Customer loyalty and corporate reputation

To what extent does corporate reputation affect customer loyalty? This study (.pdf, begin reading at page 28) found that corporate social responsibility (CSR) is the second most important factor influencing corporate reputation (with overall competency being first). In fact, CSR was found to have a higher impact on corporate reputation than product price. The authors posit that CSR impacts customer loyalty because such corporate behavior elicits customers’ positive emotions. Left unresolved is whether a company can over-leverage such CSR activities in its push to drive customer loyalty. In other words, where is a marketing line crossed in customers’ eyes where a negative emotion is associated with a company’s overt efforts to leverage its CSR activities; is there diminishing returns on such “cause marketing” activities.

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