How can green suppliers boost customer loyalty? Model proposition for energy markets

Abstract

Purpose

Clean and sustainable energy becomes an alternative to differentiate electricity suppliers, but it is necessary to have a better understanding of their behaviour to achieve green customer loyalty. This paper aims to deploy a behavioural model that helps explain loyalty of customers towards green electricity providers by including a series of antecedents such as trust, satisfaction, perceived environmental impact, propensity to trust and perceived risk.

Design/methodology/approach

The paper deploys a behavioural model that it is tested through structural equation modelling to a sample of 231 German electricity consumers with green contracts. The data analysis included two steps: first, the development and validation of the scales used to measure the constructs proposed in the model, and second, the model test.

Findings

Results demonstrate that trust and satisfaction directly influence loyalty, while satisfaction and the other variables included in the model have an indirect relationship with loyalty mediated by trust and satisfaction. As green characteristics of electricity are difficult to evaluate, managers should demonstrate in their communication the environmental effects of their activities while emphasising their capacity to attend to supply requirements for building long-term customer relationships.

Originality/value

The paper is focused on the understanding of those consumers who have signed a green electricity contract and the antecedents associated to their loyalty. The behavioural model helps identify how managers should apply marketing strategies to foster green consumers loyalty.

Citation

Cabanelas, P., Mezger, A., López-Míguens, M.J. and Rüdiger, K. (2024), "How can green suppliers boost customer loyalty? Model proposition for energy markets", International Journal of Energy Sector Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJESM-01-2022-0020