Enhancing customer loyalty: Critical switching costs factors

Research output: Contribution to journalArticlepeer-review

Abstract


Purpose
– The purpose of this paper is to examine the moderator effects of switching costs, classified by type (relational, procedural, and financial) and direction (positive and negative), on the relationships between customer-perceived value, trust, and loyalty.

Design/methodology/approach
– This study reports on quantitative data from a survey of two service contexts which vary in their degree of customer-employee contact and customization. In total, 360 usable questionnaires were collected, and the data were analyzed using multi-group structural equation modeling.

Findings
– The results demonstrate that switching costs moderate, in different ways, the relationships between customer loyalty, trust and perceived value. Moreover, the strength of the moderator effects vary according to service type.

Research limitations/implications
– This study provides new insight into understanding the moderating role of switching costs thus, reduces inconsistencies about the direction and the strength of the moderator effect of switching costs in loyalty frameworks.

Practical implications
– This study helps managers choose the most effective loyalty strategy for specific service industries and perceptions of switching costs, and to look beyond their service boundaries in order to cross-fertilize strategies for handling switching costs.

Originality/value
– No empirical study to date has simultaneously examined the moderator effect of switching costs classified by type and direction on the relationships between customer-perceived value, trust, and customer loyalty across two different service contexts in a single framework.
Original languageEnglish
Pages (from-to)144 - 169
JournalJournal of Service Management
Volume27
Issue number2
Early online date18 Apr 2016
DOIs
Publication statusPublished - 2016

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