A fresh look at the role of switching cost in influencing customer loyalty: Empirical investigation using structural equation modelling analysis

Abstract

Purpose

The purpose of this paper is to investigate the possible mediating role of switching cost (SC) in influencing customer loyalty (CL).

Design/methodology/approach

The authors derive a model containing the relationships between customer satisfaction (CS), brand image (BI), and CL through mediating effects of SC. Data collected from 200 subscribers of China Mobile was analysed using structural equation modelling technique.

Findings

The authors find that SC does not mediate the relationship between CS and CL, nor that between BI and CL. While both CS and BI have a direct and positive relationship with CL, only CS is positively associated with the SC. SC in itself has no direct relationship with CL, necessitating further understanding of its role.

Research limitations/implications

Prior findings have suggested the mediating role of SC, this study, however, show that SC does not have any mediating role in influencing CL. In fact, the direct role of SC is also questioned, as the authors do not find any direct relationship between SC and CL.

Practical implications

While managers should retain a balanced strategy for implementing SC, developing a strong BI and achieving CS is more important, and could help avoid any negative implications that may ensue from the implementation of SC.

Originality/value

This paper offers empirical evidence of the importance of SC – or rather lack of it – in enhancing CL. It also helps explain how SC interacts with CS and BI.

Citation

Ram, J. and Wu, M.-L. (2016), "A fresh look at the role of switching cost in influencing customer loyalty: Empirical investigation using structural equation modelling analysis", Asia Pacific Journal of Marketing and Logistics, Vol. 28 No. 4, pp. 616-633. https://doi.org/10.1108/APJML-11-2015-0172