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Article
Publication date: 8 May 2009

Yanqun He, Shuk‐Man Cheung and Siu‐Keung Tse

There have been mixed results regarding the impacts of satisfaction, service quality and service value on consumer loyalty. The purpose of this paper is to investigate the…

Abstract

Purpose

There have been mixed results regarding the impacts of satisfaction, service quality and service value on consumer loyalty. The purpose of this paper is to investigate the moderating effects of switching costs between the three antecedents and consumer loyalty via four loyalty dimensions, i.e. repurchase intentions, appreciating behavior, complaining behavior, and price‐increase tolerance.

Design/methodology/approach

A conceptual framework is developed where the canonical correlations among the antecedents and components of consumer loyalty are analyzed. Three hypothesis sets are proposed and tested based on 12 service industries in Hong Kong markets.

Findings

The findings provide strong evidence of the moderating effects on repurchase preference, but only partial support on the other three loyalty dimensions.

Practical implications

The above findings enable managers to adjust their strategies in response to varying levels of switching costs among services, which affect the relationships between the three primary antecedents and repurchase preference.

Originality/value

Consumer loyalty is considered as an important source of competitive advantages for service firms. Although potential antecedents of loyalty, including satisfaction, service quality and service value, have been identified, their influences on loyalty vary among different service industries. This research highlights the moderating effects of switching costs on the four consumer loyalty dimensions.

Details

Journal of Chinese Entrepreneurship, vol. 1 no. 2
Type: Research Article
ISSN: 1756-1396

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Article
Publication date: 13 November 2019

Yonghua Cen and Li Li

Given a product or service, the number of its installed user base has a significant positive effect on the existing users’ loyalty and new users’ conversion. This effect…

Abstract

Purpose

Given a product or service, the number of its installed user base has a significant positive effect on the existing users’ loyalty and new users’ conversion. This effect is conceptualized as network externalities in economics. Network externalities are supposed to be particularly striking in nowadays online business-to-business (B2B) platforms, but yet the mystery behind their effects on user loyalty to online B2B platforms remains to be delicately unraveled. The purpose of this paper is to discover the factors driving users’ loyalty, especially buyers’ loyalty, to online B2B platforms, by highlighting the impacts of network externalities on loyalty and other mediating factors.

Design/methodology/approach

A conceptual model of buyer loyalty under network externalities is elaborated. The reliability and validity of the instruments of the latent model constructs are assessed by confirmatory factor analysis, and the hypothesized causal relationships among the constructs are tested by structural equation modeling, on 710 valid buyer samples collected from a famous online B2B platform in China.

Findings

The analysis demonstrates that: perceived value, user satisfaction and switching costs are the major predictors of buyer loyalty to online B2B platforms characterized by network externalities; network externalities positively account for buyer loyalty by contributing to perceived value, user satisfaction and switching costs; and direct network externality (measured by perceived network size and perceived external prestige) has a significant effect on indirect network externality (measured by perceived compatibility and perceived complementarity).

Originality/value

The findings allow the authors to conclude meaningful managerial implications for online B2B service providers to build up loyal user bases through improving users’ perceptions of network externalities, switching costs and value.

Details

Journal of Enterprise Information Management, vol. 33 no. 2
Type: Research Article
ISSN: 1741-0398

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Article
Publication date: 2 April 2020

Yu-Wei Chang

Switching to public cloud enterprise resource planning (ERP) systems not only provides financial and functional benefits to organizations, but also results in sunk costs

Abstract

Purpose

Switching to public cloud enterprise resource planning (ERP) systems not only provides financial and functional benefits to organizations, but also results in sunk costs of incumbent systems and uncertainty costs of cloud systems. The purpose of this study is to investigate the enablers and inhibitors concerning switching to cloud ERP systems at the organizational level.

Design/methodology/approach

Data were collected from 212 top managers and owners of the enterprises in Taiwan, and 10 hypotheses were examined using structural equation modeling.

Findings

Technological (system quality), organizational (financial advantage), and environmental contexts (industry pressure) are found to be the antecedents of switching benefits. Perceived risk of cloud ERP systems and satisfaction with and breadth of use of incumbent ERP systems are found to be the predictors of switching costs. Switching benefits positively affect switching intention, but switching costs negatively affect switching intention.

Research limitations/implications

This study develops a theoretical model grounded in a set of theoretical foundations, including two-factor theory, technology-organization-environment (TOE) framework, information systems (IS) success model, and expectation confirmation theory (ECT). Two-factor theory is used to characterize switching benefits and costs that affect switching intention. Technological factors come from IS success model, and the factors affecting benefits are organized based on TOE framework. Sunk costs of incumbent ERP systems are developed based on ECT.

