Enhancing customer loyalty:Critical switching costs factors

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. </jats:sec

Customers' attitudinal, emotional and behavioural responses to firm-initiated service termination

There are an increasing number of reports on termination of customer relationships initiated by major banks in the press. Yet, our understanding of the negative consequences of firm-initiated service termination is still very limited. This study looks at two distinct termination strategies (firm-oriented and customer oriented) to compare how customers perceive and react to these termination strategies. In particular, we examine how perceived severity of the two strategies affects customers' distributive justice, anger, customers' complaint behaviour and revenge intentions. We also explore the mediating role of distributive justice and anger as well as the moderating role of attitude towards complaining. We use an experiment in a retail banking context. 746 adult consumers were recruited from a US online panel with quota for age and gender. Our results show that a firm-oriented approach is perceived as more severe and less fair compared with a customer-oriented approach. A firm-oriented approach also leads to higher level of anger, complaint behaviour and revenge intentions. We also find support for the mediating role of anger and distributive justice on the severity behavioural responses' links and also the moderating role of attitude towards complaining on the effects of anger on revenge and third-party complaint behaviours. This study contributes to the service termination literature by providing a comprehensive model of disengaged customers’ attitudinal, emotional and behavioural reactions to firm-initiated service termination

The Impact of Termination Severity on Customers’ Emotional, Attitudinal, and Behavioral Reactions

Purpose: This paper empirically examines the direct and indirect effects of perceived termination severity on customers' behavioral reactions via betrayal and justice. It also examines the moderating effects of attitude toward complaining (ATC). Design/methodology/approach: This paper employs a quantitative method approach using a scenario-based experiment in a banking setting. Findings: The results show that a more severe termination approach results in higher customer negative reactions. Betrayal is shown to be a key driver of customers' behavioral reactions, and ATC moderates these effects. Research limitations/implications: Future studies should examine the effects of different termination strategies in markedly different cultures and should also examine other boundary conditions such as prior warning, relationship quality and service importance in influencing customers' negative behavioral responses. Originality/value: This paper contributes to the service termination literature by shedding light on the impact of termination severity on customers' reactions. It also unveils the mechanism that explains customers' reactions to service termination. Further, it reveals that ATC moderates customers' public (but not private) complaining behaviors