Would social and functional benefits provided by service personnel and other customers be a double-edged sword?

Keeping loyal customers is very challenging, especially when customers' are in a situation to choose between their loyalty towards the firm and towards a preferred service employee/other fellow customers. This paper examines the effect of social and functional benefits coming from a preferred employee versus other fellow customers, on three forms of loyalty: firm-owned, employee-owned and customer-to-customer loyalty. A total of 207 valid responses were collected, in a GYM context, using a systematic sample and then, analyzed by the means of PLS-SEM. The functional benefits coming from a preferred employee, were found associated with customers’ satisfaction with the firm, while social benefits coming from the same employee were found associated with employee-owned loyalty. For interactions with other fellow customers, functional benefits were the strongest predictor of customer-to-customer loyalty, followed by social benefits. Customers’ satisfaction with the firm was found to reduce employee-owned and customer-to-customer loyalty, but enhance one’s firm-owned loyalty.