The Dynamics of Customization, Perceived Fairness, and Customer Loyalty within a CSR Framework

Abstract

Background: Customisation, understood as tailoring products, services, or communication to individual customer preferences, is increasingly used to enhance customer satisfaction, yet its impact on customer loyalty remains complex. Businesses increasingly focus on customisation to enhance customer satisfaction, yet its impact on customer loyalty remains complex. While customisation aligns with customer-centric strategies, ensuring fairness in these practices is crucial for fostering long-term relationships. This study explores the interplay between customisation, perceived fairness of the firm, and customer loyalty within the framework of corporate sustainability, drawing on equity and social exchange theories. Objective: We test whether perceived firm fairness mediates the link between customisation and customer loyalty within a corporate sustainability framework. Methods: We surveyed customers of a Croatian card services company using systematic random sampling and analysed the data using PLS-SEM. Results: Customisation improves perceived firm fairness but has no direct effect on loyalty. Fairness fully mediates the relationship between customisation and loyalty. Conclusions: Customisation boosts loyalty only when customers experience it as fair. Design transparent, consistently applied rules and communicate the “why” behind tailored offers to align with corporate sustainability principles and sustain long-term relationships.