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Although more effort and resources are traditionally directed to aggressive marketing, to gain new customers, research has shown that defensive strategies, concerned with retaining customers, can be more profitable (Fornell, 1992). High customer retention leads to long-lasting customer–provider relationships that, in turn, lead to improved financial performance through increased cross selling, possibly at higher prices, repeat purchases and positive word-of-mouth communication (Reichheld and Sasser, 1990; Reichheld, 1996; Grönroos, 2000).

The prevailing idea in the literature is that the behaviour of customers towards a service firm is driven by their loyalty (or disloyalty) to the firm (eg Jacoby and Kyner, 1973; Bansal and Taylor, 1999) which comes as a result of how much customers believe that what they get from a specific supplier is worth more than what they can get from others. Previous research has shown that loyalty is primarily affected by satisfaction and service quality (eg Zeithaml et al., 1996; Bloemer et al., 2002; Durvasula et al., 2004). A number of other variables, such as price and value, are also discussed in the literature as affecting customer loyalty either directly or through service quality/customer satisfaction (Zeithaml et al., 1996). Culture has been recently assigned a prominent place in this discussion and a whole stream of research has been initiated concerning culture’s consequences on service quality, customer satisfaction and loyalty (eg Furrer et al., 2000; Liu et al., 2001).