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How to Make Switching CostlyThe Role of Marketing and Relationship CharacteristicsUniversity of Zaragoza
University of Zaragoza Customer switching costs have emerged as one of the fundamental drivers of customer retention. Although the consequences of these costs have been well documented in the literature, research on the determinants of switching costs remains limited. The present study seeks to address this issue by investigating the extent to which switching costs are influenced by marketing variables—price and advertising—and relationship characteristics. The authors develop a conceptual framework about the drivers of switching costs and test the framework empirically in the mobile phone industry using a hierarchical Bayes approach. The empirical results show that by using price and advertising—both service and brand advertising—firms are able to make switching costly for customers. Moreover, relationship characteristics significantly contribute to explaining consumers’ differences in the cost of switching. Finally, this study illustrates the key role played by competitors’ marketing actions in affecting the cost of switching for customers of the focal firm. Implications for decision makers are discussed.
Key Words: switching costs • customer retention • price and advertising • relationship characteristics • hierarchical linear model
This version was published on November
1, 2009 Journal of Service Research, Vol. 12, No. 2,
119-137 (2009) |
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