Originality/value

Different from previous studies on cloud computing adoption, this study provides insights into switching intention to cloud computing. The study also proposes an integrated model grounded in multiple perspectives to explain organizations' decisions to switch to cloud ERP systems. These findings help cloud service providers better understand how to promote cloud ERP adoption from technical, organizational, and environmental perspectives.

Details

Journal of Enterprise Information Management, vol. 33 no. 3
Type: Research Article
ISSN: 1741-0398

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Article
Publication date: 13 February 2019

Scott A. Thompson, James M. Loveland and Katherine E. Loveland

The purpose of this paper is to investigate the competing effects of brand community participation, which should enhance loyalty to both the brand and to already-owned…

Abstract

Purpose

The purpose of this paper is to investigate the competing effects of brand community participation, which should enhance loyalty to both the brand and to already-owned products, against switching costs, which should make consumers sensitive about the financial costs associated with new products.

Design/methodology/approach

Using the participation and weekly adoption data from 7,411 members in two brand communities and one product category forum over a six-month period, switching costs were computed for each member using 10 years of product release and pricing data.

Findings

Consistent with prior research, switching costs had a significant effect on reducing product adoption. Brand community participation also had a significant effect on overcoming switching costs. However, these main effects were qualified by an interaction, such that the most active participants were more likely to buy the new product when switching costs were higher.

Originality/value

Most importantly, these findings provide unique insights into financial switching costs and demonstrate ways in which brand community participation provides a way to mitigate switching costs for consumers who would most be affected by them.

Details

Journal of Product & Brand Management, vol. 28 no. 2
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 1 January 2005

Serkan Aydin, Gökhan Özer and Ömer Arasil

In the GSM mobile telephony sector, the main condition for protecting the subscriber base is to win customer loyalty, a key necessity for the maintenance of a brand's life…

Abstract

Purpose

In the GSM mobile telephony sector, the main condition for protecting the subscriber base is to win customer loyalty, a key necessity for the maintenance of a brand's life in the long term. To achieve this aim, customer satisfaction and trust must be measured and “switching costs” identified. The latter render subscribers' preference for rival operators more expensive. In this connection, this paper's aim is to measure the effects of customer satisfaction and trust on customer loyalty, and the direct and indirect effect of “switching cost” on customer loyalty.

Design/methodology/approach

The data set covered 1,662 mobile phone users in Turkey. The data were analyzed by moderated regression analysis to test the hypotheses.

Findings

The findings of this study show that the switching cost factor directly affects loyalty, and has a moderator effect on both customer satisfaction and trust. Therefore, it plays a crucial role in winning customer loyalty. In short, it is a quasi moderator. However, switching costs was measured as a unidimensional factor, but switching costs in fact contains psychological, financial and procedural sub‐dimensions. Therefore, future research might measure the sub‐dimensions of switching costs and examine their moderating effects.

Originality/value

With respect to the findings, trust has more importance than customer satisfaction in engendering loyalty, since trust contains belief in the brand, which provides positive outcomes not only in the present but also in the future. But customer satisfaction does not contain this dimension. So, the effect of trust on loyalty becomes greater than the effect of customer satisfaction. Therefore, any GSM operator who wishes to preserve its existing subscriber base should concentrate on winning its subscribers’ trust.

Details

Marketing Intelligence & Planning, vol. 23 no. 1
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 4 March 2014

Jun-Gi Park, Kijun Park and Jungwoo Lee

– This study aims to investigate the influences of loyalty and switching costs toward a firm's overall post-adoption behavior in using information system.

Abstract

Purpose

This study aims to investigate the influences of loyalty and switching costs toward a firm's overall post-adoption behavior in using information system.

Design/methodology/approach

A research model is developed around two constructs found in the literature – loyalty and switching costs – that are most critical in firms' decisions on continued use of the same IS service providing company. It is empirically tested using a survey of IT decision makers in total 102 companies in South Korea. Partial least squares method is used to assess the relationships specified in research model.

Findings

The findings suggest that both loyalty and switching costs have positive influences on the continuous intention to use and the inattentiveness of alternatives.

Research limitations/implications

Findings are based on a single point cross-sectional survey. To further investigate the continuance of specific IT service firms, triangulation will be necessary with longitudinal and qualitative data concerning the process of decision-making, including political and contractual situation.

Originality/value

The study fills the research gap in studying post-adoption behavior at the firm level by empirically testing the duality of loyalty and switching costs.

Details

Industrial Management & Data Systems, vol. 114 no. 2
Type: Research Article
ISSN: 0263-5577

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Article
Publication date: 6 September 2018

Chung-Yu Wang

The purpose of this paper is to examine how customers derive value and switching costs from their own participation conditional on their perceived efficacy of themselves…

Abstract

Purpose

The purpose of this paper is to examine how customers derive value and switching costs from their own participation conditional on their perceived efficacy of themselves (self-efficacy) and their advisers (adviser-efficacy) in financial services.

