Examining the Causal Relationships among the Four Sub-Dimensions of Customer Lifetime Value in The Chain Restaurant Industry

With the evolution of relationship marketing, the concept of customer lifetime value (CLV) has been emerged and discussed importantly. The purpose of this research was to examine the causal relationships among the four sub-dimensions of customer lifetime value in the chain restaurant industry. Based on literature review, theoretical relationships among the four sub-dimensions of CLV were derived and six hypotheses were proposed. To test the proposed theoretical relationships,data was collected from 371 chain restaurant patrons. According to the data analysis, it was concluded that the four sub-dimensions of CLV were highly interrelated, and they play significant role in maximizing CLV. Specifically, customer acquisition not only influences customer retention, but also influences customer relationship expansion and customer defection. Therefore, customer acquisition strategies should receive more attention from the perspective of chain restaurant company's long-term success. Also, the mediating role of customer relationship expansion was found in the CLV formation process. Based on data analysis, theoretical/empirical implications were discussed.