The effect of environmental corporate social responsibility on customer retention: A mixed methods study on the mediating effect of customer behaviour

The effect of environmental corporate social responsibility on customer retention: A mixed methods study on the mediating effect of customer behaviour

As a beneficial strategy for most organisations, customer retention ensures that an organisation’s current customers are secured and maintained. As a joint company and community initiative for the creation of value, the use of corporate social responsibility (CSR) as a customer retention strategy to enhance an organisation’s profits while contributing to the preservation of the environment can be seen as a valuable tool for creating shared value (CSV). This study aims to explore Environmental Corporate Social Responsibility (ECSR) as a viable customer retention strategy, by investigating the effect of ECSR on customer behaviour, specifically customer satisfaction, customer trust and customer loyalty, and the effect of enhanced customer satisfaction, customer trust and customer loyalty (as mediating variables) on customer retention. The researcher has selected the food industry in which to conduct the research as the concept of ECSR is particularly relevant within the industry due to its negative environmental impact. A conceptual framework was devised, whereby concepts from the stakeholder theory and the social exchange theory were used to support the study. An explanatory sequential mixed methods design was used to answer the main research question of the study: What is the impact of Environmental Corporate Social Responsibility (ECSR) on customer behaviour, and how does this affect customer retention? The findings indicate that ECSR enhances customer behaviour, specifically customer satisfaction, customer trust and customer loyalty. However only customer trust and customer loyalty positively mediate the relationship between ECSR and customer retention. These findings provide a theoretical framework how the impact of ECSR on customer behavior affects customer retention. Furthermore, the findings from this research contribute to literature as the researcher uncovered that customers are more accepting of the time inconvenience, decreased taste, and increased cost of food items purchased from organisations within the food industry that practice ECSR, if such purchases result in a benefit to their health and contribute towards environmental preservation. This research contributes to consumer behaviour theories by providing a greater understanding of the role of ECSR in customer retention, particularly with regards to customer satisfaction, customer trust and customer loyalty. Keywords: customer retention, customer loyalty, customer behaviour, customer satisfaction, customer trust, environmental corporate social responsibility

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