Advanced Search

Journal Navigation

Journal Home

Subscriptions

Archive

Contact Us

Table of Contents

Click here to sign up for SAGE Journal Email Alerts today!

Sign In to gain access to subscriptions and/or personal tools.
Journal of Service Research
This Article
Right arrow Abstract Freely available
Right arrow Free Full Text (Free PDF) Free
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Right arrow Citation Map
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to Saved Citations
Right arrow Download to citation manager
Right arrowRequest Permissions
Right arrow Request Reprints
Right arrow Add to My Marked Citations
Citing Articles
Right arrow Citing Articles via HighWire
Right arrow Citing Articles via Google Scholar
Right arrow Citing Articles via Scopus
Google Scholar
Right arrow Articles by Wieringa, J. E.
Right arrow Articles by Verhoef, P. C.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Complore   Add to Connotea   Add to Del.icio.us   Add to Digg   Add to Reddit   Add to Technorati   Add to Twitter  
What's this?

Understanding Customer Switching Behavior in a Liberalizing Service Market

An Exploratory Study

Jaap E. Wieringa

University of Groningen

Peter C. Verhoef

University of Groningen

In recent decades, many service markets have been liberalized, which means incumbent service firms face new competitors and must address customer switching—which from a public policy perspective, is necessary to ensure that liberalization succeeds. In this article, the authors conduct an exploratory study in which they investigate determinants of customer switching in the liberalizing Dutch energy market. Their results suggest that relationship quality, switching costs, and current demand for products and services from the energy supplier (e.g., usage rate, number of contracts) represent important determinants for all customers. In a subsequent analysis that accounts for customer heterogeneity, the results indicate a large inertia segment (71%) but a relatively small (6%) disloyal segment. The authors discuss implications for both incumbent service firms (former monopolists) and public policy officials.

Key Words: customer loyalty • customer relationships • liberalizing markets • public policy • energy market • switching costs • latent class analysis • logit model

