SMEs’ switching behavior in the natural gas market

Abstract

Purpose

The purpose of this paper is to explore loyalty and switching behavior among corporate energy customers in Italy. Thanks to the recent liberalization process, firms have now the opportunity to evaluate alternative energy providers and try to reduce their energy expenses. Nonetheless their switching rate in Italy is currently as low as 6.3 percent.

Design/methodology/approach

The study is based on a cross-sectional analysis of the switching behavior of a sample of 110 Italian small and medium firms that purchase natural gas from a middle-sized natural gas supplier.

Findings

The analysis emphasizes the role of price convenience (but not of dissatisfaction with the service provision) as a driver of the intention to switch to a new supplier. The negative impact of procedural and relational switching costs on the intention to switch emerges, as well.

Research limitations/implications

The sample size was quite limited. Moreover participants were all customers of one natural gas supplier only.

Practical implications

The findings highlight the need for gas service providers to focus on customer orientation and loyalty to stimulate customer loyalty and not just customer repurchases.

Originality/value

Whilst a few studies have explored switching behavior and loyalty among private energy customers, this study investigates this issue among corporate energy customers.

Citation

Vigolo, V. and Cassia, F. (2014), "SMEs’ switching behavior in the natural gas market", The TQM Journal, Vol. 26 No. 3, pp. 300-307. https://doi.org/10.1108/TQM-01-2014-0005