Rollover service contracts: The influences of perceived value, convenience, confusion and switching costs on consumer satisfaction and service loyalty

Muhammad Mohsin Butt, Stephen Wilkins*, Joe Hazzam, Ben Marder

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Rollover contracts are agreements that automatically renew, or ‘roll over’, when the contracted term is completed, unless the customer has previously given notice to terminate the agreement. Although ubiquitous, academic examination of this contract model is scarce, and it is not known the extent to which rollover contracts influence consumer satisfaction and individuals’ subsequent behaviors. A conceptual model was developed and tested using structural equation modeling. The data were obtained from a survey of 994 service consumers in the United States. Perceived value emerged as the strongest enabler of consumer satisfaction with rollover contracts, followed by convenience, while consumer confusion–e.g. caused by lengthy and complex contracts–has the strongest negative effect on consumer satisfaction. The strongest relationships in our model are between satisfaction and staying intentions, word of mouth, and future rollover acceptance with other firms and products. The paper presents important theoretical contributions and managerial implications.

Original languageEnglish
Pages (from-to)1336-1356
Number of pages21
JournalJournal of Strategic Marketing
Volume32
Issue number8
Early online date13 Mar 2024
DOIs
Publication statusPublished - 2024

Keywords / Materials (for Non-textual outputs)

  • competitor homogeneity
  • consumer inertia
  • rollover contracts
  • service loyalty
  • trust

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