JultikaUniversity of Oulu repository

Abstract

This study aims to extend the understanding of the effect of false sustainability claims on customer retention. In recent years, knowledge and capability to manage corporate sustainability have become crucial and sustaining customer relationships is one of the primary purposes of corporate sustainability. Extreme competition sometimes causes unethical behavior even though customer retention is in play. As customer demand grows for sustainability in business, companies emphasize false sustainable claims such as vague, misleading, and false statements and corporate greenwashing. This troubling evolution of the effect of false sustainable claims on customer retention examines through the main research question "How is customer retention affected by false sustainability claims?". Further, this study is only approaching the company perspective on the subject.

The research is qualitative and has used the abductive research approach. The theoretical framework has formed from the research question and further modified during the empirical study. The empirical data has been gathered from eight in-depth interviews using the purposive sampling technique from the non-probability sampling techniques. Interviewees are owners or the management level employees of Finnish companies that value corporate sustainability and have extensive professional experience of the subject. Accumulated empirical data, organized, and analyzed logically with theory. The results highlighted the drivers and benefits of customer retention, the importance of customer retention, the relationship between corporate sustainability and customer retention, corporate sustainability on customer retention and the effect of false sustainability claims on customer retention.

The findings of the study are mainly aligned with the previous literature, and new findings have derived on the subject. The key results of this study indicate that the drivers of customer retention are trust, transparency, commitment, customer satisfaction and being ethical is affected by false sustainability claims. Further, false sustainability claims negatively impact the benefits of customer retention, loyalty, reputation, brand image, and word of mouth. Therefore, the study has found that false sustainability claims do not contribute to customer retention, and concepts undesirably complement each other. Apart from the theoretical contribution of the study, the study can be used to guide managerial attention towards the relevant issue. Though the results of the study are bound to be applicable globally, the overall generalizability of the findings still calls for further testing. Therefore, the last part of the study contains limitations of the research and suggestions for future research.