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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: 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: 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: 7 June 2011

Ge Zhu, Shan Ao and Jianhua Dai

Switching cost is an important concept in the study of consumer loyalty which has implications for organizational business strategy and regulatory policies. Much research…

Abstract

Purpose

Switching cost is an important concept in the study of consumer loyalty which has implications for organizational business strategy and regulatory policies. Much research has already examined the formation and influence of switching costs on the consumers' repeated purchase intentions, but little research has focused on quantitative measurement of the switching cost itself. This paper aims to address this issue.

Design/methodology/approach

By game theory, a complete Nash‐Bertrand model is proposed to accurately estimate consumer switching costs considering price compensation and transport costs in a duopoly. The relationship between switching costs and market structure is then analyzed by using the example of Hong Kong's wireless telecommunication market. From the observed data of China's wireless telecommunication industry, the model calculates switching costs per year of China Mobile and China Unicom's users respectively, as well as other variables.

Findings

The results demonstrate that reducing consumer switching costs will benefit small operators and increase competition in a winner‐take‐all market.

Originality/value

The model is valuable in calculating unseen switching costs and studying the impact of switching costs on market structure, especially for a duopoly in telecommunication.

Details

Nankai Business Review International, vol. 2 no. 2
Type: Research Article
ISSN: 2040-8749

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Article
Publication date: 20 January 2012

Chung‐Yu Wang and Li‐Wei Wu

The objective of this study is to examine the effect of corporate image, perceived value, and switching costs on customer loyalty in customer/provider relationships of…

Abstract

Purpose

The objective of this study is to examine the effect of corporate image, perceived value, and switching costs on customer loyalty in customer/provider relationships of different length.

Design/methodology/approach

Five key constructs, namely: corporate image, perceived value, switching costs, customer loyalty, and length of relationship, were employed. Using a systematic sampling technique, student interviewers randomly approached customers exiting hair salons. The final survey sample consisted of 279 respondents.

Findings

This paper supports a contingency model with regard to customer loyalty and its antecedents. The results suggest that corporate image impacts customer loyalty in both newer and older relationships. Whereas in newer relationships, corporate image has a cardinal influence on switching costs, in more‐established relationships switching costs are influenced primarily by perceived value. In both cases, switching costs influence customer loyalty.

Research limitations/implications

As extant research claims that relationship quality, and not length, moderates the relationship between loyalty/repurchase behavior and their antecedents, future research could adopt relationship quality as a moderator to test the model of the present study.

Practical implications

The results support the importance of enhancing corporate image to retain newer customers. In longer‐established relationships, corporate image remains a determinant of repurchase decisions. However, customer value also has a significant influence on switching costs and loyalty.

Originality/value

The current study moves beyond customer‐perceived value, switching costs, and corporate image to demonstrate that relationship length has a significant influence on customer loyalty.

Details

Managing Service Quality: An International Journal, vol. 22 no. 1
Type: Research Article
ISSN: 0960-4529

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Article
Publication date: 1 February 2001

Jonathan Lee, Janghyuk Lee and Lawrence Feick

The main objective of customer satisfaction programs is to increase customer retention rates. In explaining the link between customer satisfaction and loyalty, switching

Abstract

The main objective of customer satisfaction programs is to increase customer retention rates. In explaining the link between customer satisfaction and loyalty, switching costs play an important role and provide useful insight. For example, the presence of switching costs can mean that some seemingly loyal customers are actually dissatisfied but do not defect because of high switching costs. Thus, the level of switching costs moderates the link between satisfaction and loyalty. The purposes of this paper are: to examine the moderating role of switching costs in the customer satisfaction‐loyalty link; and to identify customer segments and then analyze the heterogeneity in the satisfaction‐loyalty link among the different segments. An empirical example based on the mobile phone service market in France indicates support for the moderating role of switching costs. Managerial implications of the results are discussed.

Details

Journal of Services Marketing, vol. 15 no. 1
Type: Research Article
ISSN: 0887-6045

Keywords

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