THE EFFECT OF EMPLOYEE’S COMMITMENTS ON CUSTOMER’S LOYALTY BASED ON TRANSACTION COST

Few researchers, such as Hansen, Sandvick and Selnes (2003) and Jones, Taylor and Bansal (2008), have mentioned about the effect of employee’s commitments and individual commitment on consumer’s loyalty for products. This study aims to integrate the organizational commitment provided by Hansen, Sandvik and Selnes (2003) with the affective commitment and the calculative commitment presented by Jones et al. (2008) to explore the three types of commitments which affect customer’s loyalty to the providers. Individual commitment, employee commitment, affective commitment and calculative commitment are selected as research variables. The research attempts to understand the factors and the effects of different commitments on consumer’s loyalty and consumer’s willing to continue consumptions under the agent’s services from the different insurance companies. The 300 consumers serviced by insurance agents are selected as research samples. The research method is applied questionnaires analyzed by multiple Hierarchical Regression analysis. The research results show that employee’s commitments and individual commitments positively influence the calculative commitment and the affective commitment which affect consumer’s loyalty. Transaction cost does not have positive effect on consumer’s loyalty.