How do social cues from other passengers affect word-of-mouth and intention to continue using bus services? A second-order SEM approach

Word-of-mouth (WOM) and intention to continue use (ICU) are the two critical components of customer loyalty towards a particular service. There has been a large body of research investigating the effect of determinants on the loyalty formation of public transport passengers. However, the impact of social cues from other passengers, which are part of the social environment, have received less attention. This study developed a theoretical model to examine the complex relationships among the cues from other passengers, perceived security and safety, perceived value, WOM and ICU. Cues from other passengers involved three dimensions: similarity, physical appearance, and suitable behaviour. These three dimensions were measured using a formative approach in structural equation modelling (SEM). Additionally, the moderating effects of demographic characteristics on the formation of public transport passenger behaviours were explored by multi-group SEM. The model was empirically tested using data collected from more than 870 bus passengers in two big cities in Vietnam (Ho Chi Minh and Danang city). The results showed that social cues from other passengers have a strong predictive power over the WOM and ICU of bus passengers. The study successfully demonstrated the critical role of demographic characteristics as moderators on loyalty formation. The findings reported in the present investigation provide several theoretical and practical implications.