Design/methodology/approach

Student interviewers approached customers exiting banks with a skip interval of two. The respondents received the questionnaire items translated into Chinese. The final survey sample consists of 220 respondents.

Findings

Empirical results confirm that customer participation influences switching costs through customer value. The synergistic effect of self-efficacy and adviser-efficacy moderates the relationships among customer participation, customer value and switching costs. The incongruent levels of self-efficacy and adviser-efficacy can increase customer value and switching costs.

Originality/value

This study looks beyond self-efficacy to demonstrate that the synergistic roles of self-efficacy and adviser-efficacy significantly influence the relationships among customer participation, customer value and switching costs.

Details

International Journal of Bank Marketing, vol. 37 no. 1
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 5 September 2016

Ingy Shafei and Hazem Tabaa

This research works toward identifying the service quality constructs for the telecommunication industry, the extent they affect customer satisfaction, the perceived…

Abstract

Purpose

This research works toward identifying the service quality constructs for the telecommunication industry, the extent they affect customer satisfaction, the perceived switching costs and their significance to the customer. The purpose of this paper is to examine the effect of customer satisfaction and switching barriers on customer loyalty as well as the mediating effect of the switching barriers on the customer satisfaction and loyalty link.

Design/methodology/approach

An empirical causal framework was developed and tested through qualitative and quantitative phases. In-depth interviews were performed with consumers and experts in the field as well a survey with consumers. The results were analyzed using Cronbach’s α, Pearson’s correlation and regression analysis techniques.

Findings

The results of the research showed that network quality, customer support and pricing structure are the main service quality constructs that affects the customer satisfaction, showing how the customer is more interested in the core services other than other benefits and value-added services.

Originality/value

The research presents a comprehensive framework enabling mobile service providers to understand the factors affecting consumer loyalty. In terms of practical implication; the telecommunications sector is changing radically and as the market is approaching its maturity, customer retention has become a critical issue in the success of the mobile telecommunications business. The findings of the research can aid practitioners in firms in focussing their efforts on areas that can build consumer loyalty and retention.

Details

EuroMed Journal of Business, vol. 11 no. 3
Type: Research Article
ISSN: 1450-2194

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Article
Publication date: 1 April 2003

Mike Hess and Joan Enric Ricart

Previous research argues that customer switching costs play an important role in the firm’s ability to retain customers and achieve competitive advantage. Research also…

Abstract

Previous research argues that customer switching costs play an important role in the firm’s ability to retain customers and achieve competitive advantage. Research also indicates that in the increasingly networked environment, switching costs are changing in important ways. Despite switching costs’ recognized role in contributing to competitive advantage and its increasingly strategic characteristics in the expanding networked environment, we find a lack of coherence and completeness in the conceptual tools and models developed to understand its role and help effectively to manage the phenomenon. In this paper we attempt to address these needs by expanding and refining the conceptualization of customer switching costs and developing a more useful and comprehensive framework for managers.

Details

Management Research: Journal of the Iberoamerican Academy of Management, vol. 1 no. 1
Type: Research Article
ISSN: 1536-5433

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Article
Publication date: 9 October 2009

Celso Augusto de Matos, Jorge Luiz Henrique and Fernando de Rosa

The purpose of this paper is to develop and empirically test the antecedent, mediating and moderating role of switching costs on the relationship between satisfaction and loyalty.

Abstract

Purpose

The purpose of this paper is to develop and empirically test the antecedent, mediating and moderating role of switching costs on the relationship between satisfaction and loyalty.

Design/methodology/approach

Competing models are proposed based on previous studies investigating the influence of switching costs on satisfaction and loyalty. A survey was conducted with 7,461 customers of a large Brazilian bank. The four competing models were tested using structural equation modeling technique.

Findings

The analysis revealed that: switching cost is a significant antecedent of both attitudinal and behavioral loyalty; the mediating effect of switching cost is stronger in the relationship between satisfaction and attitudinal loyalty; and the moderating effect of switching cost is stronger in the relationship between satisfaction and behavioral loyalty.

Practical implications

This study emphasizes the relevance of the switching cost construct in the banking industry. Customers with different switching costs levels will manifest distinct relationship between satisfaction and behavioral loyalty. Thus, investment on marketing strategies and campaigns should be oriented to better convert switching perceptions into effective loyalty considering its mediating or moderating effects.

Originality/value

Even though there are several different approaches (i.e. direct, mediator and moderator) concerning the effects of switching costs on the satisfaction‐loyalty relationship, there is a lack of integration between these approaches. The paper tests and compares the different roles of switching costs. Another contribution is the inclusion of both attitudinal and behavioral aspects of loyalty, given that the current literature is incipient concerning the role of switching cost when considering the distinct loyalty components.

Details

International Journal of Bank Marketing, vol. 27 no. 7
Type: Research Article
ISSN: 0265-2323

Keywords

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