Customer participation, value co-creation and customer loyalty: evidence from Umrah travel agencies in Indonesia

Abstract

Purpose This study aims to elucidate customer participation and value co-creation in enhancing customer loyalty in the context of Umrah travelers. First, it identifies the antecedents of Umrah travelers’ participation including service brand image, service employee performance and willingness to customize. Second, this study explores the impact of Umrah travelers’ participation in Umrah travelers’ loyalty. Finally, it explores co-creation value (hedonic, refreshment and price) and Umrah travelers’ satisfaction emerging in the relationship between Umrah travelers’ participation and Umrah travelers’ loyalty. Design/methodology/approach The survey draws its respondents from Umrah participants in Central Java Province, Indonesia, using the purposive sampling method with 459 samples. Data analysis used confirmatory factor analysis and structural equation modeling. Findings The results reveal that service brand image, service employee performance and willingness to customize significantly affect Umrah travelers’ participation. Umrah travelers’ participation has an insignificant effect on Umrah travelers’ loyalty; conversely, Umrah travelers’ participation has a significant effect on co-creation value (hedonic value, refreshment and price). Only the price of the co-creation value has a significant effect on Umrah travelers’ loyalty, while hedonic value and refreshment value do not. Finally, Umrah travelers’ participation directly affects Umrah travelers’ satisfaction, and, in turn, Umrah travelers’ satisfaction impacts Umrah travelers’ loyalty. Originality/value This study attempts to elucidate the theory of customer participation and value co-creation in the Umrah travelers setting. It identifies the factor determiner of customer participation from the professional aspects of the company, namely, service brand image, service employee performance and willingness to customize. This study explored the importance of value co-creation and customer satisfaction in enhancing customer loyalty.