References

  • Allison, Paul D. (1999), Logistic Regression Using the SAS System: Theory and Application, Cary, NC: SAS Institute.
  • Andrews, Rick L., and Imran S. Currim (2003), "A Comparison of Segment Retention Criteria for Finite Mixture Logit Models," Journal of Marketing Research, 40 (May), 235-243.[CrossRef][Web of Science]
  • Bolton, Ruth N. (1998), "A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction," Marketing Science, 17 (1), 45-65.[Abstract/Free Full Text]
  • ———, Katherine N. Lemon, and Peter C. Verhoef (2004), "The Theoretical Underpinnings of Customer Asset Management: A Framework and Propositions for Future Research," Journal of the Academy of Marketing Science, 32 (Summer), 1-20.
  • ———, and ——— (1999), "A Dynamic Model of Customers' Usage of Services: Usage as an Antecedent and Consequence of Satisfaction," Journal of Marketing Research, 36 (May), 171-86.[CrossRef][Web of Science]
  • Burnham, Thomas A., Judy K. Frels, and Vijay Mahajan (2003), "Customer Switching Costs: A Typology, Antecedents, and Consequences," Journal of the Academy of Marketing Science, 31 (March), 109-126.[Abstract]
  • Button, Kenneth J., and Theodore E. Keeler (1993), "The Regulation of Transport Markets," Economic Journal, 103 (July), 1017-1027.[CrossRef]
  • Capraro, Anthony J., Suzan Broniarczyk, and Rajendra K. Srivastava (2003), "Factors Influencing the Likelihood of Customer Defection: The Role of Customer Knowledge," Journal of the Academy of Marketing Science, 31 (March), 164-175.[Abstract]
  • Cooil, Bruce, Timothy L. Keiningham, Lerzan Aksoy, and Michael Hsu (2007), "A Longitudinal Analysis of Customer Satisfaction and Share of Wallet: Investigating the Moderating Effect of Customer Characteristics," Journal of Marketing, 71 (January), 67-83.[CrossRef][Web of Science]
  • Den Hertog, Johan (1996), "The Policy of Deregulation in the Netherlands," European Economic Review, 40 (April), 979-987.[CrossRef]
  • Dick, Allan S., and Kunal Basu (1994), "Customer Loyalty: Toward an Integrated Conceptual Framework," Journal of the Academy of Marketing Science, 22 (Spring), 99-113.[Abstract]
  • Doh, Jonathan P., and Hildy J. Teegen (2003), "Private Investment in Emerging Markets Telecommunications Infrastructure: Global Trends, National Policies, Firm Strategies" Competition & Change, 7 (March), 39-60.[CrossRef]
  • Dwyer, Robert F., Paul H. Schurr, and Sejoh Oh (1987), "Developing Buyer-Seller Relationships," Journal of Marketing, 51 (April), 11-27.[CrossRef][Web of Science]
  • EnergieNed (2004), "Op 1 juli stappen 150.000 klanten over op een andere elektriciteitsleverancier," [On July 1st 150.000 customers switch to another energy supplier]. Press release, June 30.
  • Essent (2005), "Halfjaarbericht 2005" [Half-yearly report 2005] http://www.essent.nl/essent/bin/Halfjaarbericht2005_tcm26-12346.pdf (accessed July 4, 2007).
  • Evanschitzky, Heiner, and Maren Wunderlich (2006), "An Examination of Moderator Effects in the Four-Stage Loyalty Model" Journal of Service Research, 8 (May), 330-345.[Abstract/Free Full Text]
  • Gatignon, Hubert (2004), Statistical Analysis of Management Data, Boston: Kluwer.
  • Geyskens, Inge, and Jan-Benedict E. M. Steenkamp (2000), "Economic and Social Satisfaction: Measurement and Relevance to Marketing Channel Relationships," Journal of Retailing, 76 (Spring), 11-32.[CrossRef]
  • ———, ———, and Nirmayala Kumar (1998), "Generalizations about Trust in Marketing Channel Relationships," International Journal of Research in Marketing, 15 (July), 223-248.[CrossRef]
  • Hair, Joseph F., Bill Black, Barry Babin, Rolph E. Anderson, and Ronald L. Tatham (2006), Multivariate Data Analysis (6th ed.), Upper Saddle River, NJ: Prentice Hall.
  • Jones, Michael A., David L. Mothersbaugh, and Sharon E. Beatty (2000), "Switching Barriers and Repurchase Intentions in Services," Journal of Retailing, 76 (Summer), 259-274.[CrossRef][Web of Science]
  • Keaveney, Susan M. (1995), "Customer Switching Behavior in Service Industries: An Exploratory Study," Journal of Marketing, 59 (April), 71-82.
  • Klemperer, Paul E. (1995), "Competition When Customers Have Switching Costs: An Overview with Applications to Industrial Organization, Macro Economics and International Trade," Review of Economic Studies, 62 (October), 515-539.[CrossRef][Web of Science]
  • Kumar, V., and Werner Reinartz (2005), Customer Relationship Management: A Databased Approach, Chichester, UK: Wiley.
  • Morrison, Donald G. (1969), "On the Interpretation of Discriminant Analysis," Journal of Marketing Research, 6 (May), 156-163.[CrossRef][Web of Science]
  • Morwitz, Vicky G., Joel H. Steckel, and Ashok Gupta ( 1997), "When Do Repurchase Intentions Predict Sales?" Marketing Science Institute, working paper, report no. 97-112, Boston.
  • Neslin, Scott A., Sunil Gupta, Wagner Kamakura, J.X. Lu, and Charlotte Mason (2006), "Defection Detection: Measuring and Understanding the Predictive Accuracy of Customer Churn Models " Journal of Marketing Research, 43 (May), 204-211.[CrossRef]
  • Newberry, David (2005), "Introduction" Energy Journal, European Electricity Liberalisation [Special issue], 1-10.
  • Nunnally, Jun C. (1978), Psychometric Theory, New York: McGraw-Hill. Oliver, Richard L., and Russel S. Winer (1987), "A Framework for Formation and Structure of Consumer Expectations: Review and Propositions" Journal of Economic Psychology, 8 (December), 469-499.[CrossRef][Web of Science]
  • Palmatier, Robert W., Rajiv P. Dant, Dhruv Grewal, and Kenneth R. Evans (2006), "Factors Influencing the Effectiveness of Relationship Marketing: A Meta-Analysis" Journal of Marketing, 70 (July), 138-153.
  • Ramamurti, Ravi (Ed.). (1996), Privatizing Monopolies: Lessons from the Telecommunications and Transport Sectors in Latin America, Baltimore: Johns Hopkins University Press.
  • Rust, Roland T., Katherine N. Lemon, and Valarie A. Zeithaml, (2004), "Return on Marketing: Using Customer Equity to Focus Marketing Strategy," Journal of Marketing, 68 (January), 109-127.[CrossRef][Web of Science]
  • ———, Jeff J. Inman, Jianmin Jia, and Athony Zahorik (1999), "What You Don't Know about Customer-Perceived Quality: The Role of Customer Expectation Distributions," Marketing Science, 18 (1), 77-92.[Abstract/Free Full Text]
  • Szymanski, David M., and David H. Henard (2001), "Customer Satisfaction: A Meta-Analysis of the Empirical Evidence," Journal of the Academy of Marketing Science, 29 (Winter), 16-35.[Abstract/Free Full Text]
  • van Damme, Eric (2005), "Liberalizing the Dutch Electricity Market: 1998-2004," Energy Journal, European Electricity Liberalisation [Special issue], 155-79.
  • Verhoef, Peter C. (2003), "Understanding the Effect of Customer Relationship Management Efforts on Customer Retention and Customer Share Development," Journal of Marketing, 67 (October), 30-45.[CrossRef][Web of Science]
  • ———, Jenny van Doorn, and Mathilda Dorotic (2007), "Customer Value Management: An Overview and Research Agenda" working paper, University of Groningen, Netherlands.
  • ———, and Philip Hans Franses (2003), "Combining Revealed and Stated Preferences to Forecast Customer Behaviour: Three Case Studies " International Journal of Market Research, 45(Quarter 4), 467-474.
  • ———, ———, and Janny C. Hoekstra (2002), "The Effect of Relational Constructs on Customer Referrals and Number of Services Purchased: Does Age of the Relationship Matter?" Journal of the Academy of Marketing Science, 30 (Summer), 202-216.[Abstract/Free Full Text]
  • Vroomen, Björn, Bas Donkers, Peter C. Verhoef, and Philip Hans Franses (2005), "Selecting Profitable Customers for Complex Services on the Internet" Journal of Service Research, 8 (August), 37-47.[Abstract]
  • Woodruff, Robert B. (1997), "Customer Value: The Next Source for Competitive Advantage," Journal of the Academy of Marketing Science, 25 (Spring), 139-153.
  • Wedel, Michel, and Wagner A. Kamakura (1999), Market Segmentation: Conceptual and Methodological Foundations, Boston: Kluwer.

