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Enhancing customer loyalty: critical switching cost factors

Enhancing customer loyalty: critical switching cost 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Service Management Emerald Publishing

Enhancing customer loyalty: critical switching cost factors

Journal of Service Management , Volume 27 (2): 26 – Apr 18, 2016

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References (107)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1757-5818
DOI
10.1108/JOSM-09-2015-0291
Publisher site
See Article on Publisher Site

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.

Journal

Journal of Service ManagementEmerald Publishing

Published: Apr 18, 2016

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