31 research outputs found
âLetâs Wait and See!â The Real Option to Switch as a Value Component of Customer Relationships
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112218.pdf (publisher's version ) (Open Access)We suggest that a customerâs option to switch suppliers, and to wait and see before switching, adds to customer value in uncertain markets, and affects the customerâs switching behavior. We use a real options model to examine the value of this option and conduct sensitivity analyses based on data collected from the German public health insurance market to support our argument. We elaborate on the customer value construct and show how it contributes to customersâ behavioral loyalty. We also provide guidelines for managers of in-suppliers and out-suppliers on how to use the value of customersâ option to switch, e.g., for pricing decisions and management of customer churn.25 p