The aim of this study is to investigate the effects of customer satisfaction and customer delight on customer loyalty through customer retention. Data were collected using a questionnaire developed based on the literature and administered to a sample of restaurant customers consisting of 376 customers. Using IBM SPSS and AMOS software for data analyses, the results indicate that customer retention had a perfect mediating role in the effect of customer satisfaction on customer loyalty and a partial mediating role in the effect of customer delight on customer loyalty. The study provided several contributions. A key contribution to researchers is that the effect of customer satisfaction on other variables, particularly customer loyalty should be assessed in terms of its direct and indirect effects. A basic contribution to managers is that both satisfied and delighted customers have potential intentions to defect, hence, retaining customers is a crucial step to ensure loyalty. Delighted customers are more likely to be retained and retained customers are ready to be loyal customers.

Customer focus strategy has shifted the way the businesses shape their customer satisfaction. Service oriented companies in general have been given a great emphasis and a significance care to both customer satisfaction and customer delight lately. However, the management decision of what to offer to gain customer happiness is still a challenge issue. To test such issue, this study develops and tests a set of new factors which shapes both customer satisfaction and delight within the UAE setting. The factors include perceived service value, perceived service quality, perceived price fairness in addition to perceived service recovery. Data were collected through survey using a structured questionnaire distributed to 420 customers over all 28 branches of Etisalat Company in Dubai. 350 valid questionnaires were analyzed using factor analysis along with correlation and regression. The results of the study indicate that perceived service value, perceived service quality, perceived price fairness and perceived service recovery could be considered as the critical success factors that can be used to shape and measure customer satisfaction and delight. The findings can be used as guidelines to retain customers and to enhance the business value especially when organizations service providers focusing more on what customer perceive rather than focusing on what to offer from products and/or services. Moreover, some managerial implications and a set of theoretical recommendations are suggested in the final part of this study.