisfied customers tend to be the most loyal 
customers who spend more money with the firm, often purchase additional services, and contributes significantly to 
a firm’s bottom line profit. Extant research also reveals that effective complaint handling is positively related to 
customer loyalty and the subsequent customer retention, which eventually leads to long-term profitability 
(Reichfield & Sasser, 1990; Tax et al., 1988). Additionally, the empirical findings of Oh (1999) for luxury hotels 

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