Journal of Service Research, Vol. 10, No. 2, 174-186 (2007)
DOI: 10.1177/1094670507306686
Add to CiteULike CiteULike   Add to Complore Complore   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us   Add to Digg Digg   Add to Reddit Reddit   Add to Technorati Technorati   Add to Twitter Twitter    What's this?


This article has been cited by other articles:


Home page
 Journal of Service ResearchHome page
Y. Polo and F. J. Sese
How to Make Switching Costly: The Role of Marketing and Relationship Characteristics
Journal of Service Research, November 1, 2009; 12(2): 119 - 137.
[Abstract] [PDF]

This Article
Right arrow Abstract Freely available
Right arrow Free Full Text (Free PDF) Free
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Right arrow Citation Map
Services
Right arrow Email this article to a friend
Right arrow Similar articles in this journal
Right arrow Alert me to new issues of the journal
Right arrow Add to Saved Citations
Right arrow Download to citation manager
Right arrowRequest Permissions
Right arrow Request Reprints
Right arrow Add to My Marked Citations
Citing Articles
Right arrow Citing Articles via HighWire
Right arrow Citing Articles via Google Scholar
Right arrow Citing Articles via Scopus
Google Scholar
Right arrow Articles by Wieringa, J. E.
Right arrow Articles by Verhoef, P. C.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Complore   Add to Connotea   Add to Del.icio.us   Add to Digg   Add to Reddit   Add to Technorati   Add to Twitter  
What's this?