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Enhancing customer loyalty: critical switching cost factors

Dahlia El-Manstrly (Business School, University of Edinburgh, Edinburgh, UK)

Journal of Service Management

ISSN: 1757-5818

Article publication date: 18 April 2016

Issue publication date: 18 April 2016

6121

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.

Keywords

Acknowledgements

The author is indebted to the anonymous reviewers and guest editors for their fruitful comments and suggestions. The author would also like to express her great appreciation to Catriona Schaupp for proofreading the manuscript.

Citation

El-Manstrly, D. (2016), "Enhancing customer loyalty: critical switching cost factors", Journal of Service Management, Vol. 27 No. 2, pp. 144-169. https://doi.org/10.1108/JOSM-09-2015-0291

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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